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The Society of the Plastics Industry Inc. has picked Orlando, Fla., for the NPE trade show, citing $20 million in cost savings — $10 million for exhibitors and another $10 million for attendees — as NPE says goodbye to Chicago, its longtime home.
SPI leaders announced the decision Nov. 17. The Orange County Convention Center will host the next two NPE shows, in 2012 and 2015.
NPE2012 will run April 1-5, and NPE2015 from March 22-26.
Chicago and Orlando have been competing for the business for months. Both cities submitted bids after SPI had requested proposals.
The news is a big loss for Chicago, which has been home to the show since 1971.
SPI, which produces the show every three years, said the 14 NPE shows in Chicago have pumped $1.1 billion into the local economy and brought in nearly 900,000 visitors.
NPE2009, this past June, generated $95.3 million in spending, according to the Chicago Convention and Tourism Bureau. The 2006 NPE, held in healthier economic times, generated $154.7 million.
“Chicago has been linked with the NPE in the minds of all our industry people from around the world, and Chicago has served as a world-class city, helping us attract visitors,” said Jim Buonomo, immediate past chairman of the SPI executive board.
But for years, exhibitors have complained about high costs of exhibiting in Chicago's McCormick Place — and rigid work rules by local labor unions. It seemed to come to a head at this year's NPE, held during a major economic downturn that squeezed the entire plastics industry, from machinery manufacturers that have large NPE booths, to attendees facing cutbacks on travel.
“With the deep, deep recession that we're in this year, the costs really exacerbated themselves,” said Bill Carteaux, SPI president and CEO.
In a news conference explaining the move, SPI officials said cost pressures have limited the ability of exhibitors to show a full range of running machinery and new technology — which is the main reason people attend NPE, according to survey results.
Carteaux said that by moving the show to lower-cost Orlando, “we can put on a more high-quality event and give the attendees what they're looking for.” That will drive attendance to Florida, even though Chicago is more centrally located, SPI officials said.
McCormick Place has lost other trade shows to lower-cost venues. Most recently, the Healthcare Information and Management Systems Society left for Las Vegas, citing high costs in Chicago.
When a reporter from Chicago asked Carteaux how the city can improve its trade show climate, Carteaux said: “It really came down to one major issue. The biggest single issue really pertains to what this presentation focuses on, and that's the costs. What they haven't been able to do yet is really address the long-term issue of the cost of exhibiting in McCormick Place and Chicago.”
Florida is a right-to-work state and the Orange County Convention Center is non-union.
Carteaux and the other SPI leaders did not say much specifically about unions in McCormick Place. Carteaux did say Orlando offers more “defined” costs, “as opposed to the variability that we find in Chicago.”
SPI's projection of $10 million in exhibitor savings comes from lower costs for move-in and move-out, utilities and travel. It does not include savings associated with companies being able to assemble their own booth and dispose of recyclable materials.
The $10 million in attendee savings comes from lower travel-related costs. Chicago's main advantage is its location in the heart of the U.S. plastics industry. Carteaux said about 50 percent of Chicago NPE attendees came from within a 300-mile radius of the Windy City. Florida has a smaller plastics sector.
Even so, SPI's demographic data shows it is 19 percent cheaper to travel to Orlando from the Midwest than to Chicago. Lodging is 23 percent less expensive, SPI said.
Comparing the cities
Jim Murphy chaired the NPE2009 operations committee, which analyzed survey responses of exhibitors and attendees, and other data, said the committee reviewed five potential cities: Atlanta, Chicago, Houston, Las Vegas and Orlando. Atlanta was rejected because it does not have enough contiguous space and too few hotel rooms. Houston also does not have enough hotel rooms, and the facility is too small. Vegas does not have enough power to run the industrial machinery of an NPE.
That left Orlando and Chicago as finalists. Back in August, people from all six NPE-related committees — plus SPI staffers and officials from key NPE show contractors, held the NPE2009 wrap-up meeting in Orlando, where they toured the Orange County Convention Center.
At the wrap-up meeting, Murphy said, the NPE operations committee decided to do a thorough study of both cities — comparing costs for small, medium and large exhibitors, hotels and restaurants and their proximity to the show, as well as transportation costs and even parking.
Murphy is president of extrusion systems at Davis-Standard LLC.
SPI leaders said it was difficult to leave Chicago.
“We certainly know that changing the venue of the plastics industry's most important business event is not something we could do without being completely convinced that the decision is the right one,” said Buonomo, who is chief strategy officer and chief financial officer at Nypro Inc.
The bottom line won out, said John Effmann, chairman of NPE2012. “Orlando represents a lot of things, not just savings and dollars in cents. But we couldn't get past the idea that this is a business decision and it's really not about emotions,” he said.
“The lower costs, simpler work rules and more flexible logistics at the Orange County Convention Center will cut costs dramatically as well as enable SPI to build a more dynamic show experience by attracting new participants and encouraging bigger and better exhibits,” said Effmann, who is director of sales and marketing for extruder maker Entek Manufacturing Inc.
According to SPI's study comparing the two cities, Orlando provides an average savings of 48 percent on utilities for booths and 19 percent for on-site hauling and rigging services — two major costs to exhibit at a trade show.
The new SPI executive board chairman, Christopher Keller, president of auxiliary equipment maker Conair Group Inc., said SPI polled 1,711 NPE attendees. The top two reasons to attend an NPE, listed by a combined 62 percent of respondents, were to learn about emerging technology and to see machinery running on the show floor, he said.
Top issues for exhibitors were drawing attendees, having lower and more predictable costs and the overall ease of exhibiting.
In 2012, the NPE show will start on a Sunday with educational programs and other special events. The trade show will be open from Monday through Thursday, eliminating the sparsely attended final half-day of previous shows. SPI also will address what officials called a longstanding wish of attendees and exhibitors that booths be grouped by product category.
Carteaux conceded that moving NPE from Chicago carries risk. NPE is a major source of income for the Washington-based SPI. When some machinery exhibitors pulled out of NPE2009, SPI offered a “stimulus package” to lower exhibitor costs. That cost SPI $3.2 million, and was a reason the trade association laid off 11 people after the show.
But he added that “staying in Chicago is not risk-free. It doesn't guarantee that we're going to have a great event. Yes, there's a risk in moving to Orlando, but there's also a risk in staying in Chicago in terms of the costs.”
Chicago officials have made moves in recent weeks to make exhibiting in their city more affordable.
On Nov. 16, the Metropolitan Pier and Exposition Authority announced plans to cut its full-time workforce of roughly 500 employees and to offer 95 workers the option of early retirement. The headcount reduction will mean a 20 percent drop in staff and a savings of $16.5 million.
McCormick Place has made other cost-cutting moves in the past.
Carteaux said the actions could reduce NPE-related costs for SPI, but would have no impact on exhibitors.
“[Chicago officials] continue to chip around the edges, but they still haven't addressed the true long-term costs of exhibiting at McCormick,” he said.
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