CARDIFF COUNCIL CYNGOR CAERDYDD
CABINET MEETING: 12 SEPTEMBER 2013
INTERNATIONAL CONVENTION CENTRE, EXHIBITION CENTRE AND MULTI-PURPOSE INDOOR ARENA
REPORT OF DIRECTOR OF ECONOMIC DEVELOPMENT AGENDA ITEM: 2
PORTFOLIO: FINANCE & ECONOMIC DEVELOPMENT
Reason for this Report
1. To seek authority to commence the process to procure the delivery of an International Convention Centre, Exhibition Centre and Multi-Purpose Indoor Arena through the publication of a Prior Information Notice (PIN) to the Official Journal of the European Union. The publication of the PIN will allow the Council to test the market and work with potential developers and operator consortia which will help shape the Council’s approach to the subsequent stages of the procurement process.
Background
2. Over the past 20 years Cardiff has seen significant investment in cultural and leisure infrastructure, including the creation and development of Cardiff Bay as a visitor destination, the Millennium Stadium, Wales Millennium Centre, the SWALEC stadium, Cardiff City Stadium and the St David’s 2 shopping centre. These investments have enabled the city to host major international events, attract international visitors, and have raised the city’s international profile. These investments have also contributed to Cardiff’s growing reputation as a ‘liveable city’ which can attract and retain a skilled and talented workforce.
3. The Administration’s Corporate Plan for 2013 – 2017 identifies the delivery of an International Convention Centre and Indoor Arena as one of the key deliverables for developing and attracting high value business activity in Cardiff. ‘Rebuilding Momentum’, the City Government’s Green Paper consultation, published in March 2013, identifies the lack of a Convention Centre as a major structural economic weakness. The responses to the consultation exercise continue to strongly support the delivery of a Convention Centre as a core infrastructure requirement for a Capital city, which has recently been further endorsed by the new Cardiff Business Council.
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International Convention Centre (ICC)
4. Not surprisingly, there is compelling evidence to suggest that Cardiff’s reputation as both a visitor destination and a business centre is stronger amongst people that have actually visited the city than amongst those that have not. This suggests that if the Administration is going to secure Cardiff’s role as Wales’ economic dynamo by attracting inward investment and new jobs then it needs to do more to attract to the city those who can help influence those outcomes. In addition, business tourism is a highly lucrative source of revenue helping to underpin the jobs of those employed in the hotel and hospitality sector. For all these reasons, an International Convention Centre, capable of attracting global conferences, conventions and events must be a priority for the city.
5. Since opening in 1995 Edinburgh’s ICC has attracted around 980,000 delegates to more than 2,400 events, generating an estimated £340m for the Scottish economy. It has also stimulated the development of a new Grade A office environment in the immediate vicinity of the facility. There is significant evidence to suggest that this facility has been a catalyst for the city’s economic development success.
6. The lack of an ICC in Cardiff creates a significant gap in the city’s infrastructure at a time when city’s are competing against one and other for global business. More importantly, in the current economic climate an ICC project will employ some 1000 people during its construction phase and will, when operational, create around 500 direct full time equivalent jobs and hundreds more indirect jobs through its supply chain.
7. In order to help understand an optimum ICC requirement for a city the size and status of Cardiff the Economic Development Service commissioned a report from leading industry advisors Right Solutions which has recently been updated. Right Solutions advise that significant demand exists for a modern purpose built Convention Centre in Cardiff that is capable of hosting conferences of up to 1,500 delegates. This would enable 95% of all conventions delivered in the UK to be accommodated. The Right Solutions advice is provided in Appendix 1-3. The Service has continued to engage with Conference Centre operators and event promoters around the UK and has concluded that the case for building a larger facility capable of accommodating all conferences is weak owing to the significant additional costs involved. Instead, it is considered more prudent to consider co-locating complementary facilities such as an Exhibition Centre and/or an Indoor Arena to ensure a capability to host the largest global conventions.
Exhibition Space
8. The availability of exhibition space has become an increasingly important aspect of any convention centre project. Most of the convention centres in the UK are now expanding the space available for exhibitions either as integral parts of their existing facilities, e.g. Edinburgh, or as new adjacent stand-alone facilities, e.g. Liverpool. Exhibitions are increasingly used to generate sponsorship funding to provide financial viability for
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convention events, and as such more and more space is being required by event operators. Right Solutions have previously suggested that Cardiff would require a minimum exhibition space of 3,500 square metres. However, informal consultations with convention centre operators in Edinburgh, Glasgow and Liverpool suggest that a minimum of 5,000 square metres is more appropriate and even more if it can be afforded. At present the Council’s intention is to require 5,000 square metres as an integral part of its ICC project. However, the Council will also seek a solution that will provide the potential for the development of a substantially larger stand- alone facility that could be developed as a later phase as and when demand requires it and/or funding becomes available.
Banqueting Halls
9. The ICC project will also require a significant facility to accommodate major gala dinners and banquets of the scale associated with the convention industry. Research suggests that appropriate space needs to be provided for the same number of delegates as can be accommodated in the ICC’s main auditoria. As such Cardiff’s current position is to require a banqueting hall with the capacity to accommodate 1500 delegates.
Mutli-Purpose Indoor Arena (IA)
10. Rebuilding Momentum further identifies a Multi-purpose Indoor Arena as “an important building block for any liveable city”. Cities around the UK are starting to realise the importance of attracting premium events. New arenas have recently been constructed in Liverpool, Leeds and Glasgow, and the Mayor of Bristol has begun to explore the potential for a regional facility in the centre of Bristol as part of the Temple Meads Enterprise Zone.
11. Whilst Cardiff benefits from the Millennium Stadium and the other sporting stadia capable of hosting large events it lacks an appropriate facility to attract many of the premium UK entertainment events and the mobile international entertainment and sporting events attracted to the UK. Competition for these events is increasing across the UK and the expectations of event organisers and performers in terms of the facilities provided are rising accordingly. If Cardiff wants to maintain its capital city status and its position as the primary regional centre for major events it will need to respond to the market and provide a bigger and better facility in the city.
12. Whilst primarily supporting a regional market, the Indoor Arena will also help to attract new visitors to the city and raise the city’s profile, particularly in the UK context. The facility would also complement and add value to the ICC by enabling larger conferences, such as party political conferences to be attracted to the city. This is achieved by locating all of the required exhibition space for larger events in the Indoor Arena, freeing up the integral exhibition space in the ICC to create much larger areas of flat floor seating capable of accommodating up to 4,000 delegates, and larger banqueting halls.
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13. Some cities, most recently Liverpool, have developed integrated ICC/IA facilities. However, the operating models for an ICC and an IA are significantly different and sometimes conflicting and feedback from facility operators and event organisers suggests that the two facilities are better provided as independent facilities. This also seems to be a lesson learned by Liverpool who will be investing in a new stand-alone Exhibition Centre adjacent to the ICC/IA which is soon to begin construction.
14. The Administration is, therefore, currently minded to provide separate facilities in close proximity to one another. However, it also appreciates the need to keep its options open to secure the most deliverable solution and at the best value for money and will therefore consider the views of those responding to the procurement process.
15. In terms of the indicative capacity of an Indoor Arena for Cardiff, feedback from arena operators in the UK suggests that major cities can support audiences of between 12,000-15,000 people. This is evidenced by the size of arenas recently constructed in the UK. The Administration is minded to pursue a horse-shoe shaped arena similar to Liverpool arena that seems more flexible and better suited to attracting sporting events than the alternative fan-shaped arena recently delivered in Leeds.
Procurement Process
16. It is proposed to issue an information pack to interested parties to include:
• The “Rebuilding Momentum” Green Paper • The Aecom Cardiff Masterplan Study • The Right Solutions Reports on Conference Facilities (Appendices 1-3)
Reasons for Recommendation
17. The recommendation in this report is to issue a Prior Information Notice via the Official Journal of the European Union to carry out an appropriate market testing exercise to establish the need for and optimum size, location and configuration of an International Convention Centre with appropriate exhibition space together with a Multi-purpose Arena. The project is designed to enhance Cardiff’s existing conference and sports facilities and to enable broader economic development activity by stimulating investor confidence in Cardiff.
Local Member Consultation
18. The proposal does not involve a local issue.
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Legal Implications
19. The publication of a PIN in the Official Journal of the European Union does not oblige the Council to embark on a procurement exercise. It gives notice that the Council is considering its options in regard to the relevant project and invites views from the market on the options open to the Council.
Financial Implications
20. Information provided via the PIN will be essential in assisting the Council in assessing the scope, viability and funding options to deliver the facilities quoted in the report. This will also assist in development of a robust options appraisal and business case which will be needed to ensure that all financial implications and risks for the Council are determined, with a view to identifying mitigating actions and wider implications for the City. Any business case will need to be reported to Cabinet in future reports and at that time consideration will need to be given to any budgetary framework issues. Any costs in the initial development of this proposal will be met from existing revenue budgets.
RECOMMENDATION
Cabinet is recommended to agree to the issue of a Prior Information Notice, including an information pack, to assess market interest in a project to design, fund, construct and operate a Convention Centre, associated exhibition space and a Multi-purpose Arena.
NEIL HANRATTY DIRECTOR OF ECONOMIC DEVELOPMENT 6 September 2013
The following appendices are attached:
Appendix 1 – Right Solutions - Cardiff Convention Centre Study 2004 Appendix 2 – Right Solutions - Cardiff Conference Centre Study 2004 Appendix Appendix 3 - Right Solutions – Cardiff Convention Centre Study 2011
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Appendix 1
REPORT TO CARDIFF COUNTY COUNCIL FOR CONFERENCE DEVELOPMENT NEEDS STUDY
Prepared by: Sally Greenhill Eric Rymer
The Right Solution Ltd Canada House 272 Field End Road Eastcote, Middlesex HA4 9NA Tel: 020 8582 0489 www.rightsolution.co.uk
28th June 2004
© Cardiff Council
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Contents
Introduction ...... 3-4 Executive Summary ...... 5-7 Cardiff as a conference destination ...... 8-9 Appraisal of existing business ...... 10-12 Market demand ...... 13-23 Summary of organiser interviews ...... 24-27 Market Supply ...... 28-32 City Comparisons...... 33-35 Specification of facilities ...... 36-42 Potential Development Sites ...... 43-44 Funding Options ...... 45-49 Economic Benefits ...... 50-59 Importance of infrastructure ...... 60-61 Next steps ...... 62 Appendices:
Competitive Convention centres Local venues Local hotels Theoretical Room Sizes Subvention Evaluation Form
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Introduction
Cardiff's Strategic Tourism Growth Area Action Plan, published in January 2003, identified that, although it is marketed as one of the UK's top 11 cities for conferences, Cardiff is in the UK's 'second division' in terms of its offer for conferences, compared to cities such as Birmingham, Edinburgh, Glasgow and Manchester. The reasons identified for this were: • The lack of a purpose built, dedicated conference centre • Deficiencies in existing venues such as lack of exhibition space, catering facilities and quality breakout rooms • Limited size of the Cardiff International Arena, the main venue in the city currently • Lack of a large conference hotel with 300+ rooms or sufficient accommodation for large events • Lack of routes from international destinations to Cardiff International Airport limiting connections for national and international delegates.
As a result of the recommendations outlined in the action plan a decision was taken to further examine Cardiff's conference market development needs, addressing in particular the venue issues.
This document outlines the findings of the study into Cardiff’s conference market development needs, which focused on the following objectives: • To identify the existing position of Cardiff in the UK conference market identifying the local situation and the national, UK and international conference markets; • To assess the local supply in Cardiff and the surrounding region in terms of its ability to meet existing and potential demand; and to identify any gap in provision of suitable facilities preventing the city from achieving maximum potential; • To consider the competition in terms of provision of venues, in particular purpose built conference facilities throughout the UK, Europe and world-wide to compare the city’s provision and identify any opportunity for new facilities to be better meeting market needs; • To specify the size, scale, format and style of facilities that would best help Cardiff to increase demand, whether by extension and refurbishment of existing facilities or development of a completely new conference centre, having considered all options including potential construction costs for new build or extensions to existing venues; • To explore and appraise the alternative sites and funding options for venue developments in Cardiff; • Draw conclusions and make clear recommendations for Cardiff in order for the city to develop additional income from the conference market, looking at facilities, services and marketing; • Estimate the likely outcome as a result of the recommendations in terms of economic benefit.
In order to address the objectives outlined above, the method of approach included visits to many of the city's venues and hotels, and meetings with the major players in the conference market in Cardiff. The Right Solution would like to acknowledge the help provided by all those who contributed to the study. 3 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
In addition to the local support and background information gained, six destinations were selected for individual comparisons with Cardiff and the convention bureaus in those towns and cities were extremely helpful. Finally a major contributing factor to the findings of this study are the results of telephone interviews with 50 major conference organisers and their views are outlined in this report.
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Executive Summary
1. Although Cardiff has experienced considerable success as a conference destination to date, there would appear to be capacity for it to increase the level of enquiries and bookings. Cardiff Conference Bureau receives around 150 enquiries per year, a lower level than many other destinations in the UK which are receiving over 500.
2. It is an attractive city offering three main venues supported by a reasonable quantity of recently developed, good quality hotel accommodation and university facilities available in vacation time only. In theory the three main venues are able to accommodate large conferences with capacity for 500 in City Hall, 2,000 in St David's Hall and up to 5,000 in Cardiff International Arena. However the existing venues do have limitations in terms of the facilities and services they offer, particularly when compared with more recently developed purpose built convention centres in the UK. The age of the buildings, the layout and the configuration of St David's Hall, City Hall and the Cardiff International Arena (CIA) mean they are not meeting market needs for plenary sessions, catering, breakout and exhibition space. The city needs a customised venue to enable it to compete aggressively and increase its reputation as a premier destination for conferences and events.
3. The key target sector for the city is the 'not for profit' or association sector. Competition for these events in the UK is fierce, with more venues and destinations competing to meet their requirements. The extensive range of destinations used overall and the number investing in new or regenerated facilities is continually increasing. In order to attract these events the city's offer needs to be ideally suited to their needs. Cardiff is likely to find it more difficult to compete in future and see continuing erosion of its market share, unless facilities are improved.
4. Cardiff is currently at ninth position of UK destinations used by associations. Destinations with purpose built centres all enjoy significantly higher positions. The percentage of associations holding events in Cardiff has gradually reduced to just under 5% since 1999, as the competition has increased elsewhere. These organisations increasingly demand high quality conference venues and state of the art facilities with high levels of service and security, provision of sophisticated electronic communications technology and flexible space for exhibitions and breakout/syndicate use.
5. Cardiff should target associations with specific academic or industrial links to the city together with those for high spending professional delegates. To date Cardiff has been at a disadvantage compared with other UK towns and cities, as it does not have many associations or leading association representatives based in the city. However, with the newly developed ambassador programme, there is now an opportunity to capitalise on the city's links with academics and experts in a specialist field by supporting and encouraging them to bid for events in their field.
6. National association organisers seek integrated infrastructures with good transport systems to and within a destination plus venue, accommodation and post conference entertainment in close proximity. Cardiff is well placed to meet these requirements with a purpose built, up to date venue in an appropriate location, 5 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
within easy reach of hotels, restaurants, entertainment and shops. There is a need to encourage good road and rail links to the airport in order to develop more international and national business.
7. Since 1996 over 50% of UK exhibitions were less than 5,000 square metres in size. In recent years the exhibition market has seen growth in smaller niche or specialist events as quality of visitors has become more important than quantity. These are ideal for smaller conference and exhibition centres with a limited amount of exhibition space, and would provide a secondary target sector for a new centre, helping to maximise occupancy by taking filler days between conferences and other events.
8. Research with a sample of fifty organisers of association events revealed that 43 held events for up to 1,000 delegates. The size of facilities available was a major influence on their destination decision, followed by location and access issues. 25 preferred purpose built conference centres for their events and specific centres mentioned were the ICC Birmingham, MICC Manchester, EICC, Edinburgh and Harrogate International Centre. Only sixteen of the fifty had held an event in Cardiff and 13 viewed it as an excellent or good destination. Issues raised were the facilities at City Hall, St David's Hall and the CIA. Reasons for not having held an event in Cardiff included the location not being central, the venues not being large enough, the lack of subvention and low membership of their association. 26 said development of a purpose built conference centre would encourage them to hold more events in Cardiff in future.
9. There is no doubt that the competition for conferences is increasing throughout the UK. There are 32 conference and exhibition centres considered as market leaders, many of which are refurbishing or extending in order to retain market share. A further seven cities are either planning or considering new conference centres.
10. Cardiff is already finding it hard to compete with the offer of other destinations and is likely to find it even more difficult in future without developing new facilities. Six towns and cities were researched to provide direct comparisons with Cardiff: Birmingham, Edinburgh, Glasgow, Harrogate, Manchester, Newcastle. These have all increased conference business in recent years and agreed that significantly more events were gained once their conference centre was planned or opened. Despite the challenges the market has faced in the last two years, these cities had all experienced increased demand, indicating clearly the contribution the conference centre makes to the town or city's success as a conference destination.
11. To retain and increase market share Cardiff would benefit from the development of a convention centre of sufficient size to cater for up to 1,500 delegates in the main auditorium. To provide all the necessary facilities the total lettable space would be approximately 7,600 square metres, and the gross internal floor area in the region of 17,500 square metres. An estimate of the build cost for a new centre of this size is just under £53 million. Although there are several sites that may be suitable for a new convention centre in the city, a lower cost option may be to reconfigure and extend the Cardiff International Arena, for which our initial estimate is approximately £24 million. This does not include any possible costs involved in negotiations over Clear Channel's contract.
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12. The design, layout, style and standard of facilities will have significant impact on the potential success of a new centre, with flexible modular space allowing for maximum space to be sold at any one time, and minimising set up and breakdown times. Provision of the latest technology in design particularly for data and telecommunications will be an important factor for competitive advantage. Superior quality facilities command premium prices and will help the financial feasibility of a new centre.
13. An initial estimate of the potential direct spend generated by a hypothetical year's events in the new centre is just under £5.4 million. The total economic benefit to Wales for that year would be £8.1 million and 239 full time equivalents. This compares favourably with the development costs of new facilities.
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Cardiff as a conference destination
On commencing the study the first task was to assess Cardiff’s current offer as a conference destination. Visits were made to the principal venues and hotels and a tour of the town undertaken ‘through the eyes’ of a conference organiser or delegate.
Cardiff is an attractive conference destination. It is compact and easy to travel around and has good quality shops, restaurants, and entertainment. It offers a range of venues available including three main venues – City Hall, Cardiff International Arena and St David’s Hall. These are supported by a reasonable quantity of hotel accommodation, much of which has been developed in recent years and therefore offers a modern, competitive product.
However in terms of the facilities and services available, particularly when compared with the more recently developed convention centres in the UK, the existing venues do have limitations. The age of the buildings, the layout and the configuration of the facilities within St David’s Hall, City Hall and Cardiff International Arena (CIA) mean they are not totally appropriate for major conferences in terms of meeting the requirements for plenary sessions, eating, breakout and exhibition space. One typical example of requirements for a conference for 1000 is as follows:
Approximate space requirement Plenary session for 1000 845m 2 Varying combination of breakouts: 2 x 200 345 m 2 3 x 100 260 m 2 2 x 150 260 m 2 2 x 75 130m² 4 x 50 170 m 2 4 x 25 90 m 2 Catering area for 1000 1400m² Minimum exhibition space 1500 m 2 Poster display space 100 m 2 Total 5,100 m 2
Although in theory the CIA can provide this space, the format, and in particular the division of the space by an acoustic curtain, means it cannot compete with the more recently developed purpose built conference centres in the UK. Up to date conference requirements in terms of technical infrastructure for tele and data communications are also not being provided. St David’s Hall is only able to offer one main auditorium and not the required support spaces for breakout, catering and exhibition. City Hall, although an impressive historic building, has a range of fairly small rooms and is limited by its age and style. If it was able to offer facilities more comparable with the recently developed purpose built centres, Cardiff would be in a better position to attract more conference business.
The SWOT analysis overleaf summarises our assessment of Cardiff as a conference destination. There is no doubt that it is an attractive city with many features of interest to the market in comparison to other large cities. However, currently the venues are 8 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
preventing the city from maximising its potential and it could find it difficult to maintain market share in future. The city needs a good venue, supported by the infrastructure to accommodate conferences to the required standards, to compete both nationally and internationally, to enable it to increase its reputation as a premier destination for conferences and events.
SWOT analysis of Cardiff as a conference destination Strengths Weaknesses Attractive and compact city Perception of distance Good shopping and leisure offer Limited supply of accommodation Capital city appeal Major venues not totally suited to conference Seat of government market Quality of hotels Lack of industry/corporate business locally Range of venues Limited convention bureau activity University links Subvention funding not being fully utilised Ambassadors programme Limited international access by air Good UK transport routes Lack of related services available such as DMCs, Welcoming people and PCO’s Welsh characteristics Skills shortage International sports exposure through stadium Wales not 'on the radar' for many conference Delegate and organiser satisfaction levels organisers Flagship visitor attractions & unusual venues Opportunities Threats Increasing number of international air routes Increased competition through Cardiff and Bristol Reduction in market volume Develop local exhibitions Other destinations more active/aggressive Major/milestone events such as city centenary Peaks and troughs of demand difficult for raising profile accommodation providers Association events reducing in size Market demanding more versatile and up to date Wales Millennium Centre will raise profile of venues city Tightening of labour market Change in EU funding regimes may offer Electronic communication and virtual meetings opportunity for funding Global issues impacting travel and conference Wales Convention Bureau market
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Appraisal of existing business
Cardiff has hosted a significant number of conferences annually for many years. The three main venues are hosting a total of around 315 days of conferences per year - 15 at St David's Hall, 100 days at Cardiff International Arena (CIA) and 200 at City Hall. In addition the hotels and universities are also hosting a significant number of events. Celtic Manor and the Vale Hotel, although not strictly within the Cardiff area, have both been successful in attracting more corporate conferences to the area, although this has limited benefit for the city centre. They are likely to remain focused on the corporate sector in the future. Although the Wales Millennium Centre will help raise the profile of the city, the facilities will be used year round by the cultural programme and will not be available for conference use.
The Millennium Stadium is a purpose-built sports stadium and as such is generally not suited to the main conference market for Cardiff, namely the association market. Other sports stadia around the country do market themselves in a limited way as conference facilities, which appeal to the corporate market. However, it is non-core business and does not constitute a large part of their operation. Equally, these venues are perceived as "unusual venues" by the customer. As such, they do not appeal to the majority of the market. In order for Cardiff to become a serious player in the conference industry, the offer of the stadium as the main conference venue would not achieve the objective. The same is true for exhibitions – whilst some could be held in the stadium, it is not core business.
The table below shows that the number of events booked through the Conference Bureau at the Cardiff Initiative gradually increased up to 2002, while the average number of delegates varied greatly.
Year Number of bookings Average number of Through Conference delegates attending Bureau 1999 36 311 2000 28 659 2001 39 701 2002 46 457 2003 38 392
The average number of events for the years shown above is 37. They are receiving in the region of 150 enquiries a year or 3 per week with a conversion rate from enquiries to bookings of 1:3. 56% of British Association of Conference Destinations (BACD) members receive over 500 enquiries a year so there would appear to be capacity for Cardiff to attract significantly more enquiries, which should lead to increased bookings.
Current policy for Cardiff Conference Bureau is to target larger association events that offer maximum economic benefit to the city. The average number of delegates for
10 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study bookings featured in the table above is 504. This compares favourably with the averages shown in the general market information provided later in this report, as the number of delegates attending many association events, particularly those which are regional, is gradually reducing. This creates a much more competitive environment in which many more venues and destinations are able to accommodate such events. Bearing this in mind, the city may find it more productive to target associations with specific academic or industrial links to the city or those with a reputation for high spending delegates such as higher earning professionals. Clearly the city’s 'offer' needs to be ideally suited to such events to be successful in achieving this objective, and the marketing and sales activity would need to be tightly focused.
In addition to the events generated by the Conference Bureau, the individual venues generate their own business. Annual occupancy for the three major venues accommodating conferences varies from 15 days at St David’s Hall up to around 200 days at City Hall. This shows a reasonably healthy picture, particularly in comparison with other towns and cities where major events are often concentrated in one major venue. A typical size of event at the CIA is 600 delegates for association events, which make up 50% of their conference business, and around 50 delegates for corporate events (30%), other than AGMs which generate another 10%. These sizes are very similar to the market in general. In addition there are 20 exhibition days per year. At City Hall the average size of conference or meeting is much smaller at around 100 delegates.
Pricing of venues
The hire rates for individual venues are summarised in the appendix entitled local venues. The average delegate rate for Cardiff is £36 which is lower than rates achieved elsewhere in the UK. Similarly in comparison with other cities’ main venues, City Hall and St David’s Hall are very competitively priced. However at £15,000 the main auditorium at the CIA is much more expensive than that at Bournemouth IC which is £6,490. When much of the time it is being used for less than 1,000 delegates, it can seem expensive when compared with purpose built conference centres in other cities. For example the main auditorium at MICC, Manchester is £8,750 and the Fleming and Whittle Rooms at the Queen Elizabeth II Centre in London are £12,230. It is difficult for Cardiff to compete with other cities where the main venue is better value and the Conference Bureau is losing 1 in 3 enquiries suited to the CIA for this reason. Further details of other UK centres pricing is provided in the appendix called Competitive Convention Centres.
For many events across the UK the prices quoted by centres become irrelevant as the organiser receives subvention for the venue costs from the destination. This is not currently happening to the same extent in Cardiff. Further information on comparative cities’ subvention policies is provided in the section on city comparisons. For the future, a very clearly defined system of evaluation together with strict application of the guidelines will help the city to compete more successfully. Please see later economic benefits section of this report for further details on subvention.
In addition to the business placed at the main venues other events are held at the hotels. These tend to be corporate conferences and to a lesser extent the small association
11 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study conferences. As occupancy of meeting rooms is currently around 50%, there is an opportunity for more demand to be created.
Business being lost/turned away
The Conference Bureau has only recently begun to record business lost to other venues and destinations. It is therefore too early to draw conclusions from the information available. However they believe that many of the organisations who had considered Cardiff previously are no longer making enquiries as the facilities within the town cannot compete with the more recently developed conference centres elsewhere in the UK.
The city may see continuing erosion of its conference market share unless facilities and services are improved in the near future.
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Market demand
This section provides an overview of the characteristics and trends for each market sector that could create demand for a new convention centre. These sectors include:
• Non-profit making sector conferences – national and international associations • Profit making sector – corporate conferences • Exhibitions
Each of the above sectors and the importance it would have for Cardiff is now explored.
Non-profit making sector: National associations
The non-profit making sector includes organisations whose memberships and affiliations are primarily national rather than international such as:
• professional associations and institutions • trade associations and trade unions • public sector organisations • societies and educational bodies.
It also includes a plethora of voluntary bodies for which membership is more related to a hobby or interest rather than a person’s employment such as:
• political parties; • charities; • voluntary associations; • religious groups.
The term national association, while not precise, is used to describe this segment of the market. The majority of conferences held in Cardiff currently and historically are from this sector. There are 7,000 associations listed in the British Directory of Associations, around 50% of which are estimated to hold regular events. National associations hold an average of 13.4 events per year so the sector as a whole generates a significant number of events each year, estimated at between 30% and 40% of the UK market in recent years.
As the majority of members are in their own country only, they tend to hold their conferences and meetings in that country, although a proportion of national associations has a link to a European or international association or federation. In this way they act as a conduit for bids for UK associations to host international conferences.
To date Cardiff has been at a disadvantage in comparison with other towns and cities, as it does not have many associations or leading association representatives based in the city. These are often experts in a particular field or academics linked to
13 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study universities or academic institutions who become ambassadors for the town in encouraging bids for events. However there is now an opportunity with the development of the Ambassadors' programme to gain support for additional conference bids.
The major annual conferences of these organisations bring together substantial numbers of delegates:
• 17% of national associations have an annual conference of up to 100 delegates • 21% of national associations have an annual conference of 100-200 delegates • 36.5% of national associations have an annual conference of 200-500 delegates • 12% of national associations have an annual conference of 500-1000 delegates • 13.5% of national associations have an annual conference of 1000+ delegates Source: British Association of Conference Destinations (BACD)
Although the larger proportion of events - 86.5%- are for less than 1,000 delegates, the greater economic benefits and the high profile are earned from those for more than 1,000 and the city would benefit greatly by being able to offer the facilities that such events require.
Cardiff is currently at ninth position of destinations used by national associations as shown in the table below. Destinations with purpose built centres all enjoy significantly greater use. It is also worth noting that the percentage of associations holding events in Cardiff has gradually reduced to just under 5% since 1999, as the competition has increased elsewhere.
Destinations used by national associations 2003 2002 2001 2000 1999 London 38.8 54.3 54.9 55.2 63.1 Birmingham 16.1 29.5 34.9 35.1 36.6 Edinburgh 9.9 12.6 16.8 18.5 18.1 Glasgow 8.9 11.6 16.8 9.4 16.8 Manchester 8.6 22.8 22.0 24.4 27.5 Brighton 7.9 9.3 9.2 10.4 7.4 Bournemouth 6.2 8.3 8.2 8.4 8.4 Harrogate 5.6 9.3 9.9 10.4 9.4 Cardiff 4.6 7.9 12.5 10.4 14.4 Blackpool 3.3 6.3 8.9 9.7 8.1 Source: UK Conference Market Survey 2003 (Figures show percentage of respondents having held events in destination and do not add up to 100 as organisers have often used more than one destination in a year)
Traditionally many national associations chose the locations of their conferences on a rotation system e.g. north south rotation, or rotation around several regions of the UK on a 3 or 4-year cycle. The table below shows that the percentage always choosing a
14 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study different destination has continued to increase since 2000 and just 15% of associations now have a regular cycle of destinations. Bearing in mind the extensive range of destinations used overall - 87 were mentioned by the 300 associations included in the survey - and the number investing in new or regenerated facilities, destinations have to work hard to attract conferences. Cardiff is likely to find it more difficult to compete in future unless new facilities are developed.
How often associations 2003 2002 2001 2000 return to destination Every year 35.9 36.4 29.6 42.9 Every other year 4.6 7.3 7.6 8.1 Regular cycle of a certain number 10.9 15.2 22.7 25.3 of locations Always a different destination 39.1 32.8 30.3 26.6 Source: UKCMS 2003
These organisations will increasingly demand high quality conference venues and state of the art facilities with high levels of service and security. Their requirements include adequate provision of electronic communications technology but also flexible space for syndicate/breakout rooms, and greater need for exhibition space. This is almost certain to lead to lower satisfaction levels with the existing Cardiff venues in future.
The key factors influencing venue selection are: 1. Location 2. Price/value for money 3. Access (road/rail/air) 4. Capacity of conference facilities 5. Quality of service Source: UKCMS 2003
National association organisers are likely to seek more integrated infrastructures with high quality transport systems to and within a destination, plus venue, accommodation, restaurants and post conference entertainment in close proximity – Manchester’s new ‘Conventions Quarter’ is one example of such a development. Cardiff is well placed to provide this with a purpose built up to date venue in an appropriate location within easy reach of hotels, restaurants, entertainment and shops.
Non profit making sector: International associations
The international association congress sector brings together members with common professional, scientific or social interests. These associations vary widely in size and can be regional or worldwide in scope and tend to use meetings as one of the most important communication methods among members. They also use their meetings as a key revenue generator to support the headquarters and fund outreach activities such as specialised research and public health campaigns as well as programmes in developing countries.
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These congresses (also known as general assemblies, conventions, conferences etc.) alternate between venues within their region or the world either on a fixed rotation or by invitation. They can be held annually, or every two, three, four or even five years and their economic attractiveness has become apparent to destinations globally. There are two methods of targeting these congresses with a view to hosting their events in the UK. It is either done through the UK member contact or chapter of an international association or by approaching the headquarters, usually located overseas, directly. There are clusters of international association headquarters in London, Paris, Brussels, Geneva and The Hague, as well as in Washington DC. However, there is a difference in style between associations with headquarters in Europe, which are usually run by a small number of full-time staff with a series of executive committees, and those located in North America, where the organisations generally have very large headquarters buildings and staff (they also tend to be much more commercially aware, having less of an historical background). Specialised research helps convention cities determine the so-called next ‘open date’ (i.e. the next year for which the location of the congress has not been decided), the exact bidding process and the representative most likely to extend the invitation.
When destination selection is by invitation, the UK contact within the organisation is crucial in spearheading the bid process to bring the event to the UK. This is why ambassador programmes actively identify and recruit local ‘worthies’ who have connections to international organisations who are essential to the successful bids for these events. Ambassadors are encouraged to submit bids to host events in their home city and to promote the destination on their behalf when attending events abroad.
Although this segment encompasses a wide range of organisations which can be governmental, professional, scientific or social in nature, it is the medical, scientific and pharmaceutical meetings which are the most attractive both in terms of attendance and revenue.
It is difficult to put a figure on the number of international associations in existence around the world. The Union of International Associations (UIA) measures approximately 9,000 meetings annually and publishes a well respected and robust annual statistical review. They estimate this covers 80% of events of this nature, which would result in a total of over 11,000. There was a slight decline in the overall number of such events held in 2002 and 56.7% were held in Europe, down 1.77% from 2001, 5.5% in the UK which is down from 6.6% in 2001.
International associations favour cities with the infrastructure to cope with the demands of a large group of international delegates. This tends to include a large, purpose built conference venue with ample catering areas, regular international flights, ample hotel accommodation of a range of standards from budget to luxury, and a sufficiently attractive destination to act as a draw to delegates and accompanying partners or ‘add- on’ stays.
During the last few years the top destinations worldwide for international association conferences have been Paris, London, Brussels, Vienna, Geneva and more recently Singapore. Apart from London, no other UK city features in the top 30. Edinburgh is at 39 for 2002 (31 for 2001) and Glasgow 41 (34 in 2001). Edinburgh, Glasgow, Birmingham and Manchester have all been able to significantly increase their
16 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study proportion of international events through provision of a high quality purpose built centre, associated infrastructure development and positive marketing of their products and services for this market.
The chart below shows that 96% of international association events were for less than 2,500 delegates in 2002, with a general reduction in size of events since 2001.
Number of delegates attending international association meetings 2002
40%
35% 34%
30% 25% 25%
20% 19%
15% 11% 10% 7%
5% 4%
0% Less than 100 101 to 250 251 to 500 501 to 1000 1001 to 2500 More than 2501
Source: UIA 2002 The reducing number of delegates may explain the fact that purpose built centres, although still the most popular option for such events, have lost market share to other venues, as shown in the chart below.
Venues used for international association meetings
40% 38% 36% 35% 34% 34%
30% 30% 30%
25% 22% 1985 20% 19% 19% 1993 16% 2002 15% 13% 11% 10%
5%
0% Conference Centre Hotel University Other
Source: UIA 2002 17 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
In the past Cardiff was less successful in competing for international association meetings in comparison with other major cities in the UK. However the recently initiated ambassadors programme will encourage help in the bidding process from academics and local members of associations. Development of up to date facilities and additional international routes into the airport is essential to attract more of these events. However, due to the time and cost involved in bidding for such events it is likely to remain a less important target sector for Cardiff than national associations and corporate events.
Corporate
The profit making sector of corporate companies and organisations' events is estimated to generate 60% of the UK’s conferences. It includes a wide range of different types of events, mostly held within a reasonable travelling distance from the attendees’ point of origin, such as: • sales conferences • product launches • management meetings • training courses • business presentations • incentive trips • hospitality events.
Corporate events tend to have lower numbers of attendees than other sectors. During 2002, 68% of the events held were for less than 50 delegates and the average number of delegates attending a corporate event was 131. Since 1999 the mean number of delegates at corporate events has reduced by 25%.
Corporate conferences 2003 2002 2001 2000 1999 Mean no. of delegates 131 111 128 138 176 Source: UKCMS 2003
This is most probably due to the emphasis on efficiency and lower duration of events causing them to be held more regionally, and both employers and employees being much more careful about use of time.
However, it is interesting that increased globalisation has also created an increase in the number of very large events held. The percentage of events for over 1000 delegates increased to 3.3% in 2002 from 1.7% in 2001. Fewer, larger, companies exist as the major players merge and acquire competitors in their strategy of globalisation, creating demand for much larger events, particularly larger parties and dinners for which a ‘new’ venue in Cardiff would be popular.
The health of the economy, the state of markets in general, and market changes in industry hugely affect corporate events. It also seems to be most affected by other
18 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study forms of communication. Between 1998 and 2003 the volume of events for this sector reduced by 17%. During 2002, 93% of corporate organisers made use of the Internet for communication with delegates, 76% used teleconferencing, and 65% used video conferencing, figures that have increased dramatically in the last few years.
Advances in technology have also hugely influenced this sector in terms of use of presentation technology. 90% of corporate organisers now use PC linked data projection for their presentations. This has raised expectations of venues in terms of their ability to keep up with advancements in presentation technology and provision of excellent tele and data communication facilities are essential.
Corporate events tend to favour out of town hotels, city centre hotels and residential conference centres, as these venues are more likely to meet their requirements in terms of quality of facility and adjacent accommodation. This sector has high expectations for all aspects of the meeting experience, demanding high quality meeting facilities and service, as justification for use of their valuable time in meetings. Hotels will continue to attract the greater proportion of this sector's events and Cardiff needs to ensure it can offer a top quality experience for all corporate delegates to increase its share of this highly competitive sector.
Incentive travel is a specialised sub sector of the corporate market. It tends to be concentrated in four or five star luxury hotels and is therefore unlikely to be a key target sector for a new convention centre. Currently London is the most popular UK incentive destination followed by Edinburgh, Scottish golf resorts and Stratford on Avon. An NTB estimate of the value of the inbound and domestic incentive travel market is £165 million per year, and it is believed that 5-10% of UK luxury hotels’ bedroom revenue is generated by this sector. Cardiff is attracting only a small share of this business currently and it is not a key target sector for a new convention centre. However, Cardiff may potentially be an attractive destination for UK incentives in future. The development of new conference facilities would help raise the profile of the destination with this sector in addition to the other key target sectors, particularly as corporate delegates tend to promote a good destination within their own organisation. This would also benefit the wider region around Cardiff and Wales in general as incentive business is more likely to go beyond the city.
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Size of UK Conferences
The volume of events, according to numbers of delegates, for each of the conference sectors discussed above is summarised in the chart below:
Size of UK conferences
70
60 International Associations National associations 50 Corporate
40
30
20 Percentage of events 2002
10
0 Less than 51-100 101-200 201-300 301-500 501-1000 1001- More 50 2000 than 2000 Number of delegates
Although the majority of events in all sectors are for less than 1,000 delegates, it can be seen that associations hold significantly more events of more than 1,000 than the corporate sector, and these are likely to remain a key target sector for Cardiff. The gala dinner for many associations also requires large numbers to be accommodated. If sufficient flat floor space were available such gala dinners could be accommodated within a new centre. The key to attracting such events will be to offer the appropriate size and quality of facilities.
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Exhibition market characteristics
The exhibition market in the UK is estimated to contribute over £2 billion to the economy from exhibitor spending alone. Currently the value of exhibition visitor spend is not known on a UK wide basis, although it is known to generate significant levels of spend for a town or region’s local economy, with average spend by exhibitors estimated at £150 per day.
Although the UK exhibition market is healthy in terms of number of exhibitions held, there is a trend towards smaller exhibitions. The number of exhibitions recorded by the Exhibition Venues Association (EVA) for 2002 was 855. The average rented space in 2002 was 8,199 square metres, compared with 8,707 in 2000. The average number of visitors was 12,047 in 2002. It is believed that the figures below represent approximately 46% of the UK exhibition industry (these are prepared from 37 qualifying venues who offer more than 2,000m 2 of covered space) so the majority of the exhibitions not included in these statistics are much smaller. The average number of visitors to the smaller exhibitions was 5,049.
Summary of number of exhibitions per year, Gross and net space (sq m) and numbers of visitors 1991 – 2001
Number of exhibitions Net Space Gross Space Visitors 1991 680 2,745,522 5,246,000 9,292,000 1992 672 2,434,960 4,468,000 9,153,000 1993 671 2,669,173 4,868,000 9,516,000 1994 691 2,509,548 4,833,000 10,280,000 1995 773 2,728,742 5,198,000 9,705,000 1996 710 2,975,751 5,583,000 10,392,000 1997 841 3,337,575 6,157,750 10,757,000 1998 843 3,107,478 6,141,050 10,994,000 1999 817 3,120,362 6,086,250 10,096,000 2000 868 3,732,120 7,558,050 11,082,000 2001 823 3,118,465 6,890,500 9,069,000 2002 855 3,400,000 7,010,000 10,300,000 Source: UK Exhibition Facts, EVA
The growth up to 2000 was attributed to increased diversification and interest in niche or specialist events that tended to be smaller in size as quality of visitors became more important than the quantity. This trend is interesting, as these events are less likely to use the major exhibition centres on the scale of the NEC and are a more appropriate target for smaller multi purpose conference and exhibition centres with a limited amount of exhibition space.
Exhibitions tend to fall into two categories, trade/professional and consumer although some exhibitions attract both audiences. Trade exhibitions have been steadily reducing as a proportion of the overall number of exhibitions and now represent 55%.
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Consumer exhibitions aimed at the general public make up 44%. The remaining 1% attract both trade and consumer.
The seasonality of exhibitions is illustrated in the chart below:
Seasonality of exhibitions by month, 1999-2001
120 110 100 90 80 70 60 50 40 30 20 10 0
il y e r ry ch r n ly er r Ju ust b uary rua Ap Ma Ju g tobe n b Ma Au tem vember cember Ja Fe p Oc Se No De
2001 2000 1999
The peaks in Spring and Autumn could conflict with the times when Cardiff is busy with sports events and could mean that accommodation is limited. However it is also possible that an appropriate exhibition or event of interest to the public could add to the attractions for visitors to the town at that time and result in extended stays.
In the main, exhibitions are focused on a local or regional target market where visitors can reach the event within one to one and a half hours. The table below shows that London and the West Midlands are the most popular areas for exhibitions to be held. It can be seen that just 6 exhibitions took place in Wales in 2001, 5 of which were less than 5,000m 2 in size.
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Size of exhibitions by broad regions 2001
Size band – gross m 2 Total Exhibitions Up to 5,000 5-10,000 10-20,000 20-60,000 60,000 +
Region No. % No. % No. % No. % No. % No. % London 323 100 159 49 80 25 61 19 21 6 2 1 South East 29 100 22 76 7 24 ------South West 46 100 35 76 11 24 ------E. Midlands 23 100 22 96 1 4 ------W. Midlands 199 100 75 38 56 28 36 18 22 11 10 5 North West/ Northern 44 100 33 75 7 16 4 9 - - - - Yorkshire 74 100 44 59 22 30 6 8 2 3 - - Scotland 67 100 46 69 16 24 5 7 - - - - Wales 6 100 5 83 1 17 ------N. Ireland 12 100 9 75 3 25 ------
Total UK 823 100 450 204 112 45 12 Source: UK Exhibition Facts, EVA Note: percentages shown in italics add horizontally
The table below shows that since 1996 over 50% of UK exhibitions were less than 5,000 m 2 in size, and around 80% were less than 10,000 m 2. There may be an opportunity to increase the number of exhibitions held in Cardiff by attracting organisers with the appropriate space in a venue.
The average number of open days for the exhibitions itemised in the table overleaf is 2.5. Adding set up and breakdown time to this results in an average rental time of 4 to 5 days. However it is important to note that exhibitions of one day have not been included. These would add another 173 exhibitions to the total, the majority of which are public exhibitions. These events provide a potential target market for a suitable venue in Cardiff as they help to maximise occupancy by taking ‘filler’ days between conference and other events.
Total number of exhibitions by size band (m 2) 1996 – 2001
Size band (gross m2) 1996 1997 1998 1999 2000 2001
Up to 5,000 402 499 523 483 455 450 5 to 10,000 144 158 160 176 200 204 10 to 20,000 100 107 102 108 138 112 20 to 60,000 34 31 36 44 52 45 60,000 and over 9 13 10 6 14 12
Not known 21 33 12 - 9 -
Total 710 841 843 817 868 823
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Summary of organiser interviews
Interviews were completed with a sample of 50 conference organisers during October 2003, in order to gauge perceptions of Cardiff. Respondents were mainly selected from The Right Solution’s own database of qualified conference organisers, with some additional contacts from Cardiff Conference Bureau. These were organisations in the 'not for profit' sector of the UK conference market including organisers of political party and union conferences, and many large associations and non-profit making organisations who are regularly organising events. A summary of the key results now follows:
1. 43 of those interviewed organised events for up to 1,000 delegates and 7 for between 1,001 and 6,000.
2. Their top 10 popular destinations are: 1. London 2= Cardiff Birmingham Brighton 5= Manchester Bournemouth 7. Edinburgh 8= Glasgow Eastbourne 10. Scarborough N.B. Cardiff may appear higher in this list due to it being mentioned as the reason for calling.
3. The factors influencing their destination decision are as follows:
1. Size of facilities 2. Location issues and where delegates originate from 3. Access and travel 4. Wide range of accommodation nearby 5. Rotation of conference 6. Subvention
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4. The preferred venue types for the 50 respondents are as follows:
30
25 25
20
15 15
10 7
5 3
0 Purpose built conference Hotels Universities Other centres
The most frequently mentioned individual centres were Harrogate International Centre, ICC Birmingham, MICC Manchester and EICC Edinburgh.
5. Responses to whether they had held an event in Cardiff were as follows:
Have held an event in Cardiff
40
35 34
30
25
20 16 15
10
5
0 Yes No
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6. The reasons stated for not having held an event in Cardiff are as follows: 1. Location not central 2. Venues not large enough 3. Lack of subvention 4. Low membership of associations in Wales
7. For those who had held events in Cardiff, issues were raised over the facilities available at City Hall, St David’s Hall, and the CIA, and the service from the accommodation bureau was also mentioned.
8. The chart below shows views of Cardiff as a destination:
Views of Cardiff
25 22
20
15 12
10 9
6 5
1 0 Excellent Good Satisfactory Poor No knowledge
It is interesting to note that of the 13 who viewed it as excellent or good, 9 had held an event in the city and 4 had not. Similarly 9 who viewed it as either satisfactory or poor had also held an event, and 6 had not.
9. When asked whether development of new purpose built conference facilities would encourage them to hold more events in Cardiff in future, responses were as follows:
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30
25 24
20 17
15
10 9
5
0 Yes No Possibly
It can be seen that although many said they preferred purpose built conference centres for their events, 24 did not think such a centre would encourage them to favour Cardiff more in future. The issues of association membership, making maximum use of the subvention fund and overcoming negative perceptions of the location and distance would also need to be addressed.
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Market Supply
There are an estimated 5000 conference venues in the UK, for which the geographical spread is shown in the table below. It would appear that supply is exceeding demand in Wales as this region has 4% of supply yet experiences 2% of demand.
Estimated geographical spread of UK venue universe 5000 venues % Supply Number % Number of venues Demand of events
Northern England 22 1100 22 0.3m Central England 22 1100 21 0.3m Southern England 27 1350 25 0.3m Greater London 11 550 15 0.2m Wales 4 200 2 0.1m Scotland 13 650 13 0.2m Northern Ireland 2 100 2 0.1m
Source: British Conference Venues Survey 2003
These 5,000 venues in the UK are made up of the following venue types: Estimated UK venue universe – types of venue % Supply Number % Number of venues Demand of events
Purpose-built conference centres 3 150 5 0.07m Multi-purpose civic and municipal 3 150 2 0.02m halls Educational establishment 3 150 3 0.04m Urban/airport hotels 42 2100 60 0.84m Rural hotels 20 1000 11 0.15m Residential Centre 3 150 3 0.04m Unusual (e.g. castles, stately homes) 26 1300 16 0.31m
Source: BCVS 2003
It can be seen that demand for unusual venues such as sports arenas, football clubs, museums and galleries, and universities and academic venues falls far short of supply. However, these venues are targeting the market aggressively. One local example of this is the Millennium Stadium in Cardiff which is considering investment in a form of curtain/screen that will enable it to host more concerts, conferences and other events in future. A recent conference bid proposes the CIA and stadium working together to house a large retail conference. The stadium is also targeting increased conference and banqueting business to be accommodated in the boxes and other hospitality facilities.
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The table indicates there are 150 purpose built conference centres. However the 32 centres widely regarded as the market leaders for conference and exhibition centres are as follows:
Conference Centres Aberdeen Conference and Exhibition Centre Barbican Centre, London Bournemouth International Centre Brighton Centre Commonwealth Conference and Events Centre, London (closing July 2004) East Midlands Conference Centre, Nottingham EICC, Edinburgh Harrogate Exhibition and Conference Centre International Convention Centre, Birmingham Manchester International Convention Centre North Wales Conference Centre and Theatre Complex Queen Elizabeth II Conference Centre, London Riviera Centre, Torquay Scottish Exhibition and Conference Centre, Glasgow Waterfront Hall, Belfast Wembley Conference Centre, London (schedule to close in future as a result of stadium redevelopment)
Exhibition Centres or venues not already mentioned above Alexandra Palace, London Business Design Centre, London Cardiff International Arena Doncaster Exhibition & Conference Centre Earls Court & Olympia, London ExCel, London Fort Regent, Jersey G-Mex Centre, Manchester King’s Hall, Belfast National Agriculture Centre, Kenilworth National Exhibition Centre, Birmingham Plymouth Pavilions Royal Horticultural Halls, London St David’s Hall, Cardiff Telford International Centre Winter Gardens, Blackpool Source: BTA and Exhibition Venues Association
In addition to those listed above Newcastle, Liverpool, Blackpool, and London are all either planning or considering new conference centres. Sheffield and Leeds are also known to be considering new venues, as are Bristol and Bath, which have also undertaken studies in recent years. Bristol is now planning a new arena although conference centre developments are not yet proceeding. Many of the existing centres such as SECC, Glasgow, EICC, Edinburgh, Harrogate, Brighton, Bournemouth and 29 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
Jersey are also either extending or refurbishing in order to maintain or increase market share. The development of a new convention centre in Dublin will also impact significantly on the UK market. This has been under discussion for several years and is out to tender currently for development plans. There is no doubt that competition around the UK is increasing substantially.
Many of the 32 centres listed are multi purpose and also serve as entertainment venues. In many cases multi purpose use has been key to their viability. There are also other primarily entertainment venues that have been successful in attracting conferences to the city or town. The number of these venues will increase in 2004 when The Sage opens in Newcastle. This is primarily a music centre with an auditorium for 1,650. However it has already been successful in attracting large conferences to the city.
The Conference Blue Book 2003 (the acknowledged ‘bible’ of UK conference facilities) lists 50 venues in Cardiff, and 38 are featured in the Cardiff Conference Bureau guide. The table below shows that although Cardiff has a considerable number of venues to offer, it has fewer venues than other major destinations.
Town/city No. of venues listed in The No. of venues with Conference Blue Book 2003 capacity for 500 or more Cardiff 50 8 Birmingham 91 13 Bristol 78 11 Manchester 98 16
Although provision of the appropriate quality of venues is more important than quantity in encouraging events to take place in the town/city, the greater the destination’s offer overall, the greater the recognition of the destination among the conference and exhibition market and the more business it tends to attract. This is also very important for attracting the major political party and association conferences. The total number of venues and conference rooms in the town greatly influences the destination decision due to the need to provide a great number of meeting rooms for the breakout sessions as well as sufficient accommodation stock.
Cardiff is now finding it hard to compete with the offer of other destinations for these events. If Bristol goes ahead with the development under discussion for an Arena/conference centre this would also significantly increase competition for Cardiff, particularly as Bristol is also intending to increase its transatlantic air routes.
Details for the 15 centres directly competitive with Cardiff are itemised overleaf. By 2006 these will have an average capacity of 2,239 in their main auditorium, average total number of meeting rooms of 16 (not including exhibition halls), and average total lettable space of 11,073 square metres, a considerably larger total space than is available in Cardiff currently.
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Name of centre Largest Area of largest flat floor Total no. of meeting Approx. total lettable capacity space rooms space theatre style Aberdeen Conference and 2,000 7,300 sq.m. 29 11,755 sq.m. Exhibition Centre
Barbican Centre, London 1,989 2,000 sq.m. 12 + 2 Exhibition 5,471 plus (+ 7,000 sq.m. Halls 7,000 sq.m. exhibition) exhibition space Bournemouth International 3,900* 2,000 sq.m. 14 7,154 sq.m ¹ Conference Centre
Brighton Centre 4,450 1,941 sq.m. 17 4,689 sq.m 2
East Midlands Conference Centre, 850 671 sq.m. 6+ 2,332 sq.m 3 Nottingham University
EICC, Edinburgh 1,200 2,200 sq.m.** 14 5,910 sq.m. plus 2,200 sq.m. in extension (2006) Harrogate Exhibition and 2,009 3,500 sq.m. 10 17,000 sq.m. incl. Conference Centre *** Exhibition halls
*expanding to 7,000 by September 2005 plus 1,500 sq.m. extra space ** in extension planned for opening in 2006 *** adding 800 seat room and additional breakout rooms by Autumn 2004 123 Expansion, refurbishment or revision of spaces planned or under discussion.
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Name of centre Largest Area of largest flat floor Total no. of meeting Approx. total lettable capacity space rooms space theatre style International Convention Centre, 1,500 3,000 sq.m. 21+ 10,268 sq.m. Birmingham Symphony Hall
Manchester International Convention 800 1,900 sq.m. + 9 + 14,400 sq.m. Centre 7,500 sq.m. in G-Mex G-Mex (2) including G-Mex
North Wales Conference Centre, 1,500 1,100 sq.m. 13 2,994 sq.m. Llandudno
Queen Elizabeth II Conference Centre, 900 1,200 sq.m. 24 5,750 sq.m. London
Riviera Centre, Torquay 1,500 1,750 sq.m. 7 4,120 sq.m.
Scottish Exhibition and Conference 3,000 10,065 sq.m. 17 + 5 Exhibition Halls 26,918 sq.m.* Centre, Glasgow
Waterfront Hall, Belfast 2,245 510 sq.m. 16 4,297 sq.m.
Wembley Conference Centre, London 2,636 2,694 sq.m. 23 + 6 Exhibition Halls 32,340 sq.m. (11,500 in adjacent arena) *Arena expansion planned N. B. Number of centres with auditorium up to 1,500 is 4 and number for 1,500 or more is 11.
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City Comparisons
In order to identify key features for success in the conference market it was decided to study the following six cities, all of whom have a successful track record for conferences and events and/or characteristics comparable with Cardiff. Interviews were undertaken with the convention bureaus of the following 6 towns and cities:
Birmingham Edinburgh Glasgow Harrogate Manchester Newcastle
The collective results now follow.
Significance of purpose built conference centre to success as a conference destination
All the cities researched agreed that their purpose built conference centre is just one of several contributing factors to the above cities' success. Other major factors are strong university associations and the raised profile gained from major events such as the Commonwealth Games and Capital of Culture.
Measures of success
The most frequently used measures of success are:
• The number of conferences and events booked • The value of conferences and events placed and economic benefits • The high profile events gained.
Conferences and events held in your destination once the purpose built conference centre opened
All the cities agreed that significantly more events were gained once the conference centre opened (Newcastle responded to this as the impact of The Sage). These events were also higher value than those held in the city previously and the destination had definitely gained overall as a result of the centre.
Other factors influencing success as a conference destination All agreed that the conference centre had to be supported by the necessary infrastructure and transport routes, sufficient hotel accommodation of the appropriate quality, effective ambassadors' programmes, and strong marketing activity. The
______33 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study influence of major events such as political party conferences or major sporting events was also considered important.
Structure of conference bureau
The majority of the cities' conference bureaus are divisions of the local Tourist Board, set up as a public/private sector partnership with funding coming from stake holders which include the local Council and members through membership fees. One exception is Harrogate where the bureau is an arms length trading division of the local council.
The number of staff in each of the cities researched varied widely from 5 in Newcastle to 22 in Birmingham, with an average of 10. These cities all had a higher number of staff than Cardiff or indeed the average for conference bureaus throughout the UK revealed by the BACD membership survey, which is 3.32.
Quantity of bedstock to support conference product
The volume of ensuite rooms in each of the cities compared with Cardiff is shown in the table below:
Town/city No. of ensuite rooms Birmingham 15,180 Cardiff 7,736* Edinburgh 12,151 Glasgow 16,019 Harrogate 2,534 Manchester 15,698 Newcastle 6,000 The average from the above totals is 10,760. *includes the planned Park Plaza and Future Inns hotels. N. B. Harrogate was included as a competitive conference destination although not comparable with other cities for many other characteristics
Although there is outline planning permission for a further 800 serviced beds at 9 sites across the city, if the volume of conferences held in the city were to increase, it is likely that more accommodation would be needed to support it. The development of a purpose built conference centre is often the catalyst for hotel development. 22 hotels opened in Birmingham following development of the International Convention Centre and there is now a total of 30 in the city centre. Newcastle does not currently have a purpose built conference centre but is understood to be considering sites for a centre. If this goes ahead it is likely to need additional bedstock to support it.
It is interesting to compare occupancy figures for the selected cities with Cardiff, which for 2002 were as follows (N.B. Harrogate not available):
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Birmingham 68.9 Cardiff 73.0 Edinburgh 75.4 Glasgow 71.1 Manchester 75.3 Newcastle 73.7 Source: PKF UK Hotels Study Cardiff enjoys very similar occupancy to the other cities currently, for a lower quantity of bedstock in many cases. However average achieved room rates (AARR) for the same period were as follows:
Birmingham £60.20 Cardiff £55.16 Edinburgh £72.53 Glasgow £55.33 Harrogate N/A Manchester £64.00 Newcastle £61.39 Source: PKF UK Hotels Study 2003
The AARR for Cardiff is lower than all other cities and some 30% less than the rate for Edinburgh. Between 1995 and 2001 the average occupancy for Cardiff was 70.4% yet the AARR for the same period was £47.30. The cities with purpose built conference centres tend to generate demand at higher value rates.
There are occasions when it is difficult to book sufficient hotel accommodation in Cardiff, such as when there are sports events at the Millennium stadium. This is hindering the acquisition of conferences for the city. It is hoped that an increase in the quantity of bedstock would enable allocations to be made sufficiently far from the date of the event so that the accommodation service could operate successfully. A study of the hotel stock in Cardiff is to be undertaken shortly.
Volume of conference business in the last three years
In the last two years the UK market has been faced with cumulative challenges such as depressed macro-economic conditions, foot and mouth, the September 11 th 2001 tragedy, war in Iraq and SARS. These have contributed to a significant reduction in demand from the corporate sector and other trends as outlined earlier in this report. Despite all of these issues, the cities researched had all experienced increased demand during 2001, 2002 and 2003, a clear indicator of the conference centre's contribution to the town or city's success as a conference destination.
However all commented that the market was becoming more competitive nationally and internationally, with an increased number of facilities bidding for the same number of events. They acknowledged that in future they will need to be innovative with the manner in which they market their destination. All are focusing on the added value they can offer through service quality and packages in order to remain competitive. ______35 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
Specification of facilities
Cardiff wishes to retain its status as a key destination for UK conferences and increase market share. To do so it needs to be able to accommodate the major association conferences. These events act as a catalyst for many other conferences and events and generate significant levels of economic benefit. However the market has become increasingly competitive in recent years and they now require a high quality purpose built convention centre.
Having assessed the existing conference market in Cardiff, and identified the general market characteristics, and combined this with the specific research undertaken with organisers, we recommend that the appropriate development for Cardiff is a convention centre of sufficient size to cater easily for up to 1,500 delegates. This would enable the city to attract the majority of conferences taking place in the UK. Although the majority of UK events are for less than 1,000, it is the larger, more prestigious events that generate the most economic impact for the city. By providing facilities for up to 1,500 the high profile events can be accommodated, yet at the same time the size of facilities will not be too large for the majority of events. Designing the facilities with maximum flexibility would also enable the city to attract larger conferences of more than 1,500 if necessary, guaranteeing that it can accommodate the prestigious events which generate maximum economic benefit.
It is important to emphasise that the existing venues in Cardiff are struggling to meet clients' expectations in terms of the quality of facilities provided. The design, layout, style and standard of facilities will have significant impact on the potential success of the new centre in the following ways:
• The shape, layout and a modular format should enable the operator to sell as much of the available space as possible, accommodating several events simultaneously if appropriate; • The access for set up and breakdown and the ability to minimise the times allowed for these is critical to accommodating more events and maximising occupancy; • The technical and technological infrastructure will be an important factor in differentiating the centre from the competition and allowing it to meet the criteria for the large association conferences. The provision of required data and telecommunications and the latest technology in design will impact its competitive advantage. • Superior quality facilities are able to command premium prices. Compromising the quality at any stage during the design process could impact the revenue earning capability.
The requirement is to design a truly multi-purpose facility to appeal to the widest range of customers. The maximum amount of flexibility must be incorporated in order to maximise occupancy and revenue. The operator must not be limited by the design of the rooms, so that a conference can use one part of the facility, whilst an exhibition is using another part. All the types of event for which there is demand will need to be accommodated including conferences/meetings, exhibitions, banqueting, and special events. Advances in technology mean that it is now far easier to incorporate flexibility
______36 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study and adaptability into the design than it was just a few years ago. This will help the centre to gain competitive advantage over existing centres.
The needs of all market sectors and in particular the needs of the large association conferences were considered fully in preparing the specification that follows. The basis for the specification is an auditorium for 1,500 people as the main space, in order to accommodate the majority of UK events. The size of the main auditorium is the driving factor when determining the ancillary spaces to create a conference centre of international standard. It is important to ensure that the main auditorium is supported by banqueting, exhibition and breakout space, as well as non-lettable space, such as registration, plant, catering facilities and so on. However incorporating maximum flexibility into the design will ensure that the space can be adapted to suit the differing requirements of a wide range of events, including those for more than 1500 on the occasions when this may be required.
From a breakdown of the ideal space requirement, a potential cost can be derived, based on a per-square-metre rate, for a new build project. This rate will vary, depending on the level of quality. However assuming that the quality will be that of an international conference centre the rate taken is at a fairly high level. Rates for such buildings are amongst the highest in the construction industry, as the build is very specialised and complex. The suggested cost is an indication only and will be refined as any potential design progresses.
The first assumption of the following spatial breakdown is that the building is completely new. The facilities are “ideal” without any external encumbrance. Following this, we will look at the potential of integrating the “ideal” facilities into existing buildings in Cardiff, namely the CIA and St.David’s Hall. All scenarios are theoretical, at this stage, and will need much further work by a design team to establish real options.
Area Breakdown
As stated above, the indications are that a main auditorium seating 1,500 people would address the majority of the potential conference demand for Cardiff. At this point in the project, we will assume that this is a fixed, raked auditorium, with a proscenium stage. It may be that as the design progresses, alternatives to this are pursued, such as a moving floor or links to the exhibition space, to provide a multi- purpose facility. However, that will be subject to future consideration. To support such a space, a range of rooms will be required, which are generally flat-floored and multi-purpose. These will provide the necessary banqueting, exhibition and breakout space, when used in conjunction with the main auditorium. It is also important to provide a range of rooms that can be used by more than one event simultaneously, in order to maximise on yield. Smaller meeting rooms are required to address all areas of the market.
It is suggested that the following spaces be incorporated:
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Capacity Hall Description (persons) Area (m 2) 1 Auditorium space 2 Flexible multi purpose space 5000 4660 3 Flat-floored Meeting Room 400 346 4 Flat-floored Meeting Room 250 216 5 Flat-floored Meeting Room 100 86 6 Flat-floored Meeting Room 100 86 7 Flat-floored Meeting Room 100 86 8 75 65 Flat-floored Meeting Room - divisible 9 75 65 into three, each seating 10 75 65 11 50 43 12 Flat-floored Meeting Room - divisible 50 43 13 into four, each seating 50 43 14 50 43 15 25 22 Flat-floored Meeting Room - divisible 16 25 22 into three, each seating 17 25 22 18 25 22 Flat-floored Meeting Room - divisible 19 25 22 into three, each seating 20 25 22 21 Executive Meeting Room 20 17 22 Executive Meeting Room 20 17 23 Executive Meeting Room 20 17 24 Executive Meeting Room 20 17 25 Executive Meeting Room 20 17 26 Executive Meeting Room 20 17
This generates a gross lettable area of just under 7,600 m 2. Although specified individually on the above list, the options for each of the spaces to be incorporated into a flexible larger space should be explored. This may reduce the overall footprint. The lettable space must also be supported by ancillary facilities, an initial suggestion for which is as follows:
Total Function Area 7,581 Stage 800 Registration (1,500 people) 1,100 Toilets & Cloaks 462 Café/Meeting Point 300 Loading Bay 500 Circulation @ 25% 1895 Plant @ 10% 758 Administration @ 15% 1137 Temp. Offices 100 Lockers/Changing 120 Medical Room 50 Kitchens & serveries 1250 Storage @ 20% 1516
Total Area (Gross Internal Floor Area) - m2 17570 ______38 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study
Based on the above, we can estimate a new-build cost. In the UK, we would suggest that a budget of £3,000/m 2 would be appropriate for this type of building. As a comparison, the following costs are applicable:
VENUE COST/m 2 ICC, Birmingham £3,577 EICC £3,200 SECC “Armadillo” £2,342 Manchester ICC £2,464
On this basis, the cost for the suggested conference centre would be just under £53,000,000. This cost excludes:
Professional fees Inflation VAT Legal fees and Statutory costs Site acquisition and disposal costs Finance Charges FF&E (Fixtures, fittings and equipment).
St. David’s Hall
As there is the possibility of re-developing the area around St. David’s Hall, it is worth looking at the potential for creating a conference centre as an extension to the existing facility. At this stage we have not taken into account the desirability of this, either from a civic or marketing point of view. It is merely looking at the physical potential.
The venue already has an auditorium and stage, together with dressing rooms and administration spaces. It has a registration/reception area, but this is really too small for an international conference centre. Naturally, there is existing plant, but it is assumed that this would be inadequate for an expanded facility. The venue does not have any breakout space to speak of, which is one of its current disadvantages; nor does it have adequate banqueting and exhibition space.
Consequently, the extra facilities required to turn St David’s Hall into an international convention centre would nominally be as follows: Total Function Area 6,081 Stage Existing Registration (1,500 people) 1,100 Toilets & Cloaks - some existing 300 Café/Meeting Point Existing Loading Bay 500 Circulation @ 25% 1520
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Plant @ 10% 608 Administration @ 7.5% 456 Dressing Rooms/Temp. Offices Existing Lockers/Changing 120 Medical Room 50 Kitchens & serveries 1250 Storage @ 20% 1216
Total Area (Gross Internal Floor Area) - m2 13201
On this basis – and assuming the same exclusions as above – the build cost would be just less than £40,000,000.
Cardiff International Arena
This venue has several potential advantages for an expansion of the facilities. It already has significant function and ancillary areas. It also has an adjacent piece of land, which is council-owned and is currently being used as a car park, which we believe to have an approximate footprint of 2,500m 2. There is a further adjacent piece of land, not council owned, which could also be used for expansion.
The main arena has the potential to hold banqueting and exhibition events of the required size, although the current facility would need extensive refurbishment and installation of good partitioning systems. There are significant breakout spaces and office areas, together with a good back-of-house infrastructure. If this venue were extended and refurbished, the extra facilities required would be:
Total Function Area 1,992 Stage 800 Registration (1,500 people) 1,100 Toilets & Cloaks - some existing 200 Café/Meeting Point 300 Loading Bay - some existing 300 Circulation @ 25% 498 Plant @ 10% 199 Administration @ 15% Existing Dressing Rooms/Temp. Offices Existing Lockers/Changing Existing Medical Room Existing Kitchens & serveries - some existing 400 Storage @ 20% 398
Total Area (Gross Internal Floor Area) - m2 6187
On this basis – and assuming the same exclusions as above – the build cost would be just less than £19,000,000. It would be prudent to add in a figure for refurbishing the existing building, which can only be a 'guesstimate' currently; say an allowance of £5,000,000. Again, this does not take into account the actual ownership or Council lease arrangements, nor such factors as marketing implications or lost business during ______40 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study refurbishment. This is just a preliminary physical exercise at this stage, and the above issues, plus the practical aspects of integrating the design could add to the costs involved.
Further information on the requirements for adaptation of the above two venues is provided in the appendix: Theoretical Room Sizes.
Potential Development Sites
Three options for the development of further conference facilities have been discussed, namely the expansion of St. David’s Hall or Cardiff International Arena or the development of a completely new centre.
St. David’s Hall
One of the options in the report is to expand St. David’s Hall. We understand that as part of the St. David’s 2 development, an area of some 1,800m 2 has been earmarked for use by St. David’s Hall.
The option put forward in this report proposes a requirement of a little over 13,000m 2, which is clearly much greater than allowed in SD2. St. David’s Hall suffers from lack of banqueting and breakout space, which is what would be required for a useful expansion. (As an indication, an audience in the existing auditorium of 2,000 would need an area of approximately 2,800m 2 in order to feed them, ignoring the extra space required for food preparation and circulation.) Consequently, the 1,800m 2 proposed in the SD2 plans will not materially benefit St. David’s Hall, in terms of upgrading to an international conference centre specification.
Sports Village
Initial reactions to the inclusion of a conference centre in the Sports Village development were negative, due to its “out-of-town” location. However, the envisaged development will create its own unique town area and there could be advantages to this. With some of the sites mentioned , they are just outside the main city area – “the wrong side of the tracks”. With the Sports Village, it will create its own destination and could be attractive as a conference and leisure “quarter”, particularly for corporate business.
Initial discussions with Orion Land, who are developing the Council owned site indicated that there is a 30-acre site earmarked for a conference centre and 3,000-seat arena, together with a 500-bed hotel, probably of 4-star standard, which would complement the existing St. David’s Hotel.
The size of the site would easily accommodate the proposed conference facilities, with the added benefit of the arena, which could host the occasional plenary session for larger numbers, particularly in the association market.
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The plans for this are at a very early stage, which limited the information available at this stage. However discussions with the developers should continue, regarding their intentions in this area. If a conference centre of considerable size were to be developed here, this could be competitive with an alternative in the city centre. However it is likely that it would target a different target audience, due to the fact that a non city centre site would not be as attractive to the not for profit sector.
New development
Should the option for a totally new site be pursued, several sites have been identified within Cardiff. The advantages and disadvantages of these are outlined in the table overleaf.
The sites are referred to by number alone, due to commercial sensitivity, with the exception of the St.David’s 2 (SD2) development and the Sports Village, both of which are in the public domain.
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Potential development sites
Site No Advantages Disadvantages 1. • Good central location close to hotels, restaurants and • Not Council owned - land cost transport links • Limited size of site - particularly at ground level 2. • Good central location • Possibly no longer available 3. • • Not available 4. • Council owned • Let on long lease • Good central location • Appropriate size particularly if combined with Site 2 (if available) 5. • • Not available 6. • Could be incorporated into CIA or Site 7 • Part of the SD2 development intended for bus station • Good central location • Could be linked to hotels 7. • Good option for expansion of CIA, particularly when • Not Council owned - land cost combined with site 6 • Existing permission for office use raises land value 8. • Existing market awareness of CIA • Would require negotiations with Clear Channel with • Potentially lower development costs required possible cost implications 9. • Could be considered in conjunction with site 14 • Not Council owned - land cost • Limited size 10. • Not Council owned - land cost • Designated for student accommodation and parking • Limited size • Away from existing infrastructure 11. • Option to purchase as part of SD2 • Not Council owned - land cost • Could be combined with site 10 • Away from existing infrastructure
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Site No Advantages Disadvantages 12 • • Not available 13. • Council owned • Away from existing infrastructure • Existing tenants willing to relocate • Adequate size 14. • Mixed ownership including Railtrack and others - land cost • Away from existing infrastructure • Limited size St • 1800 sq m available inadequate for expansion of St David's David's Hall Hall Sports • Could in time become an attractive destination within the • Away from existing infrastructure Village city • Private developers may require return • Adequate Space may be available
N.B. Site numbers refer to the numbers on the confidential plan attached for key stakeholders only (commercially sensitive information)
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Funding Options
The following section is intended as a general overview on the types of funding available for the development of conference centres. It is of necessity a very general view, as well as being somewhat simplistic. There are other funding sources, such as complicated VAT schemes, which can supplement the core funding. However, there are primarily three types of funding route for the development of conference centres: · Private Funding · Developer Funding · Public Funding
Private Funding
This can take the form of a private individual donating money to build a centre, for example as in the Jacob K Javits Centre, in Manhattan, New York, or the Kimmel Centre in Philadelphia.
Alternatively, funds can be raised from companies, such as the sponsorship obtained by The Sage, a new concert hall in Gateshead. (The Sage has also attracted significant funding from individuals.)
For a private individual to donate the substantial sums involved, that person would need to be a major philanthropist, with a perceived civic debt to the city. That person would also want to buy a permanent place in history.
Company sponsorship is part of their marketing budget and generally has not been attracted to this sector – The Sage is the exception.
In principle, there is no reason from the venue marketing viewpoint why this route could not be pursued. However, the likelihood of achieving a result is slim.
There is also the possibility of a consortium of private funders. The likelihood of funds for this type of project is low. The private consortium would require a return on their investment, which is unlikely from a pure conference centre. Alternative returns are possible if there were aspects of planning gain within the project. We discuss this briefly in the next section.
Developer Funding
A straightforward developer is dependent on the return on investment. As mentioned above, a conference centre alone stands little chance of giving any return in the commercial sense. The benefits of a conference centre accrue to the local economy, which is of little interest to the commercial developer.
However, there is the possibility of planning gain, whereby a developer is given an incentive to build the centre, for example being allowed to develop adjacent (council- owned) land for commercial use. The cost of the land is, in effect, the conference centre construction. The amount that the developer will commit to the centre will
______45 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study depend on the extent of the planning gain. This in turn depends on the amount of available land and the current and projected demand.
For example, the City of Edinburgh is currently tendering for a developer on this basis, in order to fund an extension to the EICC.
Some other similar projects have been partly financed by hotel companies, who have built (or had built for them) a hotel as part of the conference centre. They then have the management contract for the hotel. However, such deals are increasingly rare and hotel groups are now very reticent about this type of activity.
Another current opportunity is that of incorporating a casino operation as part of the development, particularly in conjunction with a hotel operation. The latest changes in UK legislation will open up gambling laws, enabling new casino licences to be granted. This opportunity is already being exploited by other towns and cities in the UK. The advantage of a casino operation is that it generates tremendous amounts of cash revenue, and operators traditionally 'subsidise' non-core functions. In order to secure a foothold in the city, it may well be that a casino operator would be prepared to invest in the development of a conference centre and/or hotel, not only in the initial capital phases, but also during the operational phase, subsidising the operational deficit.
Finally, development funding can be raised from companies, who specialise in the management of such facilities. The company inputs the funding, or part of it, in return for a management contract to run the centre for a specified period - usually quite a lengthy period. However, being commercial organisations, a solid return on investment is required, which is unlikely from a pure convention centre, without substantial deficit funding from the local authority.
Public Funding
The final source of funds for conference centre developments is the public purse. This can either be from local government, or national government (including quasi- governmental sources such as the National Lottery in the UK) or European government.
National Government
To deal first with national government, this has never been a good source of direct funds for conference and exhibition facilities in the UK, with the notable exception of the Queen Elizabeth II Conference Centre, in Westminster. As the QEII proved an expensive and somewhat embarrassing exercise for the government, it is extremely unlikely that national government would wish to contribute to a conference centre development.
Some funding from central government has been channelled into developments such as the Edinburgh International Conference Centre, via Enterprise Agencies. The introduction of Regional Development Authorities has opened up the opportunity for funding from Government for certain developments and it is likely that future convention centres will receive some funding from this source. The convention centre ______46 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study being planned for Liverpool will receive funding from the NorthWest Development Agency and the London Development Agency is heavily involved in the new convention centre for London that is currently being explored.
In Europe, a large proportion of the cost of Euro Disney was funded by the French Government, with the justification of huge numbers of visitors and thousands of jobs.
Local Government
Local government funding has traditionally been the way to finance conference centre developments. This is primarily because this type of development benefits the local area in many ways. It creates short-term construction jobs and long-term full-time employment, not only within the centre, but also in the supporting service sectors.
Furthermore, the creation of a conference centre often attracts inward investment, particularly when it develops an area that has been left derelict for some time, such as in Birmingham and Edinburgh. The Edinburgh development, on a site that had lain derelict for many years, has kick-started further direct development of commercial property to the tune of £300 million - in turn creating many full-time employment opportunities.
Finally, the direct injection of visitor spending into the local economy can be tremendous. Whilst a conference centre may operate at a loss itself, the overall profit to the economy outweighs the operational deficit.
It should also be remembered that conference centres are major civic statements. Local government has a duty to improve the local environment, and major buildings of this nature rejuvenate and extend the stock of civic buildings for the future of the city. As iconic buildings, they can become the “castles of tomorrow”.
It is for these reasons that conference centres are primarily financed through local government. However, raising finance through this route has been made increasingly difficult in the UK by national government in recent years - a fact of which the reader will be all too aware. This leads to the need to obtain grants for as much of the development as possible, in order to minimise the amount to be raised by the city or region.
One of the ways that this can be achieved is through the co-operation and active involvement of the local Chamber of Commerce. As noted above, the development of a conference centre brings great gain to the local economy. The owners of businesses who benefit from this influx of visitors are invariably members of the Chamber of Commerce - therefore the Chamber is often asked to help with the development of a centre. This happened with the NEC in Birmingham and the Palais des Congrès in Paris, for example.
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European Funding
If a city has Objective 1 or 2 status, one funding option is for the city to obtain a grant from the ERDF as a primary source of kick start finance. Birmingham won £50 million (approximately 30%) for the construction of the International Convention Centre there. Birmingham had Objective 2 status at the time of the ERDF grant. However in the late 1980's grant aid was awarded for several facilities of this type which may not be as readily available now as Objective 2 priorities and measures have since changed.
(There are other sources of European finance, such as the European Investment Bank, but this is regarded as very bureaucratic and does not offer particularly good rates.)
Also, the European Social Fund will contribute to conference centres, where it is demonstrated that the employment basis has changed, involving the creation of jobs and the re-training of employees
If Cardiff were to seek funding for a convention centre, it would most likely use Priority 1 or Priority 3 of Objective 2, basing the proposal either on SME site development or community organisation benefit.
The process would be to develop a bid with The Cardiff Partnership (Contact: Ceri Macleod, Head of European Unit, tel: 029 2087 2673). Ms Macleod and her team would present a bid along with any others in that particular round to the Partnership's Management Board for their consideration against the aims and objectives of the Programme. The Board would then prioritise which bids are to be recommended to WEFO (Wales European Funding Office contact Tania Dillon 01443 471133) for their final assessment and subsequent formal approval, subject to resources being available.
However, Cardiff has had only £14 million allocated for Objective 2 funding, so potential grants would not necessarily be either available or large. Also, the grant would be dependent on the site chosen. The Bay area is one of the core Objective 2 wards, but the city centre is not (the boundary is the River Taff, on the other bank from the Millennium Stadium). It is anticipated that the requirements for European funding bids will change in the near future, but at this stage how this will impact a potential convention centre is unknown.
Funding of UK Convention Centres: Case Study Examples ICC, Birmingham • Objective 2 status • EU lobbying by City of Birmingham • ERDF grant of £37 million, index-linked • Eventual grant of £50 million • Funds raised by City of Birmingham partially by mortgaging the National Exhibition Centre • Total cost £180 million including Symphony Hall.
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EICC, Edinburgh (Original) • Funded by City of Edinburgh, Lothian Region and LEEL (Lothian & Edinburgh Enterprise Limited) • LEEL officer seconded to secure development • Capital cost subvented by VAT scheme loophole • Sale and leaseback of plant freed up funds • Cost £38 million.
EICC, Edinburgh (Expansion) • Kick-start funding provided by City of Edinburgh (CEC) and SEEL (LEEL’s successor) • Construction to be funded by a commercial developer, in return for gift of land, from CEC. • Commercial developer’s planning gain will be commercial office development • Cost currently budgeted at £25 million
Manchester International Convention Centre • Funded through G-Mex owners (10 local Metropolitan Boroughs) • Grant from English Partnerships for urban development (£3 million) • Cost £23 million.
Music Centre, Gateshead (Subsequently renamed The Sage) • Main grant funding from Arts Council, which required extensive submission, including designs and business plan • Remaining funding from local council, ERDF, Northern Arts & One North East (RDA) • Total cost of building development £70 million • Endowment funds being raised to subsidise operation, particularly educational elements • Major sponsors (over £1 million each) of endowment fund include The Barbour Trust; The Garfield Weston Foundation; Joan & Margaret Halbert (local benefactors, who will have the library facility named after them); The Northern Rock Foundation; and The Sage Group plc, whose £6 million donation was in exchange for naming the centre.
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Economic benefits
Major convention centres rarely cover the capital costs involved in their development. The return on investment for convention centres is generally evaluated by the economic benefit to the town of the business that they generate. Cardiff is already aware of the enormous benefit conferences bring to the city. The economic benefits from business tourism (conferences form only a part of the total) for a selection of major conference destinations is as shown below:
Belfast £41 million Blackpool £50 million Bournemouth £90 million Bradford £20 million Edinburgh £125 million Greater Glasgow & Clyde Valley £150 million Harrogate £144 million Jersey £28 million Mersey £33 million Newcastle Gateshead £32.5 million Portsmouth £2.5 million Southport £25 million Tees Valley £62 million Telford & Shropshire £65 million York £80 million Source: BACD
Conference delegate spend
The estimates of conference delegate spend for different sectors of the market are outlined in the table on page 55.
Many national association conferences last from 2-4 days, with an average spend per delegate per day of £136 (excluding travel to and from the destination). It is not unusual for a national association annual conference to generate expenditure of several hundred thousand pounds, while very large conferences of 1000+ delegates can produce an economic impact worth millions of pounds.
Large international association congresses, ranging from 1000 to 15,000+ delegates, attracting a high overseas attendance are extremely valuable to the chosen destination. According to the International Passenger Survey, average expenditure per day for overseas conference delegates attending meetings in the UK in the year 2001 was £147, compared to just £58.90 per day by those visiting the UK on a general purpose visit. ICCA calculates average worldwide expenditure per delegate per day at US$343 in 2001 and total average expenditure per meeting in 2001 at over US$1.1 million.
The national and international association segments also provide continuous economic benefit in times of recession, either local or worldwide. While corporate events ______50 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study diminish at such times, association events continue regardless although numbers may be less than at times when economies are buoyant.
Exhibition spend
The direct and indirect spend by exhibition organisers, exhibitors and visitors to exhibitions results in substantial economic benefits for the UK. Research conducted in 2001 estimated exhibitor expenditure alone to be £2.04 billion. Many contractors, suppliers and exhibitors, as well as media and security personnel also arrive in a destination several days before the commencement of an event
Individual domestic visitor spend in the destination while visiting an exhibition is not yet measured on a UK wide basis, although it is recognised that total visitor spend is significant.
In addition there is the value of orders taken at exhibitions which contributes to the local, regional and national economy. For example, the UK’s largest public show, ‘Daily Mail Ideal Home Show’, attracted 426,528 visitors in 2002 with an estimated total spend of £147 million or £345 per visitor. The estimated total spend expected after the show but as a direct result of the show was £2.1 billion or £4,929 per visitor . SED, an outdoor trade show focusing on plant and machinery, attracted 19,430 visitors in 2002. The total estimated spend by visitors for orders placed at the show was £135.8 million. The total estimated spend by visitors after the show but influenced by their visit to the show was £419.5 million, giving a combined total of spend directly influenced by visits to the show of over £555 million.
The average daily spend of international business visitors attending trade exhibitions in the UK was £224 in 2001, according to the International Passenger Survey (IPS) published by the Office of National Statistics. The IPS determines the average length of stay for international business visitors attending trade exhibitions as 3.6 days. It can therefore be calculated that a UK exhibition attracting 1,500 international business visitors would contribute over £1.2 million in direct spend to the economy, solely through its international business visitor component.
Figures from VisitBritain (formerly the British Tourist Authority - BTA) show that in 2001 the UK exhibition industry attracted 207,000 overseas visitors. The business tourism spend alone for these visitors totalled £168 million, a direct input into the UK economy. This spend does not include any income generated from sales within the exhibition itself.
Job generation
Conferences are held all year-round, peaking in Spring and Autumn but with high levels of activity in the Winter months, thus sustaining permanent, full-time employment. It is estimated that the sector nationally employs around 530,000 people both directly and indirectly.
The higher standards of service demanded by conference and exhibition visitors require more labour-intensive service suppliers, which in turn translates into higher levels of job creation. For example, 68% of all tourism jobs in Harrogate are created ______51 SG/EJR/The Right Solution Ltd 28/06/04 Cardiff conference development needs study and sustained principally by conferences and exhibitions, and only 32% by leisure tourism. The NEC Group of venues (National Exhibition Centre, International Convention Centre, Symphony Hall, and the National Indoor Arena) sustains around 22,000 jobs in the West Midlands.
Employment in the exhibition segment reflects the high level of productivity to be found in the segment. It is estimated that the segment supports over 27,000 full-time jobs, and over 5,000 part-time jobs.
Winning and hosting key national and international conferences and exhibitions is seen as a major economic boost to the host town or city and many use the conference sector as a means of urban renewal and regeneration. The city of Glasgow employed 40,000 people on the Clyde at the height of the shipbuilding era but as the industry declined so did the area around it. The Scottish Exhibition and Conference Centre (SECC) was built on the banks of the Clyde in 1985 and over the last fifteen years £1 billion has been spent in transforming Clydeside as both conference business and general tourism has grown. The Scottish Exhibition and Conference Centre directly supported over 3,300 jobs in Glasgow and other regions of Scotland in 2001. Glasgow as a whole now employs 47,000 people in tourism-related industries and is one of the UK’s most successful tourism destinations.
A further indirect benefit of major events is that they help raise the profile and status of a destination, which has spin off for other forms of tourism and further economic regeneration. When the G8 summit was held in Birmingham, the value of the TV coverage to the city was estimated at £5 million. A new centre would help Cardiff to attract high profile events in future and these then act as a catalyst for other events as they encourage other event organisers to consider the city.
Sponsorship
Sponsorship can help generate income for the conference centre and for the destination. In addition to sponsorship of individual conferences or individual elements of a conference such as presentations, coffee breaks or parties, less temporary sponsorship can be sought for items such as signage throughout the centre or links with individual rooms or areas. In the case of the new music centre in Newcastle/Gateshead the whole centre has been re-named The Sage as part of a valuable sponsorship deal with Sage software who paid £6 million into an endowment scheme in return for the building taking their name. (See earlier funding section).
Association conferences in the medical or pharmaceutical sectors often attract lucrative sponsorship from pharmaceutical and medical equipment companies keen to promote their products, and these events usually have valuable commercial exhibitions attached. The commercial sponsors will often host groups of their top clients and prepare a luxury programme for them. These groups can make up as much as 75% of the delegates attending a conference, and there is competition between the companies to provide quality programmes for their delegates including accommodation at high quality hotels within walking distance of the conference venue, and up-market exclusive social functions and entertainment.
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Economic benefits of a new convention centre
Estimates of the likely economic benefit resulting from the hypothetical diary projected for a new centre are outlined on pages 56 to 59. This has been calculated using the information from the table shown on page 55. The total direct spend from the hypothetical diary is just under £5.4 million. The Tourism Impact & Planning Model for Wales used by the Development Division of the Wales Tourist Board suggest a multiplier of 1.5. The total economic benefit to Wales would therefore be £8.1 million and 239 full time equivalents. The latest Wales Tourist Board research to measure usage of Wales as a destination for business events showed that an annual expenditure figure on all events held in Wales in 2003 was £156,839,015, of which 7%, or £10,397,093, is calculated as the additional expenditure generated as a result of the Wales Tourist Board’s conference and incentive campaigns.
Subvention Policy
Achieving the economic benefit estimated would be dependent on a significant subvention budget, allowing many events taking place in the centre to make use of the facilities at reduced rental rates or at no charge. This should be separate to the operational budget for the centre.
To date the policy has been for the council to match fund the allocation from accommodation commission to a level in the region of £48,000 per year. This is managed jointly by the Council and the hotels association, which has a broad policy of allocating subvention to non profit making organisations who generate a minimum of 500 bednights over 2 days. It is only available to organisations who use the Convention Bureau accommodation service. As associations are finding that delegates increasingly choose to book their own accommodation via the Internet this policy could work against the city in future and will need to be reviewed regularly.
Many association conferences require subvention. Some look for funding of all conference space and others for part funding only. The subvention policy has recently been reviewed and agreed, to strengthen and formalise the procedure for qualification in future, in order to encourage more conferences to Cardiff and share the responsibility for the required subsidy between all interested parties.
It should be noted that the subvention budget discussed above does not include the costs incurred for other services provided by the city during individual conferences such as extra security and policing, specialist signage etc. The costs for these services are additional to the subvention requirement, as is the funding of the Convention Bureau. Although an individual convention centre would have its own sales and marketing team, there would remain a requirement for the Convention bureau to market the destination strongly and co-ordinate the bidding process for events. A decision to aim for increased conference business for the city would require additional funding for the Convention Bureau to enable the ambassador programme to become more pro-active and to fund more aggressive bid activity.
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Additional benefits to Wales
Research into incremental expenditure by all business visitors to UK destinations shows that currently: • 17% of conference delegates are accompanied by a guest who is not a delegate • Delegates spend an average extra 0.8 nights at their destination before or after the business event they are attending, although this figure is higher for association and academic conferences. Large congresses tend to feature pre- and post-congress tours for delegates and accompanying persons’ programmes which make them doubly valuable to their chosen destination • 39% of delegates claim they would be likely to return to the destination of the conference for a holiday or short break so a positive business visit could also stimulate a future leisure visit.
Increasing the volume of conference business to Cardiff is therefore likely to provide wider benefits, not just to the city through additional short break visitors and those accompanying delegates, but to the wider region and other parts of Wales. Many will choose to visit other parts of Wales after their conference, extending the economic benefits.
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Expenditure Estimates for conference sectors Expenditure Category Corporate Association Academic Other £ £ £ £ Registration Fee 333 159 201 133 Overnight accommodation during the conference 226 155 151 128 (105) (58) (57) (47) Overnight accommodation before or after 174 116 88 113 conference (86) (44) (46) (45) Travel to UK for conference 511 489 574 455 Travel in UK to conference 72 46 73 36 Local travel at destination 6 4 3 3 Food and drink 39 40 40 33 (20) (15) (15) (13) Evening events and entertainment 4 9 18 7 (2) (3) (13) (3) Shopping and gifts 18 34 28 24 (7) (12) (6) (9) Day trips pre/post conference tours 3 2 3 1 Total expenditure per trip 355 400 548 354 Total expenditure per day 140 136 201 128 Source: Estimating the Direct Expenditure benefit of conferences to a local area UK Tourist Boards 2001 (figures in brackets are per day)
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Hypothetical Diary Month Event No. of No. of days Estimated Halls Estimated visitor Room nights attendees/ total space spend* (no. of days x exhibitors required £ people) January Banquet 600 1 2160 2 Assoc iation meeting 200 3 3084 4, 3, 12-18 81,600 600 Association meeting 450 2 4540 1,3,5,6-8,19-21 122,400 900 Corporate meeting 150 2 562 4,5 42,000 300 Corporate meeting 30 1 65 9 Corporate meeting 10 1 17 22 Corporate meeting 15 1 43 15 February Association meeting 300 4 4691 1,3,6-18 163,200 1200 Association meeting 250 4 5631 4,2,3,6-8,9-15 136,000 1000 Exhibition 250 3 2500 3 112,500 750 Corporate meeting 150 2 694 4,5,16-21 42,000 300 Banquet 450 1 2160 2 Corporate m eeting 50 1 86 7 Corporate meeting 10 1 17 25 Corporate meeting 15 1 65 10 March Association meeting 200 3 3084 4,3,12-18 81,600 600 Association meeting 450 4 6798 1,2,3,5-8, 10,12,16, 22-23 244,800 1800 Exhibition 250 2 2500 3 75,000 500 Corporate meeting 80 1 562 4,5 Corporate meeting 10 1 43 15 Corporate meeting 20 1 65 10 Corporate meeting 15 1 65 11
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Month Event No. of No. of days Estimated Halls Estimated Room nights attendees/ total space visitor spend* (no. of days x exhibitors required £ no. of people) April Association meeting 500 3 7110 1,2,3,4-8,10,12,16 204,000 1500 Association meeting 700 3 7001 1,2,3,5-15 285,600 2100 Banquet 600 1 2160 2 Corporate meeting 50 1 86 7 Corporate meeting 10 1 17 24 Corporate meeting 20 1 43 14 Corporate meeting 15 1 43 15 May Association meeting 800 3 7413 1,2,3,4-8,9-15,19-21 326,400 2400 Association meeting 150 2 2830 2,4,9-14 40,800 300 Association meeting 300 2 4691 1,3,6-18 81,600 600 Corporate meeting 20 1 43 12 Corporate meeting 10 1 17 22 Corporate meeting 20 1 43 15 June Association meeting 200 2 474 4,5,6-8 54,400 400 Association meeting 350 2 6418 1,2,3,6-8 95,200 700 Exhibition 466 4 4660 2,3 279,600 1864 Corporate meeting 200 2 536 4,18-27 56,000 400 Corporate meeting 70 2 216 5 19,600 140 Corporate meeting 20 1 43 14 Corporate meeting 15 1 43 15 July Corporate meeting 120 2 664 4,5,22-27 33,600 240 Association meeting 150 3 2107 1,4,9-11,16-22 61,200 450 August
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Month Event No. of No. of days Estimated Halls Estimated visitor Room nights Attendees/ total spend* (no. of days x exhibitors space £ no. of people required September Association meeting 800 4 6851 1,2,3,6-8,9-18 435,200 3200 Association meeting 400 3 4569 1,2,4,5,6,9-11,16-18 163,200 1200 Association meeting 350 3 7581 Whole site 142,800 1050 Corporate meeting 100 2 562 4,5 28,000 200 Corporate meeting 20 1 65 10 Corporate meeting 15 1 43 12 Exhibition 466 3 4660 2,3 209,700 1398 October Association Meeting 400 3 4569 1,2,3,6-8,9-18 163,200 1200 Association Meeting 700 3 7581 Whole site 285,600 2100 Association meeting 200 2 474 4,5,6-8 54,400 400 Corporate Meeting 150 2 562 4,5 42,000 300 Corporate Meeting 200 1 2500 2,3 Corporate meeting 10 1 22 16 Corporate meeting 25 1 65 10 Corporate meeting 40 1 86 7
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Month Event No. of No. of days Estimated Halls Estimated visitor Room nights Attendees/ total space spend* (no. of days x exhibitors required £ no. of people) November Association Meeting 250 2 4483 1,3,5,6,9,12,16,22-24 68,000 500 Association Meeting 500 3 7391 1,2,3,4,5,6-15,19-20 204,000 1500 Association Meeting 1200 3 7581 Whole site 489,600 3600 Corporate Meeting 80 1 216 5 Corporate Meeting 150 2 562 4,5 42,000 300 Corporate meeting 10 1 22 16 Corporate meeting 20 1 43 12 Exhibition 466 3 4660 3 209,700 1398 December Banquet 600 1 2160 2 Banquet 1200 1 2160 2 Banquet 400 1 2160 2 Corporate meeting 10 1 17 22 Corporate meeting 20 1 65 11 Corporate meeting 15 1 43 12 Exhibition 466 3 4660 2,3 209,700 1,398 Total 18,004 137 162,503 5,386,200 38,788
*Estimated visitor spend for conference attendees based on information outlined in chart on page 69. Exhibitors estimated at 50% net space, 10 square metres per stand and 2 exhibitors per stand @£150 per exhibitor per day. Banquets and non residential corporate meetings (perceived to be local) are not included as generating room nights or economic benefit.
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Importance of infrastructure
'Conventions Quarter'
It has already been mentioned that the development of a new conference centre needs to be supported by the necessary infrastructure development of hotels, shops, leisure and transport in order to ensure its success. The appraisal of sites has taken this into account, to ensure the area surrounding the selected site for a new convention centre is able to provide the necessary support.
Conference organisers are influenced by the total facilities and services a destination can offer, in particular the capacity, quality and supporting services available at the conference centre. The chart below shows the priority of factors influencing venue selection for associations' conference organisers.
Position 2003 Factor 1 Location 2 Access-road & rail links 3 Price/value for money 4 Capacity of conference facilities 5 Quality of conference facilities 6 Availability Source: UKCMS 2003
Cardiff is well placed to meet the destination requirements, if it was able to provide a higher quality conference centre.
Hotels
There should be sufficient hotel accommodation nearby for the maximum potential number of delegates, exhibitors or visitors to be accommodated within easy reach of the conference centre. There needs to be a range of standards to cater for the needs of exhibitors, visitors, organisers, conference delegates and accompanying persons, and their varying price ranges. Hotels should be within walking distance of the centre and ideally linked in terms of communication facilities. Cardiff is currently able to provide sufficient quantity of good quality accommodation at most times. Additional conference business would increase demand for accommodation. A specific hotel study is to be undertaken in the near future identifying development needs. A specific requirement for a new convention centre would be a hotel adjacent to or physically linked to the centre to serve as a 'headquarters' hotel for the major association conferences. This would ideally provide a minimum of 200 bedrooms and preferably be of four star or equivalent standard or higher.
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Transport
The ability to provide easy and regular access for conference delegates is critical to the city's further development in this market. Research with our sample of organisers revealed perceptions that Cardiff is not easy to get to. Marketing of the city needs to overcome these views by focusing on how compact the city is, and the availability of efficient, regular and good quality transport to enable delegates or visitors to reach their conference venue easily, whether by private car, coach, public transport, or taxi, train and plane. International visitors require not only sufficient international air routes but quick and easy access from the airport(s).
Development of venue facilities will also need to consider transport facilities for goods vehicles. Conferences and exhibitions can generate a vast number of vehicle movements, from 40-tonne articulated lorries, to a multitude of small delivery vans, which need to be efficiently managed, with a holding area, and call-off facilities, as well as vehicle entry doors to the venue itself. The provision of ample parking for cars and lorries also needs to be supplemented by coach parking. Large numbers of coaches may need to be loading or unloading at the same time. The decision on the appropriate site for development will need to consider this fully.
Shops, restaurants and entertainment
Many conference and exhibition centres are currently recognising the need to provide a wider visitor experience and develop their offer with associated developments such as retail, leisure, restaurants and entertainment. This is a major strength for Cardiff which is already able to offer value for money and quality in a range of catering options from upmarket haute cuisine to simple snacks with plenty of recognisable high street brands and standards.
Many delegates and visitors will also take advantage of local shops and availability of a range of goods is popular. This is also an area where Cardiff is well able to satisfy visitor needs currently. The destination's current shopping offer compares favourably with other conference destinations in the UK.
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Next steps
The following recommendations are required in order to develop conference business for Cardiff and follow up the outcomes of the study:
• Continue to explore the options for potential sites for a convention centre, looking at the viable alternatives, associated costs and funding options, including sustainability/revenue funding • Prepare a detailed feasibility study for the chosen site • Progress the specification into a spatial design for new facilities • Continue development of the existing ambassador programme to develop relationships with associations that have academic or industrial links to the city • Encourage association membership among local academics by raising awareness of the benefits and support available • Encourage stronger partnership among all major players in the destination. Kick start this process with communication of the report and resulting recommendations • Initiate discussion with exhibition organisers for development of events in a new facility • Promote development of international air routes to Cardiff and associated transport routes to the airport • Hotel study to identify development opportunities • Utilise the subvention policy to maximise potential for Cardiff through the agreed revisions to the way it is implemented • Gain the commitment of a Project Champion , an individual who acts as a catalyst for change in the city, pioneering and supporting radical change by committing significant time and energy to gain the wide public support needed to justify allocation of public funds.
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APPENDIX: COMPETITIVE CONVENTION CENTRES
Venue Phone number/website Meeting rooms Capacity Capacity Room size Hire cost Other relevant details theatre classroom Exclusive of style style VAT AECC, 01224 824824 Day Delegate Linked to Aberdeen Inn by walkway – 123 Aberdeen www.aecc.co.uk rate of £28 beds. Arena 4,000 7,300 sq. m. Boyd-Orr Hall 2000 1,400 sq. m. 758 tiered seats. Divides into 2 x 800 Fleming Auditorium 500 430 sq. m. 300 tiered seats. Forbes Room 244 104 247 sq. m. Gordon Suite 685 565 sq. m. £1,400 Crombie Suite 700 565 sq. m. £1,400 23 Breakout rooms £120 to £310 Of varying capacities. East Midlands 0115 951 5000 Atrium and gallery added in 2000: Conference www.emcc.co.uk Reception/exhibition and 3 syndicate rooms Centre, for up to 50 people Nottingham Theatre 550 160 380 sq.m. £4,500 Retractable seating Jesse Boot Conference Suites: 1a 40 12 35 sq.m. £150 1b 20 6 20 sq.m. £3.50 (per person per day) 1c 25 10 21 sq.m. £150 Suite 1 Complete 100 40 76 sq.m. £250 2a 25 10 23 sq.m. £150 2b 20 6 19 sq.m. £3.50 (per person per day) 2c 40 12 34 sq.m. £150 Suite 2 Complete 100 40 75 sq.m. £250 3a 40 15 36 sq.m. £150 ______1 SG/EJR/The Right Solution Ltd
Venue Phone number/website Meeting rooms Capacity Capacity Room size Hire cost Other relevant details theatre classroom Exclusive of style style VAT EMCC cont'd 3b 35 15 29 sq.m. £150 3c 40 15 30 sq.m. £150 Suite 3 Complete 120 50 95 sq.m. £250 4a 40 18 35 sq.m. £150 4b 40 12 35 sq.m. £150 Suite 4 Complete 80 40 70 sq.m. £250 Banqueting and Hall A: 400 theatre Exhibition Suite 850 676 sq.m. £3,500 Hall B: 400 theatre Complete Harrogate 01423 500500 All rooms have lighting controls, telephone International www.harrogateinternationalcentre.co.uk points, 3 phase & blackout; 16,500 sq. m Centre exhibition space with stands; 214 bed hotel Auditorium 2009 300 £9,030 (or £17 Between £10,000 and £34,000 per delegate) 578 seats removable to give 350sq.m. of arena space. Hall D 700 - 1,120 sq. m £4,390 or £3.92 per m 2 £3,550 for set up days Kings Suite 250 100 463 sq .m. Royal Hall 864 280 334 sq. m. Conference Suite 100 40 141 sq. m. Hall M - - 1,500 sq. m. Receptions only (1000) Hall Q - - 163 sq. m. Exhibition space only Foyer - - Receptions only (600)
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Venue Phone number/website Meeting rooms Capacity Capacity Room size Hire cost Other relevant details theatre classroom Exclusive of style style VAT Manchester 0161 834 2700 All rooms have lighting controls, telephone ICC www.g-mex.co.uk points, sound system, blackout Auditorium 804 802 £8,750 Raked theatre, 250 sq. m. stage Great Northern Hall 1600 750 1900 sq. m. £4,960 Ceiling 4.45 m high rising to 7.8 m £3.10 per m 2 Room 1 80 36 65 sq. m. £ 550 Doesn't divide Room 2/3 80 36 65 sq.m. £ 550 Divides into 2 (£355 for 1) Room 4/5 80 36 65 sq.m £ 550 Divides into 2 (£355 for 1) Room 6/7 40 12 32 sq.m. £ 550 Divides into 2 (£355 for 1) Seminar Suite : Mancurian 400 200 590 sq.m. £2,470 Divides into three Palatine 240 150 369 sq. m. £1,795 Part of the Mancunian. Cheshire Lines 100 45 115 sq. m. £ 655 Part of the Mancunian Sidings 40 18 48 sq.m. £ 445 Part of the Mancunian Porters 150 60 191 sq. m. £ 915 Pullman 150 60 255 sq. m. £1,000 Bournemouth 01202 456400/456550; 16 breakouts; Leisure Centre ICC www.bic.co.uk Windsor Hall 3600 800 2,000 sq. m. £6,490 Purbeck Hall 1600 900 1,800 sq. m. £5,480 Circular; exhibition hall Tregonwell Hall 1200 350 723 sq. m. £2,940 Purbeck Lounge 200 - £ 470 Meyrick Suite 75 40 90 sq. m. £ 500 Divides into 2 Branksome Suit. 62 43 80 sq. m. £ 390 Divides into 2 Westbourne Suite. 39 - 49 sq. m £ 230 Stour Rooms 1/2 88 - 89 sq. m. £ 460 Divides into 2 Avon Room 40 - 48 sq.m. £ 230 Presidents Suit. 39 - 40 sq. m. £ 230 Boardroom for 20
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Venue Phone number/website Meeting rooms Capacity Capacity Room size Hire cost Other relevant details theatre classroom Exclusive of style style VAT BICC cont'd Bourne Lounge 250 - 256 sq. m. P.O.A. Solent Rest 160 - 187 sq. m. P.O.A. Brighton 01273 292629 Centre www.brighton.co.uk/con ference
Main Hall 4450 700 1,932 sq. m. £6,130 Can curtain off to reduce area. Link to Hewison Hewison Hall 600 200 597 sq. m. £2,160 Pillars at side of room East Wing A 400 130 391 sq. m. £1,460 Divides into two rooms, bar area East Wing B 400 130 400 sq. m. £1,460 Divides into two rooms, bar area Rainbow Room 200 - 260 sq. m. £ 880 Brighton Suite: £ 425 Entire Suite Rooms 1-7 20-50 in £115 - £175 Various dimensions/capacities 20-70 people each Executive Suite 50 30 £ 655 Three rooms, same capacities Studio 60 30 46 sq. m. £ 450 Boardroom 50 - £ 350 Boardroom for 30 Skyline 200 - 320.sq. m. £ 700 Devonshire 01323 415437; 2,500 sq. m exhibition space; all rooms Park Centre www.eastbourne.org/ below have 3 phase Eastbourne conference
Congress Theatre 1700 - - £2,912 Stage 13m x 13m Floral Suite 1100 540 1,196 sq. m. £1,644 Link to Congress Suite Gold Room 400 200 409 sq. m. £ 801 Congress Suite 300 150 268 sq. m. £ 599 Link to Floral Hall Devonshire Park Hall 400 200 998 sq. m. £1,459 Divided into 2 rooms each of 400, mainly used for exhibition space
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Venue Phone number/website Meeting rooms Capacity Capacity Room size Hire cost Other relevant details theatre classroom Exclusive of style style VAT Riviera 01803 206306; Leisure Centre; Cinema Centre, www.rivieracentre .co.uk Torquay Grace Morrell: 200 211 sq. m. in total £ 600 A, B, C, D can combine into 1 room Grace Morrell A 30 20 42 sq. m. £ 100 Grace Morrell B 80 50 63 sq. m. £ 200 Grace Morrell C 80 50 64 sq. m. £ 200 Grace Morrell D 30 20 42 sq. m £ 100 Burdett Room 160 100 173 sq. m £ 275 Forum Hall 1500 430 1,230 sq. m. £2,500 Raked seating for 950/550. On 2 levels. Arena 1800 600 1,705 sq. m £2,950 Exhibition space and receptions for 1800 Barbican 020 7638 4141 2 Exhibition Halls, not suitable for Centre, www.barbican.org.uk conferences. Hall 1 : 4,103 sq. m. Hall 2: London 3,813 sq. m. Barbican Hall 1,989 - £11,800 Fixed Seats on 3 levels. Theatre 1,150 £11,800 Cinema 1 280 £ 3,500 Fixed seats. Cinema 2 251 £ 3,300 Fixed seats. Cinema 3 153 £ 2,500 Fixed seats. Conference Rooms: Each: 72 sq. m. £600 - £800 6 Individual Meeting rooms of 50 each theatre/24 classroom link to make larger rooms Suites 2 linked 110 60 144 sq. m. £ 1,250 Suites 3 linked 170 100 216 sq. m. £ 1,500 - £1,800 Boardroom 68 sq. m. £ 500 Boardroom for 22
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Venue Phone Meeting rooms Capacity Capacity Room size Hire cost Other relevant details number/website theatre classroom Exclusive of style style VAT Queen 0207 798 4000; Reputation for high security Elizabeth II www.qeiicc.co.uk Centre London Churchill Auditorium 700 356 798 sq. m. £6,995 Catering area Pickwick Suite-500
Fleet Room 75 30 87 sq. m. £ 875 Fleming Room 700 320 762 sq. m. £7,270 Whittle Room 375 172 518 sq. m £4,960 Westminster 110 66 355 sq. m. Pillars Mountbatten 300 - 350 sq m. £5,800 Fixed Stage Elizabeth Windsor 180 80 157 sq. m. Pillars Rutherford, Abbey and Can be used together, each room Henry Moore accommodates 50 theatre, 30 classroom. Pillars Poet Rooms - - 7 syndicate rooms, various sizes Commonwealth 020 7603 3412 The Commonwealth Galleries for Conference & www.commonwealth.o Receptions/Buffets for up to 1500. External Events Centre, rg.uk/ lawns for marquees 1400 sq.m. London Conference 460 - 444 sq. m. £1,890 Raked Seating. Auditorium/Exhibition Hall Auditorium and Studio Suite sold as a package for £3,649 Exhibition Hall 450 162 348 sq. m. £1,313 Studio Suite 110 70 150 sq. m. £ 683 Integrated sound and video facilities Herschell Room 60 40 92 sq. m. £ 420 Hunt Training Suite 1 80 36 69 sq. m. £ 546 Self-contained suite of rooms. Hunt Training Suite 2 21 9 20 sq. m £ 80 Hunt Training Suite 3 12 6 16 sq. m. £ 80
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Hunt Training Suite 4 18 9 21 sq. m. £ 80 Bradley Room 80 45 87.5 sq. m. £ 515 Tweedsmuir Room 40 18 44 sq. m. £ 305 Garner Room 80 36 95 sq. m. £ 710 Jehangir/Boardroom 120 54 195 sq. m. £ 756 Linked by steps and divided by a removable Suite sliding partition. Hudson Room 24 18 £ 80 Horsbrugh Room 30 - £ 368 Wallace Room 30 - £ 368 Northcote Room 20 - £ 74 Dundee Room - - £ 74 Boardroom for 12 Gillette Room* 150-170 N/A This room will be available end 2003 ICC 0121 200 2000; Quayside and Centenary Square entrances Birmingham www.theicc.co.uk Hall 1 1500 730 £26,800 Raked seating Symphony Hall 2000 - Hall 3 3000 - 3,050 sq. m. £20,000 Hall 4 825 440 800 sq. m. £13,200 Hall 5 303 125 £ 8,900 Raked seating Hall 6 120 70 113 sq. m. £ 2,000 Sub-divisible Hall 7 135 70 148 sq. m. £ 2,400 Sub-divisible Hall 8 300 180 319 sq. m. £ 5,200 Sub-divisible Hall 9 285 170 294 sq. m. £ 5,300 Hall 10 205 120 242 sq. m. £ 4,600 Sub-divisible Hall 11 345 185 388 sq. m. £ 6,000 Sub-divisible Meeting rooms £120-£370 10 rooms for 12-45 people each
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EICC, 0131 300 3000; £25,000 for whole centre Edinburgh www.eicc.co.uk Extension planned for completion 2006 Pentland Suite 1200 - Auditorium splits in 3 (600;300;300); circular Galloway Suite : Divides into 3 rooms Carrick 100 36 107 sq. m. £ 850 Re-divides into 3 rooms Harris 100 36 109 sq. m. £ 850 Re-divides into 2 rooms Ochil 100 36 107 sq. m. £ 850 Divides into 3 rooms Lomond Suite 600 300 600 sq. m. Divides into 3 rooms Strathblane Hall - - 1,128 sq. m. Reception for 800 Cromdale Hall 1000 500 1,185 sq. m. Exhibition hall SECC Glasgow 0141 248 3000; 23 meeting rooms in total; includes Moat House www.secc.co.uk Hotel. Hall 1 360 140 630 sq. m. £3.50 per sq. m Pillars Hall 2 2,500 950 2,315 sq. m. £3.50 per sq. m Hall 3 5,000 2,000 5,095 sq. m. £3.50 per sq. m . Hall 4 10,000 3,750 10,065 sq. m. £3.50 per sq. m . Hall 5 4,000 4,105 sq. m. £3.50 per sq. m Clyde Auditorium 3,050 2,285 sq. m. POA Adjacent to Forth & Gala 1/2 Forth 300 150 399 sq. m. Part of the Conference Centre with Auditorium Gala 1 & 2 together 120 70 140 sq. m. Loch Suite: Loch Suite is £11,500 for both suite and rooms Lomond Auditorium 624 250 490 sq. m. £4,900 Etive 30 15 35 sq. m. £ 250 Part of the Loch Suite Fyne 30 15 35 sq. m. £ 250 Part of the Lock Suite Alsh Suite 220 115 468 sq. m. £1,800 Divides into two rooms Boisdale 220 115 233 sq. m. £1,800 Divides into two rooms Carron 200 100 199 sq. m. £1,800 Divides into two rooms Dochart 200 100 199 sq. m. £1,800 Divides into two rooms Seminar Suite: £1,000 Leven, Morar, Ness, Katrine Leven 100 57 108 sq. m. £ 590 Morar/Ness 50 30 60 sq. m. £ 260 Katrine 12 6 30 sq. m. £ 250
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Appendix 3
Cardiff International Conference CCCentreCentre Development Study Update
October 2011
Prepared by Sally Greenhill
Atlantic Business Centre, Hamilton House, 111 Marlowes, Hemel Hempstead, HP1 1BB www.rightsolution.co.uk Tel: 01442 450422
Cardiff International Conference Centre Study update
Contents
Introduction 3 Background 3 1. Executive Summary 5 2. Cardiff as a conference destination 8 3. Market analysis - demand 12 4. Trends and Future influences 24 5. Market supply 28 6. Destination comparisons 29 7. Specification of facilities 32
©The Right Solution Limited 30th October 2011 2
Cardiff International Conference Centre Study update
Introduction
The Right Solution was appointed by Cardiff ISV and Cardiff Council to review the report originally prepared in 2004 and update the latest market information. Developers have come forward to consider development of an international conference centre in the city and questions have been raised on the optimum size and specification for Cardiff to maximise its potential in the conference market. The implications for the city of changes in the market since 2004 and newly opened convention centres elsewhere in the UK are therefore of particular importance. This reports aims to outline the potential market and appropriate specification for such a development, enabling Cardiff to increase market share from conferences, which in turn would increase economic impact, generate much needed employment, increase hotel occupancy, average room rates and revpar (revenue per available room).
Please note this document is prepared solely for the use and benefit of Cardiff Council. The Right Solution and the author neither accept nor assume any responsibility or duty of care to any third party.
Background
The development study report prepared by The Right Solution in 2004 reached the following key conclusions: • The major opportunity for Cardiff was to increase market share for association conferences that always require a combination of facilities for plenary, catering, exhibition, display and breakout rooms. • Spaces for events for up to 500 attendees were relatively well provided for in Cardiff. However there were few venues able to offer appropriate spaces for larger numbers and these were unable to meet all the requirements for association conferences as outlined above. • In particular the growth in exhibitions to support conferences was not able to be matched by appropriate facilities in Cardiff. Cardiff International Arena (as it was known in 2004) split the total area with an acoustic curtain but this was far from ideal and did not match provision by competitor cities. • The cities with purpose built conference centres received far greater market share than Cardiff and were able to increase economic impact, employment and hotel occupancy and revenue as a result. • The recommendation was for a new centre to provide a main plenary space of 1,500 plus breakout rooms, exhibition space and support areas. The original specification suggested Gross Internal Floor Area in the region of 17,570 square metres would be required. The best location for this was identified as the city centre where the infrastructure exists to support it.
©The Right Solution Limited 30th October 2011 3
Cardiff International Conference Centre Study update
Since the original report was completed, many other research reports, industry publications and expert advice have been considered by Cardiff Council.
The objective for Cardiff to become a world class business and visitor destination was included in the Council's 3 year corporate plan for 2010 to 2013. The Culture, Tourism and Events Service Area Business plan 2010/11 also listed as primary action 31235 to 'support delivery of an International Conference/Convention Centre' (ICC).
This plan recognised that development of an ICC would realise the following benefits • Enhanced conference and event offer delivering greater economic return through improved share of the conference market • Increased employment • Support Cardiff in becoming a premier visitor destination.
This report therefore aims to update the market information in light of the above ambitions and outline the appropriate specification of conference facility for Cardiff to suit market requirements for the foreseeable future.
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1. Executive Summary
1. Historically Cardiff has seen success as a conference destination. However it is now finding it ever harder to compete with cities where new purpose built international conference centres have been developed. It has been recognised that the city is in need of new purpose built conference facilities since publication of The Right Solution's development study in 2004. Much work has taken place since 2004 on the size, scale, business planning and development opportunities for a new conference centre. This report aims to confirm the size, format and specification requirements for such a centre, as indicated by the market requirements.
2. A recent report published by the Business Visit and Events Partnership forecasts 34% growth in the value of the UK conference market by 2015 and a further 15% by 2020.
3. A new convention centre in Cardiff would attract conferences and meetings events from the not for profit sector of associations, public sector organisations and charities, and the corporate sector, each of which are responsible for around 50% of the UK's conference market. Associations' conferences would form the key target sector for a new centre in Cardiff as these attract larger numbers of high spending delegates. The association sector has been more resilient to the financial situation in recent years and has seen growth in volume of events, although their events have recently been smaller, shorter and held at a wider range of destinations than was previously the case. There is an opportunity to significantly increase the annual number of association and corporate conferences hosted with the right facilities to meet market needs. In addition to conferences, the centre is likely to attract some stand alone exhibitions, and banqueting events.
4. The average number of delegates attending national (UK) associations' main annual conferences in 2010 was 380 delegates and it has ranged from this figure to 450 for the last ten years. The average number of delegates attending international association conferences was 571 in 2010 and has ranged from this figure to 590 in recent years. The majority of association conferences attract less than 1,000 delegates. 16% of national associations and 28% of international associations are for more than 500 delegates. Purpose built conference centres clearly attract larger conferences than other venues. Comparisons with seven purpose built UK conference centres in the 2010 Team Tourism Consulting report prepared for Cardiff identified the average size of event at these centres as 717 delegates. Clearly as there are fewer centres able to target those events for more than 1,000 delegates, these are keenly sought by destinations as they offer the potential for substantial visitor spending. Therefore the options to cater for more than 1,000 should not be ignored.
5. Even though the maximum number of delegates may be less than 1,000 for a typical association conference, the space required may amount to 10,000 square metres due to their requirements for main plenary hall, a range of breakout rooms, exhibition, poster display and catering space. The exhibition space
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is particularly important as renting out the space to exhibitors helps pay for conference and provides much needed funds for many associations.
6. Associations require high quality flexible conference facilities with up to date technology, high spec telecommunication systems and high levels of service and security. Recent design innovations offer more affordable solutions to incorporating flexibility. Depending on the schedule for individual conferences, not all the conference spaces are required at the same time. Building in flexibility to create different sizes and formats of space will be popular with organisers at it can reduce overall rental costs. For the city this also helps minimise, not just capital development costs but ongoing operational costs, while at the same time allowing occupancy and revenue to be maximised through simultaneous events taking place and short turn- around times between events.
7. In addition to the main centre, association conference organisers look for destinations with integrated infrastructures, frequent transport routes, sufficient high end accommodation and restaurants, retail and entertainment in close proximity.
8. Corporate events tend to involve lower numbers of delegates and lower amounts of space which also emphasises the need for flexible space that can easily be divided into smaller areas.
9. Stand alone exhibitions have seen their space requirements reduce in recent years such that the median size is now 2,631 net square metres. A new centre in Cardiff able to provide exhibition space around this size or more would have the additional opportunity to attract such events, providing valuable top-up business to conferences, and helping to increase occupancy and revenue.
10. Existing venues in Cardiff are able to meet the requirements for the majority of banqueting events in the city. However Cardiff & Co are regularly turning away enquiries for large banqueting events which cannot be accommodated. Most cities find that larger banqueting events take place once a large enough venue is available. These events would also provide top up business to conferences, particularly in the evenings and weekends, helping to spread business throughout the centre diary.
11. There is a definite need to increase the rates being paid for conferences and accommodation in Cardiff by generating higher spending visitors. Other cities have found that the development of a purpose built convention centre acts as a catalyst increasing demand substantially for the whole city. Resulting effects of supply and demand raise the accommodation and daily delegate rates for all venues.
12. Incorporating the latest technology and design innovations into a new centre in Cardiff would give the city competitive advantage. In particular the ability to integrate flexibility into the design would be very popular with users and operator enabling maximum occupancy for the operator and minimising rental costs for the organisers of events.
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13. In the competitive field of association conferences it will be vital for Cardiff to develop a high quality conference centre supported by the necessary infrastructure of hotel stock, transport routes, retail and entertainment for the city to benefit from the associated economic impact.
14. The market demand and other influences outlined suggest development of 6,750 square metres of lettable space, which with ancillary and support areas plus net to gross ratios leads to Gross Internal Floor area of 20,177 square metres. The main hall would be divisible allowing for multi-purpose use. Although aimed at the majority of the market for up to 1500 delegates, this would also accommodate larger numbers when required.
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2. Cardiff as a conference destination
Cardiff is an attractive conference destination. It is compact and easy to travel around and has good quality shops, restaurants and entertainment. Much of the hotel stock has been developed in recent years and therefore offers a modern, competitive product. However occupancy rates suffered a decline in 2010 and currently the average room rates and revvpar (revenue per available room) are low. The hoteliers and other business in the city would benefit from increasing levels of high spending visitors from large conferences in the city. This in turn creates the requirement for sufficient accommodation of the appropriate quality and may require increased stock of upscale properties. The destination comparisons outlined later in this report show that 4,856 rooms provided in Cardiff compare to over 10,000 in Birmingham, Edinburgh and Manchester.
Conference business is known to generate jobs, and the city would benefit from a boost to employment, particularly for the under 40 age group which are so often required for hospitality and service industries.
Cardiff's universities and their academic experts are particularly important in creating opportunities for conferences. Recognised as one of Britain's leading teaching and research universities, Cardiff University specialises in physical health, life and social sciences, humanities, engineering and technology, all subjects known to create significant levels of conferences and meetings. Of particular interest are the radical new approaches and research institutes for neurosciences, mental health, cancer stem cells, all of which are 'hot topics' for international conferences and should increase substantially the city's opportunities to bid. Cardiff Metropolitan University's specialisms of art & design, education and health sciences are also good subjects for generating conferences. Current plans to form a Welsh 'super university' with the merger of University of Wales Institute Cardiff, Trinity St David and Swansea Metropolitan could further increase the attraction of the city for academic conferences.
The planned electrification of the Great Western main line will also help increase the city's appeal as a conference destination, enabling conference visitors to arrive and depart in faster journey times.
Although population of Cardiff itself is around 350,000, the wider regional population would provide good target audiences for exhibitions which tend to look for population of at least 1 million as a potential from which to draw sufficient attendees.
The main venues
The four main venues – St David's Hall, Motorpoint Arena (formerly Cardiff International Arena), City Hall and the Wales Millennium Centre struggle to provide the range of facilities required by large conferences as outlined earlier in this report. The quality of facilities is limited when compared with the more recently developed convention centres in the UK. The age of City Hall, the lack of exhibition and breakout space and the large scale of Cardiff International Arena mean they are not totally appropriate for major conferences in
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terms of meeting the requirements for plenary sessions, eating, breakout and exhibition space. The format, and in particular the division of the spaces and the lack of large exhibition space all on one level, means they struggle to compete. For conferences the exhibition space has to be in close proximity to the other facilities and preferably in an area encouraging passing traffic, in order to encourage delegates to visit the exhibition. Many conference organisers now hold a reception or provide catering within the exhibition to ensure that delegates visit the space.
Existing capacities
The table below shows the capacities of meeting rooms at a broad sample of existing venues in Cardiff, with 89% of meeting spaces with capacity for up to 200. However, the percentage of meeting spaces with capacity for more than 200 is limited to just 11% of supply yet these are the most popular sizes for association conferences. Although there are venues with capacity for more than 500, these are unable to supply all the facilities required by the large conferences as mentioned above.
478 sample meeting rooms used as base for calculation Number of meeting Percentage of rooms of this size in Capacity theatre style meeting rooms Cardiff across sample in Cardiff of venuevenuessss Up to 20 184 38 21 to 50 139 29 51 to 100 57 12 101 to 200 47 10 201 to 300 23 5 301 to 400 13 3 401 to 500 3 1 Over 501 12 2 TTTotalTotalotalotal 478478478 100%100%100%
Source: Cardiff & Co
If the city was able to offer facilities of the appropriate capacities and format, more comparable with the recently developed purpose built centres elsewhere in the UK, Cardiff would be in a better position to attract more conference business.
Appraisal of existing business
Cardiff has hosted a significant number of conferences annually for many years. From April 2006 to date the city's convention bureau Cardiff & Co confirmed conferences, meetings and events worth £5,857,338 in value to
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the venues and £91,958,139 in value to the city in terms of economic impact. (Source Cardiff & Co Chaser system). Many other events will have been booked direct with venues in the city.
However, in addition to the business booked, there is significant business they were unable to convert either because the city cannot provide a convention centre, or cannot provide large enough facilities or because it lacks availability for the appropriate requirements. The city is losing many millions in economic benefit. A few examples of conferences that could not be accommodated for these reasons since 2006 are shown in the table below with a total potential value of £3,574,820 to venues or £55 million in potential economic impact. The average value of the examples shown is £274,986 per conference. The actual number of enquiries turned away is around five times those shown here, although not all of them would eventually convert. In addition, the convention bureau believes that many organisations do not consider Cardiff as the facilities within the city cannot compete with the more recently developed conference centres elsewhere in the UK. Clearly the potential value of conferences being lost to the city is high.
Examples of c onferences lost due to lack of convention centre or event too large since 2009 Organisation Date of Number Estimated conference of pppotentialpotential delegates value to venue Church of God Prophecy UK Aug 2007 2,500 £200,000 British Association of Barbershop Singers May 2008 1,400 £250,000 Office Events Dec 2009 1,500 £75,000 British Contact Lens association May 2009 1,000 £80,000 British Council of Shopping Centres Nov 2009 2,250 £500,000 Stroke Association Nov 2009 1,500 £238,820 Institute of Physics and Engineering May 2010 1,000 £192,000 Association of Surgeons of Great Britain June 2010 600 £96,000 British Society for Immunology Nov 2010 1,200 £406,000 Hampton Medical (for association conference& exhib) Sept 2011 300 £135,000 British Society for Rheumatology April 2014 2,000 £70,500 ISRRT May/June 2014 2,000 £331,500 British Mass Spectrometry Society August 2015 2,250 £1,000,000 £3,574,820 Source: Cardiff & Co Chaser system -unconverted business
95% of the 1311 enquiries for conferences and meetings received by the Cardiff & Co convention bureau since April 2006 were for less than 1,000 delegates. 77% were for less than 300, sizes which follow the general patterns already outlined. This emphasizes the need for flexible, divisible facilities that are equally suitable for smaller meetings and events as they are for larger conferences.
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The city is in an excellent position to attract more conference business due to the successful ambassador programme that is already in place. This programme has 460 members including medical experts, academics and other representatives from the fields of dentistry, chemical industries, electromagnetic and business management including 65% business ambassadors and 35% academics. Since its launch in 2009 the ambassador programme has generated conference enquiries, yet many cannot be accommodated due to the space requirements for exhibition space along with plenary and breakouts and the need for all facilities in one place. The issue of timing is another factor as if conferences take place at a certain time of the year when Cardiff's limited venues are already busy then the opportunity is missed. The ambassadors offer the city the ideal opportunity to attract more national and international conferences if the appropriate facilities were available.
Pricing of venues and hotels
The average daily delegate rate* at the hotels in Cardiff is currently £31.37 exclusive of VAT( source: Cardiff & Co ) which is lower than average rates elsewhere in the UK. The UKEMTS revealed the average rate at contributing venues throughout the UK to be £35 excluding VAT. The average rate at commercial venues (non hotels) in Cardiff is even lower at £27 excl. VAT and the University of Wales is offering a rate of £19.50 excl. VAT this Autumn. *rate per person including meeting room hire, coffee break and lunch.
For 2011 the occupancy of the Cardiff hotels averages 68.1% (for year to August) with revpar at £38.82. These figures are lower than any of 8 other cities included in the STR Global analysis. Only Birmingham has a slightly worse figure of 66.1% occupancy and revpar of £35.18. The last quarter of the year tends to adjust the figures for Birmingham as the busiest time for conferences and exhibitions.
There is a definite need to increase the rates being paid for conferences and accommodation in Cardiff by generating higher spending visitors. Other cities have found that the development of a purpose built convention centre acts as a catalyst increasing demand substantially for the whole city. Resulting effects of supply and demand raise the accommodation and daily delegate rates for all venues.
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3. Market Analysis --- demand
Since the global financial crisis in 2007 there has been a reduction in volume of events, particularly from the corporate sector. The most recent estimate of the value of conferences and meetings in the UK is £16.3 billion, generated from 1.3 million events (Source: UKEMTS 2011). This is slightly down on the 2010 figure shown below. However it is important for future planning for Cardiff to cover a longer period of time looking at future trends and characteristics that may impact the development of a convention centre. In particular, the association sector, the key target for the new centre, is more resilient to recession and is likely to show continued growth due to strengths in medical and scientific research. It has already been mentioned that several research institutes are based at the University of Cardiff which will help the city to bid for association conferences related to these fields.
The recent report Opportunities for Growth in the UK Events Industry published by the Business Visits and Events Partnership (BVEP) forecasts 34% growth on the current value for UK conferences and meetings by 2015 and a further 16% growth by 2020. Exhibitions are also forecast to grow 16% by 2015 and a further 15% by 2020.
Sector Estimated value in Estimated value in Estimated value in 2010 201520152015 202020202020 (£billions) (£billions) (£billions) Conferences and meetings 18.8 21.8 25.2 Exhibitions and trade shows 9.3 10.8 12.4 Source: BVEP October 2011
The prime target events for a new centre are: • Non-profit making sector conferences – regional, national and international associations, government and public sector organisations, estimated as 49% of the market in 2011 • Profit making sector – corporate companies, regional , national and international, 51% of the market.
A new convention centre in Cardiff would attract events from each of these two sectors together with some stand alone exhibitions and banqueting events such as local and regional social events, awards dinners, parties and receptions. It is also possible that some entertainment events may opt to use the centre, although these events are already well served by existing venues in Cardiff.
The definitions and descriptions for the market sectors were included in the original report in 2004 and have not been repeated here. However the latest market information, trends and changes in characteristics for each market sector are now summarised.
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National associations (UK) and nonnon----profitprofit making sector
Meetings and conferences from this sector are already held in Cardiff, yet there is an opportunity for the city to substantially increase the annual number of conferences it attracts with the right facilities to meet market needs.
Around 50% of the 7,000 associations listed in the British Directory of Associations are estimated to hold regular events. Government and public sector organisations regularly holding meetings and events are also included in this sector. There are two annual surveys recording information on this sector - the UK Events Market Trends Survey (UKEMTS) and the British Meetings and Events Industry Survey (BMEIS) and the latest results from each of these surveys are used to compile the key facts below.
UKEMTS & BBBMEISBMEIS 2020201120 11 K11 KeyK ey results Not for profit Sector Implications for Cardiff
Average number of events per organiser 26 (22) Small increase in volume last year
Buyers organising more events next year 27% (25%) Small increase in volume predicted
Percentage residential events 21 (42) Reduced volume of residential events but further 11% estimated to stay in destination Average number of delegates: -at main annual event 380 (418) Lower numbers of delegates -other events 92* (119) Many events for less than 100
Average budgeted daily delegate rate £42.50 (£47.40) Lower budgets for venue costs (inc VAT)
Average budgeted 24 hour delegate rate £134 (£135.60) As above (inc VAT) £120 (UKEMTS)
Average annual budget for events £108,900 (£129,500) Lower budgets for all event requirements
Anticipated budget change next twelve +0.6% Very little growth in available budgets months
Preferred venue incentive Added value items More expected within rates paid
Percentage of events with third party 17.7 Around a fifth using third parties assistance (requiring commission)
Average number of events per UK venue 371 (includes many No growth year on year small meetings)
Average event duration 1.5 days Careful diary management required
Percentage of event business generated National/international business prime 71 from local region (all venue types) target to minimise displacement. Figures shown in brackets are the previous year's survey results. *The UKEMTS 2011 lists a slightly lower average figure for all events of 76 delegates.
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The average size of annual meetings shown above as 380 and has ranged from this number to 450 for the last ten years. The average size of association conference on the Eventia database of 1,240 national associations is 428 delegates, with around 12% for between 500 and 1,000 and just 4% of the conferences recorded for more than 1,500 delegates. Clearly the more delegates that are attracted to the event, the more lucrative it is for the association and the city. Glasgow is gaining much success from a financial model launched to help associations attract more delegates, by sharing in the marketing costs and guaranteeing the venue costs even if delegate numbers increase. It is clearly important to have large enough facilities to accommodate the needs for the total number of delegates.
Currently Cardiff is in eighth position of the most popular destinations for national associations' events as shown in the table below:
Percentage of National association organisers having held organisers' preferred an event in destination dddestinationsdestinations 2010/11 1 London 73
2 Birmingham 48
3 Manchester 37
4 Leeds 34
5 Bristol 33
6 Glasgow 30
7 Edinburgh 30
8 Cardiff 29
9 Oxford 29
10 Coventry 28 Source: British Meetings and Events Industry Survey 2011 N. B. Organisers have often used more than one destination in a year.
Many national associations choose the locations of their conferences on a rotation system e.g. north south rotation, or rotation around several regions of the UK on a 3 or 4-year cycle. Over 40% of associations have a regular cycle of a certain number of destinations, a trend that has grown substantially.
Although Cardiff is already in the top ten, as competition elsewhere has grown, it has become ever harder for the city to maintain and increase its share of this market. This requires the appropriate combination of facilities, marketing and services to meet conference needs exactly. The key factors influencing destination and venue selection for these events are shown in the table below:
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Rank Key Factor
1 Price/value for money
2 Location
3 Access (road/rail/air)
4 Quality of service
5 Quality of conference facilities
6 Availability
7 Capacity of conference facilities Source: BMEIS 2011
It can be seen that the quality of facilities and service are key drivers in addition to the basic parameters of location, access and cost. This has become more important in recent years as new purpose built centres have increased expectations. National associations demand high quality flexible conference facilities with up to date telecommunications and high levels of service and security. Their requirements include adequate provision of exhibition space plus flexible space for varying sizes of syndicate/breakout rooms. Although nearly every association will vary in its exact requirements, the typical formulae of facilities required to accommodate such conferences are: • Main plenary space for total number of attendees for up to one day (rarely more) • A range of breakout rooms of different sizes for the duration of the conference for simultaneous sessions to take place with required capacities varying each day of the conference duration • Exhibition space in a location that encourages delegates to walk through the space. Exhibitors provide vital funding for the conference, which is often substantial, and need to see return on their investment. Catering is often provided within the exhibition space so that delegates then enter the area. In addition 'poster' display space is required although this is now being done digitally as well as physically. • Catering spaces. Delegates often buy their own meals using cash payments or vouchers so a range of alternatives including outside options close to the centre may be used. • Gala dinner venue for the total attendees including delegates and partners (either in the centre or nearby) • Offices, support spaces, internet areas etc.
To give just one example, a conference for 1,500 delegates could require up to 10,000 square metres of total space depending on the size of the exhibition area, as shown in the table below. Unless all of these requirements can be met under one roof, the city will be less competitive in attracting these events.
Theatre style capacities unless otherwise Approximate space requirement in sq m stated Plenary session for 1500 1,500
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Varying combination of breakouts : 2 x 400 676 3 x 200 (cabaret style) 720 2 x 150 253 2 x 75 127 4 x 50 169 4 x 25 (boardroom) 100 Catering area for 1000 1,400 Exhibition space 3,000 Poster display space 150 Total square metres 8,095
Depending on the schedule of the conference, not all of the above areas would be required at the same time. Incorporating as much flexibility into the design of the centre will enable spaces to be used as much as possible by divisibility into different sizes, uses and layouts. This is explained further in the specification section.
In addition to the main venue, national association organisers also look for destinations with integrated infrastructures with high quality transport systems to and within a destination, plus accommodation, restaurants and post conference entertainment in close proximity. The continuing development of Cardiff as a destination including additional hotels, restaurants, and easily accessible transport routes would be essential to its future success in attracting more association events.
Non profit making sector: International associations
This sector also uses their meetings as a key revenue generator to support the headquarters and fund outreach activities and holds them on a regular basis either annually or once every two, three or four years. There are two organisations regularly reporting statistics for this sector, the Union of International Associations (UIA) and the International Congress and Convention Association (ICCA). Each has slightly different qualifying criteria for their statistics. ICCA estimates there are around 19,000 international association meetings, with 9,120 included in their statistics for 2010. The UIA figure is higher at 12,015 meetings for 2010 which took place in 181 countries and 1,573 cities. The top countries and cities are listed in the tables overleaf:
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Top ten countries for international association meetings (UIA)
Top ten Number of Top ten Number Top ten Number countries meetings countries of meetings countries of meetings 201020102010 201020102010 200920092009 200920092009 200820082008 200820082008
USA 936 USA 1085 USA 1079 Japan 741 Singapore 689 France 797 Singapore 725 France 632 Singapore 637 France 686 Germany 555 Japan 575 Belgium 597 Japan 538 Spain 467 Spain 572 Belgium 470 Germany 440 Germany 499 Netherlands 458 Netherlands 428 Korea Rep 464 Austria 421 Italy 413 UK 375 Italy 391 Belgium 383 Austria 362 Spain 365 UK 349 Source: Union International Associations
It can be seen that the UK is in ninth position for 2010 and tenth for 2008, but slipped out of the list to eleventh for 2009. The UK's position is clearly affected by London's ranking and the table below reveals that London has not made it into the top ten cities for the last two years.
Top ten cities for international association meetings (UIA) Number of Number of Number of Top cities Top cities Top cities meetings meetings meetings 201020102010 200920092009 201020102010 200920092009 200820082008 2002002008200 888 Singapore 725 Singapore 689 Singapore 637 Brussels 486 Brussels 395 Paris 419 Paris 394 Paris 316 Brussels 299 Vienna 257 Vienna 311 Vienna 249 Seoul 201 Geneva 183 Barcelona 193 Barcelona 193 Berlin 171 Tokyo 150 Tokyo 190 Prague 170 Seoul 125 Geneva 189 Stockholm 159 Budapest 116 Madrid 175 Seoul 151 Copenhagen 104 Berlin 165 Barcelona 148 London 103 Source: Union International Associations
The UK attracts just 55% of the number of meetings held in France. Apart from London, no other UK city features in the top 30. Edinburgh, Glasgow, Liverpool and Manchester have all been able to significantly
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increase their proportion of international meetings through provision of a high quality purpose built conference centre, accompanied by associated infrastructure development and positive bidding for this market in conjunction with local ambassadors. If other cities increase the number of these meetings they are hosting, the UK will regain market share. Of the total 12,015 international meetings for 2010, just 375 (3.3%) were held in the UK, 4 of which were held in Cardiff, compared to 168 in London, 35 in Edinburgh, 14 in Glasgow and 12 in Belfast. In total 66 different towns and cities across the UK recorded meetings in 2010, emphasising the competitiveness of this sector. Those recording 4 or more meetings are shown in the table below: Cardiff is 10th in terms of UK cities by attracting 4 international association meetings in 2010:
UK cities with 4 or more international meetings CityCityCity No of international meetings 202010101010 1 London 168 2 Edinburgh 35 3 Cambridge 17+4* 4= Glasgow 14 4= Oxford 14 6= Belfast 12 6= Liverpool 12 8 Manchester 10 9 Birmingham 7 10= Brighton 4 10= Cardiff 4 10= Nottingham 4 Source: UIA international meeting statistics 2010 *4 recorded as Hinxton (Wellcome Trust facilities near Cambridge)
Despite the recent interest in Asia as associations are keen to increase members in emerging markets, particularly China and India, Europe has retained market share of around 55% in the last ten years. The UK has had strong appeal for such meetings since records began in 1856, yet in recent years London has found it increasingly difficult to provide sufficient hotel accommodation at affordable rates and until 2010 did not have a large convention centre. Cardiff has the opportunity to increase the annual number of meetings from this sector through positive bidding for this market in conjunction with local ambassadors. However this requires a large, purpose built conference centre with ample catering areas, supported by the infrastructure to cope with the demands of a large group of international delegates such as regular international flights, and a range of ample hotel accommodation from budget to luxury. It is also true that conference subvention is a major factor that significantly impacts on a city’s ability to compete internationally.
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Distribution of international association meetings 2010 (Source:ICCA) Oceania, 3% Latin America, 10%10%10% Africa, 3% Europe, 54% North America, 11%11%11%
Asia/Middle East, 19%
Source: UIA
Although this segment encompasse s a wide range of organisations, the medical, scientific and pharmaceutical meetings tend to be the most attractive both in terms of attendance and revenue. Many of the specialist subjects at Cardiff ’s unive rsities are those for which there are large professional or academic associations that reg ularly hold such conferences. However membership of the associations by local 'experts' and specialists is fundamental to success in attracting the event. The more hi gh profile the experts are, the more likely the city will be to win the bid to host the event. This is why ambassador programmes actively identify and recruit local high profile experts with connections to international organisations . Cardiff already has a successful ambassador programme yet many ambassadors are frustrated by the city's inability to provide the centre needed to host their association's conference. The chart below shows that 48% of international associations prefer conference centres for the ir event.
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Preferred type of facility for major meeting
60%
50% 48.3% 42.3%
40%
30.9% 30%
20%
10.2% 8.7%8.7%8.7% 10.2% 10%
0% Organisation University Hotel Conference centre Other headquarters (in(in---- house)
The chart below outlines the average size of international association meetings over a ten year period. It can be seen that 86% are for up to 1,000 delegates ,10% for 1,000 to 3,000 and just 4% for 3,000 delegates or more. The larger meetings te nd to be held in the major capital cities around the world with the infrastructure to accommodate them easily.
Size of International Association meetings 1996 to 2005 (UIA) 501 to 1000 1001 to 3000 3001 to 5000 14%14%14% 10%10%10% 2%2%2% 5001 to 7000 1%1%1%
More than 7000 1%1%1%
101 to 500 50%50%50% Less than 101 22%22%22%
Source: UIA
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The seasonal distribution of international association meetings is shown in the chart below, with peak months September, October. June , May and November. This helps to judge how their requirements would integrate with other activities in Cardiff.
Seasonality of International Association meetings
16%16%16% 14%14%14%
14%14%14% 12%12%12% 12%12%12% 11%11%11% 12%12%12% 10%10%10%
10%10%10% 8%8%8% 8%8%8% 7%7%7% 8%8%8% 7%7%7%
6%6%6% 4%4%4% 4%4%4% 4%4%4% 3%3%3%
2%2%2%
0%0%0% July July July July May May May May April April April April June June June June r r r r March March March March August August August August January January January January October October October October February February February February Septembe Septembe Septembe Septembe November November November November December December December December Source: UIA
CCCorporateCorporate
The profit making sector of corporate companies and organisations' eve nts was estimated to generate 51 % of the UK’s conferences and meetings in 20 10 (Source: UKEMTS ). Historically the industry sectors that generated most meetings and events were as follows: -Pharmaceutical -Financial services -IT -Automotive (much reduced in recent years) -Retail/FMCG -Utilities Although these sectors continue to generate meetings, albeit at lower levels than in previous years, there are other corporate sectors anticipated to generate more meetings in future including biotechnology, creative industries and retail sectors. The majority of corporate business is generated from the immediate locality and the health of the overall economy in Cardiff will determine whether this sector generates large numbers of meetings. However there are regional, national and international corporate events which often require large combinations of facilities and high profile venues for prestigious events and these could be attracted to Cardiff with the right venue offer.
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Corporate events tend to involve lower numbers of delegates, with many for up to 200 people, as seen in the average size of conference and meeting in the table below. They therefore require smaller areas. This emphasises the need for the larger areas at a new convention centre to be more flexible and divisible so that yield can be maximised through accommodation of simultaneous meetings. The impact of the recession has been greater on the corporate sector than the not for profit sector and is resulting in reduced numbers of events, lower numbers of delegates attending, shorter duration and lower budgets as shown in the table below. This more competitive environment makes it more important than ever to offer the highest quality facilities.
Implications for BBBritishBritish Meetings and Events Industry Survey 2020201120 111111 Key results Corporate sector Cardiff Number of events per organiser 30 (35) Lower volume
Percentage expecting to organise more events next year 32 (32) Stable volume
Percentage residential events Fewer residential 30 (48) events
Average number of delegates:- at main annual event 330 (345) Lower numbers of delegates -other events 93 (129)
Average budgeted daily delegate rate (inc VAT) £54.50 (£59.80) Lower budgets
Average budgeted 24 hour delegate rate (inc VAT) £161.50 (£160.30) Lower budgets
Average annual budget for events £216,300 (£187,700) Lower budgets
Reported percentage change in budget last twelve months +1.0% Little change
Percentage change anticipated next twelve months Little change in +0.8% budget anticipated
Preferred venue incentive More expected within Added value items rates
Percentage of events with third party assistance 22.5 Require commission Source: BMEIS 2011
Other factors affecting the not for profit and corporate sectors are outlined in the Future Trends sector.
Exhibition market characteristics
In addition to the exhibitions held alongside conferences, stand alone exhibitions are likely to make use of a new centre's facilities, both for trade and business to business exhibitions and consumer exhibitions for the general public. The most recent estimated value for exhibitions in the UK is £9.3 billion, with to date, less than 2% of this total taking place in Wales.
The last few years have seen considerable reduction in the market for exhibitions throughout the UK. Not surprisingly trade and public events have reduced, with some notable events such as the UK Motor Show
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being cancelled altogether. Key facts on the exhibition market as experienced throughout the UK in 2010 published by the Events Industry Alliance (EIA) suggest that trade events declined 1.4% in attendance numbers in 2010, compared to 8.2% decline the previous year. Consumer events' attendance reduced by 3.6% compared to 2.9% the year before. There has been a reduction of 30% in average audience size since 2004. Despite the lower attendance figures shown by these results, there is an increased interest by many sectors in the face to face marketing opportunities provided by exhibitions and conferences, seen as a ‘more human’ opportunity to build client relationships in comparison to communication by social networks, email and the internet.
The size of space stand alone exhibition organisers require has been continually reducing over a number of years. Organisers booked 5.8% less space for trade shows in 2010 compared to 2009 and 8.5% less hall space the previous year. Space for consumer shows reduced by 1.5% in 2010 and 4.2% in 2009. The median size of show declined from 2,707 net metres in 2008 to 2,631 in 2009. The reduction in required space is potentially positive for smaller centres with limited exhibition space.
In the main, exhibitions are focused on a local or regional target audience where at least 1 million visitors can reach the event within one to one and a half hours easy travelling time. Cardiff would attract exhibitions due to its capital city image, the specialised nature of local industries and the high disposable income of many local residents. Some smaller exhibitions would provide valuable top up business for a conference centre, helping to maximise occupancy.
Banqueting
Banqueting business is generated by the local population and economy for a city or area. It includes the corporate entertaining, awards dinners and hospitality events for organisations based in the vicinity together with private social entertaining, parties, and celebrations. It can generate a significant number of events. With the exception of large annual or regular awards events or corporate functions, it is more difficult to identify target customers for banqueting. It therefore requires more general marketing and awareness raising than specific targeted sales activity in order to generate business. Many of these events look for attractive surroundings conducive to providing the appropriate ambience for the event. Although the existing venues throughout Cardiff and the surrounding area currently attract this business, a large high profile centre will attract some of this business and can often create its own demand for events that were unable to exist prior to sufficient space being available. Many of the unconverted business enquiries recorded by Cardiff & Co are for banqueting events for large numbers where finding sufficient space in the city proved difficult. The evening and weekend nature of much banqueting business will help to spread demand for a new centre and provide valuable additional revenue.
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444.4. Trends and Future Influences
The top issues and trends affecting the conference market currently are as follows:
444.4...1.1. Technology is significantly affecting the conference market, with so cial media and other forms of communication seriously impacting both event and delegate numbers as shown in the chart below:
Source: BMEIS 2011
The figures in the above chart have increased dramatically in the last year and it is likely they will continue to do so. One of the above innovation s that is affecting numbers of events held and numbers of delegates attending is the 'virtual meeting' whe reby sessions and presentations are streamed online. The corporate sector, and unsurprisingly IT companies in particular, were quick to embrace this option when the technology became readily available and cheaper to use. However many have already found tha t totally virtual events did not produce the results and effects they had hoped for and the latest trend is for what is known as a 'hybrid' event whereby actual and virtual are combined to maximise audience figures. Recently published research into medica l associations revealed that 34% believe virtual meetings will take over congresses and half have a strategy for integrating them into their events. 54% support social media for
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communicating with delegates, 83% use 'apps' to help with the event organisation and 92% expect free Wifi at venues. (source: ICCA October 2011 )
A new centre would find it much easier to integrate new technology than those that already exist, thus creating competitive advantage by helping event organisers to stream live sessions and use the latest presentation technology. In this way the meeting experience is guaranteed to be the high quality offering added value for the cost of face to face events.
Although not yet readily in use, technology has been developed for delegates to be able to use headsets to listen to simultaneous breakout sessions without moving rooms. Online streaming means they can already do this via smartphones and tablets. Clearly this has implications for the spaces required and emphasises the need for adaptable, flexible breakout space.
444.24.2.2.2 The economic situation and low growth figures predicted for the UK economy for the foreseeable future is significantly affecting the meetings market. In addition to much publicised spending cuts in the public sector, reduced demand in the traditionally strong corporate sectors such as financial services and pharmaceutical has not yet been replaced with bio technology, creative industries, renewable energy or other growth sectors, meaning the slow down in the corporate sector is lasting longer than predicted and many now doubt whether volume will ever return to levels experienced up to 2006.
The association market is more resilient and is predicted to see continued growth in volume of events due to strengths in medical and scientific research. This sector is experiencing shorter, smaller (lower numbers of delegates) less residential meetings spread over a wider number of destinations in order to reduce delegates travel time and keep costs as low as possible. This widens the number of destinations used and creates new opportunities for Cardiff if smaller simultaneous events can be accommodated.
444.4...3333 Design innovations Flexibility is the key to maximising occupancy, revenue and profit at venues. Flexibility enables venues to accommodate simultaneous events, to adapt the facilities for varied uses in event types and to change size and format of facilities as required.
Clearly partitions enable spaces to be divided. The traditional partition systems, composed of individual leaves which are installed horizontally via a top-hung track, still work well and can achieve the required specifications for acoustic integrity. A vertical partition system, stored in the ceiling and lowered into place electrically, produced by a company called Skyfold, offers advantages, particularly in space-saving and speed of installation. Its biggest disadvantage has been the inability to fit doors into the partition. This problem has now been solved and Skyfold partitions are now a viable alternative to the traditional systems.
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As well as changing the sizes of a space, other ways of adapting a room are by the use of moving floors. Several convent ion centres have adaptable floors to change from a raked auditorium to a flat -floor configuration. This has the advantage of flexibility, particularly when the room is used as a plenary hall. In the majority of conferences, the plenary session takes up a r elatively small part of the event. However, if a hall has a permanent rake, it can’t be used for much else and consequently stands idle for the rest of the conference. With moving floors and partitions, the plenary hall can be turned round into breakout, e xhibition or catering space, thus gaining most use out of expensive space.
The change from raked seating to flat floor can be achieved by the use of bleacher seati ng, such as at London ICC at ExC el, or by changing the height of the floor in sections, usin g mechanical methods, such as EICC, Edinburgh . This has the advantage of being able to create many more different formats, such as small auditoria, raked cabaret style and arena style.
In terms of convention centre design, the latest major innovation has been the development of LED lighting to such an extent that it can achieve the necessary criteria for both house and theatrical lighting. This has the tremendous benefit of being much more energy efficient than traditional incandescent lighting, which in turn means a capital cost saving in mechanical plant and dramatic cost -in-use savings.
4.4 Buyers market The market information already outlined illustrates just how high a priority cost and budget issues are for event organisers. The trend to include more elements within the rental costs for venues has been seen for the past few years and shows no sign of disappearing. This can be seen in the chart below with around 64% prioritising 'added value' items as preferred venue incentives.
A new centre woul d need to develop package pricing incorporating all elements at competitive rates in order to be successful.
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444.54.5.5.5.. The 'b'battleattle for attentionattention'' in destination competition As the world 'shrinks' and the number of destinations keen to attract valuable conference visitors increases, the battle for attention from conference organisers becomes greater. The UIA records 1,573 destinations on its international meetings database for 2010 and the number of UK destinations mentioned by respondents to the British Meetings and Events Industry Survey is over 80. For Cardiff to succeed in such a competitive market, it needs to be able to meet the market requirements exactly with exactly the right facilities at the right price, well managed and well marketed, supported by the infrastructure to provide accommodation, transport, retail and entertainment for the high spending conference visitor. Once the city can meet these needs, the rewards are great with business event visitors spending three times as much as leisure visitors, providing all year round employment and increasing revenue for many local businesses.
444.64.6 . Growth in travel and trips being made from emergingemerging markets such as India and China also looks favourable for the UK, as the country is perceived as attractive to delegates from these countries, as long as destinations are affordable. Any links Cardiff has with emerging markets for trade, businesses, universities or other academic institutions should be fully explored to maximise opportunities for attracting conferences.
444.74.7.7.7.... As concern for the perception of meetings and events remains, with public suspicion on the necessity of many events, continued communication of the value of meetings should focus, not only the economic benefit generated, but the significance to the locallocal economy as a whole of knowledge and commercial development and support for inward investment prioritiespriorities.priorities Research is ongoing into the contribution that high profile conferences can make to universities, local industries, inward investment marketing and the overall brand image of a city. All of these benefits are additional to the direct spend by delegates and partners in the city.
444.4...8.8. Subvention The trend for destinations to subsidise the costs of association conferences to encourage them to their city is not diminishing. A more competitive 'buyers' market' situation has led to many destinations offering ever increasing sums for international events in particular. It is generally true that the more affordable a destination is, the lower the subvention budget required to compensate for costs. However there is no doubt that subvention has a strong role to play in winning the bid for many of the more attractive association events and it should be allowed for in future development financial planning.
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555.5. Market Supply
There are an estimated 3,500 conference venues in the UK in total (source UKEMTS). Although this estimate needs treating with caution as the definition of what qualifies as a conference venue is not rigorous, it suggests that the quantity of supply is equal to demand in many parts of the UK. However the quality of supply varies hugely and this includes many venues that are not purpose built or able to provide the facilities required for association conferences.
As has been outlined in the previous section, if a city's venues are not totally appropriate to market needs, they limit the ability to attract more demand. Good quality facilities often generate their own demand. Many existing centres are expanding or refurbishing their facilities in order to retain and increase market share in a competitive market. The UK destinations currently planning or considering new centres or extending facilities are outlined below.
Location Status Redevelopment of the arena within AECC being explored, which would also add Aberdeen exhibition space Belfast Extension to The Waterfront being explored. Blackpool Revisions to Winter Gardens being planned to attract more conferences Recent alterations to front entrance of Brighton Centre. Plans for totally new centre Brighton currently on hold. Edinburgh Construction continues on extension to EICC adding 2,200 sq m, due to open 2013 Glasgow 12,500-seat Arena development to SECC, opens in 2013, increasing conference capacity. Harrogate Two new halls for 1,300 and 1,100 open at Harrogate International Centre in November. Leeds Leeds Council's new Arena development with conference capacity is due to open 2013. Liverpool Adding further exhibition space to ACC, Liverpool New Olympia ICC and Battersea Power Station events facilities have achieved successful London planning applications. Newcastle Funding being sought for new conference/exhibition facilities adjacent to The Sage Gateshead Gateshead. The city revisits feasibility of a new city centre location regularly. Most recently considered Nottingham expansion of the Ice Centre and new facilities at the football club. Recent changes to Telford International Centre add new entrances and 3,000 sq m. Telford Planning application for hotel adjacent. Worthing Major new development reported to include a conference centre
In addition to those listed above there is a huge quantity of new developments elsewhere in the world outside the UK and Ireland, including Reykjavik where a new concert hall and conference centre opened earlier this year, and PalaCongressi di Rimini which opened October 2011, and these are already attracting high numbers of international conferences.
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With the volume of existing venues and ongoing planned developments listed above, it is clear that Cardiff will continue to lose market share if it is not able to compete with the appropriate facilities. However developing new facilities at this time enables the city to take advantage of all the recent design innovations to maximise flexibility and incorporate the latest technology into the building. This would create competitive advantage for Cardiff and help it to retain and increase market share substantially.
6. Destination comparisons for Cardiff
The tables overleaf outline the key features of Cardiff’s offer as a conference destination in comparison to other major UK destinations. The key differences are the number of large venues, the quantity of appropriate hotel rooms for the conference market and transport routes. If Cardiff is to compete successfully for major national and international conferences it will need to address all of these issues.
The 4,856 hotel rooms in Cardiff compares to over 10,000 in Birmingham, Edinburgh and Manchester. Liverpool was able to increase its hotel stock to 5,814 rooms alongside ACC, L.
The development of a conference centre has been proven to act as a catalyst for additional hotel and transport route development as seen in Liverpool since 2008 and all the other cities listed since their conference centres opened.
As the comparisons show, the requirements to support a convention centre are international and national air routes, good rail and road access and an attractive destination overall that will appeal to delegates and partners alike.
The strong links between university experts and conferences has already been explained but cannot be over emphasised in their importance to the city's success in the conference market.
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Destination comparisons for Cardiff
The tables below show the offer available at a selection of cities with purpose built conference centres.
City/destination Main venuesvenues'''' capacitcapacitiesiesiesies/dimensions/dimensions NNNumberNumber of hotel rooms Key hotel groups or features Other destination features
Motorpoint Arena (CIA) 5,000. 4,856 rooms includes 1,910 St. David’s Hall 1,500 auditorium three to five star and 1439 Major chains and independent Ambassador Programme. Wales Millennium Centre 1,897 budget. hotels represented. International International airport routes limited. Cardiff brand Radisson Blu to date. 2 new hotels planned -Jury's Millennium Stadium 74,000 although Hampton by Hilton being International Sports Village 118 rooms and Hampton by National Indoor Athletics Centre developed and Wyndham also development ongoing Hilton 216 rooms 5,500 sq.m planned
International convention centre auditorium 1,500 plus 3,000 sq m NIA Arena 12,300 + 720 theatre, Ambassador Programme. Most major hotel chains and NEC total halls: 201,624 sq. m. plus £3.2bn p.a. and 40,000 jobs Birmingham 10,258 smaller independent hotels NEC Arena 4,500, new centre supported in conference sector. present planned International airport routes limited Hilton Birm. Metropole 2,000 National Motorcycle Museum 950 EICC 1,200 auditorium, 2,000 sq.m. + extension adding 2,200m² Award winning Ambassador Edinburgh Corn Exchange 1,500 Most major chains represented, Programme. Edinburgh First 1,200 (university) Edinburgh 10,412 and small chains or independent International Airport with ample Royal Highland Centre small hotels offer excellent range. routes. 15,000/15,670 sq.m.
Scottish National Equestrian Centre, 4,700 sq.m./2,000 theatre
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City/destination Main venuesvenues'''' capacitcapacitiesiesiesies/dimensions/dimensions NNNumberNumber of hotel rooms Key hotel groups or features Other destination features Convention centre SECC 3,000 + Award winning convention bureau 624 auditoria, 10,000 in Hall 4, provide benchmark for best 22,355 sq.m. exhibition space, practice Many of the major chains Glasgow New 12,500 seat arena due to open 7,344 International airports at Glasgow represented in 2013. and Prestwick with ample routes. Braehead Arena 4,200 theatre Strategy to grow tourism sector to £1 billion in 2016. ACC, L includes BT Convention Centre with main auditorium 1,350 & Multi-purpose hall of 3,725 sq. m Ambassador Programme called joins with arena core to provide Includes Holiday Inn Express and Crowne Plaza, Radisson, Marriott, Forum Legati. 7,000 sq. m. exhibition space. Convention bureau (part of Echo Arena 10,600 seats Thistle, Britannia, Malmaison and Liverpool 5,814 boutique hotels. The Mersey Partnership) now Aldo St. George’s Hall 1,000 focus on Liverpool City region, Jury’s and Staybridge on ACC, L Access via Liverpool and Haydock Park 1,000 sq.m. exhib. site. space, 500 theatre. Manchester airports Aintree 600 theatre, 3,700 sq.m. exhibition space
Manchester Central conference and Manchester International Airport exhibition complex completed 330- has routes to over 200 million upgrades in 2010. destinations Conference auditorium for 800, Most major UK hotel groups Manchester major exhibition spaces up to 12,326 present with new developments Strong university connections 10,000 sq m max each continuing Ambassador programme Also 1,100 theatre at University Northwest conference research MEN Arena seats 19,000 unit (international)
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777.7. Specification of facilities
The previous sections on demand, the existing market in Cardiff and the supply developments lead us to conclude that Cardiff would benefit from being able to provide all the facilities needed for national and international association conferences, major corporate events and smaller stand alone exhibitions within one purpose built facility.
The suggested schedule of areas for a new purpose built centre, is outlined overleaf. This is based on a main area of 6,750 square metres total lettable space, which is divisible into sections. The proposal is for a proportion of the hall, sized for 1,500 people, to be fitted with a moving floor that enables an auditorium to be created when required. This innovation has not yet been used in a venue within the UK although it is being developed within the extension to EICC, Edinburgh. Another alternative is to use high quality bleacher seating as has been used at the ICC at ExCel, London.
The moving floor technology allows maximum flexibility for the varying types of events that may be held within the centre. For additional flexibility many of the breakout spaces that are outlined may all be sub divided in order to provide a range of room sizes. The total space and footprint may therefore reduce substantially depending on the design. However it would be important for the design to retain the ability to accommodate events simultaneously in order to maximise occupancy and revenue.
The main hall would be partitioned to give three sections as shown below:
100m
43m 27m 30m
50m
Hall 1C Hall 1B Hall 1A
This configuration could be further partitioned, either in all halls or in halls 1B & C, subject to detailed design and budget considerations.
In terms of clear room height, the table overleaf shows a height of 14m for the whole hall. This is based on a calculation for the room in completely open state. However, when partitioned, such height is not
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required. It is suggested that 1A remains at 14m, but B & C be reduced to 9m. In this way, the breakout rooms (2 to 20 in table overleaf) could be located above halls 1 B & C. This would have the advantage of reducing overall footprint and having a floor access to hall 1A at a cross gangway level, if the 1A floor is raised in raked auditorium mode. Additionally, if the hall were used as one space in its entirety – say for a concert – then 1A would become the stage end and benefit from the increased ceiling height for stage rigging.
A detailed brief will be required in order to advise the design team on the various requirements for the different spaces.
As noted in the table overleaf, as well as the lettable spaces, a number of areas are required for support, ancillary and back-of-house operations, which add to the footprint of the building. The various areas total approximately 16,800m 2. A grossing up fact or has been added, giving a gross internal floor area (GIFA) of 20,177 m 2. On this basis, and taking a benchmark figure of £2,500/m 2 as a construction cost for this building type, the cost of the proposed facilities would be in the region of £50 million.
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CARDIFF CONFERENCE CENTRE PROPOSED MEETING ROOM CONFIGURATIONS --- 5,000 sq.m. main hall
HallHallHall Description Capacity AreaAreaArea Dimensions (m) (persons) (m(m(m 222))) Width Length Height 1 Main Hall 1 (Divisible) 5,787 5,000 50 100 14 2 Flat-floored Meeting Room (Divisible) 500 432 18 24 5 3 Flat-floored Meeting Room (Divisible) 400 346 16 21 4 4 Flat-floored Meeting Room 250 216 13 17 4 5 Flat-floored Meeting Room 100 86 8 11 4 6 Flat-floored Meeting Room 100 86 8 11 4 7 Flat-floored Meeting Room 100 86 8 11 4 8 75 65 7 9 4 Flat-floored Meeting Room - divisible into three, 9 75 65 7 9 4 each seating 10 75 65 7 9 4 11 50 43 6 7 4 12 Flat-floored Meeting Room - divisible into four, 50 43 6 7 4 13 each seating 50 43 6 7 4 14 50 43 6 7 4 15 25 22 4 5 4 Flat-floored Meeting Room - divisible into three, 16 25 22 4 5 4 each seating 17 25 22 4 5 4 18 25 22 4 5 4 Flat-floored Meeting Room - divisible into three, 19 25 22 4 5 4 each seating 20 25 22 4 5 4
Main Hall 1 Potential Configuration
Capacity AreaAreaArea Dimensions (m) (persons) (m(m(m 222))) Width Length Height Ratio 1: Hall 1A 1,500 1,500 50 30 14 1.67 Hall 1 B 1,500 2,150 50 43 9 1.16 Hall 1 C 1,551 1,350 50 27 9 1.87
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Total area required
Area Assumptions mmm222 Notes: Hall 1A = Raked auditorium, with moving floor or moveable seating Total Function Area 6,750 Hall 1B =Flat-floored banqueting hall Registration/Foyers (2,000 people) 1,440 Hall 1C = Flat-floored multi-purpose hall Toilets & Cloaks 897 Room 2 seats 300 pax banqueting Circulation @ 20% 1,350 Room 3 seats 250pax banqueting Plant @ 10% 675 Rooms 4-7 could also be divisible and combined Administration @ 12% 810 Optimum room ratio = 1:1.5 Kitchens 1,250 Revenue-earning areas = Organiser Offices, Backstage Rooms and Café Storage @ 15% 1,012 Revenue-earning Ancillary areas (exc. Parking) 750 Support spaces 1,880
Total Area (Nett Internal Floor Area) 16,814
Total Area (Gross Internal Floor Area) 20,177
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