Recession Crimps Revenues For Convention Center

March 28, 1991|By Maria Mallory

When the nation's two major trade groups for mapmakers booked their combined 1991 meeting at the Baltimore Convention Center two years ago, they didn't know the recession or the Persian Gulf war lay ahead on the nation's

economic horizon.

The American Congress on Surveying and Mapping and the American Society for Photogrammetry and Remote Sensing rented more space than they can use, so they're paying for space that's vacant.

As a result, their convention this week in Baltimore -- one of the first of the 1991 spring season -- has taken in $80,000 less than they had hoped for. That also means less for the Convention Center.

Even with the war's end, the lingering recession is crimping convention revenues, said Peggy Daidakis, executive director of the Convention Center. Many companies that would showcase their products at conventions have cut back on the number they attend.

Unused space hits the bottom lines of both the hosting organization and the Convention Center, since both earn most of their money from the exhibit side of meetings. The host organization leases the exhibit halls from the Convention Center and in turn rents booths in the halls to its industry vendors. Exhibit-hall rental accounts for about 75 percent of the Convention Center's annual revenues, according to Ms. Daidakis.

Since conventions are booked two to three years in advance, a largeportion of this year's business was locked in long before the war and the recession weakened the travel and tourism industry, said Wayne C. Chappell, executive director of the Baltimore Area Convention and Visitors Association, the Convention Center's booking agent.

To protect against a shortfall, the Convention Center rental contract includes safeguards against cancellations and cutbacks in space. The host organization is quoted a minimum rental price that it must pay to occupy the halls.

Within a year of the event, the group is liable for the minimum rental payment, according to Ms. Daidakis.

"If they cancel, then we have to scramble to find somebody to fill the space up," Ms. Daidakis said.

If the organization books enough exhibits to fill the hall, the rental price is then calculated booth-by-booth. Convention Center revenues rise with the number of booths rented.

ACSM/ASPRS did renegotiate their space request in time, but turn-out still fell below expectations.

When the groups came to Baltimore in 1989, they drew large crowds of map and surveying cognoscenti who work in the defense- and space-related companies throughout the Baltimore-Washington corridor. Then, the groups rented all of the Convention Center's exhibit space

-- five halls.

But preregistration for this year's convention lagged way behind historic levels as recession and the war discouraged attendance, said Cheryl Hill, convention manager for the event.

With the war's end, attendance rebounded to the 1989 level of about 5,000 registrants, Ms. Hill said. Exhibitors, however, remain in short supply.

Exhibitors "are still here, but they buy smaller spaces," said Ms. Hill.

Anticipating weak interest among vendors, the ACSM/ASPRS cut their space request to four of the Convention Center's five exhibit halls. But even with that cut in space, only three of the halls were filled by vendors.

The fourth now houses an expanded food-service area -- and yards of empty space.

The ACSM/ASPRS must pay the $33,000 minimum rental rate it negotiated a year ago with the Convention Center.

The decrease in rented exhibit space cut the ACSM/ASPRS's projected income by $80,000, though the convention will still be profitable for the group, said Ms. Hill.

With the season only days old, Mr. Chappell said, this year's convention season should be healthy, despite the recession.

"I'm not saying it's all rosy," said Mr. Chappell, "but [the outlook] is better than in some businesses, like homebuilding, when people just stop buying."

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