Hospitality’s rapid growth: Entrepreneurs tap into the conventions market
For its 2006 annual convention, the National Coalition of Black Meeting Planners chose the theme “Table Stakes: Are You in the Game?” In line with that theme, the group designed all workshops, general sessions and events to enhance the professional development of its members, providing the latest techniques and strategies for “staying on the cutting edge of the ever-changing meetings and hospitality industry.” The gathering also was designed to increase the business of minority suppliers in the multibillion-dollar hospitality industry by bringing them together with major industry corporations.
Conventions, meetings and events make up a hefty $102 billion chunk of the hospitality pie. The U.S. Department of Labor deems hospitality such a “high growth” industry that accommodation and food services alone will account for 18 percent of all employment by 2010, up from 8.1 percent currently.
Cities hosting national conventions or major events can count on a significant spike in revenues from spending by conventioneers. For example, while
the amount of money African-Americans spend on shopping, dining and partying is not tracked, statistics from the International Association of Convention & Visitors Bu-reaus, a trade group based in Washington, D.C., indicate that Black conventioneers on average spend nearly $1,000 each per event. The study also indicates that of all minority groups, African-Americans are more likely than any other group to travel on group tours to attend business or group conventions, cultural events and festivals. Since 2004, Target Market News reports in its annual publication, “The Buying Power of Black America,” that Black Americans have spent upwards of $4 billion a year on travel, transportation and lodging.
Before organizations such as the National Association of Black Journalists, the National Society of Black Engineers and the National Baptist Convention, or any other sizable Black organization, approach city leaders about hosting an event, their meeting planners first must meet with representatives from the prospective city’s travel and tourism bureau. Often the planners will negotiate an array of perks and other amenities as part of the city’s host package. The National Coalition of Black Meeting Planners continually trains its members to “maximize a greater return on meeting dollar investment for their respective organizations.”
Tapping Into the Market
According to statistics from Black Meeting and Tourism magazine, there were an estimated 1,600 Black conventions and conferences across the country in 2000, the most recent figures available. Like those of other ethnic groups, Black professional, religious and academic organizations are known to attract thousands of attendees to their annual gatherings. It’s no wonder, then, that cities across the country are scurrying to meet the demands of the organizations and woo them into choosing the city as the anchor for the annual convention. “The hospitality business is booming and that is why we have expanded our business empire to accommodate the market,” says Michael Roberts, CEO of The Roberts Companies, a diversified, $460 million, 34-company empire based in St. Louis, Mo. In the past year or so, Roberts and his brother, Steven, who is president of the company, have expanded aggressively into the lodging sector with purchases of major hotels in Atlanta, St. Louis and Tampa, Fla. They also are actively exploring the New York and New Jersey markets. The Roberts empire includes a construction management and consulting firm, television broadcasting properties, real estate development entities and a telecommunications tower company.
“My brother and I plan to increase the value of our family assets to more than a billion dollars in two years,” Michael says. “Much of that additional revenue will come from hotels that we purchase in major cities that attract conventions and tourists.”
Hotel purchasing by Blacks is a welcome move. Perhaps nowhere in the hospitality industry is Black ownership more lacking than in the lodging sector. The 2006 NAACP Lodging Industry Report Card gives the sector a C+ grade, only a slight improvement over 2005’s C grade but a long way since its first grade of D- in 1997. “This industry tends to be most responsive in charitable giving, but has its greatest challenges in property ownership and vendor relationships,” the NAACP report says. “While the industry expresses a willingness to explore incentives to increase African-American property ownership, very little change has been demonstrated.”
The report card gives a B- grade to Adam’s Mark, Marriott, Hyatt and Cendant hotels; a C+ to Omni, Choice and Hilton hotels; a C to Lowes, Intercontinental, Starwood and Carlson and D+ to Best Western.
Boon to Black business
The booming hospitality industry can be a boon to Black-owned businesses as construction and renovation of facilities increase. In October, New York City approved a multibillion-dollar renovation of the Jacob K. Javits Convention Center, its largest exhibition venue. The construction is expected to be completed in 2010 and will increase exhibition space at the center by nearly 50 percent, to 1.1 million square feet.
The Javits Center is the key venue for dozens of national and international expos, conventions and meetings, including those of Black organizations. Even before the passage of the renovation project, NYC & Co., New York City’s official tourism and marketing agency, had already booked nearly a dozen new conventions for the Javits Center, adding more than $228 million to the city’s economy.
“Part of what we do is to sell the amenities of the city to prospective conventioneers,” says Arlene Kropf, NYC & Co.’s assistant director of communications. Formerly called the New York Convention & Visitors Bureau, NYC & Co. acquired its new name in 1999. The expansion of the Javits Center will launch a new era for New York’s $24 billion travel and tourism sector, says Jonathan Tisch, NYC & Co. chairman. “This expansion will not only impact the West Side of Manhattan, but every neighborhood in each of the city’s five boroughs and generate nearly $50 million in additional tax revenue.
Small businesses also stand to benefit. For example, the project’s construction manager is required by city law to provide opportunities for minority-owned and women-owned business enterprises to participate in the bidding and contract award process. As stipulated in the Request for Qualifications for Construction Manager Services, the construction manager also is required to “use its best efforts to purchase from and/or subcontract with qualified MBE and WBE firms.”
Convention/Meeting Planning Resources
• Convention Industry Council (www.convention
industry.org) represents more than 98,000 individuals and 15,000 firms in the meeting, convention and exhibitions sector.
• Meeting Professionals International (www.mpi
web.org) provides professional development resources, networking opportunities and strategic partnerships. MPI Foundation is the research and development aspect of the organization and offers scholarships and other related items to undergraduate and graduate students interested in careers in the event planning and hospitality industry.
• National Coalition of Black Meeting Planners (www.ncbmp.com) provides training and educational programs, as well as networking opportunities and resources, including consultants and vendors. The organization hosts two annual meetings.