PricewaterhouseCoopers LLP The Economic Significance of ...

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The Economic Significance of Meetings to the U.S. Economy

Interim Study Update for 2012 Executive Summary Convention Industry Council

January 30, 2014

Ms. Karen Kotowski, CAE, CMP Chief Executive Officer Convention Industry Council 700 North Fairfax Street, Suite 510 Alexandria, Virginia 22314

Dear Ms. Kotowski:

PricewaterhouseCoopers LLP ("PwC") has performed certain services to assist the Convention Industry Council ("you," or "Client") in the assessment of the Economic Significance of U.S. Meetings in 2012. Our services were performed and this Deliverable (which is hereafter referred to as "Report") was developed in accordance with our engagement letter dated September 3, 2013 and are subject to the terms and conditions included herein. Our services were performed in accordance with Standards for Consulting Services established by the American Institute of Certified Public Accountants ("AICPA"). The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards. Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based. We did not audit or otherwise verify the information supplied to us in connection with this engagement, from whatever source, except as may be specified in this Report.

Our work was limited to the specific procedures and analysis described herein and was based only on the information made available through November 21, 2013. Accordingly, changes in circumstances after this date could affect the findings outlined in this Report.

This Report has been prepared pursuant to an engagement between PwC and its Client. As to all other parties, it is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

We appreciate the opportunity to assist you with this matter. If you have any questions or we can be of further assistance, please contact Adam Jones at (813) 222-5429 or via email at adam.w.jones@us..

Very truly yours,

PricewaterhouseCoopers LLP, 4040 West Boy Scout Boulevard, Suite 1000, Tampa, FL 33607 T: (813) 222-5429, F: (813) 342-8630,

Table of Contents

I. Introduction & Executive Summary ............................................................................................................................................... 2 Introduction ............................................................................................................................................................................... 2 Meetings Scope and Definition .................................................................................................................................................. 3 Meetings Volume........................................................................................................................................................................ 3 Direct Spending .......................................................................................................................................................................... 5 Total Economic Significance ...................................................................................................................................................... 6 Meetings Direct Contribution to GDP Compared to Other Industries ..................................................................................... 8

Appendix A: Glossary .......................................................................................................................................................................... 10 Appendix B: Conceptual Framework ...................................................................................................................................................15

Meetings Defined ......................................................................................................................................................................15 Scope of the Meetings Sector ....................................................................................................................................................17 Meetings Economic Activity..................................................................................................................................................... 23 Appendix C: Economic Modeling........................................................................................................................................................ 25 Economic Model Structure ...................................................................................................................................................... 25 Appendix D: Secondary Research Sources ......................................................................................................................................... 28 Appendix E: Acknowledgements .........................................................................................................................................................31

Table of Figures

Table 1 Number of Meetings and Participants by Meeting Type ......................................................................................................... 3 Table 2 Number of Meetings and Participants by Host Type............................................................................................................... 4 Table 3 Direct Spending by Commodity ............................................................................................................................................... 5 Table 4 Total Economic Contributions ................................................................................................................................................. 7 Table 5 Total Tax Contributions ........................................................................................................................................................... 7 Table 6 Direct Contribution to GDP and Employment of Select Industries ........................................................................................ 8 Table 7 What Constitutes a Meeting? ................................................................................................................................................. 16 Table 8 Core Meeting Industries and Corresponding NAICS Codes ................................................................................................. 20 Table 9 TTSA Industry Extension ....................................................................................................................................................... 21 Table 10 TTSA Commodity Extension ................................................................................................................................................ 22 Table 11 Meeting Industry Supply vs. Demand .................................................................................................................................. 23

Section I Introduction & Executive Summary

Section I ? Introduction & Executive Summary

The Economic Significance of Meetings to the U.S. Economy

I. Introduction & Executive Summary

Introduction

PricewaterhouseCoopers LLP ("PwC") was engaged by the Convention Industry Council ("CIC") to prepare an interim update to the estimated economic significance of meetings to the U.S. economy. The study involved updating inputs and assumptions in the models underlying estimates previously prepared by PwC on behalf of CIC for calendar year 2009 ("2009 Study") to reflect meetings activity in the U.S. during calendar year 2012.

The 2009 Study involved a comprehensive primary and secondary research effort to quantify the size and economic significance of the U.S. meetings industry, including more than 6,000 surveys of meeting organizers, meeting venue managers, destination marketing organizations, meeting delegates, and exhibitors. The study found that nearly 1.8 million meetings took place in the U.S during calendar year 2009 which involved an estimated 205 million participants and generated more than $263 billion in direct spending and $907 billion in total industry output.

Key spending model inputs and assumptions updated from the 2009 Study to reflect calendar year 2012 results included spending profiles and meetings and attendance volume. Updates were based on industry data for 2012, trends between 2009 and 2012 related to meetings volume and expenditures derived from secondary research sources, and PwC analyses to reconcile secondary sources, interpolate data gaps, and calibrate model results. The economic relationships included in the input-output model deployed for the 2009 Study were also updated based on the 2011 IMPLAN economic model. Surveys and interviews conducted as part of the 2009 Study were not updated as part of the interim update approach.

Examples of secondary sources considered in the interim update included, but were not limited to, the following:

Government: Bureau of Economic Analysis, Office of Travel and Tourism Industries, Census Bureau, Bureau of Labor Statistics, and others.

Industry: PCMA Meetings Market Survey, CEIR Exhibition Industry Index, U.S. Travel Association Domestic Travel Report, MPI Business Barometer, ICCA International Association Meetings Market, Business Travel News' Corporate Travel Index, GBTA BTI Outlook, Smith Travel Research, and others.

Proprietary: PwC Convention Center Report, PwC Hospitality Directions, previous PwC studies involving the meetings industry, and other such sources.

The remainder of this section provides an executive summary of the study's conceptual framework and key findings. Report sections that follow present updated tables for meetings volume, direct spending, and meetings significance to reflect 2012 meetings activity and include further breakdown of results by type of meeting, venue, participant, origin, host organization, and commodity. Additional background and study details related to segment definitions, conceptual framework, economic modeling process, and secondary sources are available for reference in the appendices.

2

Section I ? Introduction & Executive Summary

The Economic Significance of Meetings to the U.S. Economy

Meetings Scope and Definition

For purposes of the 2009 Study and this interim update, a "meeting" refers to a gathering of 10 or more participants for a minimum of four hours in a contracted venue. Meetings include conventions, conferences, congresses, trade shows and exhibitions, incentive events, corporate/business meetings, and other meetings that meet the aforementioned criteria. Excluded from the definition of meetings are social and recreation activities, certain educational and political activities, and gatherings for sales of goods/services such as consumer shows.

The study uses an extended approach to quantifying the significance of meetings activity which captures the activities of the core meetings industries, meetingsrelated components of the travel and tourism industries as an extension of the Travel & Tourism Satellite Account ("TTSA"), and other relevant industries. Components of the meetings sector considered include "core" meetings industries (specialized meetings organizers; convention, congress, and exhibition centers; incentive houses and destination management companies; and convention and visitor bureaus) and extend the sector to other supporting entities such as accommodations, transportation, technical equipment, food services, speakers' representation services, stand construction, other support services, and auxiliary businesses.

Meetings Volume

More than 1.8 million meetings were estimated to have been held in the U.S. during calendar year 2012 and involved an estimated 225 million participants. The majority of meeting participants were generated by corporate/business meetings (50 percent), followed by conventions/conferences/congresses (27 percent) and trade shows (12 percent).

Table 1 Number of Meetings and Participants by Meeting Type

Meeting Type

Meetings Participants % Participants

Corporate/Business Meetings Conventions/Conferences/Congresses Trade Shows Incentive Meetings Other Meetings

Total

1,298,300 273,700 10,900 67,700 182,600

113,337,000 60,960,000 26,768,000

9,172,000 14,710,000

1,833,200 224,947,000

50% 27% 12%

4% 7%

100%

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Section I ? Introduction & Executive Summary

The Economic Significance of Meetings to the U.S. Economy

The majority of meetings and meeting participants in 2012 were hosted by corporations (55 and 49 percent, respectively). Association/membership organizations hosted the second largest share of meeting participants (26 percent), followed by non-government, not-for-profit organizations (23 percent).

Table 2 Number of Meetings and Participants by Host Type

Host Type

Meetings Participants % Participants

Corporate Association/Membership Non-Government, Not-For-Profit Government

Total

1,017,000 315,400 432,100 68,600

109,571,000 59,495,000 51,572,000 4,308,000

1,833,200 224,947,000

49% 26% 23%

2%

100%

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