Impact of Issue 3 on Convention Business in Cincinnati

1. Failure to expand convention center
   Exhibit A: In 1998, PriceWaterhouseCoopers (PWC) issued a report to the City of Cincinnati which concluded that the drop in business was due to the city’s failure to expand its convention center. In a letter to Council Member Phil Heimlich on November 6, 1998, Jim Underwood (President of Underwood and Associates, the research company hired by the city that authorized the study) stated:
   
   

   ...the Convention Center has suffered a marked decline in the number of trade association visitors to the city...between 1993 and 1997, trade show attendance at the Convention Center has declined from more than 80,000 visitors to slightly more than 20,000...PWC says that without an expanded Convention Center, the facility soon will slip to 14th - last among it comparable competitors. The reason for that is because Cincinnati’s competitors are expanding their facilities and will soon have exhibit space to accommodate large trade show and exhibitors needing more space than the Convention Center can provide in its current configuration (Attachment A).

   Underwood’s letter also stated, "...Cincinnati is a more marketable choice as a trade and exhibition alternative than other cities," but for the size of its convention center. Nowhere in this report is Issue 3 mentioned as a cause of the decline.
   
   Exhibit B: On January 8, 1999, the Business Courier wrote an article, "Convention Bookings Drop, City’s undersized center blamed for steep decline" (Attachment B). The article stated:

   New figures released by the Greater Cincinnati Convention and Visitors Bureau show a third straight annual decline in the number of hotel room nights generated by conventions booked during the year...And more disturbing is this: The pace of the decline is rapidly accelerating from 3.4 percent in 1996 to 14.2 percent last year. ‘We’re no longer a big-league convention city,’ said Gary Wachs, general manager of the Garfield Suites Hotel downtown. ‘We’re just losing one convention after another and we’re not going to shore this up until we get an expansion.'

   In the article, Mike Wilson, then President of the Greater Cincinnati Convention and Visitors Bureau (CVB) blamed the slump on "Cincinnati’s undersized center and an unusually high amount of staff turnover at the bureau." Issue 3 was never mentioned as a cause.
   
   Exhibit C: An article in the Business Courier on February 2, 2001 (Attachment C) pointed out that Wilson may be fired because of the decline in bookings. The article said that,

   "Hotel and restaurant operators are growing increasingly frustrated with the decline in the numbers of people attending conventions at the ...convention center," and that hotel booking reports indicate that 2001 began with 50,000 fewer room nights than the same time the year before. David Anderson, then chairman of CVB, said the quality of the convention center and the quality of some downtown hotels were "making Cincinnati’s convention product all the more difficult to sell." Wilson also blamed the worn-out carpet (he said the city, which owns the center, had failed to perform cosmetic repairs for the past five years) and the lack of technology in comparison to centers in other cities. Paul Sacco, general manager of the Omni, said the city will continue to lose business until the center is expanded.

   Issue 3 was never mentioned as a reason for the decline in business.
   
   
2. Lack of adequate leadership
   In 2001, after the convention center posted a $200,000 deficit in 2000 and because losses were predicted to double the next two years, CVB launched an independent review of its ability to attract groups (Attachment D - 2/7/01 Cincinnati Post article).
   
   The review by C.H. Johnson Consulting (Attachment E and Attachment F) found that of eight cities studied, Cincinnati hotels had the lowest occupancy rates and the smallest convention center; that CVB sales staff failed to reach its sales goals for the past three years; and despite missing its sales goals, CVB paid $726,00 in staff bonuses from 1998 to 2000.
   
   The report blamed CVB for a lack of vision, stating that it "has matured, but not evolved...there is no prevailing vision for the future or plan of attack to solve its issues...the organization has grown stagnant and lost resources rather than increasing them as its peers have..."
   
   Though the report added that CVB suffered from having the lowest budget of its peers, the poorest convention center and the lowest hotel capacity, "the organization has not been an effective tool in developing strategies to combat market conditions or distinguish Cincinnati in the...marketplace."
   
   The report also found that Cincinnati had suffered from bankruptcies and corporate losses, and had lost its image as a "hot" destination. The report issued a number of recommendations, including reconstituting the board of CVB, evaluating management, pursuing additional funding, and restructuring CVB.
   
   Issue 3 was never mentioned as a factor in the poor performance of the convention center. As a result of the Johnson report, Wilson was let go as President of CVB.
   
   
3. Other reasons for convention losses
   Tourism in Cincinnati slumped even more in 2001. Whereas convention business in other cities such as Cleveland, Louisville and Indianapolis was up, Cincinnati's hotel occupancy was off 26% in April, and through August, was at 50%, compared to 56% in 2000. According to business owners and CVB, the reasons were the riots, the Comair strike, and the poor performance of the Reds (Attachment G and Attachment H - 5/27/01 and 10/14/01Cincinnati Enquirer). Issue 3 was never mentioned. According to Chuck Curran, former Interim President of CVB, when he talks to his salespeople about the loss in business, "Issue 3 is not on the radar screen."
   
   CVB maintains records of lost business for each year and assigns a "Lost Reason Code" to each event. Most notably, Issue 3 is not listed nor assigned a code as a reason for tracking lost business.
   
   Records have been obtained for the years 1996, 1997 and 1998, but have not been made available for other years. In these records, CVB lists 8 reasons in 1996 and 18 in 1997 and 1998 for loss of business (Attachment I, Attachment J, Attachment K).
   
   Only 2 out of 357 losses make mention of Issue 3 among other reasons for choosing another city:
   
   

   1) A note after the Christian Church International Christian Women’s Fellowship that had been scheduled for June of 2000, that says, "Lost to Louisville/Indianapolis due to local factors, high airfare and Issue 3."
   
   2) A note after the National Minority AIDS Spring Meeting, scheduled for March of 1999 that says, "Selected Pittsburgh; had Issue III concerns and Pittsburgh could self contain."
   
   

   The Facts About Lost Business Due to Issue 3 Articles in the Cincinnati Enquirer (Attachment L) and Business Courier (Attachment M) have stated that CVB has estimated a loss of $63.7 million in convention business due to Issue 3. Stonewall Cincinnati, a pro-homosexual political activist group, uses the $63.7 million figure in speaking to the press, though their website on October 29, 2001 claimed the loss was "over $35 million." (Attachment N).
   
   But according to Chuck Curran, the $63.7 figure has no validity and he does not know where it came from. He says that as far as how much convention business has been lost from Issue 3, "There is little black and white and a lot of gray." (Attachment O)
   
   Normally, contracts with the convention center and hotels are booked 12 to 18 months in advance. According to Curran, eight groups that were scheduled to come to Cincinnati between 1995 and 1999 cancelled because of Issue 3 (Attachment P), though he is not sure if the groups had actually signed contracts for their convention. (It should be noted that groups contract with the city for the center, not with CVB.) The projected economic impact from these groups was estimated at $24.6 million.
   
   CVB has only been able to produce letters from three of the eight groups, the American Speech-Language Hearing Association, the American Musicological Society, and the American Library Association (Attachment Q).
   
   Of the eight groups who supposedly cancelled conventions due to Issue 3, the American Academy of Audiology in 1997 (economic impact estimated at $2.6 million) and the Music Teachers’ Association in 1999 (economic impact estimated at $1 million) were replaced by other meetings.
   
   Three groups, the Ohio Psychological Association in 1995, the American Musicological Association in 1996, and the Association of Flight Attendants in 1999, whose total economic impact was estimated at $1.8 million, were booked in hotels only. Thus, CVB does not know whether they were replaced.
   
   The final three groups, American Library Association in 1995, American Historical Association in 1995, and American Speech, Language and Hearing Association in 1995, were replaced with local trade shows which, according to Curran, provide minimum hotel usage. Curran points out that it is possible that had the eight groups not pulled out, CVB may have been able to accommodate them and those that replaced them by moving dates around.
   
   Nonetheless, the worst figure that could be used to estimate the economic impact from Issue 3 would be $21 million ($24.6 million minus $3.6 million for those that were definitely replaced). If we subtract those who booked hotels only and may have been replaced ($1.8 million) and those replaced with trade shows ($19.2 million), the economic loss is zero.
   
   CVB also states that approximately 12 other groups who were considering holding their meeting in Cincinnati alongside other cities, whose economic impact is estimated at $20.8 million by CVB, chose other cities because of Issue 3. Curran admits that there is no assurance that Cincinnati would have been chosen by these groups.
   
   Nonetheless, spokespersons for CVB have used the figure $45.4 ($24.6 + $20.8) as the amount the city has lost due to Issue 3 (Attachment R - quote from Julie Harrison in 10/30/01 Detroit News). Curran calls the $45.4 figure "the outer end of what we know."
   
   It is worth noting that of the top 20 conventions in 2000 and 2001, eight were Pentecostal or evangelical Christian groups (with total attendees of 68,000) that likely viewed Issue 3 as a positive impact on the City (Attachment S). However, Curran points out that these groups do not spend much in comparison to professional groups that Cincinnati is losing to other cities.