Hotels, Buyers Increase Conference Center Service Focus

A number of hotels are converting existing meeting space into ancillary conference centers and competing with traditional centers on their own turf, as buyers, accustomed to centers' promotion of the importance of a dedicated environment and packaged, per-attendee pricing, begin to demand similar services from hotels.

"The customer becomes more demanding and more educated on what they should expect from a meeting environment," said Chuck Ocheltree, chief development officer of EMCVenues Consulting Solutions. "They're really looking for a hotelier to step up and say they know all the things that go into delivering an excellent meeting, not just the tables and chairs but the importance of having that meeting room on a 24-hour basis, or having a staffed business center."

Complete meeting package pricing, a standard of the conference center industry that has softened among leading industry vendors during the past year, remains the top source of confusion among meeting buyers, he said. However, as the industry educates buyers of its value, hotels now have begun to offer packaged pricing for meetings.

"Any place where there's a high concentration of conference centers, the hotels have all been asked by the meeting planner to build a package," Ocheltree said. "Maybe it's just a day-meeting package where they package the lunch, the meeting space, the audiovisual equipment and the coffee breaks, but they are packaging much more."

The market is moving beyond defining a conference center by the tables and chairs it provides to a definition of services and deliverables, he said.

Membership in the International Association of Conference Centers is open to any property that adheres to the criteria set forth by the organization. Ocheltree said many of his hotel clients seek IACC accreditation. In the past, corporate groups were used to fill in for slowing transient and leisure business at hotels, but now chains understand the market more fully and the revenue generated from meetings and events, he said.

"One reason that hotels are still interested in creating an ancillary conference center or creating a conference space within their hotel is because it really shows a commitment to that market segment. It really says to the meeting customer: 'We understand your business and we're making commitments to not only show that we understand it but to deliver the best meeting experience possible,' " he said.

The Wyndham Miami Airport Hotel, an EMCVenues client, is finishing a three-month, $3.4 million construction project that converted hotel meeting space into a dedicated conference center.

"It fits well with the way the economic patterns are starting to take," said general manager Selim Soliman. As the national economy rebounds, companies are growing, hiring more people and rolling out new strategies, he said, making conference centers a booming business.

Having a conference center benefits the hotel not only by attracting more business, but also in upkeep of equipment that could be overused in multi-purpose rooms, said Soliman.

"The space is protected. It lasts much longer," he said, noting all furniture and amenities are designed with keeping attendees comfortable and focused. "It's a huge selling point. Imagine being in a meeting room for eight hours—you want to be comfortable," he said. Before beginning construction, Soliman formed a focus group of meeting planners to discuss the development. The center also will seek IACC accreditation, he said.

Soliman said the hotel offers CMP pricing just as a standalone conference center would. The packaged pricing yields significant savings for buyers over traditional hotel meeting space, but the arrangement yields strong revenues for the hotel as well, he said.

"If we do one thing only, and one thing well, then we get better at it and we get more efficient at it," he said. With the conference center, the hotel can serve several groups with fewer staff, he said, and there is less waste in food and beverages.

Traditional conference center companies also have adjusted their sales pitches to corporate meeting buyers in the past year. Some companies have softened CMP pricing for new customers and launched aggressive marketing campaigns. Competition from hotels is a concern, said executives.

Jeff Weggeman, vice president of sales and marketing for Aramark Harrison Lodging, said meeting buyers choose hotels over conference centers because they think of traditional centers as isolated, stodgy and inflexible. AHL is working to disprove those myths, he said.

"There are shoulder periods and slower periods where if we are trying to gain another 5 percent to 7 percent occupancy brandwide, we can bring hotel meeting users in and speak their language in terms of pricing. Then, when they come in, we convert them," he said, adding that buyers are often surprised on how adjustable packages are, with credits for offsite meals and creativity in menu options.

Weggeman, who also has served as co-chair of the IACC marketing committee and on the board of directors, said more buyers are taking meetings to conference centers this year.

"Speaking on behalf of IACC, I can say our business as an aggregate is growing year over year," Weggeman said. "As much as we think they're playing in our game, their overlord, if you will, is transient business. We are seeing more ancillary conference centers, for a very small, specific segment of the inventory of the hotels." There is "no doubt" that hotels are seeing the value in dedicated meeting space, AHL's Weggeman said, but hotels' economic driver is guest rooms, not meeting space.

"The hotels have yet to get to any of the standards we have in terms of criteria for conference centers," he said.

Some corporations also have opted to open their own conference centers, saying it protects them from fluctuating market rates and availability.

Educational Testing Service, based in Princeton, N.J., uses Aramark Harrison Lodging to manage its Chauncey Conference Center facility, located on company property, said Pamela Wynne, manager of corporate meeting planning, etiquette and protocol consultant. ETS does 30 percent to 40 percent of its meetings at the facility but is happy to offer space to other companies, she said.

"That number is actually going down, which is great," Wynne said. "The more external business that we can put there, the higher ETS revenue is."

According to ETS policy, employees of the nonprofit educational testing and measurement firm are required to place Princeton-area meetings at the center unless the property is unavailable. In April 2005, zoning restrictions on the conference center were lifted, allowing the company to offer space to leisure groups and other companies.

"We're running the gamut from social functions to corporate meetings to sales training; we've had a couple of charitable functions there," Wynne said. "It's a revenue source for ETS." However, non-corporate business is to "fill in the holes," she said, and leisure business usually is placed on weekends or evenings.

The intent of the center was to provide ETS with a dedicated meeting location, Wynne said, but after years of trying to manage it internally, the company decided to outsource.

"Our core competency at ETS is not running a conference center," she said. "Financially, it was a great decision for us."

The two companies jointly invest in capital improvements. ETS also has preferred rates at another nearby AHL property through the agreement. Another benefit of the arrangement is that AHL can leverage greater buying power with vendors needed by the center, Wynne said.

"They can bulk buy a lot of things we wouldn't be able to," she said. "We benefit from some relationships with their partners."

Wynne said she prefers the dedicated environment of conference centers to hotel space. "You know at a conference center, there's going to be dedicated space and dedicated staff to serve your needs," she said.

As for ancillary conference centers owned by hotels, Wynne said they often are adequate for her needs, but there are benefits to a standalone center.

"It's the planner's responsibility to determine that if your executives need to be sequestered for three days, you need to be at a standalone conference center," she said.

International law firm Dewey Ballantine LLP completed a renovation of its onsite conference center late last year, doubling the amount of meeting space available, creating new resources for the in-house, full-service catering and foodservice staff and allowing events of up to 200 attendees to be held at the firm's New York office. The center is managed internally, and the firm has foregone seeking IACC accreditation.

"We were looking to better utilize the space and add flexibility. We wanted to give people more options," said senior administrative services manager Susan Tobin.

The conference center has 20 conference rooms, six breakout rooms, a cafeteria and coffee bar, a master audiovisual control room and two prep kitchens for the catering staff. The renovation project began in July 2004.

Conference center manager Mary O'Sullivan said she usually doubles the number of expected meetings per day to accommodate the flood of last-minute meeting requests she receives. Some requests come as late as one hour before a meeting, she said.

The company also has made the conference center available for client use, including groups for which the firm does pro bono work.

"It was a privacy and service issue," Tobin said. "If you can entertain someone in your own home rather than take them outside, then it's better."