Presented By: Rob Hunden, Vice President Johnson Consulting November 4, 2005

1. Public-Private Partnership and other Critical Success Factors for Investing in and Operating a Conference Centre: The International Experience Presented By: Rob Hunden, Vice President Johnson Consulting November 4, 2005

2. Facility Growth Fuels Competition

3. European Meetings Market

4. Greek Venues

5. Trends • 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

6. Location 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

7. Ownership Differences Europe Varies. 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 America Generally 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

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

9. Private 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

10. Public 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

11. Private 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

12. Financial 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

13. Development 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

14. McCormick 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

15. Viva, Las Vegas!! Most Convention Space of any City outside Europe – 150,000 Hotel Rooms • 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

16. Milan’s New Fair Complex 530,000 square metres 150 – 200 shops 10,000 parking spaces Multiple Hotels Privately-owned

17. Marketing • 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.

18. Technology & 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

19. 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

20. Questions