Conf. Ctr. Use Disappointing

Despite the efforts of the conference center industry to position their properties as finely attuned to the technological and budgetary needs of the corporate meeting industry, only slightly more than half of companies use them, according to a Meetings Monitor survey.

The verdict was better on the structure of conference centers' complete meeting packages, a per-attendee, per-night pricing program that encompasses all services and amenities that some hotels have aped as a method of attracting new meeting business (see story, this page). According to the Monitor survey of 132 corporate meeting buyers, 57 percent feel the CMP is an effective manner of negotiating services, while only 24 percent feel it's not. The rest had no opinion.

That said, only 53 percent of respondents—oddly, fewer than said the CMP was an effective package—indicated that their corporations hold meetings at conference centers.

The news comes as conference centers, similar to most industry suppliers, scramble to fill their space. "We're finding conference centers, like all properties, becoming more flexible to get you to book," said Bill Mattes, manager of travel and meeting services at Insurance Services Office Inc. of Jersey City, N.J. "There's more negotiating and more alternatives. They may throw in a free reception, work something out regarding breaks or book one free room for every 40 booked instead of every 50 booked."

"The whole market is down and there's been a decline in corporate meetings business," said Jack Kealey, senior vice president of operations at Beverly Hills, Calif.-based Harrison Conference Centers. "Hi-tech, banking and finance industry meetings have all fallen off, so we have to go back to our bread and butter, which is pharmaceutical and training meetings. Training meetings account for more than half of our business."

Despite the falloff from Harrison's existing clients, Kealey said the chain is attracting new customers—particularly those booking short-term meetings—mostly as a result of the chain's own sales efforts.

"We've had to go out and find new business," Kealey said. "We see some of the volume picking up in the fourth quarter, but who knows if that will hold. However, we are booking meetings to be held in the same month at an unheard of rate. We're used to the definition of 'short-term meeting' to be one held within 90 days of booking, but we're seeing a sharp increase in those that are held 30 to 45 days out."

Kealey attributed the rise in short-term bookings to the need of corporations to ensure that a particular meeting will not be canceled after it's booked, delaying booking time. "In the first quarter, there was a wave of cancellations for meetings that were to be held this year, but that seems over," said Jack Schmidt, vice president of sales and marketing for The Woodlands, Texas-based Benchmark Hospitality. "We think by 2002 bookings will start to track closer to what they were in 2000."

Schmidt said the conference center industry tends to benefit in general from corporate upheaval, as mergers, acquisitions, reorganizations and strategy changes often create the need for corporate training meetings, a key base of business for Benchmark and its rivals.

"But we have to be flexible now, though cautious not to give everything away," Schmidt said. "That begins the downward spiral, and while it could benefit buyers in the short term, it would benefit nobody in the long term."

The structure of the CMP, a somewhat fluid entity based on the amount of services and amenities a given conference center chooses to envelop into its purview, is handled differently by the chains as they react to the softer market. Harrison has wrapped more amenities into its CMPs, but Benchmark hasn't changed anything associated with theirs.

"We have been incorporating more into the CMP at the request of our clients for much of the year, particularly banquet functions," Kealey said. "Clients have expressed interest in holding more activities and extracurricular events onsite, in part because they're booking shorter stays." As such, he said, some buyers seek to wrap all such activities into the package.

Benchmark, meanwhile, opts to keep its structure intact despite the volatile market. "We have not changed the CMP at all," Schmidt said. "It is a valid concept accepted for many years. We haven't changed it and we have no plans to."

"We've always had one of the broadest CMPs, including LCD projectors and an array of guest services, and though that hasn't changed, we have looked at pricing," said Andy MacLellan, vice chairman and COO of Dolce International of Montvale, N.J. "We're flexible."

MacLellan said business this year has been "spotty," though strong in Europe, where Dolce has expanded its reach during the past few years. "We have been fortunate enough to rebook cancellations, though," he said.

While the CMP draws high marks from buyers based on the pre-event cost certainty it offers, without added fees tacked onto the bill, some dissatisfaction exists with conference centers' proclivity to add extensive food and beverage services to the CMP.

"We'll use them, particularly for events that have audiovisual needs past audiovisual or LCD projectors," said Michael Patton, who is senior event manager at Santa Clara, Calif.-based Nth Degree.

Patton, who said his usage of conference centers has remained steady of late, doesn't object to the CMP-style of pricing as long as the package doesn't include unnecessary frills or meals.

"I'm cool with it, as long as it's nothing beyond the basics," Patton said. "If the package drives value, it's great, but a lot of times it includes breakfast, then a break, then lunch. That may drive up banquet revenue, but it's not helpful to travelers, because they don't need that much food. If I can get a nutritionally sound package, not just a continuous feeding cycle, then it's good."

"There is the possibility of overpaying, and it's because of the food and beverage," ISO's Mattes said. "If you manage F&B properly, you can be able to pay less for attendees' food. But there is something to be said for the CMP and getting all your costs upfront."