McCormick Place Loses its Luster

Has all the grumbling about Chicago’s vaunted McCormick Place as America’s premier tradeshow venue finally reached critical mass?

For years, corporate exhibitors have groused about government-controlled, money-losing McCormick Place. Stories abound of exhibitors being forced to spend hundreds of dollars for services as mundane as plugging in a piece of machinery, or being charged $1,000 to hang a sign from the ceiling, because of onerous union rules governing “who does this” and “who can’t do that.” It’s been a constant refrain of complaining I’ve heard at every tradeshow I’ve attended at McCormick Place, dating back some 20 years.

Despite all of the criticism about McCormick Place’s high costs and lack of user-friendly service, it remains the largest convention complex in America, with over 2.5 million square feet of exhibit space. But attendance has been declining pretty dramatically, from ~3.0 million in 2001 to ~2.3 million in 2008. While the figures haven’t been released yet for 2009, it’s widely expected that show traffic will be reported as down another 20%.

As the current economic recession has put the most severe strains yet on the tradeshow business, it seems that a rebellion against McCormick Place is in now full swing. According to a recent article in The Wall Street Journal, “a gradual drop-off in business … has turned into a rout as a string of high-profile shows have pulled out.” The deserters include a triennial plastics show (~75.000 attendees), as well as the Healthcare Information & Management Systems Society’s annual conference (~27,500 attendees).

But isn’t tradeshow attendance off in other convention centers as well? Well … yes. But clearly not as much. In truth, tradeshow attendance has been under pressure at a “macro” level ever since 9/11, and an important reason beyond the issue of terrorism is technological innovation and the ability for people to interact through video-conferencing and for companies to demo their equipment and services via the Internet and other forms of digital communication.

Tradeshows were once the only way to gather a community together, but now there are other options. One school of thought holds that large tradeshows are now less effective than small, targeted conferences that provide heightened ability for attendees to interact with one another on a more intimate basis. Some events no longer charge attendees … but they make sure to “vet” them carefully to ensure that the show sponsors who are underwriting the costs are reaching prospects with important degrees of influence or buying authority.

On top of these “macro” trends, the current economic downturn just makes McCormick Place look more and more like a loser when it comes to the tradeshow game. Compared to Chicago’s three most significant competing tradeshow locales – Atlanta, Las Vegas and Orlando – the cost of many items from electricians (union labor) to foodservice (greasy spoon-quality coffee at Starbucks® prices) to hotel accommodations (room fees and surtaxes that won’t quit) ranges two times to eight times higher in Chicago. And in today’s business climate when every cost is scrutinized closely, none of this looks very cost-effective to the corporate bean-counters.

True, Chicago is more centrally located for travel from both coasts: Who wants to take a five hour flight from New York to Las Vegas or from California to Orlando to attend a meeting?

[On the other hand, no one can honestly say that the weather in Chicago is preferable to sunny Florida or Nevada!]

So it would seem that Chicago’s worthy tradeshow competitors have achieved the upper hand now. I just returned from two national shows this past week – the International Air Conditioning, Heating & Refrigeration Expo and the International Poultry Expo. Where were they held? Orlando and Atlanta – the same cities which are attracting McCormick Place’s erstwhile customers.

Hype and Hope: The Twittering Machine in Action

Twitter logoOver the past few days, we’ve heard reports of how the post-election demonstrators in Iran have been using Twitter as a means for organizing protests, moving crowds from neighborhood to neighborhood to keep one step ahead of the armed authorities … and to upload images and video clips of the demonstrations to broadcast to the rest of the world. Twitter has played an important (and successful) role in engineering a “grand workaround” scheme, thwarting a government-ordered news blackout.

We saw the same phenomenon play out in the Eastern European country of Moldova just a few months back.

Viewed from this perspective, Twitter seems to be living up to its billing — in spades.

But there’s also research that shows another side of the coin. A just-completed Harvard University study of 300,000 Twitter users has found a classic rule of behavior in force: just 10% of users are generating more than 90% of the content on Twitter.

It goes even further than that. The average Twitter user “tweets” about once every 75 days … or even less frequently. And the median number of tweets made per person is … One!

That’s right. More than half of the 300,000 people in the Harvard study have sent just one tweet ever. It was with dry understatement that Bill Heil, the Harvard Business School graduate who carried out the study, reported, “Based on the numbers, Twitter is certainly not a service where everyone who has seen it has instantly loved it.”

I have an additional explanation to offer: Perhaps most people haven’t (yet) figured out what to do with Twitter to make it meaningful in their lives.

It didn’t help that Twitter itself set the bar at a pretty low level right from the start by suggesting that users answer the question: “What are you doing?” How inconsequential is that?

As it turns out, the trivial isn’t where Twitter has found its true voice.

Indeed, ask the Iranians or Moldovans whether Twitter has been meaningful in their lives. You’ll get a life-and-death answer in the affirmative.

Marabel Chanin: A Symbol of a City

Marabel Chanin, speaking to reporters outside her home in Detroit's North End in summer 2008.
Marabel Chanin, speaking to reporters outside her home in Detroit's North End in summer 2008.
One of the sadder stories to hit the television airwaves in recent days concerns Marabel Chanin, an elderly woman living alone in an urban “ghost” neighborhood. When Marabel, a single woman, moved to Detroit’s North End back in 1964, the area, adjacent the Palmer Park Golf Course, was a beautiful, established Detroit neighborhood graced by roomy, circa 1920s single-family homes and lush landscaping.

Moving forward some 45 years later, Marabel was the last person on her block of Robinwood Avenue, living in daily (and nightly) fear of break-ins, gunfire, or worse. Complaints to police went nowhere, so her phone call to the local Detroit Fox News affiliate TV station (WJBK’s Problem Solvers) was a last-ditch attempt to find a solution to her dilemma.

Marabel’s story, profiled by the station last summer, brought the issues of crime & grime, urban decay and danger down to the most personal level and struck a nerve with viewers across the Detroit viewing area. The story ended up on the Internet, where I viewed the news clip on YouTube while researching my blog entry on the city of Detroit’s decline. It was so moving, I felt compelled to contact WJBK-TV, hoping to hear a good end to the story.

Unfortunately, as was chronicled in a follow-up report by the station broadcast last week, there was no good end. In fact, Marabel passed away in her home right around Christmas and was discovered days later. And now, five months on, her body remains at the county morgue, claimed by no one. Because of severe budget shortfalls, there are no funds to bury her or the nearly 100 other unclaimed bodies that are being kept there.

A story like this is gripping enough on a purely personal level … but it is also powerful in a larger context. To what degree does someone like Ms. Chanin — a single person of middle-class means but without close relatives — bear the blame for allowing herself to become the last person living on her city block in a trashed neighborhood? Or are there also larger forces at work that overwhelm the ability of someone of modest means (and elderly as well) to figure out a solution and act on it?

It was the southern agrarian writer Andrew Lytle who wrote in an essay years ago about the potentially dehumanizing effects of urban living. Lytle believed people were meant to live in smaller communities, where folks know each other and look out for neighbors in need. He also warned against large-scale industrialization, arguing that economic downturns lead to massive unemployment and thus dislocation of workers, whereas people who work the land usually can get by in a bad economy.

Of course, Lytle did not anticipate the advent of “industrialized agriculture” and the effect that would have on small farmers. But when you consider the economic landscape in 2009 and its effects not only on Detroit but also communities like Elkhart, IN, Lytle’s essay suddently takes on a very contemporary significance.

And what of Marabel Chanin? WJBK-TV has established a fund to provide a burial ceremony for her — and to do the same with some of the others unclaimed at the morgue. Tax-deductible donations to the “Marabel Chanin & Friends” fund are being accepted c/o National City Bank/PNC (First National Bank Building, 660 Woodward Avenue, Detroit, MI 48226). Reportedly, community response has been strong.

Yet Another Headache for the U.S. Auto Industry

Several Mexican drug cartels are very active along the U.S. border.
Several Mexican drug cartels are very active along the border -- and U.S. auto parts plants are getting caught in the crossfire.
Now here’s an interesting confluence of events that at first blush seem totally unrelated to each other: the U.S. automotive industry and the Mexican drug wars. As if the auto industry didn’t have enough problems on its hands, now it’s finding itself in the crosshairs of the Mexican drug cartels’ shootout with the government in towns along the U.S. border.

Ciudad Juarez, Mexico is a factory town that happens to have its share of U.S.-owned auto supply factories, drawn to the region by cheap labor rates averaging less than $1.50 per hour. Always a tough city, Juarez has gotten a lot more dangerous in recent months. The raging violence peaked several months back with drug gangs killing six police officers in one single week before the Mexican government sent military troops in.

Civilians and foreign nationals are also at risk, it turns out. In January, a plant manager for Detroit-based auto parts manufacturer Lear Corporation was kidnapped on his way to work in Juarez, and a $1 million ransom was demanded for his release. Shortly before this drama unfolded, the firm’s local facilities were attacked by a band of gunmen armed with assault weapons; reportedly, they were after employees’ Christmas bonuses plus proceeds from the plant’s ATM machine.

Auto parts maker Delphi has also reported a number of disturbing incidents, including the attempted kidnapping of one of its female executives.

So, in addition to being faced with a blizzard of bad news on the domestic front stemming from the collapse of automotive sales, the auto parts manufacturers are encountering an entirely different set of bad conditions on the border. In response, they’re taking special precautions, including adding more security (and vetting security personnel more carefully), removing ATMs from plants, restricting local personnel travel to daylight hours only, and even going so far as to keep their CEOs away from the region entirely.

But you can only wonder how much longer things can go on like this if the Mexican government doesn’t gain the upper hand in quelling the danger and the violence — and soon. After all, there are nearly 1,000 auto parts makers in the country, ~70% of which are subsidiaries of U.S. companies. That makes it very hard for the military to patrol so many locations against the seemingly random attacks, kidnappings, and other acts of violence.

At some point, the prospects of cheap labor and low costs will run smack up against basic safety, security and peace of mind. Other Latin American countries face similar issues … so might this mean a shift of some of these operations back to the United States? Now, that would be an interesting twist!

We shall see.

Conference Centers to the Fore

What a difference a few months make. “Way back” in 2008, high-end resort properties in exotic locations were doing a healthy business hosting corporate events. Large corporations have long been a core resort customer segment that has delivered volume business year after year – major contributors to the bottom line even as resorts have also attracted their share of weddings and other smaller events.

The economic meltdown has now brought hugely negative publicity to corporate events held at resorts, the result of news reports that federal government bailout money has gone to pay for them. These events have been described by politicians and the press as “outrageous,” “excessive,” “junkets” and “boondoggles” – places where well-heeled business types get to wine and dine and cavort in the sun on the taxpayer’s dollar.

Even the AFL-CIO union hasn’t been immune to the criticism, coming under fire for holding its annual convention at the exclusive Fontainbleau Hilton resort property in Miami Beach.

While one can certainly fault these companies and organizations for being politically tone-deaf, the fact is that business does get carried out at these events. Even in today’s electronic age, it is still important to organize face-to-face get-togethers on a regular basis.

Enter the Conference Center. This corner of the hospitality industry, long relegated to backwater status, has consistently labored under the image of being far less impressive and exciting than the resort segment. Now, sensing an opening, conference centers are making their move. They’re promoting themselves as a preferred location for serious business events – far away from tourist attractions or white sand beaches, extreme recreation or other distractions (the ubiquitous golf being the exception).

Properties like the Marriott Aspen Wye Conference Center in Maryland and the Wyndham Princeton Forrestal Conference Center in New Jersey are stepping up promotion, as is the International Association of Conference Centers. The basic message is that conference center properties are the places where productive meetings take place, free of distractions. “Serious-minded meetings are in … posh or over-the-top venues are out” is the order of the day.

Plus, right now it just sounds a lot better from a PR standpoint if you can report that your corporate event is being held in a location five miles from Trenton, New Jersey.