Pa. Convention Center is the Heart of Reinvigorated Exhibition Industry

One of America’s most historic cities embraced its founding principles to reinvigorate its flagging exhibition industry

Pennsylvania Convention Center (PCC)’s extended wing overlooks a statue of state founder William Penn, nestled atop Philadelphia City Hall. Penn established the diverse city in 1682 to uphold ideals of liberty and free trade championed by John Locke. These principles, to this day, are at the forefront of the convention centre’s agenda as its management navigates the demands of unions and free market enterprises.

PCC has successfully reinvented itself after criticism over high prices and less than cutting edge service levels led to a fraught negotiation period. As president & CEO John McNichol puts it: “The city of Philadelphia was on an upward trajectory, but we were not”.

During EW’s recent tour of America, we sat down with McNichol and GM Lorenz Hassenstein to discuss how rolling out an ambitious change programme has transformed the venue’s reputation.

McNichol’s journey began 10 years ago when he was appointed to the board of directors. “We had become out of date in comparison to our competitors. We’re a union town, a union facility. Other towns that were also union facilities had began listening more closely to the customer, and we were falling behind in meeting the demand of expanded exhibitor rights – essentially we were restricting what they could do in their booth space and not allowing them to do things that they could do in other facilities.”

In 2010, a $789m expansion of the facility was announced, allowing the building to handle bigger, concurrent shows. “We were growing the facility, but we hadn’t changed our business model to accommodate our customers or the changes. It was a ‘grow or die’ situation. We weren’t attracting the right sized shows to the city but we had adjacent land that could be used and would not be hard for us to acquire.”

City officials believed the build would allow the centre to reach its full potential, envisioned when it was built in 1993. McNichol and the board members agreed that it was time for some tough decisions, and together drew up a plan to bring the facility into the 21st Century, taking time to better understand the customer, and utilising best practices.

Public facilities manager SMG was chosen to handle daily operations because of its performance in 75 convention centres under management. “Almost overnight we saw changes, with Lorenz bringing a greater understanding of show management, and how they make operating, rebooking and management choices,” says McNichol. “It was more of a free market shift. I’d liken it to a public and private partnership, you still have a public interest.”

SMG took on 85 per cent of the convention centre’s previous employees and retrained and re-tasked them. The bigger impact was at leadership level. PCC were getting smarter about where the industry was headed, and renegotiated work rules, renegotiating a Customer Satisfaction Agreement, going into effect in May of 2014 after a five-month process.

The procedure culminated in two out of six unions declining to sign the agreement, resulting in PCC working with four unions. “Two of the unions balked on the deal and organised a labour protest. What they did not count on was that the other union leaders had bought into the deal, and they actually crossed the picket line, which is almost unheard of in Philadelphia history,” adds McNichol.

PCC redrew the union agreements with regards to jurisdictional alignment, this created buy-in on the way the convention centre was run and opportunities to discuss what they thought were best practices.

“It was really important for the customers to see that we were introspective about how we run the business. We had too complicated a mix of unions, and the negotiations were confusing to the customer or unnecessarily more expensive.”

Jurisdictions were streamlined, giving up to 30 per cent greater efficiency for customers. “It was a lot of hard work but also a little bit of luck that resulted in fewer unions and a great Customer Satisfaction Agreement,” says McNichol.

“The contractors have an open relationship with their contractors, but I can’t control who you buy from. We wanted to protect our contractor relationships. We want them to make money to service the customers. In the customer continuum, we deal with exhibitors but also their customers. I’d say we’ve gone from a D minus to a solid B plus and we’re always looking for ways to improve.”

McNichol adds that he’s tried to change the mind-set at the organisation, orientating it towards really caring about the customer’s profit and loss concerns. “We actually care about open commerce. Everyone in our pipeline should have an equal chance for profit, or why would they come? We need to not just be the petrol dealer, we need to engage in that commerce, saying: ‘here’s how you can save some money’.”

Hassenstein points to LIGHTFAIR International, which is due to return to Philadelphia in May 2017, after it was last staged in the city in 2013. “They had previously told us ‘don’t bother calling’, but having witnessed the changes and actions we bought in, they saw how their show could work far more efficiently. That to me is much more important than getting a new customer.”

PCC’s progress has entailed some tough decision-making, but it’s further evidence that putting the customer first yields results.