Atlantic City's efforts to rebuild its convention business following Hurricane Sandy came with a powerful incentive - $1 million in cash.
The pot of money offered by the Atlantic City Alliance was designed to attract new conventions to town, with priority given to midweek events that could fill in gaps during normally slow times of the year.
While the subsidy has lured three new, high-profile conventions for 2013, the alliance disclosed that less than half of the money has been spent. The exact amount was not revealed. Because of the lead time needed to plan and stage new conventions, it appears unlikely that any other conventions will tap the fund the rest of this year, officials said.
Still, the alliance insists the subsidy program has been a success and will return for 2014. Without the money, Atlantic City would find it much harder to compete with Boston, Philadelphia, Baltimore and other cities in the Northeast for the lucrative convention business, said Liza Cartmell, the alliance's president and CEO.
"A million dollars puts you right in the game," she said. "It's a critical subsidy."
The alliance is a private organization that receives $30 million annually from the casinos to promote and market the city. With much fanfare, it launched the $20 million "Do AC" advertising campaign in 2012 to target tourists in key feeder markets throughout the Northeast corridor.
The alliance also funds special events and public art projects in the city. It broadened its reach when it announced the convention program in December.
Although the casinos and other Atlantic City landmarks were relatively unscathed during the Oct. 29 hurricane, dozens of conventions canceled their bookings because of Sandy. The alliance believed the million-dollar fund would tempt conventions to take another look at the city post-Sandy.
"We wanted the marketplace to know that we were open for business," said Gary Musich, vice president of sales for the Atlantic City Convention & Visitors Authority.
Historically, the casinos have been reluctant to block out hotel space for conventioneers because they can usually make more money reserving the rooms for gamblers. But as revenue from slot machines and table games continues to dwindle during the city's seven-year casino slump, conventions are in vogue as a potential moneymaker.
"All of the properties are much more focused on this," Musich said of the casino industry's support of conventions. "The properties have been great partners."
Musich, whose agency collaborates with the alliance for the subsidy program, said the convention trade is growing in some areas. He said the number of room nights generated by conventions is up 30 percent from 2008 to 2013.
Overall, the sheer number of Atlantic City conventions has been flat over the same five-year span, but the growth in room nights has been fueled by the city's emphasis on bigger conventions, Musich said.
Figures provided by the ACCVA show the number of convention room nights is expected to jump from 273,931 in 2009 to a projected 371,726 in 2013.
The convention subsidy is seen as a way to continue the growth. There are conditions attached, however. When the alliance announced the program, it said conventions would have to generate at least 1,000 room nights to be eligible for subsidies.
Priority is given to first-time conventions that agree to hold their events during midweek, nonsummer periods, when business is traditionally slower in Atlantic City.
The incentives can cover a wide range of expenses. Transportation from the airport, receptions, rent, electric bills, and food and beverage are some of the costs that might be subsidized. The alliance has said the incentives could be tailor-made for a convention's particular needs.
The first convention lured by the subsidy program was the June 5-7 conference of SPINCon, a gathering of meeting and event planners. Musich said SPINCon includes key representatives of the meetings and convention trade, so it was a coup for Atlantic City to land the conference.
Overall, SPINCon attracted about 200 attendees and generated 1,000 room nights. Musich estimated the convention's economic impact for the city at $400,000 to $500,000.
The next convention to benefit from the subsidy program is the Society of American Travel Writers show scheduled for Sept. 9-13. Jeff Guaracino, chief strategy and communications officer for the alliance, said the travel writers convention will dovetail with the Miss America Competition, guaranteeing the city a full dose of publicity.
"Through the subsidy, we are bringing in this convention that acts as a meeting and also as a mega-press trip for writers who have not been to Atlantic City before," Guaracino said.
A third convention receiving subsidies will be an Oct. 25-29 conference by Bobit Business Media, which produces trade publications specializing in the transportation field. Musich said the Bobit conference will showcase the city to fleet managers overseeing limousine and transportation companies.
Altogether, there will be 1,500 attendees at the Bobit convention. Musich said the convention is expected to generate $500,000 in spending for the city.
"They are doing a trade show here for the first time," he said. "This is a new show."
Musich stressed that the convention subsidy was key for attracting Bobit and should give Atlantic City a competitive edge over other cities in the future. He added that the $1 million incentive is high compared to what other cities are offering in convention subsidies.
"It's tremendous. It's huge," he said. "You're dealing with a very competitive business."
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