An Unconventional Centre

Perth Convention and Exhibition Centre

Dean Lee challenges the perception that the Western Australia capital Perth is isolated. The Chief Executive of Perth Convention and Exhibition Centre, Dean says, “Historically it’s always been classified as such, but as Australia enters the Asian century we are particularly well placed – the closest Western city to Southeast Asia – so from a proximity point of view we are a very attractive destination.” And as the increasing importance of the Indian Ocean rim emerges we will see it taking an even stronger position during the coming century. It’s an opportunity, not a problem, says Dean. “Don’t forget a third of the world’s population lives in the same time zone as Perth.”

The city also has no trouble promoting itself to the resources sector, either nationally or internationally, says Dean. The majority of business comes from the national market but Perth does have strengths which are significant enough to attract conferences from abroad too – principally in the medical, biotech and resources sectors. However, “we face the same challenges as anyone else trying to attract business in international markets with the strong Aussie dollar and, compounding that, the additional travel and land costs of Western Australia.”

Perth Convention and Exhibition Centre competes with other Australian venues to some extent. “I would characterise the relationships within Australia as ‘co-opetition’ as opposed to direct competition.” That’s not just a cute marketing term – Dean means that many of the conference organisers, especially the associations and not-for-profit organisations that need to reach their members throughout the country, are on a geographical rotation that will see their (typically annual) conference move from state to state and capital to capital on a more or less regular basis and Perth takes its turn in that listing every few years.

That said, Perth does face some challenges in hosting visitors to WA, and “that’s something where we are seeking to provide some relief in conjunction with the Perth Convention Bureau” (of which PCEC is a member, as are all the other venues in the state, and all are presented to potential clients as a choice by the bureau whose job is to entice people to the city). PCEC is one of the newest venues, having opened in 2004, but all of its competitors in the country are going through major expansions. “That places significant challenges on us to be able to offer the latest, especially in technology,” a key area where clients seek the latest and greatest.

Unlike other states, WA has a unique model in that this is a privately owned convention centre and is operated exclusively by Spotless Facility Services, a well-known provider of integrated services. The state is in the position where it receives many of the benefits with none of the risk and is currently disengaged from funding and supporting the development of competitive facilities. Most convention centres (globally, not just in Oz) are built and operated by the state; PCEC is private and, “we had the opportunity to consider who would be best placed to take most advantage of our products – catering space and related services. So we have looked at the WA market as a strong source of business; our plenary hall, which was built with the primary aim of holding conferences, is now used more than 25 times a year as a live performing arts venue. We do a lot of corporate events. We host weddings and a lot of social and celebratory events, which has diversified our revenue stream and business volumes without conflicting with our ability to benefit the state by attracting national and international business.”

However, PCEC is fortunate in sharing its location in the WA capital with the headquarters of many major resources corporations, so there is a lot of corporate business coming through the centre every week. In terms of income, the overall balance is split around 50-50 between WA and national/international. Dean admits that when PCEC opened, it initially followed the conventional state-owned model and found it was not a good way to make money. Profit derived directly from the convention centre is rarely a motive for the state-owned model which, using public funds, is set up more as a conduit for money to flow through the other facilities in a destination that would benefit from the events (hotels, restaurants, etc).

Today the centre is “choosy about what business we take to ensure it benefits the bottom line.” Now PCEC and Spotless have become what Dean describes as “the only entity in this region which has resolved a profitable ownership and operational model for a convention centre, and I think that is remarkable.” PCEC receives no funding from government but “gives the government and our community what it needs as well as producing a return for Spotless and its shareholders.”

PCEC is the only purpose built convention centre in the state, and the largest. Unlike some other states, “we do face competition from a very credible operator in the form of what has until now been called Burswood Casino. But we see ourselves as being in different sectors.” Clients interested in offering incentive or reward-type events will be naturally attracted towards something like a casino as an entertainment-oriented destination, Dean explains. Those who see their event as rather more ‘serious’ – or who need to comply with internal ethical standards, for example – may choose to distance themselves from that sort of venue and choose a dedicated convention facility. In any case, for smaller events there are plenty of choices including most of the major hotels, but for an event larger than the critical size of around 450 attendees, the options drop away sharply. Above a thousand guests PCEC becomes the only game in town if you don’t want to share with a casino.

While the venue is undoubtedly capable of hosting important conventions with style (for example last summer’s CHOGM meeting with the Queen as chief guest) Dean says it is a challenge to develop Perth into a destination that would enable him to bring some major global events (he cited a recent world oil and gas show in Kuala Lumpur) to the centre. However, he sees the well-publicised ‘shortage of accommodation’ rather differently than many in the travel and tourism industry. The timeframe for organisations booking events can be five years ahead of the date and “as CHOGM demonstrated, if you can book far enough in advance there is no shortage of hotel rooms,” although there may still be the question of the cost of those rooms and Dean acknowledges such events will displace other business from the accommodation (for example, companies generally postponed any meetings for the duration of CHOGM). Anyone wanting to put on an event with a week’s notice, however, may not be able to find rooms – it’s a matter of thinking well ahead. Event organisers who rely on selling as many registrations as possible (as opposed to associations which can rely on a regular membership clientele) are likely to find it significantly harder to arrange sufficient accommodation at present in Perth. “The cost aspect is affecting us, which is obviously related to the supply and demand issue.”

Dean is understandably guarded about forthcoming projects that may alleviate the ‘bottleneck’ although he cites a number of developments in Perth now starting or being assessed (not only the Waterfront) worth a total of some nine billion dollars, where “many players are looking at opportunities for developing hotels.” He points out that the events industry provides diversification and a revenue-stream confidence boost for financiers who may be shy of investing in hotel projects they think may have limited profitability after the construction phase of the resources ‘boom’ has levelled off. Several potential sites are currently under consideration for projects that would add significantly to CBD Perth’s stock of hotel rooms – one of them, says Dean, within the Waterfront development that abuts PCEC and another close by.

Dean is confident that PCEC and the authorities can maintain Perth’s reputation as a destination. He says there is a “well-founded” general sense of optimism about the way forward and doubts there would be any boom-and-bust scenario, “as long as the city takes care to capture value during this boom time and invests in improving the city and its appeal. Otherwise there would be challenges for us in the longer term in winning national and international business.”

PCEC will play its part too, and Dean and his team are looking at ways to improve and expand facilities in a way that will best meet the needs of the future – and looking long-term, because the really big global events tend to be booked at least eight years ahead of time, requires a highly-polished crystal ball. Dean says he would welcome the WA state government taking a more active role, especially in the area of investing in the bricks and mortar to provide the facilities that PCEC would then manage to the optimum benefit of the city and the state.

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 19, 2018, 9:24 AM AEDT