David L. Lawrence Convention Center isn't living up to its high expectations
December 14, 2013 11:03 PM
An aerial view of the David L. Lawrence Convention Center.
By Mark Belko / Pittsburgh Post-Gazette
In 2004, the first full year of its operation, the $373 million David L. Lawrence Convention Center pulled in 272 events. It hasn't seen that many since then.
In the same year, the center, nearly triple the size of its predecessor with 313,000 square feet of exhibit space, drew 115,640 people for conventions, the business coveted by cities because of the out-of-town visitors and spending it draws.
In only one other year -- 2011, when the National Rifle Association came to town -- has convention attendance been higher at 134,787. In the other seven years, attendance has see-sawed between 42,763 and 88,073 visitors. Last year, it was 86,019.
Touted by its backers as the key to attracting bigger shows and boosting tourism, the state-of-the-art, ultra-green riverfront gem appears to be having performance issues.
In fact, in many categories -- from public shows to trade shows to meetings and banquets -- attendance has been stagnating or declining.
PG graphic: Troubling numbers (Click image for larger version)
The number of trade shows, another coveted piece of business, peaked at seven during a three-year period from 2007 to 2009 before plummeting to two the last two years. Meetings have gone from 131 in 2004 to 60 last year. The number of banquets has plunged from 42 in 2004 to 16 in 2012.
Attendance is trending the same way.
Trade show attendance, after peaking at 22,765 in 2009 during the Great Recession, plummeted to a mere 564 last year. Banquet attendance went from 19,441 in 2004 to 7,475 in 2012 -- only in 2006 was it lower at 6,765. Meeting attendance fell from 28,446 in 2004 to 11,674 last year, second only to 8,473 in 2011.
"At the very least, it's pretty clear that the center, at best, is kind of sputtering," said Heywood Sanders, a professor at the University of Texas San Antonio who has studied the economics and impact of convention centers, including Pittsburgh's.
The declines have come even as the convention center struggles with chronic operating deficits that have required the use of Allegheny Regional Asset District funds and state gambling revenues to cover.
For some, the attendance numbers are troubling.
"They're not good and they're decreasing," said state Sen. Jim Ferlo, D-Highland Park, who in the 1990s supported the drive to expand the convention center as a means of attracting tourism.
He wondered whether "we're beginning to have a white elephant" on the banks of the Allegheny River.
John DeSantis, executive director of the Pittsburgh Home and Garden Show and another backer of the expanded convention center, said it was "stunning" that the facility hosted only two trade shows in each of the last two years.
As for the 564 people who attended those two shows last year, "That's a large wedding. That's craziness," he said.
Direct spending as barometer
But those responsible for booking conventions, shows and other events at the center say that attendance, in and of itself, is not a good guide in determining the success of the building.
The better barometer, they said, is direct spending, and on that count, the facility has more than proven its worth.
"Attendance is not a bellwether for success. It is part of it. It is all about economic impact. It is all about the direct spending and the growth that the city has seen since [the convention center opened]," said Craig Davis, CEO of VisitPittsburgh, the local tourism agency responsible for booking most of the city's major conventions.
According to VisitPittsburgh statistics, direct spending from major events, which include conventions and trade shows, jumped from $89.9 million in 2004 to a high of $169.2 million in 2009. Last year, it was $118.2 million.
Furthermore, the number of so-called "room nights" generated by major events in Pittsburgh has gone from 108,000 in 2004 to a high of 147,538 in 2009. Room nights is a measure of the number of rooms occupied in Pittsburgh in a single year. Major events produced 134,014 room nights last year.
In all, major events at the convention center have accounted for $1 billion in direct spending between 2003 and 2012, based on the VisitPittsburgh statistics. "The convention center has been a catalyst for growth since it opened," Mr. Davis said.
While the number of convention center events has dropped by 36 percent since 2004, overall revenue from the bookings has been climbing steadily, from $4.4 million in 2004 to nearly $7.4 million last year, said Tim Muldoon of SMG, the convention center manager. Convention revenue jumped from $1.7 million in 2004 to $4.9 million last year. "I think that's a very important number and it sure shows we're moving in the right direction," he said.
But those numbers have not been able to offset the center's deficits, which total about $2.5 million a year. The city-Allegheny County Sports & Exhibition Authority, the center's owner, gets $1.7 million a year from a state gaming economic development fund to help cover the shortfall. It also received $1.5 million in RAD funding in the past for that purpose.
While tourism officials could fill the convention center with smaller, less expensive shows to boost attendance numbers, they have chosen instead to be more selective, seeking those with the most bang for the buck, so to speak, officials said. "We're not going for the number of events. We're going for the event that has the most economic impact for the region," SEA executive director Mary Conturo said.
Despite some of the declines in attendance, county Executive Rich Fitzgerald believes the center, largely financed by the hotel tax and nearly $150 million from the state, is doing well, particularly in bringing out-of-towners into the region.
"I think by all accounts it's been pretty successful. There are some big events we never would have gotten if not for the convention center," he said, adding that the numbers rank favorably against other facilities in Pittsburgh's competitive set.
But the center has not done as well as nearby competitors to the west. The Duke Energy Convention Center in Cincinnati is about two-thirds the size of Pittsburgh's but has outperformed it in two of the past three years, at least in terms of attendance.
Cincinnati measures attendance based on "visits," which means that the same delegate is counted for each day of the same convention. On that basis, Cincinnati drew 905,025 people over 153 events last year, compared to 694,750 "visits" in Pittsburgh over 174 events.
In 2011, Duke Energy brought in 798,378 people over 163 events, compared to 760,106 visits at the Lawrence center over 172 events in a year attendance spiked thanks to the NRA.
A little closer to home, the Greater Columbus Convention Center topped 1 million in attendance last year with 331 events and 973,149 in attendance in 2011 with 318 events.
While VisitPittsburgh touts direct spending and economic impact to make its case, Mr. Ferlo said that attendance is a "good barometer" of the convention center's performance. He had little regard for the direct spending numbers, saying that inflation could account for at least some of that.
"That's a magician's trick with math," he said.
Back to attendance
The estimates, Mr. Davis said, are generated by an independent third party, Wayne, Pa.-based Tourism Economics Inc., and the model is used throughout the industry. He added that VisitPittsburgh takes "by far the most conservative route" in calculating impact.
Mr. Ferlo was concerned enough about attendance trends that he called for an independent review of the center and VisitPittsburgh to determine just how well they are doing in bringing in business.
Likewise, former county commissioner Bob Cranmer, one of the architects of the Plan B funding that helped to build the convention center, Heinz Field and PNC Park, said attendance is important.
"I'm disappointed [in the numbers] but when we built the convention center, it was designed to have a hotel next to it and that has not been built. That has had an impact," he said, adding that he believes the loss of the US Airways hub at Pittsburgh International Airport also has played a role.
Mr. Sanders said that what Pittsburgh is experiencing is not unique. "Most centers have seen their business slide," he said.
One big reason is that cities keep expanding their convention centers even as demand has languished. As a result, "you're going to have centers competing against each other into the ground and that's what they're doing."
If the Pittsburgh convention center is underperforming, Mr. DeSantis puts the blame squarely on the shoulders of VisitPittsburgh. He maintained that the tourism agency is beholden to the local hotel industry and is preoccupied with putting "heads in beds" at the expense of marketing the center, which he said has always been "the redheaded stepchild."
Mr. DeSantis argued that the job of marketing the center should be turned over to SMG, even if it means taking from VisitPittsburgh some of the $8.2 million in county hotel tax revenue it receives each year. That would provide more accountability, he said.
"We've got this Duesenberg sitting along the Allegheny River and no one will give them the key to start the engine," he said.
Mr. Davis said VisitPittsburgh's mission is to increase overnight visits through hotel rooms. The convention center is a tool in doing that. "We have to, in that mission, work with the hotels and with the convention center to attract the most amount of business for the city that we can. I will not make excuses or apologize for focusing on our mission," he said.
Mr. Muldoon said SMG has no interest in taking over VisitPittsburgh's role in marketing the center.
Beyond attendance and even direct spending, the convention center has other impacts that are incalculable, Mr. Davis and other facility supporters said.
They argued that "perception-changing" events like the G-20 economic summit in 2009, the One Young World summit in 2012, and the Bassmaster Classic in 2003 would not have been possible without the center.
While Mr. Davis makes no apologies for the center's performance, he said the thing that prevents it from going to "the next level" is the lack of the convention center hotel that was to be connected to it.
The hotel, which would supplement the 616-room Westin Convention Center Hotel now connected to the center, has been on the drawing board for more than a decade but has yet to be built, in large part because of funding shortfalls.
But others see the absence-of-a-convention-center-hotel argument as an excuse, particularly given the local hotel boom.
"When convention centers don't perform as they should, the one response is what it was in Pittsburgh: We need a hotel," Mr. Sanders said.
Mark Belko: firstname.lastname@example.org or 412-263-1262.
To report inappropriate comments, abuse and/or repeat offenders, please send an email to
email@example.com and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner.