City prepares to compete for mega-conventions, risks losing small events

Over the years, the city has made a name for itself by hosting a handful of large conventions and a bevy of small and midsize
gatherings. Industry experts said the Indianapolis Convention and Visitors Association has done a solid job cultivating its
own niche while also pilfering business from convention giants such as Chicago, Orlando and Las Vegas.

But as companies and other organizations tighten
their belts, the number of conventions held nationwide is expected to shrink in the months ahead. That
is sending the convention Goliaths back to get what David-like destinations have taken.

"Cities like Indianapolis, Louisville and St. Louis are at risk," said Rob Hunden, president
of Hunden Strategic Partners, a Chicago-based consulting firm specializing in destination attractions
such as sports stadiums. "The bigger cities are finding that simultaneously hosting small and midsize
conventions is just as good as hosting one super large convention. There are a finite number of really
large conventions around, so competition for all conventions is increasing."

U.S. convention space has grown from 40.4 million square feet in 1990 to 68.4 million this year,
according to industry publication Tradeshow Week, and a fierce fight is on the horizon to make
those investments pay.

The stakes are particularly high in Indianapolis, where the RCA Dome is being demolished to make way for a $275 million convention
center expansion that will add nearly 350,000 square feet of exhibit space.

It’s far from alone: Atlanta, Chicago, Phoenix, Philadelphia, Louisville, Orlando, Las Vegas and
New Orleans are just a few of the other cities that have either recently completed or are planning to
expand their convention centers.

"You’re seeing a transition from a seller’s market to a buyer’s market," said Heywood Sanders, a University of Texas
at San Antonio professor and author of several studies on convention centers. "You’re seeing a lot
of these very large convention cities realize they have to go after the smaller or midsize conventions
not only to thrive, but to survive. The sales and marketing efforts are becoming very intense."

As usual, Indianapolis boosters will tout the
convenience of its compact, walkable downtown. But they also will stress the city’s affordability relative
to big markets. And then there are the new facilities.

When the larger Indiana Convention Center opens in 2010, total exhibit space available in the
convention complex–which includes Lucas Oil Stadium–will reach 745,300 square feet, up from 403,700.

Although Indianapolis still won’t have as much
convention space as behemoths like Chicago, Orlando and Las Vegas, which have more than 2 million square
feet each, the extra room will allow the city to host a larger gathering or several smaller ones at the
same time.

New ICVA CEO
Don Welsh said his organization is prepared to defend its turf and go on the offensive for new business. It already
has 61 big groups signed up to use the new convention space through 2015. The city now draws about 35 such groups a year,
so gaps in the schedule remain.

"That’s just the start." Welsh said, citing projections that show convention center events will fill 850,000 hotel
room nights annually within three years, up from 500,000 now. "I think that speaks to what we have
to offer here."

Indianapolis
has some excess capacity after losing two major trade events: Performance Racing Industry’s annual trade show
and the Custom Electronic Design & Installation Association’s Fall Expo. Once two of the city’s largest trade shows, they
left because of the convention center space crunch and have since outgrown even the expanded facility.

Welsh said ICVA will continue to emphasize many
of the things local convention officials have historically stressed, including the city’s connectivity
and thriving downtown. But they also will play up the city’s affordability. He expects that strategy
to play especially well with fraternal and religious groups.

In today’s economy, it won’t be lost on corporate planners, either.

"In Chicago, you have to take a taxi or bus
almost everywhere," Welsh said. "With our downtown, we can lower your transportation costs.
Our hotels–the same brands as in many bigger cities–will cost $50 to $100 per night less. Restaurants in Indianapolis
are 20 [percent] to 30 percent less expensive than in cities like Seattle, San Francisco and Boston."

The ICVA isn’t sitting back and waiting for
convention business to roll into town, said Welsh, who left a similar job in Seattle in June to lead
the Indianapolis group. The organization is looking for a senior-level executive to direct its sales and marketing
strategies, and for a key staffer with major-market sales experience.

ICVA also is restructuring its Washington, D.C., office and making changes at its Chicago office,
bringing in staff with more experience in marketing and working with larger conventions. And a new branding
campaign will be unveiled in the first quarter of 2009.

"We want to demonstrate all the great new products and amenities this city has to offer,"
Welsh said. "We will be rather bold in stating that Indianapolis is as good as many larger cities
we have not compared ourselves to previously."

The branding campaign will be rolled out in specialty convention and tourism publications as well
as through trade shows and other industry gatherings. Taking aim at other cities, Sanders said, is sure
to get their attention.

"The situation with the FFA convention is a perfect example of what’s going on," Sanders said of the annual event
that draws 55,000 participants and generates $30 million in direct spending. "Louisville took it
from Kansas City. Indianapolis took it from Louisville. Now Louisville is looking to outshine Indianapolis
and take it back.

"That’s
the dynamic at work here, and that’s what you’re going to start seeing more of. These cities all have to justify their
expansion, and they’ll do anything to fill that space. It could get pretty ugly."