Conference Centers Eye Asia - 2008-07-21

Suppliers for years have enthusiastically discussed the notion of bringing the conference center concept to Asia, particularly to Japan, but development and implementation of the idea in the Far East lags far behind its potential.

Conference centers are a key part of the corporate meetings landscape in the United States and Europe, but Benchmark Hospitality's Tokyo Conference Center Shinagawa, which opened in 2001 in the city's Minato-ku district with 20,000 square feet of meeting space, is the only International Association of Conference Centers-certified conference facilities in all of Asia.

The Woodlands, Texas-based Benchmark's vice president of capital markets Alex Cabañas said he believes it will take 10 to 15 years for the conference center concept to get going in earnest in Asia, but Japan is ready for more supply.

"In Japan, receptiveness has been tremendous," said Cabañas. "Under our Benchmark Japan plan, announced this year, we will develop with our Japanese partners as many as four or five new conference centers in the next five years in Tokyo and Nagoya for sure, and possibly in Tokyo and Yokohama as well."

Meanwhile, Montvale, N.J.-based conference center chain Dolce International is studying China for possible openings, said chairman and CEO Andy Dolce. "We've been doing lots of research and some dialogue in China, in Shanghai, Beijing and elsewhere in the country, since September 2007 and very seriously for the last six months. As hungry as the Chinese are for management education, we see real opportunity in China because interest is high and there isn't a lot of meeting space there."

Conference centers can stimulate genuine interest and take hold in Asia in just five to 10 years, said Dolce, adding that due to the influence of multinational companies operating in Asia, not too much education about conference centers' value will be needed.

Cabañas and Dolce agreed that before anything concrete happens, connecting with local partners is key. "We need a local partner who can bring development and capital expertise to the table, and we need to be able to make multiple deals for multiple properties in a particular region," Dolce said.

Ideally, Dolce would build a four-star, 300-room conference hotel with 30,000 to 40,000 square feet of meeting space, he said. "When the opportunity is right, Broadreach, a private equity investment REIT based in Palo Alto, Calif., is prepared to invest capital," Dolce said, but added development and construction costs are rising in China, as the cost of labor has increased.

As for market sources, Dolce said, "we can't rely on the U.S. as before, and, as we learned in Europe, we need to build a regional and national base, and we'll rely on the Middle East as a feeder market."

"There' s no doubt that the volume of meetings in the U.S. has declined," said Neil Pompan, president of IACC North America. "However, conference centers typically thrive in down economies as they cater to small- and medium-sized markets."