Shortage of nonstop flights imperils convention biz

Indianapolis’ dwindling number of nonstop flights—especially to the West Coast—threatens to stunt the city’s convention business just as officials are marketing the expansion of the Indianapolis Convention Center and downtown’s hotel market, including the 1,005-room JW Marriott.

Leonard Hoops, CEO of Visit Indy—the city’s tourism marketing arm—acknowledged that the lack of nonstop flights is one of Indianapolis’ “top five” issues in holding onto convention business. Meeting planners say it might be No. 1.

Hoops

“Indianapolis has a lot going for it, but its biggest detraction is its accessibility by air,” said Dirk Ebener, CEO of Nuernberg Messe, an Atlanta-based convention management company. “If convention organizers think the lack of nonstop flights will hurt attendance, they’ll stay away.”

With the expanded convention center and added hotels, Hoops said, “the problem with air lift is getting worse.

“As we’ve grown, it’s opened us up to a larger pool of convention business, but that pool increasingly prefers better air lift than Indianapolis currently has.”

The city must act now to formulate a plan, said Chris Matney, the Indianapolis Airport Authority’s air service director.

“When the economy improves, route expansion could happen relatively quickly,” he said. “If we don’t have a plan in place to attract some of that expansion at our airport, we could miss out.”

Some convention attendees think the city already is missing out.

A number of attendees at the huge CEDIA electronics trade show in Indianapolis last month complained they wasted too much time making connecting flights into and out of Indianapolis. Many of that organization’s members live in California and have taken to Internet chat rooms and message boards to air their grievances.

“I have complained massively about this,” said Jerry Del Colliano, publisher of Los Angeles-based Hometheaterreview.com, who attended this year’s show. “Air access to Indianapolis is absolutely awful. It’s really hurting attendance at the show there.”

While a slow housing market has hurt CEDIA in recent years, Del Colliano said the scarcity of nonstop flights between Indianapolis and the West Coast and overseas was a prime reason the show’s attendance declined sharply since it started its two-year run here in 2011.

The show drew 25,000 attendees when it was in Denver in 2008 and 20,700 in Atlanta in 2010. This year’s show drew 16,913.

“We lose a lot of our West Coast attendees when we come to Indianapolis,” said Debbie Antrim, CEDIA’s senior director of trade shows and events. “I know Visit Indy is very interested in fixing this problem.”

West Coast members weren’t the only ones absent. Some major exhibitors including Sharp, Samsung, Panasonic and LG also took a pass.

“The No. 1 market for home theaters is, without a doubt, Southern California,” Del Colliano said. “With no direct flights, the dealers are staying away in droves. When they don’t come, the exhibitors stay away, too.”

Del Colliano said most CEDIA members are rejoicing that the organization—which happens to be headquartered in Indianapolis—is moving its trade show to Denver next year.

“Time is money, and a lot of dealers can’t afford to waste a day traveling to and from a trade show,” Del Colliano said. “It’s too bad, because Indianapolis has a beautiful airport and a nice convention center.”

CEDIA will be in Denver through 2014 and in Dallas in 2015 and 2016. CEDIA officials said they are considering bringing their show back to Indianapolis in 2017.

Missing out

Indianapolis bills itself as the crossroads of America. But in terms of air service, that’s not the case.

“I guess Indianapolis is 200 miles too far east,” said Matney, the airport authority’s air service director.

Many U.S. cities have seen a decline in nonstop flights as airlines have merged, jet fuel costs have skyrocketed, and routes have been either consolidated or eliminated.

But Indianapolis is at the bottom of the heap compared with many cities it competes against for conventions.

The Indianapolis International Airport has an average of 140 daily nonstop flights to 34 destinations. That’s down from 176 daily nonstop flights to 45 destinations in 2008—before the economy declined—and 205 daily nonstop flights to 45 locations when Indianapolis-based American Trans Air was going strong. After a few years of decline, ATA went through its second bankruptcy and ceased operations in 2008.

Atlanta, by comparison, has 1,234 daily nonstop flights to 212 destinations. Denver has 802, to 170 locations. Even St. Louis far outpaces Indianapolis, with 236 daily nonstop flights to 61 locations.

While Matney said Indianapolis International has “solid” connections to the East, he admitted the airport’s nonstop service to Western destinations is weak.

For instance, Indianapolis has only four nonstop flights to Los Angeles per week—all offered by Delta Airlines. During the summer, one or two nonstop flights per week are available to San Francisco and Seattle.

In Denver, American, Frontier, United and Southwest airlines offer 168 nonstop flights to Los Angeles per week and dozens each week to San Francisco and Seattle year-round.

Hoops said that, in the 18 months since he became CEO of Visit Indy, convention business totaling 100,000 room nights and millions of dollars in economic impact—amounting to about 10 percent of the city’s total tourism business—has been lost because of the city’s lackluster nonstop offerings.

Overcoming inconvenience

Visit Indy is on track to book 750,000 hotel room nights this year, with a goal of reaching 850,000 by 2016. It’s an ambitious goal without the aid of a Super Bowl, which Indianapolis had in 2012, and Hoops wonders if it is possible without more nonstop flights.

In some cases, he said, the $1.1 billion airport terminal, the $275 million convention center expansion, and the new JW Marriott and other hotels in Indianapolis’ compact downtown are enough to offset the inconvenience.

Hoops pointed out that, last October, Visit Indy lured the Seventh-day Adventist Church World Business Conference for 2020 with the group’s leaders deciding the positives of the city as a convention destination outweighed the negatives—primarily its air access.

But in other cases, those positives aren’t enough to persuade convention operators and meeting planners to deal with the flight hassles.

“We simply may not be able to get to our absolute top convention business potential without improving our air lift,” Hoops said. “This problem is especially critical with a lot of tech companies which are located out West. That’s a potentially very big and lucrative piece of business.”

Wooing airlines

In better economic times, airlines would consider adding nonstop flights at airports that waived terminal fees. But no more.

“Our airport fees are only 5 percent of an airline’s total costs, and it’s just not enough of an incentive anymore,” Matney said.

Some cities eager to lure nonstop flights to key destinations are aggressively lobbying airlines. Many are considering financial giveaways.

Memphis, Tenn., this year put together a task force charged with formulating a plan—and possibly raising money for incentives—to lure nonstop flights.

Raleigh-Durham, N.C., and Pittsburgh have had task forces for several years aimed at the same goal, and each has recently lured new routes.

San Antonio officials last year put together a six-figure advertising campaign to help Alaska Airlines sell enough tickets for a nonstop route to and from Seattle.

Charleston, S.C., recently secured a commitment from JetBlue to offer nonstop flights to Boston and New York after dangling a $1 million incentive package.

Maryland officials paid $3 million to entice British Airways to fly nonstop from Baltimore.

Travel experts said Indianapolis is arriving late to the party.

Indianapolis Mayor Greg Ballard began studying the nonstop flight issue last year and is considering starting a task force. Hoops thinks the recent appointment of former Deputy Mayor Michael Huber as the airport authority’s senior director for commercial enterprise will jump-start the process.

Businesses with either headquarters or dealings here have complained for years about the dearth of nonstop flights. Changing that, Matney said, likely would be a combined effort to boost the convention business and to help local businesses that need quicker flights to tech hotbeds and other business centers.

But local officials have been hesitant to jump into the high-stakes game with financial offers.

“Offering incentives and money is one way to attract nonstop flights, but there are other ways,” Matney said.

One less costly alternative, he added, is to demonstrate—or even guarantee—a consistent customer base for certain routes.

“We have to face this challenge one market at a time,” Matney said.

Without offering incentives, the Greater Durham Chamber of Commerce worked with local tourism officials and North Carolina Gov. Bev Perdue to persuade United Airlines to start a nonstop route to San Francisco in early 2013.

It might be tougher for Indianapolis to make the case that new nonstop routes would be filled regularly, given the relatively small number of corporate headquarters here and the fact that conventions produce a fluctuating passenger load.

One alternative to support convention business could be brokering deals for short-term nonstop service or charter flights for big conventions, Hoops said.

“The convention argument to an airline is not a convincing one,” he said. “So we have to find ways to be creative. We can’t afford to sit and do nothing.”•