Managing Meetings At: Pfizer -- A Prescription For Conferencing

<B> Managing Meetings At: Pfizer -- A Prescription For Conferencing</B>

By Mary Ann McNulty

In a deal closely watched for its size as well as innovation, Pfizer Inc., New York, last month agreed to lease 110,000 square feet of meeting space and fill at least 33,000 room nights a year in a brand new facility that Doral Hotels & Resorts will build at its Arrowwood Conference Center in Rye Brook, N.Y. The new facility will be for Pfizer's exclusive use and will be built to Pfizer's specifications. The 15-year deal could well exceed $200 million, making it one of the most lucrative in the conference center industry.

For its part, Pfizer will get $18 million worth of economic development incentives offered by the Empire State Development Corp., Westchester County Partnership for Economic Development, county executives and the Town of Rye Brook. Pfizer executives considered 18 potential sites in the New York metro area before narrowing the list to four, including at least one in New Jersey. The tax, energy and other economic incentives offered Pfizer were intensified as a result of the two states' ongoing battles for economic developments.

Doral intends to break ground for the new Pfizer Learning and Development Center and 100-room addition to its 274-room property in September, with completion in January 2000, said Bruce Blum, president of Doral Hotels & Resorts in New York. The $35 million expansion will include 73,000 square feet of conference space and 37,000 square feet of offices to house Pfizer's 130-person training staff. Currently, Doral has 30,000 square feet of meeting space.

Pfizer's training staff is conducting a "very intensive review" of industry best practices and even visiting Silicon Valley firms to identify state-of-the-art technologies it may want to include in the building. The facilities will have a broadcast studio, teleconferencing and computer-based learning.

For Pfizer, this deal is intended to help it consolidate worldwide training for its sales force, management and executives in a location close to the company's Manhattan headquarters. With sales rising to more than $12.2 billion in 1997 and projections of 20 percent annual increases over the next five years, Pfizer needed more space. Pfizer is famous in the pharmaceutical industry for the training it puts into its sales force, Dunphy said, and it is not uncommon for sales reps to undergo three or four weeks of initial training and other sessions lasting as long as two weeks.

Besides the hot new drug Viagra, designed to cure male impotence, Pfizer is expected to launch several other new products in coming years--and each will require sales force training. Pfizer's deal with Doral allows the company to boost its annual room nights to 66,000, if necessary.

In an attempt to meet the need for facilities, Pfizer executives last year signed a three-year deal with Doral to consolidate a substantial portion of its business at Arrowwood. Then, they began seeking a facility to meet its long-term needs. The company hired real estate firm Cushman & Wakefield to find the space. "This transaction gave Pfizer the flexibility to expand and contract its annual room block commitment in accordance with its needs," said Charles Borrok, vice chairman of Cushman & Wakefield.

Pfizer travel manager Phil Dunphy said the company opted to lease a facility built to fit its needs rather than build its own after reviewing the experiences of other large companies, including Xerox and IBM, which struggled with what to do with their facilities when training needs declined. The long-term lease of a built-to-suit facility appeared to be a best of both worlds, Dunphy said.

It also appears to be the start of a new trend for companies and conference centers. The hotel industry's rising occupancies and rates are forcing many companies out of the urban centers for training, Blum said, while others see their training budgets rising substantially and are looking for longer term solutions to their space woes. Other companies besides Pfizer have approached Doral about similar deals, he said.

Meanwhile, Benchmark Hospitality told Meetings Today it's working with Applied Materials to develop a "global university." And Shell Oil and BellSouth have signed similar contracts in the past few years, noted a spokesman for the International Association of Conference Centers in St. Louis.

Insiders said few companies in history have committed as much money as Pfizer for a training facility they don't own. Still, many said that outsourcing to a professional conference center manager is the right idea. "Some companies opt to build their own facilities, yet they don't understand the service end of conference centers and how to handle corporate culture," said John Potterton, director of business development for Conference Center Concepts, a consulting firm in Chicago that also owns and manages The Summit. Some make mistakes in designing facilities or in servicing them. "It all gets too close to home. Hiring a professional to run a facility is easier."

For Doral, the deal represents guaranteed volume for at least one-third of its rooms each year for the next 15 years. "Even at a negotiated rate, it sounds like Doral has some opportunities to do things they've never done before," Potterton said.

Doral has long planned to expand the Arrowwood facility. In fact, it won approval to expand from local authorities in 1990.