Our most recent competition wasn't in the convention arena but on the hardwood of the WNBA Finals that took all five games to decide the 2015 champion. Our Minnesota Lynx emerged victorious, which Leonard graciously acknowledged. He also noted our win over Indy and New Orleans in securing Super Bowl LII last year. But not surprisingly, Leonard did remind me of the burden of his significantly higher annual room night goal that is a function of his city's much larger hotel room inventory in close proximity to their convention center.
Over the next two issues of the Minute, we will feature Leonard's responses to several hospitality/tourism related questions that he was kind enough to answer.
Q: What are the key things that are making Indianapolis competitive in the meetings and conventions business?
A: About 30 years ago, Indy's elected and civic leadership decided to make the city a great event and convention destination by designing and building sports and convention infrastructure that would differentiate Indy from other cities vying for the same business. Over the years, elected and civic leaders have followed through on that vision regardless of political party in the mayor's office or City-County Council. The primary focus has been physical connectivity - Lucas Oil Stadium connects to the Indiana Convention Center; 12 hotels and 4,700 hotel rooms connect to the Indiana Convention Center and Circle Centre Mall; the 250-acre White River State Park, which includes visitor attractions such as the Indianapolis Zoo, NCAA Hall of Champions, the Indiana State Museum, the Eiteljorg Museum (Western art and history), the Indy Canal Walk, and a music amphitheater, is directly across the street from the 1,005-room JW Marriott (which is one of the 12 connected hotels).
Since the addition of the JW Marriott and the convention center's most recent expansion in 2011, Visit Indy's convention sales bookings has increased from about 500,000 room nights annually to 881,000 in 2014.
Q: What changes are you seeing in the industry, and what is Indianapolis doing to stay ahead of them?
A: While some first-tier cities such as San Francisco have been able to maintain higher convention center rents and hotel room rates as the economy has improved, second-tier cities continue to fight for market share and as a result continue to see erosion in convention center rental rates and pressure on group hotel room block rates, especially during need months.
Third party firms such as Conference Direct, Experient, and Helms Briscoe, along with AMCs such as Smith Bucklin, add to this challenge as they are aware of discounts and rebates from clients they have already booked in a city and seek similar concessions for other clients.
One way Visit Indy has addressed this is by eliminating a "buy down fund" and replacing it with a proprietary dynamic pricing matrix (DPM) which considers 14 variables (econ impact, tax impact, meeting date, meeting pattern, etc.) to determine center pricing. If the client insists on a lower rate than the DPM allows, then the hotel community can supplement the difference with a promotional assessment that is paid to the convention center. If the hotel community chooses not to do that, and the rental price is higher than the customer is willing to pay, then we pass on the bid.
Visit Indy is also actively evaluating developing, incubating and/or owning its own convention center shows/meetings/events for traditional need periods, similar to the European model.
On the leisure side, Visit Indy's annual $1 million summer marketing campaign is now 100% digital. No print or TV media. This includes geo-fencing in target markets, developing products for multiple VALS/PRISM style psychographic customer profiles, social media suggested posts, etc. This is the first year we've done so and it helped us shatter our summer leisure hotel room nights record (400,000+ Fri/Sat non-group room nights between Memorial Day and Labor Day).