1. Tomorrow’s Congress & Convention Centres Michael Hughes Managing Director, Research & Consulting July 5 th 2010 Liverpool, United Kingdom

2. Objectives About the Survey & Respondents About the Survey & Respondents Growth Rates & Outlook Growth Rates & Outlook Financials & Revenues Financials & Revenues New Buildings & Expansions New Buildings & Expansions Design & Technology Design & Technology Green & Environmental Green & Environmental Client Trends Client Trends Conclusion and Q&A Conclusion and Q&A

3. About the Survey & Respondents

4. About the Survey In May and June 2010 AIPC conducted an executive-level survey covering congress and convention centre trends. In May and June 2010 AIPC conducted an executive-level survey covering congress and convention centre trends. The survey was sent to all AIPC members and about 150 non- members around the world. The survey was sent to all AIPC members and about 150 non- members around the world. 88% of the survey respondents are AIPC members. 88% of the survey respondents are AIPC members. The AIPC member response rate is significant: 71%. The AIPC member response rate is significant: 71%. Survey was conducted by Red 7 Media, LLC, which owns EXPO and Event Marketer magazines. Survey was conducted by Red 7 Media, LLC, which owns EXPO and Event Marketer magazines.

5. Key Themes 2010 expected industry growth trends – 4% global revenue growth from 1% to 2% event and attendance growth. 2010 expected industry growth trends – 4% global revenue growth from 1% to 2% event and attendance growth. Pricing – published rates are holding or increasing, but top clients are negotiating more or asking for incentives. Pricing – published rates are holding or increasing, but top clients are negotiating more or asking for incentives. Focus on new revenue and services. Focus on new revenue and services. Management role changing. Management role changing.

6. Key Themes Continued building boom – 59% of venues have a new build or expansion project underway or opened in the past three years. Continued building boom – 59% of venues have a new build or expansion project underway or opened in the past three years. Primary technology and service interest is in wireless internet access; higher quality, high-tech meeting rooms; and environment conditions (HVAC, lighting, etc.). Primary technology and service interest is in wireless internet access; higher quality, high-tech meeting rooms; and environment conditions (HVAC, lighting, etc.). Primary client trends and requirements are increased negotiations; shorter booking window; and higher-quality F&B. Primary client trends and requirements are increased negotiations; shorter booking window; and higher-quality F&B.

7. Ownership Structure Survey Question 3. What is the ownership structure of your venue?

8. Management Structure Survey Question 4. What is your management structure? Tomorrow’s Congress Centres: More ownership combinations and continued trend to private management.

9. Facility Location and Size Survey Question 5. Where is your facility located? Average and Median Size of the Survey Respondents: Total function space m²: 45,808 (median: 18,000) Exhibition space m²: 31,800 (median: 10,700) Largest non-exhibit space: 4,409 (median: 2,020) Theatre-Auditorium seats: 3,128 (median: 2,150) Total meeting rooms: 32 (median: 23)

10. Growth Rates & Outlook

11. Expected Revenue, Event Bookings and Attendance Change 2010 vs. 2009 – All Respondents Survey Question 7. By what percentage do you expect your facility's total gross revenues in 2010 to change compared to 2009 (or your current fiscal year compared to last fiscal)? AND, Q8 and Q9. Revenue is expected to grow faster than bookings and attendance.

12. Expected Gross Revenue Change 2010 vs. 2009 Survey Question 7. By what percentage do you expect your facility's total gross revenues in 2010 to change compared to 2009 (or your current fiscal year compared to last fiscal)?

13. Expected Change in Number of Events 2010 vs. 2009 Survey Question 8. By what percentage do you expect your facility's total number of events in 2010 to change compared to 2009 (or your current fiscal year compared to last fiscal)?

14. Expected Change in Total Attendance in 2010 vs. 2009 Survey Question 9. By what percentage do you expect your facility's total number of event attendees and delegates in 2010 to change compared to 2009 (or your current fiscal year compared to last fiscal)?

15. Financials & Revenues

16. New Revenue Sources Survey Question 15. Have you added any new revenue sources (facilities, services or events) in the past five years? (And) #16. If you have added new revenue sources, what are they? Primary Sources Expansions, more space Expansions, more space Technology, wireless, internet and AV Technology, wireless, internet and AV F&B including more catering, concessions, food courts F&B including more catering, concessions, food courts Event services Event servicesSecondary Booking more entertainment- related events Booking more entertainment- related events Launching own events usually entertainment-based Launching own events usually entertainment-based Signage and advertising Signage and advertising Package offers Package offers Registration Registration Parking Parking Event management Event management Tomorrow’s Congress Centres: Continued search for new revenue sources; the secondary sources will become more common.

17. Primary Responses to the Global Financial Crisis and Recession Survey Question 10. What were your primary responses to the recent global recession and financial crisis? (Please check all that are applicable.) “Other” responses include: Cost control, froze salaries, reassessed capital expenditures, energy expenses More concerts/cultural events; less corporate events Communicated more with all staff Value added, rate flexibility and discounting

18. Facilities with a Gross Profit (excluding debt service or loan payments) Survey Question 11. Does your facility business turn a gross profit, net of any debt service or loan payments related to past or current construction or development?

19. Governmental Payments or Subsidies Survey Question 13. Does your venue receive any governmental payments or subsidies to fund operations or pay debt service or loans?

20. Overall Success Measurement Survey Question 14. How do you and your senior management team measure overall success? (Please check all that apply.) Primary Metrics 1.) Venue operational profit/loss91% of respondents 2.) Total number of events73% 3.) Total economic impact63% 4.) Total number of visitors57% 5.) Public Relations – press coverage36% Secondary Performance of proprietary event business20% Total number of booked hotel rooms19% Hotel community occupancy levels10% Visitor-related tax revenues 9% Hotel community gross sales or profit 3% Other14%

21. Convention and Exhibition Space Pricing Trends Survey Question 12. In general, is your convention and exhibition space / hall pricing increasing or eroding? Tomorrow’s Congress Centres: On-going analysis of where to increase and reduce rates for all services.

22. Venues Engaging in More Client Incentive Activities Survey Question 18. Are you engaging in more incentive activities (i.e., rent reductions, added value services, cash incentives, hosted functions) than previously? Tomorrow’s Congress Centres: More incentives for the largest 20% to 30% of events and group meetings.

23. New Buildings & Expansions

24. Most Recent New Building or Expansion Project Survey Question 19. When was the last new building, expansion or major refurbishment project completed at your venue? Tomorrow’s Congress Centres: Possibly a slowing of the building and expansion boom, but still continual facility growth.

25. New Building and Expansion Projects Underway Survey Question 20. Are you planning a new build, expansion or renovation currently, or is one underway? Primary Reasons for New Building Projects 1.) Demand from events that need larger space: 39% 2.) Add new technology features and services: 17% 3.) Update aging facilities: 16%

26. Project Financing Sources Survey Question 22. How will the new building project be financed? “Other” responses include: Combination of sources Combination of sources Bank loans Bank loans Internal funds Internal funds 38% of new development projects have a P3 component.

27. Factors Limiting Ability to Expand or Renovate Survey Question 24. What factors are most limiting your ability to carry out required facility expansion / renovations? Tomorrow’s Congress Centres: The limiting factors are manageable, but which one of these factors (or more than one) could increase significantly?

28. Design & Technology

29. Most Important Facility Design and Functionality Themes and Amenities Over the Next 5 Years 1.) Wireless internet access71% 2.) Higher quality, high-tech meeting rooms67% 3.) Environment conditions (A/C, lighting, etc.)60% 4.) Multi-function space for various event types57% 5.) Unique overall ambience, aesthetics55% 6.) Better signage and way-finding54% 7.) High quality exhibit space50% Secondary Higher-quality food49% High-tech, divisible lecture halls49% Efficient transportation options (to the venue)49% Survey Question 25. Which of the following convention and congress venue center design and functionality trends, themes and amenities will be more important over the next five years to venue management, venue clients and attendees? (Check all that apply.) Tomorrow’s Congress Centres: Many design, amenity and technology projects ahead. Most focused on improving attendee/delegate experience.

30. Ideal New Facilities and Programs to Increase Profitability Primary Responses Additional exhibition space Additional exhibition space Additional meeting space, multi-functional space Additional meeting space, multi-functional space Auditoriums Auditoriums Ballroom(s) Ballroom(s) Technology, wireless Technology, wireless New kitchen and F&B space New kitchen and F&B space Secondary Responses Hotel capacity and connections to hotels Hotel capacity and connections to hotels Transportation elements and connections Transportation elements and connections Retail, other ancillary services Retail, other ancillary services Smaller, more “sociable” areas Smaller, more “sociable” areas Green and environmental impact issues Green and environmental impact issues Broadcasting services Broadcasting services More parking facilities More parking facilities Creating own events Creating own events Survey Question 27. What kinds of new facilities and programming (regardless of whether or not you can actually create them) do you think would be of greatest benefit in increasing your profitability over the next 3 years? Tomorrow’s Congress Centres: Continued search for new programs and services – the secondary sources will become more important. More creativity and entrepreneurial approach required.

31. Current Facility Limitations 1.) Lack of exhibition space52% 2.) Lack of meeting / breakout room space41% 3.) Need more F&B areas, restaurants, concessions17% 4.) Lack of theatre16% 5.) Need for more kitchen space10% 6.) Need more parking14% 7.) Out-dated telecom and internet technology 9% Survey Question 28. What limitations in your current facilities are most restricting your ability to earn more revenue? Tomorrow’s Congress Centres: These perceived limitations will drive more development and expansions. When the global economy recovers will the industry experience another development wave?

32. What Does Venue “Flexibility” Mean? “Flexibility” has many different meanings… Primary Responses Faster event turnaround Meeting and ballroom turnarounds Serving a diverse mix of business Quick and inexpensive, less labor intensive Creativity, having no limitations Higher level of client service Secondary Responses Handle last minutes changes and bookings Problem solving Retractable seating Ability to host multiple events Multi-functionality Lighting, rigging, A/V and communications capabilities Removable walls and large pre-function spaces Flexibility in services and financial / business matters Survey Question 30. "Flexibility" is identified as one of the most important features a centre needs today. What would this mean in the context of your own facilities?

33. Technology Services and Issues of Most Importance Over Next Five Years Primary Meeting room technology65% Meeting room technology65% AV technology and services65% AV technology and services65% Wireless62% Wireless62% Web site51% Web site51% Internet40% Internet40%Secondary Telecommunications36% Telecommunications36% Technology staffing32% Technology staffing32% Security technology31% Security technology31% Paying for IT investments/upgrades27% Paying for IT investments/upgrades27% Technology vendor relationships14% Technology vendor relationships14% Survey Question 38. Which of the following technology-related services and issues will be the most important to your venue business over the next five years? (Please check the top three.)

34. Green & Environmental

35. Venues with Green/Sustainability Programs Survey Question 31. Does your facility have Green / sustainability program policies and initiatives in place?

36. Venues with Recognized Sustainability Design Certification Survey Question 32. Do you have a recognized sustainability design (i.e. LEED, BREAMM) or operating (i.e., Green Globe, GMIC) certification? Certification Programs Green Globe 28% Green Globe 28% LEED 11% LEED 11% BREAMM 0% BREAMM 0% GMIC 0% GMIC 0% Other 42% Other 42% Not Applicable 32% Not Applicable 32%

37. Factors in Decision to Pursue Green Programs Survey Question 34. What factors were the most important in your decision to pursue green facilities / programming? AND, Survey Question 37. What Green, environmental and/or sustainability issues are of most importance to your clients and owners? “Other” responses: Combination of factors Corporate responsibility Cost effectiveness Customer demands Marketing strategy Social responsibility Staff interest Important Green Issues to Clients and Owners Primary Responses: Active and visible; Carbon off setting; Clients interested in reducing costs; Waste separation and recycling; Reduction of energy consumption; Energy efficiency, saving; Facilities efficiency rate; Paper recycling Water recycling Secondary Responses: Measuring client green impact; Government policy; Locally-grown food; Food donations; Composting; Reduction of use of plastic materials; Extraction of energy through our operations; Photovoltaic roof

38. Venues that have Gained Business from Green Initiatives Survey Question 35. Have you gained business because of your green initiatives? Only 3% say they have lost business because they lacked Green elements.

39. Client Trends

40. How Event and Group Clients are Changing Increased negotiations77% Increased negotiations77% Shorter booking windows74% Shorter booking windows74% Requiring higher-quality food and beverage38% Requiring higher-quality food and beverage38% More PR assistance, outreach to city leaders30% More PR assistance, outreach to city leaders30% Focusing more on event design/ambiance26% Focusing more on event design/ambiance26% Requiring attendance promotion assistance22% Requiring attendance promotion assistance22% Survey Question 39. Which of the following trends are you seeing from your key event and group clients?

41. Client Requirements Today Compared to a Few Years Ago Primary Responses More negotiating Budget concerns, more price conscious Internet, free or lower cost wireless requested/required High-tech facilities in AV and telecom Focus on meeting and breakout room space and quality Higher food quality/creativity Secondary Responses Public transport information and assistance More help in organizing their meeting and exhibition Environmentally sustainable practices PCO issues, such as “hiding clients” Attendance building assistance Survey Question 41. What are the greatest differences in the kinds of facilities and services clients are asking for today as opposed to what they required three years ago?

42. Strongest Event and Group Client Segments Primary Association conferences and meetings65% Association conferences and meetings65% Association conventions with exhibits61% Association conventions with exhibits61% National or International corporate meetings49% National or International corporate meetings49% Local corporate meetings45% Local corporate meetings45% Governmental events and meetings45% Governmental events and meetings45%Secondary Entertainment events28% Entertainment events28% For-profit trade shows, trade fairs, exhibitions25% For-profit trade shows, trade fairs, exhibitions25% Training events24% Training events24% Consumer and public shows22% Consumer and public shows22% “SMERF” events (societal, military, etc.20% “SMERF” events (societal, military, etc.20% Parties15% Parties15% Sporting events 6% Sporting events 6% Job fairs 6% Job fairs 6% Survey Question 40. In which of the following event and group segments are you seeing the best current growth or near-term growth prospects? (Please check all that apply.)

43. Conclusion

44. Centre Operation Trends Today and Tomorrow TodayTomorrow Periodic projects and enhancements Multiple projects and enhancements continually Recent and planned expansionsTo continue… Technology investmentIncreased client demand Focus on facility flexibilityNew programming, yielding more value from exhibiting space Meeting client requirementsIncreasing creativity required Focused on event organizers and exhibitors Attendee experience

45. Centre Business Trends Today and Tomorrow TodayTomorrow A few core revenue sourcesWider range of revenue sources About 60% turn a profitMay have to get to 65% to 70% Pricing, incentives, discountsSame % of key clients; larger funds Fast client-based change/trendsFaster client-based change/trends Periodic project management rolePrimarily a project management role Venue management – either more quantitative or qualitative More quantitative AND qualitative focused…

46. How the Congress/Convention Centre CEO/GM Role Will Change Over Next Five Years Survey Question 17. What are the most significant management structural changes you anticipate, over the next 5 years, including in your own role as CEO / General Manager? More in-depth management structure reviews More in-depth management structure reviews Continued focus on revenue and profits, or minimizing loss Continued focus on revenue and profits, or minimizing loss More focused on sales and marketing More focused on sales and marketing Managing expansions and hotel development projects Managing expansions and hotel development projects

47. How the Congress/Convention Centre CEO/GM Role Will Change Over Next Five Years, continued Survey Question 17. What are the most significant management structural changes you anticipate, over the next 5 years, including in your own role as CEO / General Manager? Watching industry trends more closely and changes impacting group and event clients Watching industry trends more closely and changes impacting group and event clients Working with new event types and categories – both client events and venue-produced events Working with new event types and categories – both client events and venue-produced events More focus on adding services and improving quality; while working with leaner budgets and similar or smaller staff levels More focus on adding services and improving quality; while working with leaner budgets and similar or smaller staff levels

48. Convention Center Evolution Marketplaces Civic Icons, Super Hotels Contemporary Convention Centers Resort Meeting Facilities Civic Centers and Box-Like Convention Centers Fairgrounds, Coliseums, Hotels Consider venues as marketplaces and add value for attendees/buyers and exhibitors/brand-builders. Centers that help build these marketplaces will be the most successful.

49. Most events, service providers and venues/hotels Winners over next decade Guest Transformations

50. Q&A

51. About Michael Hughes & Red 7 Media, LLC Managing Director of Research & Consulting Michael Hughes manages Red 7 Media’s research and consulting group, which is focused on providing information, analysis and recommendations to leaders in the event, venue and media industries. Red 7 Media publishes business magazines and produces executive conferences and trade shows in the event and media industries. Among the company’s market-leading brands are Event Marketer, Event Design and EXPO magazines, as well as the Event Marketing Summit. In addition, the company runs the Event Marketing Institute. Michael is a recognized events and venues industry expert that produces proprietary research and consulting projects for leading convention and event industry organizations around the world. He works closely with convention and exhibition industry leaders, corporate exhibitors, entrepreneurs, investors and real estate developers to provide strategic information, analysis and recommendations. His clients have included a majority of industry leaders in every segment of the industry as well as leaders in the investment and consulting community. Michael is frequently quoted by major newspapers and magazines such as The Los Angeles Times, Newsweek, The New York Times and The Wall Street Journal. Over his career, he has managed over 2,500 studies and assignments and been a presenter at over 100 industry conferences and meetings. He was previously VP of Research and Consulting at Tradeshow Week, where he founded and ran the magazine’s research and consulting group for 15 years. www.red7media.com Managing Director of Research & Consulting Michael Hughes manages Red 7 Media’s research and consulting group, which is focused on providing information, analysis and recommendations to leaders in the event, venue and media industries. Red 7 Media publishes business magazines and produces executive conferences and trade shows in the event and media industries. Among the company’s market-leading brands are Event Marketer, Event Design and EXPO magazines, as well as the Event Marketing Summit. In addition, the company runs the Event Marketing Institute. Michael is a recognized events and venues industry expert that produces proprietary research and consulting projects for leading convention and event industry organizations around the world. He works closely with convention and exhibition industry leaders, corporate exhibitors, entrepreneurs, investors and real estate developers to provide strategic information, analysis and recommendations. His clients have included a majority of industry leaders in every segment of the industry as well as leaders in the investment and consulting community. Michael is frequently quoted by major newspapers and magazines such as The Los Angeles Times, Newsweek, The New York Times and The Wall Street Journal. Over his career, he has managed over 2,500 studies and assignments and been a presenter at over 100 industry conferences and meetings. He was previously VP of Research and Consulting at Tradeshow Week, where he founded and ran the magazine’s research and consulting group for 15 years. www.red7media.com