The great convention bust

It wasn't the rubber balls, Valentine's Day balloons, or other bric-a-brac displayed at the Variety Merchandise Show this weekend that drew Lenny Sachs to New York City.

It was blankets. "You have to touch it to know," says Mr. Sachs, general manager of the nursing-uniform company Uniflair in Baltimore, who was researching whether Korean or Chinese specimens are typically higher quality.

Yet even in the tactile world of textiles, Sachs, who attends conventions as both a buyer and exhibitor, says the time he spends navigating trade-show floors is dwindling. He says some of the biggest exhibitions in his industry have shrunk so much it is barely worth the cost of travel. "Companies don't even send out the catalog anymore. They direct [customers] to the Internet."

He's not the only one wondering whether the convention is the best way to optimize sales these days. After a convention-center boom, with at least 44 currently in planning or construction - with space increasing by 50 percent since 1990 - attendance at these symbols of corporate America is down by half in some cities.

One key reason is economic cycles, and some industry experts expect the market to grow faster once output and hiring increase. Others suggest the past decade's larger shifts in the business landscape - including new communications technology, a more educated and tech-savvy audience, even the continued proliferation of chain stores - could permanently change the face of America's megameeting.

While many factors may be driving a decline in attendance, says Heywood Sanders, the author of a Brookings Institution report on the subject and a conventions expert at the University of Texas at San Antonio, "what is abundantly clear is that the world has changed. And the change happened before 9/11."

It's been a hope of jobs, more taxes, and tourists that have made convention development so attractive to public officials. Yet according to the Brookings report, attendance has dropped for major trade shows from 1999 to 2003.

Even at New York's Javits Center, which managed to host more events in 2003 than the year before, attendance has fallen from a peak of 1.4 million in 1997 to 955,150 in 2003, according to the report. In Chicago, McCormick Place hosted 24 of the 200 largest events in 1996. By 2002, the event count was 19.

The Brookings numbers differ from those gathered by Tradeshow Week, a convention publication that shows a milder decline. But Mr. Sanders of the University of Texas says that his figures provide a more accurate picture - and all agree that whatever the numbers, they've gone down over the past decade. Many blame the recession, especially the bust in technology. But what's different today, says Michael Hughes, director of research at Tradeshow Week, "is that there is a new marketing medium out there."

On the Internet, research tools proliferate, and any product is just a mouse click away. "It's true that the new generation of decisionmakers is more tech-savvy," says Jeff Tanner, a marketing professor at Baylor University in Waco, Texas. But like many others, he suggests that this will change the prototype for conventions more than the number of people who decide to attend. He sees conventioneers morphing from businesspeople looking for new products to informed decisionmakers: "Now they are evaluating the vendors, not the products."

As attendees become better educated, convention hosts may have to specialize to attract audiences. That's the case with the Las Vegas-based technology show COMDEX, whose attendance has plummeted. "In the past, COMDEX tried to be everything for everyone in the technology industry," says Ben Stricker, PR manager for MediaLive International, which produces COMDEX. This November, he says, the focus will be specifically on the information technology industry.

Budget tightening, too, may have lasting effects on the convention and beyond. "In the last couple years, companies have become lean and mean, and they are staying lean and mean," says Paul Herbig, a professor of marketing at Tri-State University in Angola, Ind. That means less willingness to send employees out of town to attend shows.

Megastores are likewise stamping out the need for some conventions, says Sanders. In home improvement, for example, the industry has moved toward major national retailers and away from neighborhood stores, considered more dependent on conventions.

Despite such changes, conventions have long been considered a boon to a city's tourist industry. In New York City, tourism officials hailed the move by the state Legislature to expand the Javits Center. "Other than the rebuilding of downtown Manhattan, we believe it is the most important capital expenditure project for the future of New York City," says NYC & Company chairman Jonathan Tisch. The expansion is estimated to bring $1 billion in annual visitor spending and 9,000 permanent jobs.

Many cities are offering incentives to help ensure their convention investments pay off. Last year, Macworld's East Coast show was moved from the Javits Center to the new Boston Convention & Exhibition Center. "They gave us a sweetheart deal," says Mike Sponseller, PR manager for IDG World Expo, which produces Macworld. To the disappointment of many, however, Apple pulled out of the show, bringing attendance down.

Still, across the US, no one has gone as far as thinking that trade shows will become obsolete. "Face-to-face is growing in importance," says Mr. Tanner. Conventions, after all, are also about networking: "By and large, we like to be with other people."