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Second-Tier Destination = First-Rate ROI

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Second-Tier Destination = First-Rate ROI Jeff Sventek traveled for a whole day to make it to his organization's Annual Scientific Meeting in Anchorage, Alaska. Some members, especially older ones, said they couldn't attend because of the distance.

Yet, the Aerospace Medical Association (AsMA) 82nd Annual Scientific Meeting, which was held in early May and attended by 1,300 medical professionals and academics from around the world, was one of the organization's most successful.

"It's such a unique location," said Sventek, executive director of AsMA, describing a city framed by icy Cook Inlet on one side and the snow-capped Chugach Mountains on the other.

He says attendees commented on how thrilled they were about the surrounding wildlife, and many of them added personal days to their trip.

"Many of us who live in the contiguous 48 states have the dream of getting to Alaska in our lifetime," Sventek said. "We also had a slightly higher percentage of international attendees, from Asia in particular, because many people from around the world also want to visit."

When people think about top-tier events, they often think about pricey destinations such as Chicago and New York—or, in Europe, London and Paris. But many of the most successful events actually take place in smaller destinations, from Anchorage to Austin. In these types of destinations, organizers can afford to splurge on luxuries because the basics are more affordable. They get more attention from the convention bureau because they're the biggest show in town. Attendees also benefit: They're more likely to focus on the program because they're not necessarily rushing out to catch the sights, and they're more likely to run into colleagues during their evening stroll downtown. Perhaps more importantly, smaller cities can send a more meaningful message to event participants.

Eric De Groot, founder of Netherlands-based MindMeeting, recalls attending a conference at the Georgia World Congress Center in Atlanta. At such a large venue in a huge city, De Groot says he felt insignificant, as "one of the masses." By contrast, when a Dutch European insurance company chose a tiny Dutch village to celebrate its 200th anniversary, the message it sent was that "people here know each other and take care of each other."

In many cases, De Groot says, the important choice isn't whether an organizer chooses a "first-tier" or "second-tier" city, but whether the city fits the event's mission.

"The main issue for us as meeting designers is the message the location transmits to participants," he said.

Unique Attractions
There are many ways to define a second-tier city. Some experts go by cost, ranking cities such as Chicago and New York highest simply because it's more expensive to host an event there. Some rank cities by the quality of the attractions they offer, whereas others go by meeting volumes: the number of business travelers visiting a city in any given year.

But there is agreement on one point: Successful second-tier cities are generally cheaper, offer more personal service and have a unique local attraction or activity that you can't get anywhere else. A destination that can offer meeting planners all three of these elements has hit the second-tier jackpot. If not, it can do its best to show off the assets that it has.

Take Manchester, England. Unlike Anchorage, the U.K.'s seventh-largest city has no otters, glaciers or sweeping mountain vistas. A former industrial powerhouse, the city now revolves around the media, medicine and aerospace industries. But it does have one cultural gem that it uses to attract visitors from around the world: Manchester United, one of the world's most successful football (or soccer, if you prefer) teams.

Steven Small, head of business tourism at Visit Manchester, says the city tries to offer visitors as much access as possible to football-related activities.

"We're absolutely the home of football, and we don't shy away from that," Small said.

When possible, the CVB tries to get Manchester United celebrities involved in hosting events.

"We try to do as much as we can to show that Manchester is supporting your event," Small said.

Other cities play up their strengths in the same way. In Greenville, South Carolina, for example, visitors can race cars on BMW's test track. In San Jose, California, the convention bureau will show you nearby beaches and wineries.

Lower Costs
Unique attractions or activities, however, are not enough to draw meeting planners these days. Especially in the post-recession economy, planners are wary of choosing locations simply because they offer a fabulous leisure option. In fact, lower cost is one of the top reasons that meeting planners cited for choosing second-tier destinations.

In New York, for example, the most expensive U.S. city for business travelers, the average cost for hotel, car and food per day amounted to US$536.79, compared to $261.58 in Nashville, Tennessee, and $272.63 in Salt Lake City, Utah, according to the 2011 Corporate Travel Index from Business Travel News.

Often, it's also possible to find a more favorable tax rate in a second-tier city. Todd Bertka, CASE, vice president of sales at the Greenville CVB, says his city's combined accommodations and sales tax is only 10 percent, compared to 15 percent or more in other cities.

Choosing a second-tier destination not only means that event hosts can keep their costs down, but it also allows them to afford luxuries without breaking the bank.

Karen McGrath, managing director at U.K.-based Eventure, says she recently organized a sales and team-building event at a second-tier destination and received much higher quality at a fraction of the cost she'd have experienced in a city such as London.

"Because you can reduce your costs, you can afford little gems that create a wow factor," McGrath said.

Companies, for example, can afford to rent out nearby castles for events, put up attendees in meticulously kept boutique hotels and shuttle them to nearby forests or beaches without wasting too much money or time.

Better Service
Whether they decide to splurge on luxuries or stick with the basics, many meeting planners say second-tier destinations frequently offer better customer service. Maybe that's because residents in smaller cities are just naturally less harried or because they're grateful to get business from visitors. And even when a smaller city doesn't have particularly stellar customer service, at least event organizers and attendees don't have to wait in line for every meal and ride.

"When you come to Salt Lake City, you're a big fish in a little pond," said Scott Beck, president and CEO of Visit Salt Lake, the city's CVB. "You can book a whole restaurant near the convention center, and when you get into a taxi the cabbie knows which conference you're with. Those are the kinds of experiences that make visitors feel welcome."

The fact that second-tier destinations are less harried, less crowded, with—let's face it—fewer attractions, actually means that everyone can focus on the job at hand. Event organizers can focus on getting the small details right without worrying about getting kicked off a waiting list. Event attendees, meanwhile, can find a special spot for lunch and get back in time for the 3 p.m. session, without getting lost or stuck at Saks on the way.

Smaller cities also offer more opportunities for networking.

"I've been to small locations where you run into colleagues as you're walking down the street, and suddenly you're a larger group of people for dinner," said Gail Bower, an independent meeting planner and strategist and president of Bower & Co. Consulting. "That's kind of nice."

Challenges Exist
Of course, not everything about hosting an event in a second-tier destination is easy. Accessibility is perhaps the biggest challenge. Unless a city has a large, busy airport, attendees may balk at the cost, effort or time needed for transportation. Representatives from CVBs in small cities often like to list the cities that offer direct connections into their airport, but that only serves as a reminder that travelers from many other cities require a layover.

Accessibility is not only a problem for people, but also products and equipment that must make it to a location. AsMA's Sventek points out that the exhibit materials at the Anchorage conference trade show—including oversized panels—had to be shipped in by air.

In addition, some destinations may be popularly considered second-tier because they are actually second-rate. Bower points out that some cities simply have nothing to offer, especially if they have been built up specifically to serve business travelers, as opposed to serve an established local community. In such cases, no amount of marketing from the CVB will cushion participants' disappointment when they get off the train. She recalls attending a conference at a small town in Maryland that was made up of meeting venues, drab hotels and chain restaurants.

"A place like that is very convenient and maybe cheap, but it's not that interesting," she said. "It makes you not want to leave your hotel at all." One+
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