June auto show forecast: Slow Jan., busy summer

Breana Noble
The Detroit News
Detroit Mayor Mike Duggan walks past a Ford race car driver made out of Legos at the Ford display during a behind-the-scenes tour as construction continues on the North American International Auto Show at Cobo Center in Detroit on January 7, 2019.

Detroit — Business is slow at the Caucus Club in the week following New Year’s Day.

Last year, it was one of the historic restaurant's worst. A week later, the North American International Auto Show at Cobo Center helped the restaurant beat its previous best week by 30 percent.

"When the press comes to town, it's a complete reversal," said George Sboukis, who in 2017 reopened the club on Congress Street a couple of blocks from Cobo. "It couldn't be more extreme. It was gigantic. It kind of carries the month of January."

Not for long. Facing declining participation by carmakers — only one European brand, Volkswagen, will be present this year — the Detroit auto show will end a 30-year January tradition. It will skip January 2020 and move to June with a more consumer-focused show. While it still will be based at Cobo, events and exhibits will spill into Hart Plaza, Campus Martius and other locations.

With the change in dates, some local businesses expect a far slower winter, and a busy summer season that will be even more hectic.

A block from Cobo on West Larned, the District Bar and Grill typically sees business increase at least 70 percent during the auto show, said Kelly Pendleton, the restaurant's manager.

But already, it’s expecting less. In previous years, the restaurant catered events for Mercedes-Benz, which pulled out of the Detroit show.

Pendleton is looking forward to a June event. "I think that there will be more activity during than in the cold winter months," she said. "The patio would get a lot more action.”

Sandy Baruah, CEO of the Detroit Regional Chamber, sees the change as an opportunity to show off the city and its resurgence.

"More people will be engaged with hands-on demonstrations, rides and drives and autonomous testing in a real-world environment," he said. "The opportunities are so much more robust with a show that includes outdoor events.”

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New opportunities

Claude Molinari, Cobo general manager, said it has been fortunate that the center's most profitable show took place in January, a month that is historically slow in the convention and trade show industry. The Detroit auto show represents more than 40 percent of Cobo's annual revenue.

"The North American International Auto Show's move to June certainly complicates the event schedule at Cobo Center,"  he said in an emailed statement to The Detroit News. "...We are working very hard to manage our event calendar for April and May, which were already busy, and will now be 'jam-packed.'"

Several major associations, Molinari said, had been negotiating for June in future years, though that is no longer an option. Two shows, however, have been scheduled to different months.

Over the past several years, Cobo was a part of city-wide conventions in June for the Service Employees International Union and the National Letter Carriers Union. Chinese retail e-commerce conglomerate Alibaba Group Holding Limited was in town in 2017.

The availability in January does open new opportunities: At least one longtime tenant is relocating to January 2020, and the authority booked another consumer show that could become an annual event, Molinari said. The group is speaking with another major convention that has never considered Detroit before because of the auto show.

Michael O'Callaghan, chief operating officer of the Detroit Metro Convention & Visitors Center, said the organization is working aggressively to offer January dates. The move also frees up space in December when automakers traditionally have set up stands.

"There are meetings and conventions that in some cases are specific to technology and manufacturing that Detroit could be very attractive to," O'Callaghan said. "We're sending a great deal of our efforts in that direction. Fraternal and education meetings provide opportunity, as well."

The new June dates will bring more people downtown during an already busy season, O'Callaghan said. Hotel occupancy during that month is in the mid-70 percent range.

"They'll look forward to additional hotel occupancy in the month of June," he said. "The opportunity for us to market Michigan and Detroit in one of the best times of the year really is favorable."

O'Callaghan said smaller stands and outdoor options will be less expensive for carmakers. And that could be attractive to some who've quit the show.

"The fact that the expense to the auto company to build out a display will go down," he said, "and there will be a lot of things with outdoor venues, it makes it a lot more attractive to the European auto companies."

Looking to June

Some businesses have high expectations for a June show.

Herasanna Richards, director of the Detroit Restaurant & Lodging Association, said a June auto show would provide more opportunities for local businesses to offer creative menu styles, different seating setups and auto show pop-up stores.

“The better weather will allow people to be able to get out and go exploring, and that will trickle down to restaurants and businesses,” she said. “That’s a huge opportunity.”

Dennis Archer Jr., son of the former Detroit mayor, owns Central Kitchen + Bar at Campus Martius. Archer has hosted the annual Detroit Glamour party with BMW following the auto show’s Charity Preview gala. With the German carmaker a no-show this year, Archer has teamed with the LaFontaine family car dealerships to hold the event.

Business does slow around Jan. 2 at Central Kitchen + Bar, he said, and the auto show provided steady business. But the Motown Winter Blast and other activities in the park have boosted business up to 30 percent.

Archer said the move to June won’t bring a significant uptick, because many summer nights, especially Fridays and Saturdays, Central Kitchen already is at capacity.

“At the end of the day,” Archer said, “a healthy vibrant downtown Detroit is better for everybody.”

One restaurant already is planning for June 2020: AKtakeaway on West Jefferson plans to pull employees from its Anita's Kitchen locations in Metro Detroit to meet the expected higher demand.

The Caucus Club has some concerns about the move to summer because it features a heavier menu and doesn’t have outdoor seating. But owner Sboukis hopes the move is successful.

“We hope the move means growth and more participation from the industry and not less, otherwise it wouldn’t be worth it from our perspective,” he said.  “A high-profile show like that with international attention is a natural magnet for the downtown area to just strive. We hope it’s a smart move.”