Industry Research

Grabbing Conventions

LCT Staff
Posted on August 3, 2009

As motorcoach operators look for ways to cut costs and keep clients through the recession, some are mining conventions as a backyard business opportunity. While most companies have had to cut back on business travel, these events have mostly held steady in offering operators ways to connect with their local Convention & Visitors Bureaus (CVB) or Convention Visitors Associations (CVA). Two operators recently explained to LCT how they have made local events work for them and the potential benefits.

Staying Local The Boston-based Chelsea Division of Peter Pan Bus Lines has provided convention services for the past six years. About 40% of Peter Pan’s Chelsea division work comes from conventions alone. The carrier works for the Massachusetts Convention Center Authority, the go-between for the business putting on the event and the coach company. During the past 35 years, general manager Lenny Rottenberg has managed coach service for both Democratic and Republican national conventions and conventions for large corporations such as Microsoft. When taking convention projects in Boston, operators work for third parties, mostly destination management companies. “Very few conventions directly approach motorcoach companies,” Rottenberg says. “The management company comes to a coach operator. They have found a monopoly on the conventions going from city to city.” He explains that while the company may cost more and mark up the buses, they will travel with the convention to any city and will do all the research to find a reliable transportation company so they don’t have to go from city to city to interview bus companies.

Peter Pan has 70 buses in the area, mainly MCI J 4500s, 54-passenger, late-model coaches. It’s usually a one-stop haul, making it more conducive to accommodate the higher volume of passengers brought in by conventions. “When they call us, they don’t have to call seven different bus companies [to get the buses they need]. . . they usually book 30-40 with us,” Rottenberg says.

Although opportunity abounds in a convention-heavy city such as Boston, the economic slump overall has cut the convention market by about 25%, Rottenberg says. “Day one of the convention is usually registration. You see that service being canceled. Once the day of the show starts, the shuttle is still running, but with 25% less attendees. So, instead of 30 buses, you might see 22 buses,” Rottenberg adds.

However, many companies are managing to find ways to subsidize the purchase of transportation, mostly through sponsorships in the forms of ad wraps on buses and headrests.

Minimizing Mileage, Wear and Tear

While Peter Pan does a diverse mix of business including with cruise ship clients, a significant advantage of the convention business is that it provides low-mileage work, which means less wear and tear on vehicles.

For Peter Pan’s Chelsea Division, conventions boost profits more than over-the-road tour work to Washington, D.C. and New York. “By running around the city instead of running around the highway, it keeps your wear-and-tear down, keeps your fuel down, and your buses in your own yard at night,” Rottenberg says. Staying local appeals to him. “I don’t like to leave my zip code; that’s what I say,” he adds.

Chuck Gunnells, regional director of the southern region for Arrow Stage Lines, echoes Rottenberg’s viewpoint.

“[Convention transportation is] a very viable aspect of the transportation business,” Gunnells says. “We love conventions because our equipment is here in town all the time. If we have an issue with a coach, we’re not dependent on when we’re out on tour, 800 miles away. It’s nice to have your equipment and drivers here…everybody gets to go home at night.”

Tapping City Resources

Norfolk, Neb.-based Arrow Stage Lines, a family-owned business, was established in 1928 and has been providing transportation for conventions since the late 1980s, including coach service for the press corps for the presidential election campaign of then-candidate Sen. Barack Obama. In June, Arrow’s Kansas City location worked on a large convention for Educational Testing Services (ETS), a group called Advanced Placement (AP) Readers. The attendees grade final exams of students who have taken advanced placement tests.

The convention drew about 2,200 total attendees, and lasted nearly two weeks. “It’s a great piece of business,” Gunnells says. Business is seasonal, he says. This June, it was 30%, but for most months it’s closer to 15-18%. He adds that that number is significantly higher than it was 15 years ago.

One contributing factor may be the Charter Rule. Years ago, Kansas City’s local public transportation system, Kansas City Transportation Authority (KCATA), handled convention work, but now it falls within the purview of motorcoach companies.

“This is a particular niche that has grown,” Gunnells says. “It’s dependent on the city. In Kansas City, there are not enough rooms many times close enough to the convention center that people can walk to. So, we are called upon to do these convention shuttles.”

Conventions offer many revenue streams through off-site events in addition to hotels and convention center shuttles. Almost every convention will include some evening activities requiring transportation, such as dinners out, sporting events, or trips to museums, Gunnells says.

SIDEBAR: Senators Coaches Goes Mobile

The bulk of business for Florence, Ala.-based Senators Coaches is transporting entertainers and people working backstage at concerts since the late 1970s, all across the U.S. and Canada.

“We carry the people who put up and tear down the stage, and we carry those people who perform onstage. And then we have corporate coaches as a side business,” says Frierson Mitchener, president.

Depending on the size of the show, Senators will supply anywhere from one to 15-plus coaches for a tour. Stadium tours require more stage, therefore more crew and buses; a theatre or night club tour may only require one bus, Mitchener says. On average, the carrier works on about 7,500 shows per year.

Some of the concert tours Senators has worked on recently include U2, the Rolling Stones, Coldplay, Paul McCartney, Jimmy Buffett, Sheryl Crow, Fleetwood Mac, Metallica, AC/DC, Michael Buble, Eric Clapton, John Mayer, and James Taylor.

Senators also provides mobile marketing and partnering with suppliers who design, produce, and apply advertising wraps.

Part of mobile marketing entails communicating with customers via cell phone. Mitchener provides an example: “We might travel with the Blink 182 tour, and get wrapped with the Verizon wrap, and [it’s] promoting those cell phones and trying to get concertgoers to sign two-year contracts and get free phones because one of the guys in Blink 182 uses one as well.

“Mobile marketing has exploded in the last few years, the theory being that you actually get face to face with your target audience as opposed to the Internet,” Mitchener says. “It’s more of a bullet approach to marketing as opposed to the shotgun approach that TV, radio and the Internet provides.”

Checklist: Getting Convention Business

• Connect with your local Convention and Visitors Association (CVA) or Convention and Visitors Bureau (CVB) as a member. The goal of these organizations is to book conventions for their cities. Most need shuttle service. Stay up-to-speed on who has been booked, and then try to build a relationship with the business as soon as possible.

• Establish relationships with typical convention headquarter hotels. They may be able to give you a heads-up on upcoming business, and may need your assistance in transporting guests.

• Build a relationship with the local Destination Management Companies (DMCs). DMCs will often set up the off-site events, and organize transportation and meet-and-greets at the airport.

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