McCormick Place, Chicago’s biggest conference center, continues to struggle as trade shows slowly return and conventions increasingly opt for virtual meetings.
While omicron Covid cases decline across the country and the city’s move to end its mask mandate last month signal a return to normal, McCormick Place was steadily losing trade show business prior to the pandemic. As the convention industry adapts to virtual models, questions are raised about the future of the economic engine of the city’s tourism industry, according to the Chicago Tribune.
McCormick Place plans to host 176 events this year, only 60 percent of the events in 2019, when 289 trade shows were held with a total attendance of 2.9 million. Losses fromThe McCormick Square convention and hotel complex for the fiscal year 2021 were projected at $89 million, compared with an operating income of $856,000 in 2019, according to the The Metropolitan Pier and Exposition Authority, a municipal corporation that owns McCormick Place. The agency doesn’t expect losses to turn around until at least 2025.
The numbers are concerning as the city’s hospitality industry is dependent on the convention business. Occupancy in the central business district recovered to 42.6 percent last year, after dropping to 26 percent in 2020 from 74 percent in 2019, according to research firm STR. That number fell sharply to 23.7 percent in January following the new omicron variant and new vaccine and mask mandates imposed by the city.
In efforts to speed the convention industry’s recovery, the state authorized 15 million in annual incentives for fiscal year 2022 through 2026 that MPEA can use to bring events to McCormick Place.
McCormick Place brought some big-name events this year, including the Star Trek: Mission Chicago planned for April, the Sweets & Snacks Expo returning in May from Illinois, and the National Education Association moving its convention to Chicago in July.
It’s welcome news for convention businesses that want to keep the traditional face-to-face trade shows and hotel owners who want to bring down record low vacancy rates, but like many other industries, conventions are faced with a challenge of adapting to a more virtual post-pandemic world.
“The industry likes to say you can’t replace face-to-face,” said Heywood Sanders, a convention expert and professor at the University of Texas at San Antonio.
“The larger economic reality is that as employers increasingly embrace, to varying degrees, remote work, and they recognize that the technology today has made lots of virtual activities far more reliable, they aren’t going to send as many employees to attend a convention and trade show as they used to.”
[Chicago Tribune] – Connie Kim