Messe in Miami: Convention Center Bid Roils Industry

HIL ANDERSON, SENIOR EDITOR
Share on facebook
Share on twitter
Share on linkedin
Share on print
Share on email

Miami Beach, FL – Global Spectrum is bidding on a contract to run the Miami Beach Convention Center. The bid includes a partnership with Messe Schweiz, a European company that not only manages venues but is also one of the Florida building’s best customers.

If the Global Spectrum bid is accepted by city officials, the convention center would be operated under an apparently unprecedented deal in which a show organizer would have an unofficial yet possibly significant amount of clout in the operation of a U.S. convention center.

It will be up to the city to decide if the trans-Atlantic partnership will take over management of the center from SMG in the Fall. Meanwhile, the trade show industry is looking at the developments with a jaundiced eye.

Not the Way It’s Done in the U.S.
Show organizers told Trade Show Executive they were clearly uncomfortable over the possibility of a foothold for the European “Messe model” in which a show organizing company stakes out an influential, if not controlling, position in a convention center. While it might be unlikely that an outside organizing company could find itself blackballed from a choice venue, organizers are concerned about being less able to obtain favorable dates and rates.

“This may be an accepted practice in other parts of the world, but it is one that is not yet accepted in North America,” said Ken McAvoy, senior vice president of Reed Exhibitions.

Doing What’s Best for Miami Beach
Global Spectrum and Messe Schweiz stressed in an interview with Trade Show Executive that they were not bent on making Miami Beach a fiefdom, but rather viewed their partnership as a boost for the city of Miami Beach and a convention center that has been a landmark since the 1950s.

Built in the heyday of the Miami Beach convention market, the center is ranked 26th on Trade Show Executive’s list of the World’s Top Convention Centers. It includes 502,848 square feet of prime exhibit space, 145,000 square feet of meeting space, a location adjacent to South Beach and a history that includes the unprecedented hosting of both the Republican and Democratic presidential conventions in 1972.

But Global Spectrum and Messe Schweiz contend that the center has lost momentum in recent years and is ripe for a change in management when the current contract with SMG expires at the end of September. “It is time for a new way of doing things, and that is not a negative reflection on SMG,” said Frank Russo, senior vice president of Global Spectrum.

Russo said he had toured the convention center and found it to be in good shape. There were possible improvement that could be made in terms of signage, advertising and electronic communications that would enable the center to actually draw more events rather than keep anyone out. “More shows and a better mix,” he said. “More social and corporate events as well.”

Messe Schweiz is a Miami Beach Regular
Messe Schweiz is the organizer of Art Basel Miami Beach, an annual fine arts exhibition that is one of the Miami Beach Convention Center’s premier events. Because of its long relationship with the convention center, Messe Schweiz has a vested interest in the best possible management of the building. “Their motivation is to create a better place for this show and the other shows that they own and want to operate in the market,” Russo said.

To sweeten the pot, Messe Schweiz had pledged to launch a “high-end consumer show” at the convention center in 2012 and provide the city with a sales office in Europe. The Swiss company will also offer its expertise as a facilities management company, but will otherwise let Global Spectrum run things. “Global Spectrum, and only Global Spectrum, would be the responsible party to the city,” Russo said. “It is not a question of Art Basel receiving any preferential treatment. It will be quite the opposite. We have committed to keeping them at arm’s length.”

Potential for Trouble Down the Road?
Show organizers, however, were not prepared to let their guard down. Reed’s McAvoy contended that Messe companies had competitive advantages that could undercut U.S. firms when it came to competing for business. “We feel this would be unfair competition,” he said. “We would shy away from getting involved with convention centers that adopted a Messe partner that could influence dates, space and occupancy issues.”

SMG declined to comment on the current bid process by the City of Miami Beach, except to say that they were proud of their relationship and growth with the city and hospitality community. Gregg Caren, senior vice president of business development for SMG, said that in general terms, U.S. convention centers belonged to the city where they were located and not to the trade show organizers. “They are meant to support and grow the local hospitality industry and tax revenues,” he said. “A publicly owned U.S. venue operator acts as an agent of the city.”

Up to the City to Decide
Miami Beach accepted bids for the management contract on April 11 and has not given any indication as to when it will decide if SMG will remain in charge or if Global Spectrum and Messe Schweiz will take over. Russo said officials could make a decision quickly or call the two parties in for interviews. “We have bid a very competitive market rate,” he said. “And we have included funds for capital upgrades. It is a very aggressive marketing-oriented bid.”

Reach Frank Russo at  (215) 389-9587 or frusso@global-spectrum.com; Ken McAvoy at (203) 840-4800 or kmcavoy@reedexpo.com; Gregg Caren at (215) 592-6644 or gcaren@smgworld.com