Myles T. McGrane

Myles

Myles McGranewas formerly the general manager for New York’s Javits Center. He also held key management positions at NBC, Ogden Corp., and Centerplate. He formed a convention center consultancy in 2009. Myles holds degrees… Read more

COVID – 19 and its Effect on Convention Centers: Causes, Explanations and Thoughts on Recovery

January’s announcement restricting travel between the US and China was sobering but not serious enough to change our way of conducting business meetings. Then in late February, a biotechnology company, Biogen, held its annual leadership conference, One hundred and seventy – five executives gathered at the Marriott Long Wharf Hotel in Boston. The conference was spread across the multiple meeting rooms and ballrooms. There were research presentations, new product discussions, and business planning sessions. The conference also included scheduled group meals, coffee breaks, socializing and good fellowship. This setting belonged in our wheelhouse, in short the conference setting and service helped fulfill all the goals of a well-planned business meeting, Soon after the meeting ended, attendees and others associated with the event became ill. The ominous result was what medical researchers call a “super-spreader”. More than 90 people, Biogen managers and conference and guest service workers, became infected with the COVID -19 virus. The virus then spread throughout the Boston area and, as the virus’ hosts traveled home, to other states and on to parts of Europe, Asia and Australia.

Mass indoor gatherings where socializing is expected and encouraged are the ideal setting for virus spread. Indoors, the virus thrives on a crowd density which gives it a variety of available hosts over a short time period. More super spreading events followed in the spring and into summer from funerals to house parties and church choir practices. Then in late July the bell-weather of all live events, The Consumer Electronics Show in Las Vegas cancelled its January show. Other large events followed with cancellations; the National Association of Music Merchants Show, the Specialty Equipment Market Association Show, the Automotive Aftermarket Products Expo, and most recently the New York Toy Fair. Wisely most corporate events, tradeshows and association meetings, our clients, had already shut down or postponed operations. Convention centers were converted into field hospitals, supply and distribution centers, testing sites and even municipal court rooms. COVID – 19 was upon us.

Why Has the Exhibition Industry Been so Severely Affected?

The depth and profundity of COVID – 19 has brought about global economic instability. The arrival of the pandemic, just 12 years after the 2008 Recession, has affected all market sectors and all business functions. The result has been mass unemployment, huge government subsidies, deferred or cancelled investment plans, business failures, unpaid bills and sickness and death. The event industry cannot function in this environment.

More familiar business risks such as, market risk or technology failure, seem insignificant now. The type of risk the world is experiencing today is called systematic risk by the investment community. Investopedia describes systematic risk as:

  • Risk inherent to the market as a whole, reflecting the impact of a global economic breakdown like the Great Depression, political upheaval, or a war spread across many
  • Unpredictable and difficult to avoid.
  • Risk that can be somewhat mitigated if a company has diversified lines of business

There are unambiguous and foundational causes for the rapid cancellations of conventions, conferences and tradeshows:

  • The rapid spread of infection caused by everyday face to face communications. One can envision a tradeshow today as if it were 2019 becoming a “super spreader”.
  • Uncertainty about a new surge or “second wave” of infection much like the 1918 Flu
  • Government shut down of all non-essential businesses and mass indoor gatherings
  • The lack of therapeutic treatments and a preventive vaccine
  • Re-purposing of convention and exhibiting facilities for emergency services; field hospitals, supply and distribution centers and testing sites for the virus
  • Restrictions on interstate and international travel

Can Recovery for our Industry Be Forecast?

The state of the national economy has direct influence over our industry performance. As the economy advances or declines so do conventions, conferences and tradeshows.  A useful measure of convention and tradeshow performance comes from the Center for Exhibition Industry Research. (CEIR).  The CEIR Index is derived from key performance indicators from14 economic sectors. The indicators are; event net square footage, attendance, event organizer revenue and number of exhibiting companies. The index is the geometric mean of indicator values from all economic sectors.

National economic performance is described using Gross Domestic Product (GDP).  GDP is the sum of spending by consumers, government, and businesses plus net exports. It is expressed as a percentage change from one period (quarterly or annually) to the next.

 

The CEIR graphic below depicts the index performance from 2000 to 2019. The graphic was published before the pandemic so disregard forecasts for 2020 and 2021.  Note the steep decline in 2001 to 2002, representing the 9/11 attack, and the same for 2008 to 2009, representing the

Great Recession. Below the CEIR graphic is a line graph of annual Gross Domestic Product (GDP) for the same period…Read more

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Myles shares his experience by demonstrating a practical and data-driven approach to managing convention centers. His use of analytics provides the basis for identifying strengths, weaknesses, and opportunities for growth. Myles makes this a must read for convention management looking to optimize performance and demonstrate results. –Skip Cox. Senior VP – Research and Measurement, The Freeman Company Finally! A refreshing perspective on convention centre management in North America…

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