After years of declining revenues, the conference center industry saw a financial turnaround in 2004 and several conference center management companies and the industry's organization are launching global expansion drives and tapping new markets to capitalize on the boom in demand.
Hospitality specialists PKF Hospitality Research, in the 2005 edition of Trends in the Conference Center Industry, predicted an average year-over-year increase in occupancy of 9 percent in 2005 for the conference center industry, matched by a 4 percent increase in package pricing (Meetings Today, June 6).
"We are forecasting a great year," said Barbara Rogers, director of marketing and public relations for conference center chain Dolce International. "We're seeing a lot of new customers come into the conference center sector and our facilities. We see there has definitely been an upturn in business."
Company chairman and CEO Andrew Dolce in December 2004 told Meetings Today that the company would break from industry protocol and allow new customers to opt out of complete meeting package-style pricing (Meetings Today, Dec. 6, 2004).
Rogers said the flexibility has successfully attracted new customers.
"Bringing customers in and actually having them meet with our chefs and various other people within that facility, not just the standard meeting planners, definitely helps them understand what conference centers have to offer versus hotels," she said.
Sam Haigh, Benchmark Hospitality International's recently appointed president and COO, said revenue growth this year has been strong.
"Last year was up significantly over 2003," Haigh said, adding that Benchmark shifted its mix to include greater transient and leisure business during the downturn of 2001 and 2002. Although Haigh has served as COO of Benchmark for 10 years, he took on the role of president in June.
"We repositioned our conference center properties to be more full-service hospitality operations," according to Haigh. "The face to the public is a high-end resort or hotel, and to the meeting planner we provide all the conference center benefits and advantages, including packaging the CMP."
CMP pricing benefits consumers, Haigh said, and Benchmark has no plans to discontinue the practice. "The concept that we're selling is not one that you can buy in a traditional hotel or resort," he said.
Although Benchmark has positioned its properties to attract both corporate groups and transient/leisure business since the 1990s, Haigh said the company drew heavily on individual business after the Sept. 11, 2001, terrorist attacks when conference center business "dwindled to almost nothing."
"We replaced a lot of the conference center business that went away with non-conference center business," according to Haigh. "Our long-term mission has always been to see that pendulum swing back, but we needed the market to come back. That started to happen in 2004."
According to the PKF Consulting report, U.S. conference centers increased revenue by 7.5 percent in 2004, and conference demand increased by an average of 4.3 percent, both from 2003 levels. In 2004, conference attendees represented 63.8 percent of the room nights occupied at conference centers, as opposed to transient leisure and business travelers, according to the report.
This year has seen a greater rebound, Haigh said, but industry growth has fallen a little short of expectations due to the economic impact of high oil prices.
Benchmark also will begin to expand overseas, Haigh said, and is looking for partnership opportunities. "If we're going to cross either ocean, we need to do it with a project that's large enough to sustain itself as opposed to a smaller center," he said. "We've had numerous opportunities in Europe that we've looked at."
IACC Sees Global Growth
The International Association of Conference Centers announced on June 27 the election of Philippe Attia to the association's global board of directors. Attia also is vice president of operations in Europe for Dolce International. IACC global board president Bob Johns said the board had been expanded in the hopes of strengthening and expanding the association's presence around the world. Johns also is general manager of Babson Executive Conference Center in Wellesley, Mass., an Aramark Harrison Lodging property.
"There's a lot more that IACC can do on a global basis of getting the word out about the International Association of Conference Centers and the conference center business in general," Johns said.
IACC's global growth is guided in most part by where the organization already has members, he said. Johns would like the number of international IACC members to double during the next 10 years. "Ultimately, the 10-year goal is to have more chapters," he said. "The short-term goal is to continue to promote the conference center concept throughout the world."
Another benefit to a global approach is the promotion of IACC-approved properties among U.S. companies holding meetings overseas, he said. IACC publishes a global directory of its members.
The financial rebound in the conference center industry is not limited to the United States, he said.
"We're seeing a lot of excitement in Australia," IACC's Johns said. "We're hearing pretty good things from Scandinavia, but it's certainly not back to where it could be."
The greatest strength of the IACC global board is the variety of perspectives that "come to the table" for input on industry initiatives, Johns said.
"Without question, it's a global industry," he said. "We need to understand the differences. We need to understand what these regions and cultures can get from an association membership as ours."