A recent analysis has calculated that AIPC’s 172 member convention centres represent a collective capital investment of more than US$60 billion in over 50 countries around the world.
This investment provides an additional measure of the economic impact such facilities generate in their host communities, as it is typically repaid by the incremental tax and operating revenues generated by the events they attract from a variety of markets.
“As an industry, we have long focussed on the economic impacts generated by the events our members host rather than the stimulus that the initial construction creates in a host community,” says AIPC president Geoff Donaghy.
“What this study shows is that even in the development stage, centres are already generating jobs and spending in the local community, all of which will ultimately be paid for largely by the users of the facility. When you add these impacts to the ongoing business and tax revenues a centre will continue to generate throughout its operating life, you begin to realize just how much of a factor our member facilities represent in their respective communities.”
Governments often engage in public facility development as a means of economic stimulus but when that investment is in a revenue-generating facility like a convention centre, it keeps paying long-term dividends back to the community, Mr Donaghy says.
“A government investor has multiple ways of capturing the benefits arising from a centre beyond what comes in by way of direct revenues; they also reap the benefits of the additional tax revenues that accompany organiser and delegate spending, and for that reason are inevitably profitable for the government investor. These latter taxes are generally paid largely by non-residents, due to the nature of the convention business, which means locals are benefiting from government services that are being paid for by visitors rather than being a burden on the local tax base.”
The recent analysis was performed by Sentis Research on data gathered on investments made in centres over their lifespan, and includes secondary investment made for the purposes of upgrades, renovations and facility expansions.
“These are not just one-shot investments. In today‘s highly competitive markets, centres need to keep improving their products and adapting to the rapidly changing expectations of clients and delegates. Our members maintain a close watch on industry developments in order to ensure they can deliver what event organisers want and need in a time when those requirements are evolving quickly.”
The third component of the value proposition for convention centres is the role they play in helping communities address their economic, academic and community development priorities, adds Mr Donaghy.
“As well as the stimulus surrounding construction and the ongoing revenue benefits, savvy government investors are realising they can use to their advantage the power a centre has to attract events that help them profile and address their own policy priorities. Taken together, these three factors make a powerful economic argument that is driving centre development throughout the world today.” m
Geoff Donaghy is AIPC President, CEO of International Convention Centre Sydney and Director Convention Centres AEG Ogden. AIPC represents a global network of more than 170 leading centres in 54 countries with the active involvement of over 1000 management-level professionals worldwide. Visit www.aipc.org