Meeting and Convention Round Table April 2011

As recession loosens its stranglehold on the economy, meetings and conventions drive tourism recovery.

After taking a huge hit when the Great Recession virtually shut down business and leisure travel, North Carolina’s meeting and convention business is starting to recover. Industry leaders from across the state met recently to discuss ongoing challenges as well as opportunities from major upcoming events, including the 2012 Democratic National Convention in Charlotte and the 2014 U.S. Open and U.S. Women’s Open in Pinehurst. Participating were Angela Beattie, regional director of sales and marketing for Hulsing Hotels, which operates three hotels in Asheville, including the Crowne Plaza Tennis and Golf Resort; Dennis Edwards, president and CEO of the Greater Raleigh Convention and Visitors Bureau; John Meroski, president and CEO of the Fayetteville Area Convention and Visitors Bureau; Caleb Miles, president of the Pinehurst, Southern Pines and Aberdeen Area Convention and Visitors Bureau; Tim Newman, CEO of the Charlotte Regional Visitors Authority; and Jim Thompson, executive director of the Association Executives of North Carolina, which hosted the round table at its offices in Raleigh. Business North Carolina Publisher Ben Kinney moderated the discussion, sponsored by the Charlotte Regional Visitors Authority and the Fayetteville Area Convention and Visitors Bureau. Following is a transcript, edited for brevity and clarity.

How important is the meeting-and-convention business to North Carolina and to your communities?

Miles: Travel and tourism is the No. 2 industry in Moore County behind health care. We’ve lost a lot of our industrial base, so without those two we would be a very different county. There are a lot of assets in place to accommodate people that come for meetings and conventions, and those are assets that benefit both the visitor and the local resident. So that’s a big part of what we are. Our identity is actually tied to our tourism product.

Edwards: Until we opened the Convention Center in downtown Raleigh, conventions and meetings weren’t on anyone’s radar. But since the building opened, the city and the entire county are starting to recognize what meetings and conventions do. We’ve seen a lot more restaurants and bars open up in the downtown area, better transportation programs, better customer service with taxis. Everybody that touched and felt it has now recognized the importance of it and improved their service level across the board. Raleigh-Durham International Airport spent over $800,000 to ensure that Terminal 2 was done before the NHL All-Star Game. When hotel occupancy started to decline with the economy, meetings and conventions still were already contracted and booked to come to Raleigh. So that was one market segment that really held our hotels together. The attendance might have declined, but the meetings in general still occurred.

Beattie: Our hotels, in general, were successful through most of 2008 because of meetings and conventions, and many of our hotels in Asheville are meetings- and conventions-based. Our strongest base is that segment. So many of our hotels were successful right up to the end of 2008. In 2009, they took a plunge.

Newman: At the Charlotte Regional Visitors Authority, we’re responsible for the Convention Center, NASCAR Hall of Fame, Time Warner Cable Arena, Bojangles Coliseum, Ovens Auditorium and the airport. The idea is anything that touches a visitor is something we’re going to be engaged with. Meetings and conventions will account for about a third of the annual room nights that we’ll generate in the city. The other third will be business travel, and the final third will be leisure travel and amateur sports.

What local assets do you leverage to promote your areas for meetings and conventions?

Newman: Charlotte has always been the largest single destination in the state. You’re looking at a $16-$17 billion industry, including about $4 billion right now in the Charlotte region. But we didn’t have that hook to allow us to really compete with the national big boys in terms of conventions. The reason we did the NASCAR Hall of Fame is it gives us a grand ballroom and has allowed us to pull off a national association meeting and, most recently, the Democratic National Convention. And the airport is such a huge engine for all of us. It’s a vital asset for the entire state as far as a destination link for this business, no matter where folks are coming from.

Meroski: Meetings and conventions are about 30% of our travel-and-tourism industry in Fayetteville. That will continue to grow significantly with BRAC — Base Realignment and Closure. The Army Forces Command and Army Reserve Command are moving their headquarters out of Atlanta and will be located on Fort Bragg. We think we’ll see a connection between us, Sanford and Raleigh, with the potential to have the equivalent of Research Triangle Park for military contractors 25 to 50 years from now. But the direct impact over the next few years will be about 150 meetings coming out of Forces Command and Reserve Command. We will have the second-largest amount of generals next to Washington, D.C., so we’re quickly being named Pentagon South. With that comes a lot of different things. Our message all along has been that everything begins with a visit. So not only is travel and tourism our second-largest industry behind the government, it’s just important in general.

"If they have a bad experience, they’re not going to relocate here."

Do you think business leaders underestimate the economic impact of meeting-and-convention business?

Thompson: When you ask folks at the Division of Travel and Tourism, can you tell me exactly what the impact of meetings and conventions is to North Carolina, they don’t know. They don’t track that.

Edwards: I think part of the challenge we face is there are many communities throughout the state where meetings and conventions aren’t necessarily that important because they don’t have the facilities. There are maybe a dozen cities that really put a lot of emphasis and resources into that market. When you’ve got 99 counties in the state and maybe 40 of those counties might really put an emphasis on that, I think that’s part of the challenge.

Miles: Quite frankly, there’s not a set definition in our state of what a meeting/convention is. I’m sure in Charlotte that number is fairly high. I know they have a lot of small meetings, but for us a meeting is 10 people or more. A group of 12 golfers is gold. Why? Because they spend so much money. It’s not just at the hotel; they spend more money outside the hotel.

How much do you coordinate with businesses in your area?

Meroski: I’m not sure our industry is viewed yet as a business. I think traditional economic developers look at tourism as an afterthought. The Lions convention or the Rotary convention is in town with business owners attending. Shouldn’t the economic developers be at that, selling the community to those people?

Newman: We’ve worked hard to sell Charlotte. Asheville has got great natural things to be able to sell, great facilities and history, and they do a good job with that. But there were a lot of people even five years ago in Charlotte that were like, OK, is there really anything to do here? [Duke Energy CEO] Jim Rogers said, “I wouldn’t have gone out trying to get the Democratic Convention 10 years ago because we didn’t have the infrastructure.” Some of our best meeting salesmen right now are some of our key corporate partners, like Shaw Resources, a huge energy company. They’ve helped us book six nuclear groups in the last 18 months. So it’s just getting those people educated and letting them do the work with us.

Beattie: I had an interesting thing happen recently where one of the restaurants just down the street from our hotel came in to meet with me to say: “Can you please give me a list of all the conventions that you have at this hotel, because every time you have a convention we get slammed and we’re not ready.” And I’m thinking to myself, OK, I guess I should share this information. I want them to eat at my place, but OK, maybe I should share this information to help our restaurants around us. So this gentleman was getting that meetings and conventions at our hotel in particular made them successful. So, yeah, we’ve got to get this word out.

How did you deal with challenges created by perceptions that spending money on meetings and travel is frivolous in a weak economy?

Miles: Obviously the big flag went up with what happened with AIG. The media really took it, and it caught fire. I don’t think there’s any question there was some incentive travel that was frivolous and excessive, but the next thing you know, a lot of travel is painted as excessive and not needed. I’m going to go ahead and make a prediction right now: It may take longer than we think, but I think companies are going to realize there’s a real competitive advantage to using incentive travel.

Newman: We were saying, “Who is going to get in trouble for coming to Charlotte, North Carolina, for a meeting?”

Edwards: We had a couple of groups that were booked in resort destinations, including in Florida, and came back to North Carolina and to Raleigh specifically because it was a better perception. I think long-term, at least in the next three to four years, it’s more of a budget issue, particularly from state associations. The education market is getting pounded. They’re either merging their meetings or they’re canceling them altogether.

Thompson: From the association perspective, one of the things I’ve always said is that associations will never stop meeting. We provide so much education and standard-setting, and we do it very affordably, very efficiently. When we ask members why they didn’t attend our annual meeting, one of the big things that came out of it was scheduling conflicts and time. So what we’re seeing a lot of is compacting meetings or the regionalized meeting. But one benefit for us is that because of having to justify the dollars spent, a lot of people are saying, well, can’t you get that in your own backyard? Isn’t there a local or state organization maybe you can piggyback on where you’re just having to drive to Fayetteville and stay one night in a hotel as opposed to flying out to San Francisco for your national association meeting?

Are you still hearing the argument that technology means you don’t need to make a trip and have face-to-face interaction?

Newman: The interesting thing is businesses were able to accomplish only so much online. You’ve finally got to get out and see your customers again. The comeback we’ve seen in the last year has been much stronger than anybody anticipated, and business travel is a huge part of that. All the associations that we have booked are seeing 15% to 25% increases in actual attendance versus what they projected for this year. We just finished a trade show last week that was an absolute blowout. They have been in some bigger destinations, and they were up 20% versus what they projected. That’s a real hopeful sign for the trickle-down effect.

Beattie: We’ve seen the same thing. We did see a huge decrease in the government-related associations that meet at the Crowne Plaza. Some of them did cancel their meetings. But for the most part now, I guess maybe they have gotten the education they need — or maybe they didn’t travel last year and they’re starting to travel again — and our attendance has really picked up. And most of our groups are going well over their room nights, which is nice.

"Businesses were able to accomplish only so much online."

What kinds of unique groups you are trying to attract to your areas?

Miles: We really were impacted by what happened with the recession because financial-services businesses from Charlotte cut things to the bone. We really had to scramble and work real closely with our partners to look for other opportunities. The first thing we do is secure what we have. We did that by trying to make sure our base business, our golf business, was there. People were traveling less and for shorter terms, so we had to take good care of them. And then it was finding some new markets. John mentioned what’s happening in Fayetteville with BRAC, and there’s some opportunities there trying to help out where we can.

Edwards: When we first built the building and I looked at our resources, it was obvious the Research Triangle Park, technology, higher education and medical were our key tickets, as well as the state- association market. So that was kind of the low fruit for us. What we’ve started doing now is working very closely with Wake County Economic Development. They have identified clusters that they’re focusing on for relocation to the region. Those are the same types of meetings we’re trying to focus on as well. We’re using our local resources, what we call connectors, to help entice them to bring their meetings here. It’s kind of one big cycle. If we can get them to have their meeting or convention here, it gives Wake County Economic Development, as well as many local businesses, the opportunity to showcase not only the region but their businesses as well.

Miles: The interesting thing is that meeting and convention facilities really drive what you have. Take what Raleigh has and what Charlotte has. The rest of us are pretty much two steps down, and a lot of us don’t have publicly owned facilities. We do get an awful lot of government and amateur-athletics business, primarily because of our location and, interestingly enough, our sandy soil, of all things. The fields drain real well. We have a lot of equestrian sports, and we’re trying to leverage that more. Sandy soil is good for horses, especially young ones.

What about in Asheville?

Beattie: We have a good balance of transient and meeting-and-convention business throughout the year. But one thing that recently happened is we were able to get the Southern Conference basketball tournament back from Charlotte. Sorry.

Newman: That’s OK. It’s still in North Carolina.

Beattie: Also, some privately owned venues have opened. At the Crowne Plaza, we opened a 16,600-square-foot expo center about a year and a half ago. We saw the need for an affordable place to have a convention for Southeast regional associations. We saw the need for something not as large as the Civic Center, but something large enough for 800 to 1,200 people. Destination weddings right now are huge for us, and it really helps us have a good base on the weekends for all of our hotels. The Crest Center is huge with destination weddings along with Claxton Farms and Biltmore, of course, with all of the different venue spots that they have added.

Miles: One of the things we can thank reality TV for is destination weddings. Quite frankly, it’s one of those things you don’t think is really going to work, but it really does. A lot of people are coming to have weddings. They don’t have to be from our area, they just want someplace different and unique.

Beattie: We also have SMERF business.

What’s that?

Beattie: The SMERF business is social, military, educational, religious and fraternal. Those types of groups are huge in Asheville. And each of our hotels has a particular salesperson who goes after those types of groups. You really have to go out and find these groups, which is not easy. We have corporate business, too. In the area around Asheville, we’ve opened up canopy tours, zip lines that are really drawing corporate groups to our area.

Meroski: Fayetteville is a SMERF town where our primary focus is on state, military, religious, fraternal and sports. We have to take a little bit of a different approach where we actually become a financial partner with some of these organizations. For example, wrestling. We’re proud owners of about 20 wrestling mats, and in return, we get five wrestling events. I think we own half of a basketball court, and we also own some soccer goals, so we can keep some soccer events in our community. We’re going through some hotel growth, so we’re looking to be a better player within the state-association business in the future.And we do a lot with event creation. That was part of our brand and our brand development. I think down the road we’re going to be able to really effectively compete with other patriot destinations. In May we have an event called 31-Day Salute — all military-related events geared around Memorial Day. On the 4th of July, Fort Bragg has Operation Celebrate Freedom with national recording artists. About 60,000 people come for that event. It allows us an opportunity to really use those to primarily do reunions within a reunion to encourage veterans to come in and be with their buddies. In July, we’re opening up North Carolina’s State Veterans Park in Fayetteville. Hopefully, it will become an annual event called Heroes Homecoming.

How important is the association business?

Newman: I think Charlotte is the one place in the state that truly competes in the national-association market. We’ve got a great facility, and we will, from time to time, compete for smaller national groups, but it’s just a different ballgame. We do a huge business with major national associations, the major national fraternal and religious market. Religious business is great because it generally happens in the summertime. You combine that with the amateur sports that we talked about, the weekend business and things of that nature.

Charlotte really is the feeder into the rest of what everybody does a lot of the time. Something we’re really starting to see a major opportunity with by virtue of the airport is international meetings. It’s so much easier to come into the Charlotte airport than it is to go into — pick your city — you know, Philadelphia. We’ve got both a European and a South American footprint.

"We’re hoping to really promote Asheville to the DNC."

And you have a growing energy sector with Siemens and Duke Energy in Charlotte and with ABB in the Triangle.

Edwards: I think that speaks to the diversity of the state. And that is why I think the state has done relatively well: Because we are not dependent on one particular industry.

Thompson: Well, we got burned by agriculture. We’ve been there.

Newman: And textiles.

Edwards: But we don’t even hear that word any more. It’s now everything from military to high-tech. We are diverse enough where the next time the economy takes a turn, I think we’ll hold our own.

What does it mean for your communities and for the state to get major national and international events such as the Democratic National Convention, the U.S. Open and the NHL All-Star Game?

Newman: Well, I guess I can start with the DNC. Just in the first two weeks, over 1,000 unique media outlets around the world had North Carolina as a dateline, and it’s just going to be ramping up over the next 18-19 months. That will be an opportunity for us to be on a stage we’ve never been on from a worldwide point of view. It’s the largest nonsport media-credentialed event in the world. With the Labor Day weekend leading into it, there’s going to be a lot of opportunities for packaging. You know, come spend a week to play golf or come see the universities.

What other opportunities will the convention provide for the state?

Newman: A lot of people involved in the Atlanta effort say that, because of the convention, they got both the UPS corporate headquarters and the Olympics. We’ll see, but I could see us getting a corporate headquarters or two just because people who would have never had a reason to come to North Carolina now have a reason to be here.

Meroski: I’m sure we’re going to see a lot of the potential candidates and people making some photos ops down in our area.

Beattie: We have a presidential itinerary on the DNC’s website and in our visitors guide this year because the Obamas have been there twice and they’ve done certain things each time they’ve come. So we have a presidential itinerary — where they hiked and where they ate and that kind of thing. We’re hoping to really promote Asheville to the DNC.

Edwards: Whether it’s a meeting or the convention or the All-Star Game, you’ve got major corporate sponsors in town. These are the people that will make decisions about where they’re going to be relocating their headquarters. So if we can give them a first-class experience in terms of product and customer service, and the business community steps up, the state will see benefits out of this in some kind of relocation in some city in North Carolina.

Miles: We don’t have one huge city; we have multiple big cities and lots of medium-size cities. It’s really important to do everything we can collectively to take these events and leverage them.

What about the U.S. Open?

Miles: I would like to make a couple of points about the U.S. Open. It’s the Women’s Open as well, and the two tournaments are back-to-back. Logistically it’s a little more challenging because it’s two full weeks, and it’s months and years in preparation. We’re working right now starting the housing part of it. We couldn’t hold that event in our area by itself. It takes about 12 counties to get all the lodging, which is the big issue. I mean, you’ve got to have a place to stay.

Edwards: We can help with that.

Miles: Let me tell you, the economic-development folks are chomping at the bit. Basically, the U.S. Open is a golf tournament surrounded by hundreds and hundreds of companies with thousands of people that are primarily “corporate America.” And they’re all holding meetings with their best customers, their best employees, their shareholders, etc. It’s an almost endless opportunity for North Carolina.

Edwards: I think it’s important what the business community sees when they come here, whether it be the experience they have at the airport or the experience they have with that cab company or the transportation company, the hotel, the restaurant. If they have a bad experience, they’re not going to relocate their company here in North Carolina.

You’re the front line, in essence?

Meroski: It starts with us and ends with us.

Beattie: The decision-makers will be here, so they will instruct their meeting planner to book a convention in Charlotte or book their convention in Pinehurst or Raleigh. If they have a great experience and get good service and love North Carolina, they’re going to come back with their meetings and conventions.

This article originally appeared in the April 2011 issue of Business North Carolina magazine.