A few weeks ago, in the middle of a short email exchange with a member about some changes we are considering for the 2019 ICAS Convention, my phone rang and it was that very same member calling me to talk.
“Why is the ICAS Convention always in Las Vegas?” he asked. During the next ten minutes or so, I answered his question. When we were done, he said, “Well, that makes a lot of sense. I’m glad I asked. You should tell the whole membership what you just told me.”
When I began working for ICAS in June of 1997, one of the first things I did was suggest to the Board that we move the convention out of Las Vegas on alternating years. My argument was that our members were spread throughout the U.S. and Canada. Potential weather problems in December limited our ability to consider convention venues in northern cities, but there were many strong convention hotels located throughout the southern United States.
The ICAS staff did some research, solicited bids and ultimately recommended to the Board that we hold the 1999 convention in Nashville, the 2001 and 2005 conventions in Orlando, and the 2003 ICAS Convention in Dallas.
The experiment went poorly.
Financially, we took a bath. In every year that we held the convention somewhere other than Las Vegas, our gross revenue dropped and our expenses increased. Our members expressed their opinions about Nashville, Orlando and Dallas with their feet; they stayed home. Compounding the problem, our one-year deals with the non-Vegas hotels were not nearly as generous as the contracts we were able to negotiate with the hotels in Las Vegas, so we paid for many of the things in non-Vegas cities that we got for free in Vegas. With revenue down and expenses up, our net profit for the convention dropped precipitously.
More than that, though, the members were annoyed by our decision to leave Las Vegas…even for a single year. During most of the 1990s, Las Vegas had become the unofficial home of the ICAS Convention. The night life and bar hours suited our members. The easy flights in and out, the (comparatively) inexpensive sleeping rooms and the world-class meeting space were a good fit for our convention.
“In every year that we held the convention somewhere other than Las Vegas, our gross revenue dropped and our expenses increased.”
During December and January after our conventions in Nashville, Orlando and Dallas, I was besieged with angry emails and unpleasant telephone conversations. With a bit of arrogance that I can only shake my head at now, I was so sure that the change would eventually be accepted and even welcomed that I urged the Board and the members to push through the dissatisfaction expressed by our delegates. “Change is hard, but people will eventually see the wisdom in moving the convention around,” I said to anybody who would listen.
I was wrong.
By the time of our second convention in Orlando in December of 2005, the members were mutinous. I conceded that the headwinds we were encountering were not likely to abate. We cancelled a 2007 ICAS Convention in Orlando and began negotiating a multi-year deal at the Rio in Las Vegas.
Fortunately, it was a buyer’s market. The hotel’s management was eager to strike a deal and offered dramatic concessions: a free reception, complimentary continental breakfasts and a significant increase in the number of comp suites…all additions that helped our bottom line. With Board approval, we signed a three-year deal that dramatically decreased our expenses.
A couple of years later, when the hotel sales team discovered they were just a little shy of year-end sales goals (and the bonuses that they would receive when they met those goals), the phone rang and the hotel offered additional concessions and incentives, not just for the new contract that they were asking us to sign, but for all of our current and future contracts. A couple of years later, they made an even more generous offer.
Following the financial collapse of 2008, we learned that there were some banks that were “too big to fail.” Over time, ICAS has negotiated hotel contracts that may well be, “too good to leave.” A couple of years ago, the ICAS Board of Directors asked us to calculate how much it would cost to abandon one or more of the contracts we currently have to hold the convention in Las Vegas. The actual cancellation fee is small, just $3,000 if we let the hotel know more than 24 months in advance. But the cost of foregoing all of the incentives and concessions that we’ve negotiated into our contract during the last ten years – items that we could never get in new contracts — would exceed $225,000.
And, of course, all of those contractual benefits accrue to our convention delegates. Our registration fees and booth rental fees are significantly lower than those for similar conventions, in large part because the accommodations and concessions in our multi-year contracts with the Las Vegas hotels provide both direct and indirect subsidies. Put another way, without the benefits we get from our hotel contracts in Las Vegas, ICAS would be forced to offer a much different, less lavish convention or significantly increase the various convention fees.
So, that’s why we hold our annual ICAS Convention in Las Vegas each year. It’s what the members want. We have negotiated contracts with our host hotels that are disproportionately, almost ridiculously favorable to ICAS. And those deals have allowed us to keep the fees we charge our members to participate in the convention lower than they would otherwise be.
John Cudahy
President/CEO
International Council of Air Shows
