ANAHEIM — Citing concerns over massive disruption at the Anaheim Convention Center, where a $150-million expansion and renovation is underway, two of its largest trade show customers are taking their 1998 conventions elsewhere.
The National Assn. of Music Merchants show, an annual Anaheim event for 22 years and for more than a decade the biggest-drawing convention at the center, will hold next year's meeting in Los Angeles, association officials said. The National Education Assn. has moved its next assembly to New Orleans.
"We've been coming to Anaheim forever, but there's no possible way for us to stay in the convention center while the construction is going on," said Kevin Johnstone, director of trade shows for the Carlsbad-based music merchants group. Convention center officials say they have booked several smaller shows to fill in at least some of the gaps left by the pullout of the big shows. And there has been no overall drop in bookings at the center through 2000, when convention center construction is expected to be complete.
But hotels where tens of thousands of convention delegates had reserved rooms and then canceled said they have been unable to refill more than half of them, costing hundreds of thousands of dollars in lost revenues.
The departure of the two conventions, which together bring more than 80,000 visitors and millions of dollars to Anaheim each year, has city officials and hoteliers fearful that the multibillion-dollar building boom in the Disneyland resort area over the next five years--of which the convention center project is a part--could drive more business away.
"I've got to tell you, I'm worried," said Michael Krouse, director of marketing at the Doubletree Hotel Anaheim/Orange County, which he said lost more than $500,000 when the two shows bailed out. Delegates canceled about 4,500 room nights they had booked at the hotel--each at $150 a night. The hotel has been able to book 1,050 rooms from smaller conventions that plan to avoid the convention center and use the hotel for their meetings instead.
"Disneyland has no new attraction opening this year," Krouse said. "The Light Magic parade was a fizzle. Tomorrowland won't reopen till next year, and we've got construction going on everywhere. It's a mess. I hope people don't perceive this as a reason not to come to Anaheim."
Ned Snavely, general manager of the 1,031-room Anaheim Marriott Hotel, had expected to nearly fill the hotel with music merchant association convention-goers. A scramble to book the rooms when the show relocated was partly successful, Snavely said, but "we'll never replace the full loss of revenue with such short notice."
Anaheim Mayor Tom Daly said city officials have long expected the convention center, which the city owns, would lose some business during construction.
"We are concerned, but the long-term benefits should more than compensate for the short-term losses," Daly said. "We're all in this together, and we will survive together."
To keep the shows coming, hotels are trying to woo visitors by offering their own facilities for meetings and convention center officials have promised to halt construction during some conventions. But hotel room occupancy in Anaheim is off about 10% from 1996--a drop that industry leaders attribute to the construction.
"It's all the same questions. They ask, 'Jeez is it going to be quiet enough for us, are we going to have access to the buildings?' " said convention center manager Greg Smith. "We tell them 'yes,' and 'yes,' but not everyone's going to believe you."
Construction at the center began in August. The work will eventually increase the size of the 30-year-old center by about one-third, from 1 million to 1.4 million square feet, including updating its looks, adding meeting rooms, and expanding the lobby and reception areas.
A study by the Anaheim/Orange County Visitor and Convention Bureau found that without an expansion the center could lose 60% of its future business.
At the same time, Disney has begun work on a new $1.4-billion theme park, and $510 million worth of street, sewer and electrical and telephone cable work is tearing up major streets and intersections, making getting to and from the convention center an adventure.
There appears to be no debate over whether the convention center renovation is a good idea. Major clients have vigorously encouraged the project for years. Word that money to complete the expansion is secured and work has begun is helping long-term bookings at the center, according to Charles Ahlers, president of the Visitor and Convention Bureau.
"Before, they wanted to be sure it was going to happen, because everyone knew the center just wasn't big enough anymore for some of the shows," Ahlers said. "But now they believe us, because we're fully funded and we're actually moving dirt."
For the two organizations that moved their conventions out of Anaheim, moving dirt was just the problem.