Goal is bringing more visitor dollars to Philadelphia

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LED lighting display on the Broad Street glass facade of the Pennsylvania Convention Center expansion. ( David M Warren / Staff Photographer )

During its 98-year existence, the National Safety Council - an organization with 54,000-plus members headquartered just outside Chicago - never considered Philadelphia for its annual convention.

"We didn't fit," Karen Howe, the group's senior director of conventions and meetings, said of the existing Pennsylvania Convention Center.

The organization, which advocates saving lives and preventing unintentional injuries, needed at least 450,000 square feet of exhibit space. But the city couldn't provide it.

It can now, and Howe and her organization will be here in October for seven days.

On Friday, the opening of the Convention Center's $786 million expansion at 111 N. Broad St. - the largest public-works project ever undertaken by the commonwealth - will nearly double the size of the existing center.

The bigger center will now offer 2.3 million square feet of sellable space - four times that of the second-largest building in the state, the Pennsylvania Farm Show Complex and Expo Center in Harrisburg.

With a 20-acre footprint, it will have the space of two Comcast Centers. It features a football-field-size Terrace Ballroom - the largest ballroom on the East Coast - and 528,000 square feet of unbroken exhibit space. The number of meeting rooms jumps from 50 to 79.

"There is a seamless connection between the two buildings," said Jack Ferguson, head of the Philadelphia Convention and Visitors Bureau, which is in charge of booking the center. "They are identical twins. You don't see what was there, and what has come."

The space, while dramatic, does not guarantee success. Optimizing the larger center depends on coping with several factors, among them:

Unionized-labor rules that drive up operating costs, which are passed along to the groups and shows that come here.

An imbalance between the enlarged exhibition space and the number of hotel rooms in Center City. Right now, the ideal number of rooms falls short by about 2,000.

The sputtering national economy, which drives decision-making for conventioneers as it does for families and consumers.

The number of conventioneers booked for the bigger Convention Center in the next five years is lower than the number drawn to the existing center in the last five years. This is the takeaway from a December report by Crossroads Consulting Services that the state commissioned. Economic conditions are a factor.

Meeting planners and trade-show organizers still complain about complicated labor rules that determine who performs the critical work of mounting exhibits at the Convention Center and drive up costs. The unions and the center's management are in negotiations.

The credit crisis and economic downturn stalled hotel development that had been planned to support the expanded space and larger conventions. Those conditions persist.

Nonetheless, the expansion will enable the Convention Center to do three things: handle bigger groups, handle two moderately large groups concurrently, and fill hotel rooms January through March, when the center's exhibit space is consumed by "gate shows," such as the auto and flower shows.

"It's great for the hoteliers," Ahmeenah Young, president and chief executive officer of the Pennsylvania Convention Center Authority, said as she gave a tour of the new spaces last week.

Of the hotels, Young said, "This [first] quarter was terrible for them. They could not get any national groups in here."

The expansion has one grand purpose: more dollars for the city's hotels, restaurants, parking lots, and shops. The design is provocative: Huge expanses of glass showcase the cityscape, meant to draw conventioneers onto the streets, wallets at the ready.

Space, or not enough of it, will no longer prevent Philadelphia from attracting big-time conventions.

"The expanded Convention Center will allow us to actually attract some conventions that want to be in Philadelphia but, quite honestly, have outgrown our previous building," said Mayor Nutter, former chairman of the Pennsylvania Convention Center Authority. "Now those kinds of conventions become much more available to us. We just needed a bigger building."

 

Expand . . . they will come

Ferguson has redeployed his sales force at the Convention and Visitors Bureau to capture the new business. The marketing strategy, he said, is "to position Philadelphia as a national or global destination for meetings, conventions, and trade shows."

That mission is being driven through print, TV, and online advertisements, public-relations outreach, the agency's website, blogs, and newspaper editorials. He said the expansion debut Friday was being marketed as a world movie premiere to meeting planners and show organizers.

One ad, which resembles a film promo, reads: "Pennsylvania Convention Center expansion - the Philadelphia story you can't miss. Rated: The complete package."

"What that is telling the [convention] community is . . . Philadelphia is the real deal," Ferguson said.

To date, the expansion has resulted in about $2.7 billion in bookings through 2020, Ferguson said.

Of that, the Convention and Visitors Bureau has booked $442 million - in actual revenue based on hotel-room nights and attendance - for fiscal 2011, $620 million for fiscal 2012, and $575 million for fiscal 2013.

True Value, a co-op of 5,000 hardware stores nationally and in 28 countries, is booked for September. The group is holding its convention and trade show here for the first time. As with the National Safety Council, the 440,000 square feet of exhibit space in the existing center was not enough.

"We have been looking for a location in the Northeast for some time now because we have a lot of members with stores in the Northeast," said Susan Katz, director of corporate events and travel for True Value, headquartered in Chicago. "We could not have come to Philadelphia if it weren't for the expansion."

Katz said she was expecting about 4,000 store owners and their associates, plus 8,000 exhibitors, for the three-day convention, which will showcase forthcoming spring and summer merchandise for True Value stores. The gathering, from Sept. 23-25, will take up every inch of the bigger center's 528,000 square feet of connected exhibit space.

The group has booked 15,868 room nights. The peak night will consume 3,828 rooms and include every hotel in the city.

"The hotel package was a big part of our coming here," Katz said last week. "Our biggest concerns are the labor rates and rules and what it's going to cost us."

Ferguson said the goal by June 30 was to have 810,000 room nights booked into the future. So far, the convention bureau is just over halfway there.

"The responsibility of the PCVB is to shore up the future . . . so it creates enough compression that hoteliers can forecast what their year is going to look like," Ferguson said. "If we have so-and-so number of room nights and major events in the city in the books, then we know what we have to pick up, or what's available to sell."

The expansion allows the center to host two major conventions - or a convention and a trade show, or a convention and a major consumer show – simultaneously. The original Convention Center, opened in 1993, could not.

That flexibility will be showcased next week when NASPA - Student Affairs Administrators in Higher Education starts moving into the expanded building while the Philadelphia Flower Show takes place in the existing building.

"This is like the perfect dream," Ferguson said.

And two days after the student administrators and the flower show leave, the Association of periOperative Registered Nurses will move in as the first group to use the entire Convention Center.

The nurses' group, which couldn't come here before because of the smaller space, is expected to bring 14,000 attendees, consume 27,200 room nights, and generate nearly $31 million in economic impact over seven days.

 

The vaunted 'rotation'

Light Fair International, the world's largest trade show for architectural and commercial lighting, will be here for the first time in mid-May. It is expected to bring 23,000 attendees, generate $23 million in economic impact, and consume 13,000 hotel rooms.

The Jacob K. Javits Convention Center in New York, the ninth-largest convention hall in the country and Light Fair's typical site for its trade show, is being remodeled, and the group decided to come to Philadelphia this year.

"If we do this well, we could be on a rotation basis with them," Ferguson said. "That's found money."

The "rotation" is a big deal. By having one million square feet for exhibits, ballroom functions, and meetings, Philadelphia will be an option for the largest of conventions. Meeting planners and show organizers want to change venues each year to provide fresher experiences for their attendees.

It also puts the city on the radar nationally, said Roger Dow, chief executive of the U.S. Travel Association in Washington, which represents the $704 billion domestic travel industry. With the expansion, he said, the city can rebrand itself "to compete against the Indianapolises, because it's now moved beyond the Baltimores in space footing."

"Philadelphia was a great place for good-size conventions and regional meetings," Dow said. "Now it's on the national marketplace to compete with Los Angeles, Orlando, San Diego, and Miami. The wild card that Philadelphia has - and most other cities don't - is transportation, especially the ease of using Amtrak to get there."

Dow noted another reality, a dubious one, perhaps: Philadelphia, unlike a San Diego or an Orlando, has few "distractions," such as beaches and golf courses, that might put off meeting planners wary of the perception that they were sending conventioneers to a lavish locale.

The region does have that history thing going for it.

"It's a serious town with more restaurants and places for entertainment, not just with the Convention Center, but everything around it from 10 years ago," Dow said.

Katz said True Value regularly rotated its convention among Chicago, Las Vegas, Orlando, New Orleans, and Salt Lake City. If all goes well in September, she said, Philadelphia could join them.

"Obviously, we have to see what the rate of investment is," said Katz, who was in Philadelphia last week to tour the expansion, meet with catering companies, and plan off-site events. "We are holding space for a four-year rotation here."

 


Contact staff writer Suzette Parmley

at 215-854-2594 or sparmley@phillynews.com.