St. Louis Provides Model for Convention Center Future

By Bill Dries

On a rainy day when The Rendezvous was closed yet still offered stragglers a menu of ribs only, a group of leaders from the Memphis Cook Convention Center board met in a subterranean corner of the Downtown restaurant.

So begins the process of changing the way the 40-year-old convention center is run.

The convention center board is in negotiations with the Memphis Convention and Visitors Bureau. The resulting contract would put the CVB directly into a business it already plays a large role in – putting as many conventions and meetings as possible in the convention center.

The goal of both sides in the talks is to have a contract ready to sign by the end of the year so the transition can begin with the new year.

The convention center board earlier this month selected CVB over SMG, the current center operator, and Global Spectrum, which manages the Memphis Redbirds and AutoZone Park.

Board chairman Wayne Tabor said the CVB’s enthusiasm and possible savings were factors.

Another factor is the competition for convention and meeting business coming from other cities that have fewer hoops to jump through for those making the decisions on where to meet.

As the decision was made in Memphis, the first of three annual convocations of the Memphis-based Church of God in Christ was ending in St. Louis.

The 502,000-square-foot America’s Center convention complex there allowed the saints – as delegates to the convocation are known – to meet for the first time under one roof at the same time.

And in St. Louis, the entity that runs the convention complex is the same one that promotes the convention center and the city as a whole.

The St. Louis Convention and Visitors Commission (CVM) has operated America’s Center since 1992, taking over for the city of St. Louis in the responsibilities.

Brian Hall, chief marketing officer for CVM, refers to it as a “hand in glove” arrangement.

“Anything that we sell and commit to in the sales process, we can very seamlessly deliver on the operations side because we are one in the same,” he said.

“They’re never left in a bind as the building management might be disagreeing with what the sale and marketing side had committed to a meeting professional.”

The Memphis transition could involve bringing on some SMG officials once there is a specific agreement. Local leaders have been happy with SMG’s performance.

There might still also be some contracts for key elements of daily operation like housekeeping and set up for meetings. The St. Louis CVC has a company under contract to do that.

“Their supervisors have the expertise to put very rigorous procedures in place to guide the housekeeping staff so that the building is flawlessly maintained and the set ups are set up as the client has called for them to be presented,” Hall said. “It’s highly detailed work and not just the setup, but the maintenance of the building.”

The financial goal of convention centers isn’t to turn a profit directly and exclusively from running the center. It’s what Hall and others call a “loss leader” whose real value is in the money it generates in terms of hotel rooms and spending those coming to the meeting generate in a city.

“The real win is not the financial performance of the convention center necessarily, but the real win is the economic impact that is delivered to the community,” Hall said. “It is really difficult to set in motion a pro forma for a convention center that is actually going to break even or earn revenue. … Many meeting professionals demand that the building is offered for low to no cost.”

And what was already intense competition to book conventions and meetings has only intensified with the ongoing recession.

“You might argue that meeting professionals would be looking for affordable destinations like a Memphis or a St. Louis. And perhaps at the beginning of the recession they did,” Hall noted. “But what happened is that very quickly the likes of Las Vegas, Orlando and other first-tier and very appealing destinations – they dropped their rate structure to such an extent that they were competing with destinations like St. Louis, Memphis, Kansas City, Indianapolis – whereas they traditionally don’t compete with us at all.”

Memphis and St. Louis competed for the COGIC convocation and St. Louis won for the next three years. But St. Louis recently lost another convention to Las Vegas.