Offering clients the level of certainty they need to make critical, real-time decisions to ensure the commercial success of their convention center projects.
Our convention center market insights document lets industry leaders and clients know what factors to keep an eye on, whether that be trends across the sector, how to navigate a post-pandemic industry, and top considerations before engaging in your convention center project.
Things to watch out for
Trending
Recent trends in the exhibition industry are creating significant opportunities for convention centers in major cities, and renovations and expansions are rising. Vertical expansion is a growing solution, as many have chosen to expand vertically due to the lack of available land to expand in already dense, major markets. We often see several benefits of vertically stacking, such as providing an option for below-grade exhibition halls, an aesthetic and pedestrian-inclusive building envelope at street-level with a walkable street grid, and a reduced urban construction footprint. Decision-makers need to be acutely aware of the cost implications of this approach; However with an understanding of the cost drivers, and how to effectively manage them, the benefits of stacked construction can pay off.
Outlook
The data shows strong growth for FY2022/23 as the industry continues to rebound from the effects of the Covid-19 pandemic. The Quarterly Total Index provided by The Center for Exhibition Industry Research (CEIR) – a measure of overall exhibition performance – recorded an Index of 92.0 in Q4 2023, registering just 8% below the same period in 2019, and a substantial gain compared to the last two years. The increased activity indicates a strong desire to connect face-to-face, and we expect these positive activity levels to continue through 2024.
Project Considerations
- Flexibility & Adaptability – Major shift in types of events, demographics, and medium: Consider Operability (walls) and Futureproofing (connectivity, broadcast, streaming).
- Wellness – Connectivity to the outdoors: Consider Natural light/ventilation, Outdoor decks, rooftops, and parks, Operability (“bring the outdoors in”).
- Sustainability – Balance with affordability: Consider Solar/Green Roofs, Geothermal, Low-Carbon Materiality, potential Offsets in reduced energy costs and greater resiliency.
About the charts
The first chart represents the value of the pipeline of major convention center projects from the ‘study’ phase to those ‘recently completed’; the chart below that represents the total gross square-footage of that same collection of major projects.
What this means for you
FY2022/23 saw significant rebounds in both attendance and event numbers from the prior year and almost a full return to pre-pandemic levels. This strong interest in exhibitions and events has undoubtedly driven a very healthy pipeline of convention center development around the country, from intimate renovations to large scale expansions and new-builds. Fortunately, we are starting to see a continued easing of construction cost escalation, as the national YOY escalation rate drops to 5.41 % for Q2 2024. We expect escalation to continue over the next 6 to 18 months, however at a slower pace than we have experienced over the past couple of years.
FURTHER INFORMATION:
