The Convention Industry Is Turning Second-Tier Cities Into Top-Tier Destinations

Austin, Hamburg, Auckland, Medellin, Bangalore and many more cities with good international access are emerging as “new world cities,” and the convention industry is playing a growing role in their development.

That’s according to professor Greg Clark, chairman of the Business of Cities think tank in London. He outlined the trend at this year’s International Association of Convention Centres (AIPC) conference in Boston during his presentation: “The Role of Convention Centers as Instruments of City Development & Transition.”

Clark asserts that the global financial crisis and the spread of digital connectivity worldwide have spurred a new era of mobility. Following the recession, multinational companies are much more agile and willing to invest in a wider spectrum of new destinations, based on an evolving set of criteria revolving around high levels of accessibility, talent, tolerance and technology.

“Since 2008 and the global financial crisis, there’s been a massive acceleration in the changing global maps of trade, investment, tourism, and cross-border mergers and acquisitions,” said Clark. “There’s been more change in the last five years than there was in the 50 years before that. What that has essentially done is to crystallize a new map of the world, when much of the dynamism is in locations that were previously perceived to be developing or emerging, or not yet complete as markets.”

In an effort to attract foreign investment and raise their stature on the new world map, these new world cities are now acting more like multinational corporations themselves, in effect, competing for customers looking to expand in the new global marketplace.

Because of that, there’s a more strategic focus among city leaders today on building a stronger, more specific city identity by improving their destination branding and reputation to better compete within their competitive set globally. This is a major shift for many city leaders, explained Clark, who are now seeking ways to raise their profile on a playing field that didn’t exist ten years ago.

“The competition that is produced by hyper-mobility is the key thing that many cities have to now focus on,” Clark emphasized.

For municipal governments striving to elevate their cities on the world stage, one of their primary strategies is a heightened focus on the ability of convention center districts and conventions themselves to shift global perception around the destination brand. These new world cities tend to be either second-tier cities in established global markets, which are moving out of the shadow of their iconic business world capitals, or first-tier cities in emerging or smaller global markets.

Examples of the first scenario include Austin, Lyon, Bangalore, and Hamburg. Examples of the second are Abu Dhabi, Copenhagen, and Auckland. Ten years ago, international companies overlooked cities such as these for investment and expansion, so they often bypassed them as host locations for international conventions.

Why those cities are succeeding as new world cities while others are not is based on many factors. The most interesting of those relating to the convention industry is what Clark calls the “reurbanization of business.”

“The process of sprawl was the dominant model of city development in the 20th century, [which] placed population and jobs consistently outside of the city center,” he said. “The technological advances of the 21st century, plus some big improvements that have been made in cities, has allowed companies and population to come back into cities. So at the same time as we see global urbanization, we also see a re-urbanization, particularly in the OECD countries.”

That reurbanization of downtown cores is driving the shift from previously standalone convention centers to vibrant convention center districts, where the meeting facilities are now integrated into new residential and commercial urban ecosystems more than just a decade ago.

The success of reurbanized cities like Austin, Nashville, Calgary and others illustrate how regional markets are expanding into national and international markets, driven in part by their growth in attracting more large scale conventions year-over-year.

In Nashville, for example, the Nashville Business Journal reports that the Music City Center convention facility hosted 305 events during the 2014/15 fiscal year, with 676,060 attendees generating 389,696 room nights and $392 million in economic impact. During the previous fiscal, the MCC hosted 491,352 attendees resulting in 272,917 room nights and an injection of $243 million into the city. That’s a 61% jump in tax revenues.

Conventions as Destination Brand Identifiers

Speaking to the audience of convention center executives, Clark said, “The key thing that I’m concerned about is that you believe city governments don’t really understand how to make the most of convention centers, even though all of you agree that convention centers are really critical.”

That challenge pivots on strong collaboration between city governments, convention centers and convention bureaus to define their destinations’ business brand.

San Francisco is an example of a fully realized world city that has developed its destination identity to successfully engage the leisure, business travel and convention markets. The city collaborates as well with its convention center and tech sector as it does with its wine tourism and food festival partners.

Meanwhile, cities like Miami and Amsterdam are only now emerging as new world cities, because they’ve had to overcome long-established reputations as primarily leisure destinations, which hampered the development of their business brand. Both cities are investing billions in urban infrastructure while their convention bureaus are investing heavily to promote their convention infrastructure.

Clark says cities that have effectively challenged those one-sided misperceptions are focusing on strategic urban placemaking, experiential brand building, and destination marketing that shifts their reputation from the “postcard to the business card.”

At the AIPC conference, he explained:

“These cities that have become real convention favorites—cities like San Francisco, Barcelona, Miami, Amsterdam, Cape Town, Stockholm and many others—these are all cities where part of the appeal of going to visit them is that they have this wonderful urban lifestyle. They have an outdoors culture, they have a sense of being accessible, it’s not overwhelming and yet it’s urban. There’s a buzz, there’s a feel, they are really interesting places.

“But the problem for these cities often is that it’s very difficult for them to build a business brand. They get, as it were, kind of stuck with a very strong visitor brand and then it’s hard to tell a business story…. This is where I think conventions and congresses make a huge difference.

“If you think about Miami, this was about saying we’re not just a holiday destination and a retirement location. We are actually the business capital of the Pan American economy. It’s about trade, it’s about capitalization. They’re steadily building that story, but I think that story is not complete.”

In other more established new world cities such as Sydney, Barcelona and Dublin, they have successfully linked their growing technology and academic sectors with their convention industry infrastructure to drive this shift from the postcard to the business card.

“You can see Dublin using this whole idea of being a knowledge hub, showing its excellence in medicine and technology and education, a small city with global reach,” said Clark. “For each of these types of cities, conventions and congresses can play very specific sorts of roles in helping that city to reach the next stage in its overall strategy.”

The growing emphasis on conventions as a destination brand identifier and magnet for corporate investment in a hyper-mobile world is placing a greater onus on convention centers and cities to collaborate more effectively. Clark presented the following lists to suggest how each side can be better partners in that equation.

Top 10 Strategies For Convention Centers to Support Cities

1. Understand your city type and strategy goals. Who are the wider competitors and comparators? What are the priorities? What is your city’s strategy?
2. Know the strengths and weaknesses of you city governance system and its points of influence.
3. Form a strong relationship with your convention bureau and work on joint relationships with city hall.
4. Volunteer support for city strategy in the areas of brand, tourism, connectivity, destination development, knowledge economy, and district business.
5. Share the credit with city leaders
6. Provide accessible and robust evidence on economic impact beyond the old formula of jobs and bed nights.
7. Join the city economic development organization and work with leaders at the universities, airports and city center improvement agencies.
8. Help city leader understand how conventions link and leverage business and tourism brands, because most city leaders don’t have a firm grasp of that.
9. Support other large events not taking place at the convention center, because it’s a great way to build alliances.
10. Bring business leadership from visiting groups into dialogue with the city.

Top 10 Strategies For Cities To Support Conventions

1. Recognize that growth sectors and high value sectors are the most mobile and most likely to have conventions.
2. Understand that conventions are huge sources of high value relationships in a hyper-mobile world, and conventions are about business relationships and not just a tax base.
3. See the convention center primarily as a shop window, front parlor, stage and networking platform for the city with high value audiences.
4. Task the convention center with high value strategic priorities.
5. Understand the conventions cluster as a whole and its many dimensions and impacts.
6. Solve travel and transportation problems actively.
7. Make a point of knowing which groups are in town and why, and make the welcome personal for them.
8. Follow up post-convention with high value opportunities.
9. Keep the convention center team at the top table with tourism, government and economic development.
10. Celebrate convention center successes.

Regarding number seven, Clark made the point, “The number of times I’ve been to a city to moderate a convention, and I’ve popped in to tell the city government that 1,000 investors are in town, and they didn’t know, is startling.”

Here is Clark’s presentation at AIPC 2015.

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