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Presented By:Rob Hunden, Vice President

Johnson Consulting

November 4, 2005

Public-Private Public-Private Partnership and other Partnership and other

Critical Success Factors Critical Success Factors for Investing in and for Investing in and

Operating a Conference Operating a Conference Centre: The Centre: The

International ExperienceInternational Experience

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Facility Growth Fuels CompetitionFacility Growth Fuels Competition

Region Square Meters Region Square Meters

Europe Middle EastNuovo Polo, (Milano) 530,000 Riyadh Exhibition 40,000 Messegelaende, (Hannover) 496,000 Dubai World Trade Center 37,000 Messe, Munchen GmbH 440,000 Dubai International Congress Centre 8,700

North America Africa McCormick Place (Chicago) 220,000 Zimbabwe International Exhibtion Center 65,000 Orange County Convention Center (Aneheim) 205,382 Sandton Convention Centre (South Africa) 23,476 Las Vegas Convention Center 198,475 Cairo International Convention Centre 10,629

Australia AsiaMelbourne Exhibition and Convention Centre 35,866 Modern International Exhibition (China) 150,000 Sydney Convention and Exhibition Centre 32,520 Impact Exhibition and Conv. Center (Bangkok) 84,800 Brisbane Convention & Exhibition Centre 24,991 Tokyo International Exhibition Center 81,300

South AmericaRio-centro (Rio De Janeiro) 99,964 La Rural (Buenos Aires) 49,510 Santa Cruz Fexpocruz (Bolivia) 46,000

Source: Major Exhibit Hall Directory, Johnson Consulting

Largest Facilities by Region

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European Meetings MarketEuropean Meetings Market

Rank Country # Meetings

1 United States 2882 Germany 2723 Spain 2674 France 2045 United Kingdom 1966 Netherlands 1817 Italy 1708 Australia 1459 Japan 132

10 Austria 12922 Greece 79

Source: ICCA

International Association Meetings by Country

Rank City # Meetings

1 Barcelona 1052 Vienna 1013 Singapore 994 Berlin 905 Hong Kong 866 Copenhagen 767 Paris 758 Lisbon 679 Budapest 64

10 Stockholm 6422 Athens 39

Source: ICCA

International Association Meetings by City

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Greek VenuesGreek Venues

Largest Greek Meeting Facilities

Property Location

Total Exhibit

(m2)

Total Ballroom

(m2)

Total Meeting

(m2)

Total Function

Space (m2)

Helexpo Palace- Attica Exhibition & Conference Centre Athens 12,000 0 2,260 14,260KICC-Kos International Convention Centre Kos Island 8,500 0 5,200 13,700Sofitel Capsis Rhodes Rhodes 1,650 0 3,562 5,212Creta Maris Crete 0 0 4,296 4,296HELEXPO Thessaloniki 956 0 3,013 3,969Capsis Beach Hotel & Sofitel Capsis Palace Hotel Crete 1,140 2,815 3,955Sofitel Capsis Hotel & Conference Center Rhodes Rhodes 0 0 3,803 3,803Hilton Athens Athens 904 0 2,166 3,070Divani Caravel Hotel Athens 646 0 2,328 2,973Divani Apollon Palace Athens 414 0 2,166 2,580Athens Holiday Inn Athens 0 0 2,410 2,410Athenaeum InterContinental Athens Athens 0 1,598 613 2,211Hyatt Regency Thessaloniki Thessaloniki 0 1,077 360 1,436

Source: Mpoint, Individual Properties, Johnson Consulting

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TrendsTrends

Association Meetings continued growth Europe continued dominance Length of Meetings shortened PCO’s relative dominance weakening Travel Agents no longer used Tour Companies Dominate Certain Segments Exhibition Mgmt. Companies less used Conference/Exhibition Centres strong Hotel meeting facilities strong University use flat

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Location Trends – Rising CitiesLocation Trends – Rising Cities

Robust Economies fueling growth of ‘acceptable’ destinations

South America – Santiago, Montevideo, Sao Paulo, Rio, Buenos Aires, Santa Cruz

Caribbean/Mex. – Puerto Rico, Cuba, Cancun Eastern Europe – Africa – Cape Town Asia – Singapore, Hong Kong, Seoul, Beijing, Kuala

Lumpur, Bangkok, Shanghai Australia – Brisbane, Cairns, Adelaide North American Growth Cities – Vancouver, Chicago,

Orlando, Las Vegas, San Diego

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Ownership DifferencesOwnership DifferencesEuropeVaries. Gov’t sponsored companies own many facilities. Exhibition companies often make money promoting shows, but also own facilities to help control situation. Governments more willing to take on losses.

Largest Centres are privately-owned:

Fondazione Fiera Milano

Deutsche Messe AG, Hannover

NEC Group, Birmingham

Jaarbeurs Holding, Utrecht

BolognaFiere Group

North AmericaGenerally expo halls private, convention centers public. Las Vegas adopting European model. Sands Expo, Mandalay Bay, World Market

57% Public, 36% Private, 7% Other

Other Australia, South America, Middle East, Africa – Government

Asia – Private and Public

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Public-Private RelationshipsPublic-Private Relationships

US Models Public/Special Authority Owns Private Sector manages, caters, etc. Also, public sector often manages, but not

recommended

Type of Entity Ownership Management

Private 36% 58%City 34% 22%County 10% 5%State 8% 5%Combination Government 5% 2%Non-Profit Organization 0% 0%Other 5% 8%

Source: Tradeshow Week - Major Exhibit Hall Directory, Johnson Consulting

Ownership and Management of US Exhibit Halls

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Private InvestmentPrivate Investment

Opportunities – Contractually Obligated Income (COI) for building Naming Rights (Midwest Express Center) Pouring Rights (Pepsi/Coke) Catering Rights - Purchase kitchen equipment Management

Risks Operating deficits Rents do not always support expenses

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Public ManagementPublic Management

Pros Ability to move mountains if necessary Can absorb financial losses without emergency

Cons Lack of Expertise Lack of Accountability Lack of Performance Incentive Dumping ground for political jobs Response Time is Slow Marketing

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Private ManagementPrivate Management

Pros Trained Managers Speed Customer Service Accountable to owner Incentive to perform well - $$$ No tolerance for “dead weight” in workforce Quick response time

Cons Can lack transparency Financial flexibility

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Financial PerformanceFinancial Performance

US & Canada Facilities lose money as supply of space has increased.

Subsidized via other sources. Rents do not support operations Roller-coaster calendar Debt service covered by hotel/other taxes Debate: Are they worth it?

Europe Model is different – used to promote shows Rents higher, shows longer Operating profit is possible

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Development TrendsDevelopment Trends

Larger Ballrooms (up to 10,000 sq. meters) More breakout meeting rooms for medical

conference training, etc. Attached hotels of 200 to 1,500 rooms Focus on design aesthetic Focus on local flavor Higher food standards Quality over Quantity – Hotel Standard Rooftop Garden, Solar panels

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McCormick Place West - ChicagoMcCormick Place West - Chicago 2:1 ratio of exhibit space to meeting rooms.

Includes 470,000 square feet of exhibit space and 250,000 square feet of meeting space, including a 100,000-square foot ballroom.

Ease of navigation, with meeting rooms in close proximity to exhibition hall.

Flexible registration space allows for multi-purpose use.

Transportation center provides a central arrival area for attendees of multiple events.

Unique central concourse – "Main Street America" – that creates an inviting feeling of bringing people together.

Dedicated roadways for freight with direct connection to truck marshalling.

A full range of food services including table service restaurant, food court, food service on the exhibit floor and fine catering.

Rooftop Garden

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Viva, Las Vegas!!Viva, Las Vegas!!

LVCC – 200,000 sq. metres Sands/Venetian – 110,000 sq. metres Mandalay Bay – 90,000 sq. metres

(12,000 rooms in three hotels) World Market Place - Euro model. $7 Billion Gaming Revenue $7 Billion Convention Revenue $35 Billion Total Tourism Spending $175 million marketing budget Macau’s Cotai Strip copying success

Most Convention Space of any City outside Europe – 150,000 Hotel Rooms

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Milan’s New Fair ComplexMilan’s New Fair Complex

530,000 square metres

150 – 200 shops 10,000 parking

spaces Multiple Hotels Privately-owned

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MarketingMarketing

Success is a stool with 3 legs: Proper Facility Proper Hotel Package Strong Marketing

• Local Destination Management Org. Budget• Venue Budget• Association, Tradeshow budget

Marketing is critical to venue success. Long lead times Heavy competition Local Organizing Committees more important. Selling

the City.

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Technology & Service TrendsTechnology & Service Trends

Secure Wireless access points

Solar and other “green” energy solutions

Audio/Video expectations high Meeting rooms permanently equipped Video conferencing

Larger business centers

Central computer for loading multiple presentations

Networked Conference Signage

On-site concierge

Expanded translation services

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What’s Next?What’s Next?

Continued rise in expectations Hotel package onsite, higher quality, invasion of brands Technology. like you never left the office Shopping, Restaurants, Spas and Entertainment within walking distance Price competition; internet RFPs Private venue management

As costs go up, cities choose to be in or out of the business. If “in” then continued spending, coordination, political support. If not, put resources to different uses – general tourism, economic development.

Mass Customization – If all destinations have the same amenities, must make experience unique

Pressure for regional cooperation. No longer just central city. Higher customer service expectations

Taxi courtesy enforced; must accept credit cards Hotel and restaurant workers Local police and airport agents

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QuestionsQuestions