Convention Business Now More Important Than Ever

This summer the LCVB has developed multiple campaigns to attract more leisure travel to Louisville and now another market segment which was once touted as the one segment we could rely on this summer has now weakened. AAA predicted that the number of Americans traveling on vacation during the Fourth of July holiday will decline by 1.9 percent compared with last year. AAA predicted that about 37.1 million Americans will take a trip of 50 miles or more. That is down from 37.8 million in 2008 and 42.3 million in 2007, AAA said in a news release.

We cannot control the impact the economy is having on personal households. And we cannot control the impact the economy is having on business travel. But the one travel segment that has sustaining results has been and continues to be the meetings and convention business. The average conversion rate for the LCVB in booking a meeting or convention in Louisville is 30%. We miss out on the opportunity to host numerous conventions each year for a variety of reasons. If we were able to have a 40% conversion on “tentative” to “definite”, our base of business would grow by the tens of thousands in room night productivity. It would definitely help replace the lost rooms sold to the business and leisure customers who are in “economic hibernation.” But knowing that business travel has taken a huge hit this past year and leisure travel is tied to the economy I would encourage all hotels to be more aggressive in booking as many meetings and conventions as possible all the way into 2012.

Convention planners are now asking for greater financial concessions these days because attendance has been severely impacted at conventions due obviously to the economy. Our competition in tier one cities are now offering lower rates as a result of declining market share nationwide. Sweet Adelines just agreed to a 3-year contract to meet in Las Vegas. Las Vegas wouldn’t have shown any interest in Sweet Adelines a year ago. If our hotel partners didn’t make rate concessions for Educational Testing Service, Junior Volleyball, North American Christian Convention and the United States Cycling Federation (just to name a few), we would have had a disastrous June leading up to the July 4th holiday weekend. The trend of rate reduction is creeping its way back in nationwide and though hotels are reluctant to offer lower rates than in previous years, I would submit that a bird in a hand is worth two in the bush. SMERF business (the acronym SMERF stands for social, military, education, religious and fraternal and you could even throw in another "S" at the end for sports) is what has kept us from falling further than we have and I would submit that SMERF business is what will sustain us until 2012. SMERF is rate sensitive but good solid business during tough economic periods.

Louisville has maintained a strong market share compared to its competitive set. In order for us to remain near the top of our competitive set we must increase the number of meeting and convention bookings for the next 36 months. We must take a second and third look at SMERF business. Collectively with our hotel and convention center partners we can continue to stimulate Louisville’s economy through tourism as long as we understand that we are in a unique season and work together to keep business flowing, and Louisville thriving.