Change of Venue

Kentucky Venues President and CEO David Beck sat down for a meeting with hotel managers in early March as he anticipated a strong month and a year’s worth of big business for the Kentucky Exposition Center and Kentucky International Convention Center.

Then the bottom quickly fell out.

Media coverage had started coming to the forefront about the arrival of Covid-19 on U.S. shores, and the virus’ emergence would be swiftly met with mass cancellations of large and small events with local ties, including the NCAA Men’s Basketball Tournament.

Beck said the tone around events quickly changed. After his meeting with hotel managers, he was en-route to an event at KICC that was scheduled across several days, but it canceled mid-event. State and federal Covid-19 guidance was not yet in place.

“There was almost a panic amongst people. You could see it and feel it,” Beck said.

Tourism in Louisville was set up to have a strong three years for 2019, 2020 and 2021, but so much of that hard work was quickly dissolved under the crushing hand of the pandemic.

“We’re going to dig ourselves out,” said Doug Bennett, senior vice president of convention development for Louisville Tourism. “In my 30-year career, I’ve never experienced anything like that.”

Bennett, too, said some group business is coming back. One event set for later this year will bring in about 300 people while the largest convention event tourism has booked — an industry show held by the International Association of Exhibitions and Events — is slated to bring 1,000 in-person guests and another 2,000 to 2,500 virtual guests in December.

“We get excited about 250 people meeting safely and risk-free — as risk-free as possible — and that is starting to happen,” Bennett said.

Now six months later, the future is still uncertain for both KEC near Louisville Muhammad Ali International Airport and KICC in Downtown Louisville. During a normal year, the two convention centers combined will host about 330 shows. But only a fraction of that number will be realized in 2020.

And that decline in business has dealt a sizable financial blow. As of early September, Kentucky Venues has lost more than $10 million in event revenue and 120 total events. But the financial impact echoes far beyond the offices of the agency as those 120 events were expected to bring a little more than 1.1 million people to Louisville and create an anticipated economic impact of $219 million.

Furthermore, the Kentucky State Fair was unprofitable this year with the loss of thousands of guests and a decline in livestock and horse show entries. The organization has not yet disclosed the fair’s total operating loss.

A shrinking effect

Beck said he has tried to bring private-sector concepts to Kentucky Venues and show how a state agency can be managed in an innovative way. Part of that is stress-testing your partnerships so you can work together to rebook business that is lost and find new business — albeit in a smaller format.

He remains hopeful as Kentucky Venues has started booking smaller events for later in the year and 2021. Data shared by the agency shows that it has booked 10 events at KEC and seven events at KICC in 2020 totaling more than 94,000 guests.

Meanwhile, more than 90 events are booked between the two convention centers in 2021 that will bring in more than 1.6 million people.

“What we are seeing is smaller events and fewer people participating in those events,” Beck said, noting many of them are smaller corporate events.

In Kentucky, Gov. Andy Beshear continues to discourage large gatherings and has kept certain businesses — including restaurants and bars — at a limited in-person capacity. Travel is also returning slowly and is primarily coming by car rather than plane.

The squeeze put on local convention events, as noted, extends to other business, such as tourism and hospitality, and many industry leaders say a full recovery could take years to realize. Furthermore, the normalization of large convention attendance, local tourism officials say, could still be 18 to 24 months away.

“This is a group-travel market, so until the group-travel market comes back, we’re going to continue to struggle,” Scott Shoenberger, CEO of Louisville-based The Al J. Schneider Co., recently told LBF.

The Al J. Schneider Co. owns the Galt House Hotel and other local hotel and office properties and saw its occupancy crater as group travel dissipated. The company also has a large event business.

Bennett didn’t mince words about the situation.

“Our industry has been hit the hardest in terms of lost jobs, revenue and economic impact dollars,” he said. “It will come back, but it has been unprecedented.”

The pandemic remains as months of protests over the death of Breonna Taylor have continued downtown calling for the arrest of the Louisville Metro Police Department officers involved in her death. Property damage, looting and vandalism that occurred in the first few weeks of the protests led many businesses to board up their properties, and many of those boards have remained.

Kentucky Venues acknowledged that the unrest has had some impact on its convention centers, though less so than the pandemic.

“There’s been expenses for repairs and preventative measures. It is a point of conversation at both of our properties. We strive to have the safest and healthiest facilities for our events and we have worked with show organizers to accommodate specific requests and requirements,” Kentucky Venues said in a statement.

Optimistic but realistic

In addition to seeking out smaller convention business, Kentucky Venues is looking for alternative forms of entertainment, including a drive-in concert by pop duo For King & Country that will be held Saturday, Sept. 26, at KEC.

Beck said these types of concerts have been staged at other venues across the country and he was excited to get one on the books. Since the show was announced, other promoters have reached out about hosting similar events so more may be on the horizon.

“We are feeling pretty good about the next couple of years,” Beck said. “Everybody is re-evaluating what that’s going to be. We’re going to be optimistic, but at the same time, we’re going to be realistic.”

As it looks to lure new business, the agency does so with a mind on cleanliness and safety. Beck said they have used some of their resources during the pandemic to deep clean the facilities, make improvements, deal with untended maintenance that may have been ignored during busier times and add new technology, including hands-free and voice-recognition tools.

“We don’t just want to follow the trend. We want to set the trend,” he said.

Kentucky Venues also has scaled back part-time staff to rein in expenses and instituted a freeze on hiring and overtime, and has been doing cross-training so existing employees can do multiple jobs at both convention centers as needed. Beck declined to say how many workers have been furloughed.

And the agency has cut back on overtime expenses and is seeking a STAR accreditation for sanitation and cleaning through the Global Biorisk Advisory Council (GBAC) that is the gold standard for safety and cleanliness guidelines. Convention centers around the country have applied for and received the accreditation.

“It’s a moving target. Everything you do you get better. Everything we do is to serve the client and grow the business,” Beck said.

Stacey Yates, vice president of marketing and communications for Louisville Tourism, said KICC and KEC are nearly through that rigorous accreditation process and tourism coordinates with the convention centers, hotels and other businesses to promote and market the safety guidelines being implemented throughout the city.

She said those groups booking events want to see an organized safety approach based on science when it comes to convention centers and venues.

Survive and adapt

Helpful lessons are often learned through pain and struggle, and Beck said his team has been learning from Covid-19 and its impacts on the industry.

From the idea of hosting more outdoor exhibits to reconfiguring how people are seated at events, changes will be implemented going forward that may become mainstays after the pandemic ends.

“Our society wants to naturally socialize and we are seeing changes in how people are doing business operations,” Beck said.

Kentucky Venues also wants to take advantage of the massive amount of space it has between KEC and KICC to adequately space people out and show what type of events are still possible under state guidelines

The agency, Beck said, recognizes it’s part of a larger economic engine for the city and will do what it can to drive business to Louisville, even if it’s to another facility. Yates noted that the rebound had started as about 85% of local attractions have reopened while all of Louisville’s hotels are open once again.

“Those that survive and [are] successful will not just be the newest facility with all the latest technology. It will be those that adapt to the new market,” Beck said.