The business of staging conventions and expositions, which includes trade shows as well as public consumer shows, has spawned an industry that now spans the globe. The International Association for Exposition Management reports that nearly 18 percent of their membership now resides in 40 nations around the world where they manage exhibitions, often in partnership with U.S. show managers. Records indicate that the number of shows and attendees, along with the space used by shows, have doubled in the industry since 1979. And growth continues. A piece of that growth is evident in Kentucky’s "golden triangle", which connects Louisville, Northern Kentucky (Covington and Newport) and Lexington. While Louisville and Northern Kentucky have made substantial investments to grow their convention and exposition business, Lexington is facing some difficult decisions regarding how much of a player it wants to be -- or can afford to be -- in that field.

The attraction of events becomes a boon to the local economy, bringing in outside dollars. Hotels, restaurants, gift shops and a variety of service companies are enriched. For cities that have sales tax in place, the public benefit is clear. Hence, the heated up competition around the country to lure conventions and expositions.

Louisville

"Our goal is to be a premiere leader in the convention business," says Susan McNeese Linch, vice president of communications with the Louisville Conventions & Visitors Bureau . "We compete very aggressively in the meeting and trade show business, and host some of the most prestigious shows in the nation. We fare very well as shown by our ranking." Louisville is ranked number five in the top ten Trade Show 200 cities. Six of the largest 200 trade shows in the country happen in Louisville, four of them in the top twenty largest shows. In 1998 the Louisville Bureau helped in hosting 338 conventions and shows, bringing in 695,000 delegates and generating $195 million in revenues.

"We continually need to upgrade our facilities to have good showcasing for new products," says Linch. Louisville has numerous annual shows, such as the International Lawn Garden and Power Equipment Exposition and the Recreational Vehicle Industry Trade Association Show. "We do a tremendous amount of repeat business," says Linch. "It’s a compliment as well as a challenge. We have to keep things fresh -- new things in front of them -- while maintaining good service."

Keeping things fresh includes renovation and expansion. The Commonwealth Convention Center in downtown Louisville is doubling in size, while existing facilities are being completely renovated. The need was for a bigger trade show hall. A super tress support at the top of the structure will provide column free contiguous space of 150,000 square feet on the second floor. An additional 50,000 square feet is being added at ground level along with a 30,000 square foot ballroom. The total facility will offer 300,000 square feet. Completion of the expansion is planned for December, with the new space available starting in 2000.

Louisville also boasts the Kentucky Exposition Center and Fair Grounds, the sixth largest show facility in the country. The Exposition Center offers one million square feet of ground level, indoor exhibition space. The Center is looking to secure funds for a $30 million, six year improvement project, mainly devoted to renovation. Also part of the facility is the Cardinal Stadium, an open air stadium sometimes used for trade shows that offer stage concerts. Freedom Hall, which can seat up to 19,000, annually hosts The Main Event, the largest horse show in North America. Broadbent Arena offers a 40,000 square foot arena with surround seating for up to 11,600. The grounds offer 300 acres of outdoor display space. Parking spaces number 19,000.

The Gardens of Louisville provides an auditorium for special events seating up to 6,400. A smaller theater space with 600 seats is available, as are a number of meeting rooms.

Northern Kentucky

With the adjacent cities of Covington and Newport, Northern Kentucky - sometimes referred to as "the southern side of Cincinnati" -- is flourishing in economic developments. The recent grand opening of the Northern Kentucky Convention Center in Covington is part of a $200 million Riverfront Development.

"We are filling a niche market," says Tom Caradonio, president of the Northern Kentucky Convention and Visitors Bureau. Studies had identified that Northern Kentucky could be a good site for small to medium sized conventions. "We are targeting 1,200 people to 2,000 people events," says Caradonio. This fit well, explains Caradonio, between the Sabin Center in Cincinnati, which is designed for larger shows drawing up to 10,000 attendees, and the Sharonville Convention Center in a suburb north of Cincinnati, which generally draws shows that are under 1,200.

The new Center has 110,000 square feet of floor space for tradeshows, exhibits, meetings and social events. This includes 46,000 square feet of exhibit space, a 22,000 square foot ballroom, 10 state-of-the art meeting rooms and a 26,000 square foot lobby/registration area. The facility also has a fully-equipped kitchen and on-site, full-service catering.

The Convention Center offers an unconditional satisfaction guarantee to all clients. "The reason we have this guarantee," says Caradonio, "is that our research showed that much of our customer base would be making a transition from using hotels for their shows and meetings. To overcome their fears and uncertainties about the transition, we guarantee satisfaction with our facilities and services. If remedies don’t resolve any problems, we will write a check for a full day of convention center expenses. A happy customer is your best advertisement." A pre-convention meeting brings together all of the concerned parties (catering, decorators, hotels, transportation, Center staff...) to meet with the clients and iron out details. A post-convention meeting evaluates how successfully the event unfolded.

The Convention Center books shows, conventions and corporate meetings for 12 months and beyond, and also schedules gate shows (admission charged) within 12 months. Caradonio notes that state governmental meetings that used to alternate annually between Louisville and Lexington are now adding Northern Kentucky into the rotation.

Lexington

The Lexington Civic Center is coming up to its 25th anniversary. In 1974 the Center and the Lexington Convention and Visitors Bureau were created simultaneously as part of a plan to promote tourism and convention business in and around the city. The Civic Center still carries a $24 million debt, but its operations have been successful enough to absorb $500,000 in combined expenses of the Opera House shortfall and Triangle Park maintenance, says David Lord, president of the Lexington Convention and Visitors Bureau.

"Tourism in Fayette County brought in about six hundred million dollars last year, supporting about 14,000 jobs," says Lord. "A big part of that are people who are here for conventions and trade shows." Despite the successful growth in Lexington’s hosting of trade shows and conventions since the Civic Center’s opening, it appears that all is not well with the city’s prospects for sustaining the current level of convention business, let alone growing it, if some changes aren’t made.

In an in-depth analysis of the Lexington convention and exhibition facilities, the consulting firm Pricewaterhousecoopers, LLC (based in Dallas, TX) has arrived at some significant conclusions. The report has not yet been made public, but the discussion has been underway, and Lord shared some of the key points. Pricewaterhousecoopers finds that the existing facilities are not adequate, and the firm recommends either expansion of the Civic Center or the construction of a new facility. However, working in conjunction with the report, the architectural firm HNTB concluded that it "does not appear possible to accommodate even a minimal expansion in a reasonable manner that is contiguous with the existing Lexington Center." HNTB did find that the recommendations of Pricewaterhousecoopers could be fulfilled by the construction of a new convention center on Lexington Center property. But such new construction would first require finding full reuse of the Civic Center facilities. Enter the University of Kentucky, which has been mulling over possible acquisition of the Civic Center (with Rupp Arena as a major attraction). HNTB does present several concepts for possible expansions of the Civic Center, but finds deficiencies in each scenario to meet the report’s recommendations.

What exactly are the recommendations of Pricewaterhousecoopers, and what consequences does the report foresee if the recommendations aren’t followed? First, it is worth noting that the report is the first in-depth study of the Civic Center since a 1986 report, which also recommended expansion of the facility. Specifically, the report recommends: that the exhibit space (currently 66,000 square feet) be expanded to somewhere in the range of 75,000 square feet to 90,000 square feet; that the meeting room space (currently 3,800 square feet) be expanded to 20,000 square feet to 25,000 square feet and that the ballroom (currently 8,500 square feet) be expanded to 10,000 to 15,000 square feet. Without expansion, the report finds that Lexington’s convention/exposition business will steadily erode under the pressure of competition from other cities.

In terms of financial projections, the report finds that an expanded or new convention center will generate $18.6 million in direct spending in its first year, and that figure increases to $25.8 million in the tenth year. In contrast, the center left as is, the report states, will generate $13.5 million in that first year, with the figure declining to $9.4 million over the same 10 years.

"It is clear," says Lord, "considering the age of the center, the increasing competition and the growing demand for meeting rooms for break-out sessions, that we need to make changes or watch our business deteriorate. The question is: at what cost are benefits maximized?" Lord says he would like a second opinion regarding expanding the existing facility. "If we can’t accommodate everything, can we accommodate most of what we’d like to do?" he asks.

"The main thing we want to point out to the City Council," says Lord, "is that it is not as simple as just selling the old structure, and then building a new one. How much money would it take to build and maintain a new center? The income stream would change, because Rupp Arena, our biggest income producer, would no longer be a part of the Civic Center. There’s the expense of building a new parking structure to replace the current parking space that would be taken up by a new building. And there’s debt pay-off. We are just trying to be realistic, vigilant and cautious."

"We hope that whatever is decided," says Lord, "it is decided quickly, because we are looking at five to six years for the implementation of any improvements. Or at least that long to get a new center up and going."

Of the nearly 300 conventions and expositions that the Lexington Conventions and Visitors Bureau are involved with each year, about 25 percent are equine related.

"Some of Lexington’s biggest drawing shows are at Kentucky Horse Park," says Lord. "An estimated 700,000 people visit the Horse Park each year, and 500,000 of them are there to attend special events."

Campbell Wood is a staff writer for The Lane Report.