Convention Season Heating Up In 2021, But Slow Vaccine Rollout Could Upend It Again
After a dismal year that saw the cancellation of nearly all conventions, Chicago’s hospitality industry has finally started to feel some hope. McCormick Place has a packed convention schedule for the second half of 2021, which normally would fill up the city’s hotels with nearly 1 million travelers.
Much of the hope springs from the development of vaccines, which scientists say can eventually halt the spread of COVID-19. But the slow pace of actual vaccinations has left the hospitality industry in limbo. Unless the pace picks up, another wave of cancellations could happen again, pushing even a partial recovery back to 2022.
“We’re swimming through untested waters here, so it’s hard to get a handle on where things are going with any certainty,” said Maverick Hotels & Restaurants CEO Bob Habeeb, whose 222-room Curio Hotel on Chicago’s Navy Pier had its opening day pushed back from last fall to March due to the coronavirus pandemic.
“They need a significant booking window that allows attendees to make travel plans,” she said.
Most flights and hotel rooms start getting booked three to six months before a convention starts, Nadolny added, and that means if this season is to be saved, the Chicago region will need to start making significant progress on vaccinations by March or April.
That’s why many of the largest conventions that typically book space each year in Chicago’s McCormick Place Convention Center, North America’s largest at 2.6M SF, decided to set tentative plans for late summer, Nadolny said. The International Housewares Association had to cancel last year’s Inspired Home Show, expected to draw 52,000 participants to McCormick Place, less than two weeks before it was set to open in March. This year’s four-day show was officially postponed until Aug. 7. Fifteen of the 18 shows scheduled for this year from February until June were canceled or postponed.
But on the surface, the rest of the convention season looks great, according to Cynthia McCafferty, a spokesperson for the Metropolitan Pier and Exposition Authority, the municipal corporation that owns Navy Pier and McCormick Place. A total of 59 groups scheduled McCormick Place conventions in the second half of this year, she said, including the Black Women’s Expo, which typically draws 30,000 people. In 2020, before COVID-19 hit, fewer than 50 conventions were scheduled.
But none of this year’s activity can occur until the state public health authorities certify that the city has the pandemic under control. Last year, Gov. J.B. Pritzker’s administration designed a five-phase system to measure the spread of COVID-19, which dictates how many people can gather together in bars, restaurants, theaters and other venues, including convention halls.
Much of the state, including Chicago, recently reached Phase 4, and some restrictions on activity have been lifted. Schools can reopen, and indoor dining is now allowed but limited to 25% capacity or 25 people per room. But the big block for convention planners is that meetings are still limited to 50 people or less. The remaining restrictions won’t end until Chicago reaches Phase 5, which state officials won’t certify until vaccines are widely available.
As of this week, less than 2% of Chicago’s population is fully vaccinated, a little below the statewide average, according to the Illinois Department of Public Health. Officials say an average of about 45,000 people are getting the shots each day.
“All of these conventions are booked with the best conceivable scenario in mind, but they all need Phase 5 to happen,” Nadolny said.
And even under the best-case scenario, Zoom technology and other virtual options are almost certain to cut into demand for convention and hospitality spaces, similar to what’s happened to office demand. The possibility of holding virtual meetings, as well as any lingering fears of infectious disease, means the bother and expense of traveling to conventions won’t be as appealing as it was in the past, Habeeb said.
“There is more and more good news on the vaccines every day, but the second half of the puzzle is how many people will feel comfortable traveling? I personally think we’re not going to see a return to the convention space so quickly,” Habeeb said.
He believes the result will be the emergence of a hybrid convention where some people take part in-person and others are content to stay home and join convention sessions only on their laptops.
“It will not replace the need for meeting in-person, no way, but it will be a regular aspect of every meeting,” he said. “Logistically, that means you will see diminished attendance, but with a bigger total audience.”
“Anything that happens in 2021 will probably be somewhat of a hybrid event, and that’s probably going to be the case into 2022,” she said.
The American College of Cardiology’s current plan for its annual meeting is typical of this platform. The ACC canceled its 2020 convention, expected to draw about 19,000 to McCormick Place. This year, it plans to gather in May in Atlanta, but give members the option of attending virtually.
If the rosiest predictions come true, the 59 groups holding meetings in McCormick Place this year, which include 39 major events, said they will attract a total of 878,000 visitors and be responsible for more than 879,000 hotel room nights, according to McCafferty. She said the actual numbers that show up will depend on whether vaccinations are widespread.
“Certainly, 2021 is not going to be like 2019,” she said.
But even if convention and other corporate travel doesn’t fully recover this year, Habeeb said he believes recovery is inevitable. Just as office users are finding that Zoom meetings can’t fully replace the benefits that flow from personal interaction with their colleagues, companies that depend on conventions to land new deals are eager to get their people back in to shake hands or at least bump elbows.
“Some companies have not been able to touch their customers for a year, and there is a huge impulse to just get out there,” Habeeb said.
“There are more deals made in the lobbies of a convention than on the trading floors of Wall Street,” he added. “I used to go to multiday hotel conferences all the time, and I’d be lucky if I could sit through two sessions in a row.”
Habeeb said Chicago’s hospitality industry has other reasons for optimism, especially in the downtown and the Near North Side markets. Both depend heavily in normal years on leisure travelers, and Habeeb expects they will return more quickly than convention goers, perhaps by this year’s Q3.
“People are very frustrated with being at home all the time, and we will probably start to see people eager to take quick trips or go on staycations,” he said.
Navy Pier is one of the city’s top tourist draws, so Habeeb expects this summer will be much happier than the last.
“At Navy Pier, we are blessed to have a very healthy leisure segment. We expect to really ramp up and own the summer months.”
Of course, a profound uncertainty will still hover over any travel plans for the rest of the year. New variants of COVID-19 have cropped up in many countries, some more transmissible than the virus strain that dominated 2020. The spread of any new variant could push up infection rates and sour any optimism growing among potential travelers and their employers.
“If people feel the pandemic is under control, and travel is a manageable risk, our business could skyrocket,” Habeeb said. “But if the rate of infection goes up, we’ll probably be hunkered down again.”