Hawai`i Convention Center's Impacts on Tourism
and
Marketing Strategy

by

Shoko Sugihara

MBA - TIM

Hawaii Pacific University

Spring 1998

The Professional Paper submitted by this student has been reviewed and deemed to have met the Professional Paper (MGMT 720) requirement for Hawaii Pacific University's Graduate Program.

__________________________________

Richard T. Ward, Ed. D. May 1, 1998
Dean of Graduate Studies
Associate Professor of Management

Construction of the Hawai`i Convention Center (HCC) is expected to be completed in 1997 and opened in July 1998. This study discusses the impact of HCC on tourism in Hawaii and a strategic marketing plan for HCC to expand tourism in Hawaii. The Hawai`i Visitors and Conventions Bureau (HVCB) is one of the largest U.S. Convention and Visitors Bureaus and leading to conduct marketing for HCC. Results of the research suggest that HVCB should focus on conventions rather than consumer shows in order to pursue an effective and efficient marketing strategy.

Tourism is the largest industry in Hawaii and in mature business cycle. It has been largely influenced by overseas economy historically. As an emerging strategy of the fluctuate economy, tourism in Hawaii has to establish and promote economically self-reliant travel such as convention and meeting travel. It also needs to differentiate from other travel destinations in competing convention industry.

The study investigates the following research questions: A. What are economic impacts of HCC? B. What are marketing impacts of HCC/HVCB? C. What is a relationship between tourism and HCC/HVCB? D. Which type of conventions should HCC specifically promote? E. How should HCC differentiate from the competitors? Qualitative and quantitative information was collected from primary and secondary sources of U.S. Conventions and Visitors Bureaus (CVBs) and convention centers. Analysis was conducted by metrical combinations of four criteria (e.g., tourism, economic, facts, and marketing) and three analysis methods (e.g., convention centers, CVBs, and meeting planners).

As the U.S. convention industry has huge economic impacts to the community including hospitality industry, HCC is anticipated to become a leading financial facilitator for the local community in Hawaii. The major targets of HVCB were both international and domestic corporate, convention and association meeting planners. Recognizing each target market's demands and preferences develops HVCB's effective marketing and niche market. Some U.S. CVBs have been enhancing corporate alliances with other tourism factors (e.g., hotels, airlines, retailers, and credit card firms) to conduct effective marketing. It should be urgent for HVCB to involve three key suppliers (i.e., local community, hospitality industry and other business sectors) into the marketing activities in order to solve current and potential issues for HCC. It is also important for HVCB to establish own convention services for increasing customer responses and develop destination marketing for differentiation from competitors. Finally, several ideas focusing on cost strategy are suggested in Conclusions and Recommendations.

List of Figures
List of Tables
Acknowledgments

Chapter I. INTRODUCTION

Chapter II. LITERATURE REVIEW

Chapter III. METHODOLOGY

Chapter IV. ANALYSIS

Chapter V. CONCLUSIONS AND RECOMMENDATIONS

Bibliography

Appendices:

I am thankful to Western Association of Convention and Visitors Bureaus for giving me an opportunity to attend the annual conference in Oakland, California, between October 15 and 17, 1997. I had professional lectures and presentations regarding marketing issues of convention and visitors bureaus at the conference.

Many thanks go to Mr. Jeffrey L. Stevens, Massachusetts Convention Center Authority, Ms. Corazon Vergara, Salt Lake Convention and Visitors Bureau, Mr. Christopher Kam and Ms. Leysilie Williams, the Hawai`i Visitors and Convention Bureau, and Ms. Jody Kono, the Hawai`i Convention Center, for their precious time to answer a lot of my questions when I met them. I also appreciate to marketing professional staff in U.S. Convention and Visitors Bureaus who were willing to reply to my fax inquiries. The answers and supplemental materials were used for this paper as valuable primary sources.

I am obligated to staff of PacRim Marketing, especially, Mr. Dave Erdman, Ms. Yumi Ozaki Read, and Mr. Hajime Ueno, who invited me to join a site visit of HCC and gave me useful information.

I would like to appreciate to Dr. Ward for his academic advising and guidance throughout the past eight months.

Last but not least, I would like to personally thank my husband, Kazuo. I could have not accomplished this research paper as well as my school lives without his sincere support.

Hawaii is well known as one of the most world-wide vacation destinations. More than 6 million tourists visit the Hawaiian islands annually. It is also a fact that special events, such as the Honolulu Marathon and Aloha Festival, have been attracting huge numbers of tourists. However, only 6% of total visitors came to Hawaii for corporate meetings and conventions in 1995 (Hawaii Visitors Bureau [HVB], 1996), although Hawaii has advantages of mild weather and a unique geological location.

This paper discusses the impact of the HCC on tourism in Hawaii. It also suggests a strategic marketing plan for the HCC to help expand tourism in Hawaii.

The intended readers of this paper include strategic marketing planning groups and executive managers in convention centers, meeting planners, the hospitality industry, and convention and visitors bureaus (CVBs).

The major issues of this paper are a role of HCC and its marketing strategy to expand tourism. HCC may be a great opportunity to establish a new trend of tourism. Thus, it is of utmost importance that HCC defines its role and establishes a strategic marketing plan in cooperation with tourism.

Since conventions and meetings usually book a convention center several years in advance, the convention center needs to oversee its strategy in the long-term (Massachusetts Convention Center Authority [MCCA], 1995, p.3). It is important that HCC determines which type of events will primarily be held in its facility and how it promotes itself to the target markets in order to pursue an effective and efficient marketing strategy. Moreover, HCC should promote Hawaii as a specific destination by considering the geological location and ecological situation.

This paper assumes that national and international associations are looking for facilities where conventions or meetings can be held successfully. Thus, in this paper, customers of the convention centers are not individual attendees but meeting planners that organize and coordinate the conventions or meetings. In order to achieve the customer satisfaction, a convention center needs to develop its marketing strategies and sometimes cooperate with a local CVB.

The study investigates the following research questions:

Since the convention industry and tourism have mutual influences, data and information were collected from the both industries. This study focused on collecting primary sources. First, fax inquiries to the U.S. CVBs and convention centers were used to identify who had responsibility for marketing activities and to collect facts of convention centers. Second, it was effective to visit convention centers directly, conduct interviews with marketing professionals, and explore the web sites in order to collect specific data and unique marketing strategies for the destinations. Third, presentations and group discussions at the 1997 Western Association of Conventions and Visitors Bureaus (WACVB) Annual Meeting also helped to determine an effective marketing strategy for HCC. Thus, the primary sources were useful to understand the current marketing activities of each destination because each convention center had distinct characteristics due to various environmental situations.

Analysis needed to collect secondary sources written by the third persons in order to recognize both advantages and disadvantages of the issues. First, literature of periodicals introduced successful and unsuccessful marketing activities. Second, interpretations of results of a survey on meeting planners showed how the meeting planners made decisions. Third, historic data and statistical information of the convention centers and CVBs were analyzed in order to recognize the impact on tourism. Fourth, facts of HCC were compared with and contrasted to facilities of other convention centers on the Mainland in order to measure availability and limitations. Thus, it is important to analyze data and information of primary and secondary sources in order to evaluate thoroughly.

In order to determine the best alternate solution, the above data and information were evaluated by the following criteria.

• Mutual influences between the convention industry and tourism, e.g., statistical information, the environmental impacts and potential social issues
• The economic impacts to local community, e.g., expenditures, numbers of hotel rooms and average duration of meetings
• Facts of convention centers, e.g., technological affordabilities, capacities, cost, legal regulations, limitations, and geological situations
• Decision making of target markets, meeting planners, e.g., preferences, sales promotions, media distributions, and competitive advantages

As a result of the research, the best of the following three alternatives will be determined.

• HCC should focus on conventions rather than consumer shows.
• HCC should focus on consumer shows rather than conventions.
• HCC should be open to any kind of event.

First, HCC is located in the city of Honolulu where most populations and businesses are concentrated in the states. Due to the environmental condition, there may be a limitation of economic impacts on the convention center. Second, since HCC is the only convention center in Hawaii where geological situation is exceptional, the marketing strategy for HCC is different from ones for other convention centers on the Mainland.

In Literature Review, key issues and problems are identified through reviews of business journals, the Internet and periodicals. In Methodology, locations of resources, data and information, and means of gathering information are indicated. In Analysis, a survey, interviews and marketing plans of other convention centers are qualitatively and quantitatively analyzed in order to solve the research problem. Finally, as a result of logical and integrated analysis based on the criteria, the most appropriate alternate solution is selected and several recommendations are explained in Conclusions and Recommendations.

Recently, constructions and expansions of convention centers are booms in the industry. The construction of HCC will be completed in 1998. However, Alf Nucifora (1997 a), Chairman of Nucifora Consulting Group and Chair of the Marketing Committee of the Atlanta Convention & Visitors Bureau, forecasted that the number of business travelers would reduce because of the decrease of population and increase of airfares and taxes. Thus, it is keen for HCC to develop its competitive positioning and marketing strategies in order to survive in the fierce competition. Moreover, in order to establish a customer's awareness and explore the markets of HCC, it is necessary to understand the current marketing activities and environments of CVBs and convention centers in other states.

This chapter explains how tourism has been affected by convention centers and relationships between CVBs and the convention centers in the United States. There are five major questions and their relevant small issues.

The convention industry has distinctive characteristics. First, the U.S. convention industry has a business cycle. In Meetings & Convention (M&C)'s Meetings 1996 Market Report, expenditures at total meetings and conventions had risen and fallen every two years between 1983 and 1995 (Braley, 1996 b, p.65). For example, the expenditure in 1993 was $40.4 billion that was 5.4 billion more than those in 1991 and 3 billion more than those in 1995. Corporate downsizing due to the economical recession was one of the reasons why the expenditures fell 7.4% down to $37.4 billion in 1995. The report (1996 b) also showed that meetings within the continental United State spent about 93% of the expenditures. Thus, the convention industry was one of the major role in finance of local communities.

Second, marketing professionals for the convention centers needed to oversee the trends in the long-term of the travel industry as well as the convention industry. A booking cycle of convention centers was three to five years in advance (Los Angeles CVB [LACVB], p. 63).

Third, smaller CVBs and second-tier cities where populations were from two hundred thousands to two million were competing well. There were two indicators to measure the competition: hotel occupancy rates and hotel construction growth. According to PKF Consulting, Oklahoma City increased its occupancy rate of the hotel rooms by 9 % in 1995 from the previous year while New York City increased its occupancy rate by 4.8 % in the same period (cited in Braley, 1996 a, p. 81). Another benchmark was the growth rate of hotel construction. According to a study conducted by Coopers & Lybrand, constructions of new hotels have rarely occurred in first-tier cities while the hotel growth rate was steady in the second-tier cities (cited in Braley, 1996 a, p. 81).

Fourth, the number of spouses and/or guests who come with participants of meetings and conventions has been growing. A portion of the spouses and guests occupied more than one-thirds of the attendees at association meetings and nearly one-fifth of the attendees at corporate meetings (Braley, 1996 b, p.89). Thus, the both association and corporate planners have been arranging more activities for children who attend the meetings.

Finally, inventories of U.S. convention centers' facilities increased by more than 106% for the past twelve years (LACVB, 1996, p.11). More than 60% of the marketing professionals used computers (Braley, 1996 b, p.90). In addition to traditional marketing methods, there were new marketing ways to develop the Web sites and convention centers' facilities that comply with the business demands.

Tourism in Hawaii historically has depended on foreign and domestic economies. HVCB remained the current status rather than developed aggressive marketing in the competitive markets for several years. The Japanese market has still been the largest market of the eastbound tourists. However, the number and expenditures of Japanese tourists recently have fallen dramatically due to the destructive economical fracture in its own country. Instead, the Korean market has strongly grown since the last decade. Besides, the number of westbound tourists is increasing due to the recovering economy. HVCB has currently emphasized its marketing in some regions of the Mainland, such as Pacific and East North Central. Thus, it is necessary to revitalize economy in Hawaii (HVCB, 1997 a).

CCA (1996), HVCB, and SMG ensure that the HCC would play the major role in the revitalization of the state's visitor industry. The number of visitors who came to attend conventions and corporate meetings was larger in the westbound than in the eastbound. The westbound convention and corporate meeting attendees increased by 20% to 370,580 in 1995 since 1993 while the eastbound attendees decreased by 28% to 59,240 over the same period (HVB, 1994, p. 34 & 1996). Thus, HCC has an opportunity to grow the new markets. HVCB (1997 a) has focused on direct sales for HCC and created marketing programs for meetings and incentives.

In 1988, the Convention Center Authority (CCA) was legally established to oversee the process of HCC for the State of Hawaii (CCA & Department of Business and Economy Development [DBEDT], 1996). CCA has been working closely with HVCB to market HCC. The Spectacor Management Group (SMG) was selected as an operating company for HCC and joined the marketing programs of HCC (CCA & DBEDT, 1996).

CVBs were generally run with source of funds from hotel taxes, membership dues, and government funding (Ghitelman, 1996, p.40). Carol Lentz (1997), Executive Vice President of Operations, the Portland Oregon Visitors Authority (POVA) explained that the CVBs was run by lottery. The CVBs serve to coordinate the promotional activities of the states and local governments. On the other hand, they serve for travel and tourism businesses, such as hotels, restaurants, tourist attractions and local transportation companies.

Convention centers had own staffs for marketing and sales promotions while many CVBs were taking initiatives for the marketing. Some convention centers and CVBs distinguished their responsibilities depending on how far convention dates were from booking. For example, POVA's Michael Smith (1997) stated that marketing group of Oregon Convention Center focused on conventions and meetings in short-term, i.e., within one year, and another marketing group of POVA oversaw the marketing in the long-term.

Other convention centers and CVBs established a systematic procedure. According to Salt Lake CVB's Corazon Vergara (1997), Convention Service Coordinator, both the CVB and Salt Palace Convention Center (SPCC) were conducting marketing for SPCC no matter how far the conventions and meetings would be held. In addition to selling spaces of SPCC, Salt Lake City CVB took care of selling and booking of the hotels in the city. On the other hand, SPCC handled contracts with the meeting planners. Thus, both groups shared the marketing until bookings and separately proceeded their own responsibilities after the bookings.

Mostly, the target markets of CVBs and Convention centers are state, national, and regional meeting planners including corporate organizations and associations that hold trade shows, conventions and corporate meetings. Since national associations lead larger groups of attendees, the conventions will make large economical impacts. Thus, it is inevitable to understand the preference and characteristics of each of the following categories in order to determine niche market for HCC.

M&C's 1996 Marketing Report found that corporate planners held 797,100 off-site meetings that showed a 0.5% drop from 1993, with 49.3 million attendees in total that dropped by 10.5%, and their expenditures also fell by 19% to $8.6 billion (Braley, 1996 b, pp. 71-76). The expenditures included hotels, food, airline tickets, ground transportation, speakers, entertainment, audio visual equipment and miscellaneous costs. By the year 2000, nearly nine hundred thousand corporate meetings were estimated to convene off-site annually and the number was forecasted to increase by 10% (LACVB, p.63).

The responsibility for a corporate meeting planner was generally spread throughout an organization. A survey conducted by Market Probe International indicated that only 9% of the corporate meeting planners were working in a meeting departments (cited in Braley, 1996 b, p.66). Sixteen percent of the planners worked in administration followed by sales (14%) and marketing (13%). The survey also showed that 65% of the individuals in charge of the meetings spent more than 70% of their time with other responsibilities (Braley, 1996 b, p.66). Thus, the meeting planners in corporation largely relied on marketing professionals and convention services of convention centers or CVBs.

The current trend showed that corporate meetings tended to be small with an attendance of an average of 62 people (Braley, 1996 b, p.71). M&C's 1996 Marketing Report declared that corporate events lasted an average of 2.8 days and each event took about six months to plan. 44% of corporate planners also planned or participated in the 159,200 trade shows held in 1995. Each individual handled almost six shows with attendance of the average of 1,700 people. The average duration of the trade shows was 3.5 days (Braley, 1996 b, p.71). Thus, it is a good opportunity for new convention centers to acknowledge their facility to the corporate meeting planners.

When the corporate meeting planners selected destinations, "availability" and "affordability" were the most important factors rather than "ease of transportation," "distance traveled" or "climate" (Braley, 1996 b, pp. 72-73). Nearly half of the surveyed corporate planners held meetings in the South Atlantic in the United, such as Florida, in 1995 (Braley, 1996 b, p.72). The next popular region was Pacific coast, such as California. The other popular states were Illinois, Texas and New York.

Also, the Marketing Report stated that the corporate planners typically had potential three cities and four hotels before making a final decision. Budget was a big factor when the corporate meeting planners made decisions on a convention center or hotel as the meeting site (Braley, 1996 b, p.76). The cost of the facility was very important for 73% of planners and was closely followed by the capacity and quality of meeting rooms and the quality of food service. The corporate planners usually used hotels in downtown and suburban with 50% and 41%, respectively.

Twenty percent of corporate planners considered to plan meetings outside the continental Unites States in 1995. The average number of attendees in foreign and offshore meetings was 69 attendees that was similar to the domestic meetings. However, a duration of stay and planning period were longer, 4.5 days and 8 months, respectively. Hawaii was the third popular destinations following Europe and Caribbean (Braley, 1996 b, p.73). In other words, Hawaii was in competition with not only domestic but international destinations due to the distance from the Mainland. On the other hand, it was forecasted to increase the number of corporate planners who were thinking the foreign and offshore meetings because of the globalization. Moreover, less than quarter of the corporate planners used the same hotel chains in 1993. In other words, it was relatively easy for new comers to enter the competition.

The Marketing Report showed that the number of conventions and average delegate expenditure in 1995 were lower than those two years ago (Braley, 1996 b, p.77). However, the number of delegates increased to 13 million in 1995 from 11 million in 1993. Therefore, the total expenditures of convention delegates were $15 billion that increased by 11 % from two years ago.

The most concern for the convention planners was "number, size and quality of meetings rooms" with 87% (Braley, 1996 b, p.70). Also, 83% of the planners considered "negotiable food and beverage and room rate" as the second priority followed by "cost of faculty and hotels" with 75%.

According to the Marketing Report, figures related to the association meetings decreased in each category (Braley, 1996 b, p.77, 80, 87). The number of meetings declined to 175,600 in 1995 by 15 % since the previous two years. The number of meeting attendees fell 19% to 15 million in the same period. Therefore, total expenditures also fell 16% to 12 billion in 1995.

The association planners seemed to consider costs more seriously than other meeting planners. More than two-thirds of the association planners raise "the cost of facility and hotels" as the best priority when they selected the meeting site. Seventy-two percent of them considered "negotiable rooms and food and beverage rates" as the second priority (Braley, 1996 b, p.77, 80, 87).

Budget cuts could be one of the reasons why the figures dropped. However, only 5% actually experienced decreases of the budgets. Instead, nearly a half of the association planners saw increases in their budgets in 1995 and the same numbers of them anticipated increases in 1996. While only a few planners have seen or expected budget cuts, these cuts have been larger than the increases. In 1995, the average budget cut was 22 % and anticipated an average decrease of 28 % in 1996 (Braley, 1996 b, p.77, 80, 87).

The association planners had interesting preferences on booking seasons. Many planners still held their conventions in historically peak seasons when the costs were the highest, although they concerned about the budgets. In 1995, more than a third of all conventions was held between September and November. In other words, the seasonality was more important than the budgets for the association planners (Braley, 1996 b, p.77, 80, 87).

There were two common trends in association meetings. One was a strong increase of educational seminars. Both numbers of meetings and educated attendees have been increasing. And another was an increase in use of hotels in downtown (Braley, 1996 b, p.77, 80, 87).

HVCB (1997 b) chose three marketing plans: Direct marketing, participating trade shows, and promoting tours before and after the conventions. There were three traditional marketing methods: Database marketing to identify potential attendees, telemarketing to persuade potential attendees to come, and promotion assistance to let them involve in the city (Ghitelman, 1996, p.39).

Some CVBs and convention centers already had customer databases and were using it for marketing. For example, LACVB (1996, p.3) had 61% of customers who had used the convention center before. Therefore, the direct mail or telemarketing was effective for the marketing professionals to reach the targeted customers. IACVB had directories of meeting planners depending on types of the associations. CVBs and convention centers have conducted surveys by using the directory and tried to search preferences and motivations of the meeting planners. Thus, a survey was effective to explore the new target markets.

One of the most popular ways to reach the target was fam trips or site visits. A study conducted by Indianapolis CVB showed that about 75 % of meeting planners had not been to the city (Braley, 1996 a, p.82). Therefore, they invited the planners on several fam trips a year and more than a hundred site visits. Austin, Texas, has been competing with big cities in the same State, such as Dallas, San Antonio and Houston. The CVB showed hiking and biking trail within walking distance of the convention center and appealed to the emotion of meeting planners who visited the city by fam trips.

Sales representatives

In order to reach and attract the target markets, sales representatives of CVBs and convention centers frequently participated in trade shows and promoted their destinations. LACVB (p.6) expanded sales offices in DC and established a new office in Chicago because two-thirds of associations had headquarters in DC, New York, or Chicago. The CVB also operated a national telemarketing sales center to serve corporate meetings. Sales representatives of MCCA in Washington DC conducted citywide sales by distributing press kits (MCCA, 1995, Appendix A). Thus, activities of sales representatives in DC received a political influence.

The sales representatives traveled and conducted the direct marketing to the targets. Albuquerque CVB president and CEO, Dick Gilliland, considered that it was important to send his sales representatives to targeted clients in such places as Kansas City, Cincinnati and Silicon Valley, in addition to sales offices in Washington DC and Denver (Braley, 1996 a, pp. 82-83). Thus, the local attention to target niche market was an effective method.

Most CVBs and convention centers used direct mails, advertisement on publications, and sales calls. They purchased or made own database of meeting planners and sent giveaway packages, destination guides, meeting planner kits and promotional videos as well as brochures and fact sheets of the convention center. MCCA (1995) promoted TV spots for brand awareness and appeals Boston as a specific destination. The tag line, "Boston, America's Walking City" (MCAA, 1995, pp. 14-16) made the audiences' perception that they could get everything in a walking distance.

Many CVBs made reservations on hotels according with the requests from the meeting planners. Thus, they had to know the updated hotel occupancies as well as the convention centers' booking status. In terms of a budget, CVBs received influences from the economy of the hospitality industry because an increase of the income from the hotel taxes created a source of funds for the CVBs' marketing programs.

Some CVBs and convention centers promoted the destination marketing in cooperation with the hotels and airlines. City of Santa Fe CVB ([Santa Fe CVB], p.59) promoted advertisements cooperating with the Southwest Airlines and hotels in the city. The partnership developed a "team concept" of selling as an entire destination. 1997 Marketing Action Plan stated that Ernest N. Morial Convention Center (Morial CC) also had a professional relationship with a database of frequent customers and New Orleans CVB. Mobile Convention Center (Mobile CC) provided an opportunity for partner hotels of Mobile Convention & Visitors Corporation ([Mobile CVC], p.7) to join a promotional campaign, so that the Mobile CC could obtain accurate room reports from the hotels.

Among the above CVBs and convention centers who had corporate partnerships, Vancouver and Los Angeles especially achieved successful partnerships. Tourism Vancouver - The Greater Vancouver CVB (Vancouver CVB) established the "Be a Host" program (The British Columbia Pavilion Corporation, p. 6) as the Vancouver Signature Program in corporate partnerships with the travel industry, such as airlines, hotels, credit card firms, rental car operators and the printing industry in the city (Vancouver CVB, p.8-9). Paul Vallee (1997), Vice-President Marketing & Member Service, emphasized that the marketing alliances generated not only more than 10 million in Canadian dollars but also created value-added strategy. In California, Los Angeles CVB ([LACVB], p.5) established Strategic Plan Task Force to pursue a cost/benefit relationship between public and private management. The CVB's discounting program brought nine major events to Los Angeles Convention Center ([LACC], p.6).

The 1997 WACVB Annual Meeting focused on teamwork and a variety of partnerships. The teamwork meant a relationship between CVBs and convention centers, the hospitality industry and CVBs, and among the U.S. CVBs. POVA's Carol Lentz and Alf Nucifora (1997 b), recommended a corporate alliance with credit card firms. Since the major U.S. credit card firms had accurate and update information about meeting attendees as well as the customer directories, such a corporate alliance could be very efficient for the marketing professionals to identify the customers' profiles. On the other hand, John Marks (1997), President, San Francisco CVB, recommended a teamwork among CVBs located in different regions. Since the association meetings had geographical cycles, the teamwork beyond the regions may be a potential solution for the competition.

Some convention centers used contracts with specific hotels and sold a package of the convention centers and accommodations. First, Oakland Convention Center (Oakland CC) is inter-connected with Marriott Hotel. The attendees of meetings could simultaneously utilize the meeting rooms in both Marriott Hotel and Oakland CC.

Second, Massachusetts Convention Center Authority ([MCCA], 1995, p.5) and the Greater Boston CVB (GBCVB) conducted marketing for the J. B. Hynes Veterans Memorial Convention Center (Hynes CC). The convention center held a occupancy rate with about 68% and 173 events in 1994 and American Society of Association Executives (ASAE)'s annual meeting in 1996. The Boston Convention Complex (BCC) consisted of the Hynes CC, Boston Marriott Copley Place, Westin Hotel Copley Place, and Sheraton Boston Hotel & Towers and connected all under one roof. BCC generated more than 3,000 hotel rooms with inter-connected first class shopping malls (MCCA, 1995, p.5). Thus, not only attendees but also spouses and guests could enjoy accessibility and affordability of the unique package even in winter. Moreover, unified messages for a specific destination not only made marketing programs be effective but also showed the impact on tourism easily.

Third, the Moscone Convention Center (Moscone CC) was located in a new development area in San Francisco and represented a partnership between art and engineering. Moscone CC was connected through the underground pathway with Marriott Hotel that held 15,000 rooms. San Francisco CVB has been promoting cultural tourism. The complex was surrounded by exceptional museums, a spacious garden and a historical church. Steve Spickard (1997), Vice President, Economics Research Associates (ERA), explained the economic impact of the cultural complex by showing some pictures. Thus, the attendees were naturally involved in the cultural Mecca when they participated in the conventions.

Tourism and the convention industry has been affecting mutually. There were several issues that CVBs and convention centers needed to consider: Booking seasons, expansions, the economical and environmental impacts.

Business travelers did not concern about the weather and climate of the destinations as much as leisure travelers. Robert Mandelbaum (1997), Vice President and Director of Research, PKF Consulting, indicated that hotels sacrificed their occupancy rates for increasing average daily rates in slow seasons. Meeting planners generally negotiated to make good deal with the convention centers and accommodations by utilizing the facility and hotel rooms in the relatively slow seasons. On the other hand, CVBs tried to avoid a drop of the occupancy rates of hotels and convention centers in the seasons.

For example, according to Ken Morris (1997), Public Relation Director, Anchorage CVB, conventions and meetings were promoted to be held in William A. Egan Civic & CC except summer when many travelers visited the destination for leisure and occupied the hotel rooms. In San Jose and Sacramento, tourism promoted sports events (McCasey & Munro, 1997). When the national league games were held in the city, hotel occupancy rates increased dramatically. Therefore, hotels could not handle large numbers of attendees of conventions at the same time. Thus, operating trade shows and conventions was effective for the hospitality industry to generate revenue during the relatively slow seasons.

Convention travelers in Los Angeles had the highest hotel utilization, i.e., 94% (LACVB, p.44). KPMG Peat Marwick conducted a study and found that the HCC would need at most 7,500 hotel rooms in the next decade, which meant that 720 units were needed more in Oahu (cited in CCA, 1995, p. 4-23).

Expanding convention centers and building new hotels were debating as a hottest issue in Boston. The Hynes CC was the largest convention facility except two trade centers where consumer shows and gates shows were held. Besides, the hotel occupancy rates in Boston and Cambridge always kept high scores, e.g., 2.3% up to 77% in 1994 from the previous year (MCCA, 1995, p.2). Since there were more than hundred colleges and universities in Massachusetts, sometimes a shortage of the rooms occurred. Many parents, relatives, friends stayed in the cities to attend graduation ceremonies. The period was also beginning of the high seasons for tourists. Besides, trade shows and conventions were held throughout a year. Therefore, it was not rare that tourists and attendees were forced to stay in Rhode Island or New York due to the shortage of rooms in Boston and Cambridge. Several CEOs or presidents of associations have currently joined more than the two-year-debate whether Hynes CC should expand or not (Miller, 1996, pp. 122-125). They indicated the shortage of the rooms as a reason why they gave up holding the conventions in the city. It was a key to recognize a value of Hynes CC for the regional economy. Since association meetings and conventions generated the large financial impacts on the local economy, the demand of the association executives was the most effective to move the city who was unwilling to expand the convention center. Thus, the limited number of accommodations affected marketing of the convention centers.

In Hawaii, CCA (1995, p. 4-5) estimated that HCC would host an average of 60 events per year with between 6,200 and 7,500 attendees. CCA also calculated an average expenditure per person with $640 and total expenditure in 1998 with between $170 and $207 million.

Convention industry played the major role in the financial scripts of many cities because the attendees spent dollars on hotels, food and beverages, entertainment, transportation, and taxes. It was found that the average expenditure of each convention planner per event was about $155,000 in a study conducted by the International Association of Convention & Visitors Bureaus (IACVB) in 1995 (cited in Miller, 1996, p. 122). The study also showed that the average expenditure of each delegate per event was $672.50 with an average 3.4-day stay. In addition, according to a 1994 study by Arthur D. Little, a major consulting firm in Cambridge, an additional $1.45 to one dollar spent by the delegates was converted for the local community in Massachusetts (cited in Miller, 1996, p.122). Thus, not only Boston, but also many cities were looking for expansion of their convention facilities to make it possible to hold larger conventions.

Nearly 19 years later, Atlantic City recovered from the economical decline of the convention industry, thanks to the casino industry (Ghitelman, 1997, pp. 79-87). In New Jersey, casino gambling was legalized in 1978. Thirteen casino hotels with their 10,000 guest rooms in total had an occupancy rate more than 91% in 1996. According to Steven Perskie, who helped write the legislation as a state legislator, the casino industry generated revenue without investing in convention inventory and marketing. He forecasted that a new convention center would become the central role of the city because of the two reasons: A new facility and expansion of the casino industry. Atlantic City Convention Center (Atlantic City CC) would feature 500,000 square feet, which was the largest exhibition space on the East Coast north of Atlanta. Doubletree Hotel, a non-casino property and contiguous to the Atlantic City CC, would provide 500 rooms for the meeting attendees. Another reason was a expansion of the existing casino properties and several new Las Vegas-style megaresorts, e.g., MGM, Mirage, Circus Circus and Sun International. Both the state, the owner of the new convention center, and a state agency, Atlantic City Convention & Visitors Authority (Atlantic City CVA), ensured that some of these new hotel rooms would be available to convention delegates in order to eliminate a historical problem such as a shortage of hotel rooms. Some associations have already booked spaces at Atlantic City CC from 1998 for seven years. Thus, expansion of the casino industry developed the convention capacity of Atlantic City.

A cooperation of Philadelphia Marriott was expected an economical impact on Pennsylvania Convention Center (Pen. CC) in Philadelphia. The hotel occupancy rate in Philadelphia rose to 68% by 3% between January and November in 1994 from the same period in 1993 (Gorenstein, 1995). According to Robert Butera, executive director of the Pennsylvania Convention Center Authority (Pen CCA), hotel taxes were allocated to pay off the bonds that financed the $307 million construction projects of the Pen CC. The booking for rooms as a result of conventions would jump to 345,000 that was more than double of the previous year. Tom Muldoon, president of the Philadelphia CVB, thanked to the Marriott for a relationship with the Convention Center and said, "the Marriott exists because of the Convention Center and the Convention Center exists because of the Marriott... You couldn't have one without the other" (Gorenstein, 1995).

The big events may cause heavy traffic jams. Since the events are supported by major local communities, the traffic jams make the local people as well as visitors irritate. Since Hawaii has visitors who expect something different from their own towns, such as relaxation and flourish nature, the visitors may get stress when they are involved in the heavy traffic jams and overcrowded beach. Thus, it is an important issue that HCC and HVCB should consider.

Types of conventions and meetings were various and depended on the capacity of the convention center and hotels. Many CVBs and convention centers did not focus on specific types of conventions because of the economical impacts. Instead, they tried to fill hotel rooms and maximize occupancy at convention center.

Santa Fe CVB (p.29) was interested in small meetings, such as medical, technical, and educational conventions as well as association meetings. LACVB (p.65) was able to handle all kinds of conventions and meetings including trade shows and consumer shows when the convention center was expanded. Nora Rowley (1997), Assistant Director of Convention Sales, McCormick Place Convention Complex, stated that the complex focused on trade shows and conventions because it could handle more than 50,000 attendees.

In contrast, according to Jeffrey L. Stevens (1997), Marketing & Public Relations Coordinator, MCCA had a distinct preference on the types of conventions at Hynes CC. Since the maximum number of attendees was 5,000 for the convention center, Hynes CC focused on conventions and meetings that led comparatively a smaller number of attendees than gate shows and consumer shows. Considering the characteristics of the city, traditional targets were the following: Education, finance and business, and medical. Therefore, their marketing activities were participating in trade shows to attract corporate planners and advertising on professional publications to reach the professionals in educational institutes and hospitals. Their new targets for MCAA and Hynes CC were family educational groups and the outdoor sports industry. Thus, focusing on types of the conventions helped reaching the niche efficiently.

Convention centers in different regions have rarely competed with each other. By the year 2000, 11,900 national associations will rotate their annual meetings (LACVB, p.63). For example, one meeting was held in Washington DC last year. The meeting was held in Chicago this year and would be held in San Francisco next year. In other words, the competitions were fierce in the same states and region. For example, LACVB (p.41) was competing with San Francisco, San Diego and Las Vegas in Pacific region. According to Julie Essey (1997), Director of National Sales, Atlantic City CVA, the city was competing with New York City, Philadelphia, and Baltimore in Atlantic region. On the other hand, some convention centers considered all other cities as competitors. The cities had similar characters, a size of city, and capacity of the convention centers. For example, Donald Engler (1997), Director of Marketing, Morial CC, and McCormick Place CC's Nora Rowley (1997) replied that New Orleans and Chicago were in competition with Orlando, Atlanta, San Francisco and Las Vegas. Santa Fe CVB (p.55) looked at Albuquerque, Dallas, Scottsdale, San Diego, Palm Springs, and Colorado as competitors. Thus, it was emergent to differentiate the city and convention center from other cities.

Meeting planners wanted "walking distance" between hotels and convention center and did not prefer even using a transportation. Therefore, the convenient location was very important for the Convention centers. Recently, association and corporate meeting attendees have used many convention centers located in downtown and hotels. Thus, CVBs and Convention centers needed to create the differentiation in other aspects.

One of CVB's advantages was wealth of information. The fierce competition caused changes of CVB's businesses. A relatively large CVBs had a professional group who took care of attendees and meeting planners after booking. Salt Lake CVB held 60 full-time employees and a department of Convention Service that focused on the hotels, food, transportation, entertainment and greeting. The staff of Convention Service went to the airport for greeting the attendees (Vergara, 1997). The CVB was challenging what they never had before such as golf tournaments or playing the organ during events in order to meet the customer demand. Long Beach CVB offered airport transit discount coupons in cooperation with a local bus company (Ghitelman, 1996 a, p.44); Oakland CVB provided participants of the WACVB Annual Meeting with free BERT tickets between Oakland and San Francisco. David Ghitelman (1996 b, p.45) demonstrated convention services of the following three CVBs: The Chicago CVB had an "Ambassador Program" that sent local volunteers to greet attendees at the airport; the New York CVB offered a convention concierge who took care of planners and attendees and assisted to purchase tickets of shows, concerts and sports events; and the Los Angeles CVB operated a restaurant reservation booth that helped attendees to choose dinner spots and booked the tables for them at the Los Angeles CC. CVBs’ services at the convention centers were almost similar to the jobs of concierges at hotels. Thus, the convention service was valuable for convention centers not only to attract people but also made the convention procedures operated smoothly.

San Antonio, Texas, had many competitive advantages in attracting convention events and visitors. During the past ten years, convention attendance in San Antonio has grown by nearly 50 % (Minter, 1995, p. 48). With its large number of hotel rooms and the attendance, Henry B. Gonzalez Convention Center (Gonzalez CC) was ranked among the top ten of all convention centers nationally. Gonzalez CC likely attracted many Latin Americans because of the city's Mexican historical ambiance. San Antonio was competing with Boston and San Francisco in terms of convention of professional associations both with and without major exhibition requirements (Minter, 1995, pp. 47-48).

The first-tier cities were always famous themselves. Therefore, they did not have to advertise much. However, the second-tier cities had to let meeting planners know about the space. Four staffs of Contra Costa CVB did everything from the marketing through the completion of the conventions (Corbinook, 1997).

Acknowledgment and advertisement as well as value-added were survival strategies for them. Fam trips and site visits became traditional sales promotions. Providence, Rhode Island, challenges giants New York and Boston in the Northeast. The Greater Providence/Warwick Convention and Visitors Bureau (PWCVB) sent brownies with an innovative tag line to 450 clients from IACVB's database (Braley, 1996 a, p.81). Then, they told about the Rhode Island Convention Center, with its 100,000 square-foot exhibition hall and 23 meeting rooms. As a result of follow-up calls, PWCVB received 21 serious leads and 60 prospects. Martha Sheridan, CVB president, says "We figured the best way to people's minds is through their stomachs" (Braley, 1996 a, p.81). In addition to the creative first-glance, PWCVB and other Rhode Island regions came together to represent the state as a whole at Religious Conference Management Association (RCMA) convention in Charlotte, NC, in 1996.

Small CVBs have created marketing to grab meeting planners efficiently: Packages of brownies with catchy messages; boxes of Cracker Jack with compelling coupons; free weekend getaways; persistent telemarketing blitzes; and simple yet smart advertising campaigns (Braley, 1996 a, pp. 81-84).

Columbus, Ohio, CVB sent 400 puzzle pieces to pre-registration list and offered two round-trip tickets to any America West destination for the winners who solved the puzzle (Braley, 1996 a, p. 82). In 1995, Columbus CVB sent boxes of Cracker Jack to the 1200 planners who registered to ASAE convention in Washington DC. Woody Kind, vice president of sales and marketing for the CVB, said, "These tactics are very simple and straightforward, but they set you apart from the clutter" (Braley, 1996 a, p.82). King emphasized that a small city's advantages: Safety and Friendliness. Louisville and Jefferson County CVB's Kristi Lam (1997), Communications Specialist, considered accessibility, availability, and affordability as the advantages. Santa Fe CVB (p. 59) focused on the film industry because exotic Spanish colonial scene attracted people to come to New Mexico. Thus, personalized service for less money could attract people.

Morial CC (1996) promoted its overall size, flexibility, affordability of high technology and theatrical and staging expertise. San Diego CC's Suzzanne Stolt (1997), Information Specialist, promoted "total service" including service and facility and expected the highest economical impacts. Vancouver CC developed new directions such as video conferences or new sound stage spaces complying with the current technology demands (The British Columbia Pavilion Corporation, p. 8). Conventions of outdoor sports were semiannually held in SPCC in Salt Lake City, the venue of Winter Olympic 2001 (Vergara, 1997). Atlantic City CVA's Julie Essey (1997) stated that the new convention center had contracts with many hotels with or without casinos and provided a twenty-four-hours entertainment option to the attendees and spouses. Anchorage CVB's Ken Morris (1997) promoted positive connotation of Alaska for a meeting destination. MCCA (Appendix A) distributed interactive software, such as videos and compact disks, to meeting planners.

Competition of convention industry has been more fierce. CVBs operated and conducted marketing for convention centers sometimes in cooperating with other tourism factors. The major targets were corporate, convention and association meeting planners. Conventions have become bigger and bigger while association meetings have become smaller and smaller. Convention centers in some cities successfully operated and conducted corporate partnerships with the hospitality industry, such as hotels, airlines, retailers, and credit card firms. Mutual influences between tourism and the convention industry caused potential marketing issues. Some convention centers prefer a specific type of conventions, although most of convention centers try to hold larger size of conventions due to their large economic scales. In addition to the traditional marketing plans, small CVBs were creating simple yet efficient methods to attract more meeting planners. Overall, differentiation and corporate alliances were keys for value-added marketing.

Since the first meeting will be held in HCC in 1998, HCC has not yet have historic records. Therefore, data of CVBs and convention centers in other U.S. states and Canada were collected to identify relationships and marketing activities between the two organizations. Also, the data of both convention industry and hospitality industry will be analyzed because the local and national tourism influence marketing activities for the convention centers. In Hawaii, the data of tourism is not only domestic but also international because Hawaii has the large number of tourists from Pacific-Rim countries.

Marketing activities had qualitative and quantitative aspects. Statistics were useful to compare and contrast the data. On the other hand, literature implied trends and characteristics that numbers and figures cannot explain. Thus, the two types of data were collected and analyzed.

Each critical question required qualitative and quantitative data.

First, the following data were necessary to demonstrate economic impacts of the convention industry.

• Expenditures at total meetings and conventions indicated the economical impacts and business cycle of the industry.
• Current trends and characteristics of the industry were measured by benchmarks, such as hotel occupancy rates, expansion growth rates, and the numbers of attendees, spouses and guests.
• Total expenditures, expenditure per person and the number of meetings measured the economic impacts
• Historical economic background of tourism and the current trends of visitors, for example, sizes, home towns, preferences, and types of travel purposes, were necessary to understand why Hawaii needed HCC.

Thus, data used in the first question helped HCC analyze environments of the industry.

Second, in order to demonstrate characteristics of each major target market, that is, corporate, associate, and convention meeting planners, the following data were required:

• Each responsibility of CVBs and convention centers was identified to know who was in charge of marketing activities.
• The number of attendees and average duration of meetings imply the number of rooms generated.
• Preferences of the target markets, e.g., booking seasons, the distance between hotels and convention centers, negotiable costs, availability and so on, were examined to recognize marketing methods

Moreover, in order to determine marketing methods to attract each target appropriately, the following data were required:

• Fam trips and site visits were evaluated.
• Sales representatives, who attended trade shows and conducted direct marketing, and types of media were explained.

Thus, data used in the second question helped HCC determine niche markets and marketing methods.

Third, in order to understand a relationship between local tourism and HCC, the following data were needed:

• Successful corporate partnerships were explained by cooperation of hotels in order to conduct marketing activities.
• Booking seasons and expansion debates were examined by influences between tourism and convention centers, such as local and national events, the number of hotel rooms, an average expenditure per attendee, total expenditures, and hotel occupancy rates.
• Environmental impacts were measured by types of transportation and the distance between hotels and convention centers.

Thus, the data used in the third question helped HCC recognize advantages and disadvantages within mutual influences with tourism.

Fourth, in order to consider which type of meetings and conventions HCC should pursue, the following data were required:

• Facility and capacity of convention centers, such as square foot, technological equipment, the maximum number of attendees, and location, were examined.
• The number of hotel rooms generated by events and the economical impacts on the community were evaluated.

Thus, data used in the forth question helped HCC determine whether HCC would narrow types of events or not.

Finally, in order to identify competitors and differentiate from the competitors, the following data were required:

• Geological competition was identified
• Unique and value-added strategies to survive in the competition were introduced and analyzed.

Thus, data used in the fifth question helped HCC pursue a competitive strategy.

The location and source of the above data included:

• U.S. CVBs, e.g., marketing plans, marketing activity calendars, destination guides, annual reports, newsletters, and directory of meeting planners
• Libraries, e.g., DBEDT, Meader, University of Hawaii, and the State
• U.S. convention centers, e.g., fact sheets and schedule of events
• Interviews with marketing professionals, e.g., MCCA and Salt Lake CVB
• Web sites on the Internet

• Industrial magazines, e.g., M & C, Convene, and Associate Management
• Professional journals, for example, Hospitality Research Journal
• Local and national newspapers, for example, Honolulu Star Bulletin, Honolulu Advertiser, Boston Globe, Wall Street Journal, and USA Today
• Pamphlets, brochures, and maps, e.g., Los Angeles and San Francisco
• Advertisement on publication, TV, and media kit
• Survey on U.S. meeting planners by IACVB
• Presentations and lectures, e.g., ERA, PKF, and HPU classes

In addition to reading materials and exploring the web sites thoroughly, the means of gathering the data and information included:

• Attending presentations and panel discussions, e.g., 1997 WACVB Annual Meeting
• Conducting interviews with marketing professionals, e.g., MCCA, Salt Lake CVB, HVCB or/and HCC
• Conducting inquiry to U.S. convention centers and CVBs by fax and e-mail
• Visiting convention centers and hotels directly, e.g., Hynes CC, Oakland CC and hotels in Waikiki
• Obtaining a copy of results of a survey on meeting planners conducted by IACVB

In order to select the best alternative, the following evaluation methods were applied to the indicated data:

• To compare and contrast the capacity and facility of HCC and other U.S. convention centers based on replies of the inquiry and fact sheets
• To compare and contrast marketing strategies of HVCB and other U.S. CVBs based on replies of the inquiry and other materials
• To examine results of a secondary survey on U.S. meeting planners

HCC has just joined a fierce competition in the convention industry. Acknowledgments is the first step of marketing to operate the convention center. Therefore, it is necessary to study the forerunners’ marketing activities to establish an effective marketing strategy for HCC. The U.S. convention centers had similar and different characteristics under various social and legal environments. However, most of them were strongly affected by tourism. Comparing and contrasting them helped HCC to find similarities and differences between HCC and forerunners who were potential competitors. Thus, data and information were collected from not only the convention industry but also tourism. The data will be analyzed to find unique characteristics and a value-added marketing strategy for HCC as a specific destination.

There were several steps to analyze findings of the research. The steps referred to five research questions (see Research questions in Chapter I for detail) and helped to establish a marketing strategy for HCC and HVCB.

1. Economic impacts of HCC
2. Marketing impacts of HCC/HVCB
3. Relationship with tourism
4. Types of conventions and meetings
5. Differentiation of HCC from competitors

The first step in establishing the marketing strategy was an environmental analysis. Research question A analyzed the HCC's economic impacts on the environments. Analyzing facts in external and internal environments helped to select information needed for the marketing strategy. The second step in establishing the marketing strategy was determining marketing mix and effective marketing plans. Research question B discussed the HVCB's major marketing dimensions such as products, target markets, distribution, and promotion. Moreover, interpretation of the results with keen insight helped HCC and HVCB to find its opportunity and threats in the fierce competition. The third step in establishing marketing strategy was identifying advantages and disadvantages within an inevitable relationship with tourism. Research question C examined a relationship between HCC/HVCB and tourism. Then, in research question D, it analyzed types of conventions and meetings to integrate analysis of above three aspects, such as economic, marketing, and tourism, as well as facts of HCC. Finally, research question E determined competitive strategy.

A metric method helped to determine combinations of criteria and analysis methods under each research question. [X] meant that the combination was applicable to answer the research question. [-] meant that the combination was not appropriate to answer the research question.

U.S. convention centers promoted corporate alliances within/beyond hospitality industry not only to increase economic benefits but also to reduce supplier's costs. In addition to convention rates of airline tickets such as 10 % - 15 % off normal rate, cooperation with airlines reduced the cost to transport business equipment such as computers.

CVBs tried to hold all types of conventions that fitted and maximized the utilization of space of the convention centers. In fact, most of CVBs that replied to the inquiry answered "all" to the question about a specific type of promoted conventions (see Appendix B). The most popular reason was because of large economic impact to the community and hotels. The McCormick Place Convention Complex that held huge capacity, i.e., 1.6 million square footage, focused on trade shows and conventions that utilized more than 50,000 SF (Rowley, 1997). On the other hand, the Anchorage CVB focused its marketing on a relatively smaller size of the meetings and conventions. Since the William A. Egan Civic & Convention Center had 317,000 square footage, the largest meetings that the center could hold was "about 3,000 people-city wide" (Morris, 1997). The Hynes Convention Center in Boston focused on conventions less than 6000 attendees and did not hold consumer shows that could be held in trade centers at the waterfront (Stevens, 1997). The convention center especially focused on medical and educational conventions that had currently been increasing in the industry. According to Makoto Batori (1997), Manager, Marketing Division at Pacifico Yokohama, one of the largest international convention centers in Japan, the convention center focused on medical conferences because they had enough budget.

The total expenditure of meetings and conventions was 37.4 billion in 1995 (Braley, 1996 b, p.65) and was considered as $50 billion a year industry if trade shows were included (Roig, 1998). The industry generated 70 million employees as well as 60 million hotel rooms revenues and 80 million airline seats (Roig, 1998). Thus, the convention industry took a role of activating the community. Out-of-town convention and trade show delegates in San Diego spent $571 million in 1995 (see Table 1 and Figure 1, San Diego Convention Center Corporation [San Diego CCC]).