Corporate-Owned Conf. Centers Find A Ready Market

Corporate-owned executive conference centers, such as those operated by Whirlpool and Chase Manhattan Bank, are doing a booming business these days with occupancies of up to 65 percent or more.

A poll of International Association of Conference Centers corporate-owned members finds new movement to welcome other companies' meetings into their facilities. Of the 15 residential corporate facilities in the survey, eight have recently decided to let in outsiders.

The survey also shows these centers average 30,000 square feet in size and occupancies of 60 percent.

Geoff Lawson, the IACC member who spearheaded the survey, noted that centers are doing well whether or not they open their doors to outsiders.

The other findings included:

* There is little uniformity in conference center operations or with respect to how they are financed. Members differ in terms of how--and if--they are subsidized by their corporate parents, and whether they opt to use professional management companies.

* Different conference centers measure occupancy differently, meaning that general occupancy trends and figures can only be approximated.

* Corporate facilities that do open their doors to guests do so on a very selective basis. Generating revenue is not a priority, and few if any corporations wish to invest in a collections department or have the responsibility of dealing with receivables on a large scale.

* 65 percent of the non-residential centers surveyed have laptop and dataport capabilities as well as personal computers, suggesting that computer training is frequently handled at these facilities.

Lawson, the general manager of the Bank of Montreal Institute for Higher Learning, initiated the survey two years ago at IACC's spring meeting, when a need to benchmark prompted him to search out information about occupancies and standard operating procedures in the corporate conference center market.

"I realized that there wasn't much data available," he said. "When I arrived at the Colorado meeting in 1995, I started to ask around to see who would be interested in sharing trade secrets."

Five meeting attendees banded together to develop the survey, which assessed all of IACC's member properties. Surveys were sent out last fall, and responses were tallied in January. Of the 49 surveys sent, 24 were returned.

Among the factors prompting new activity in the corporate sector, Lawson said, "is a movement in our companies to work collaboratively and inventively. Management movements such as total quality management and excellence benchmarking are spurring education and training. As the demand for such services increases, occupancies should continue to rise as well."

Lawson said it is premature to say whether such a push in demand would translate into new building starts among the corporate sector. Nonetheless, many parts of the country are starting to feel a need for facilities. Mike Illson, vice president and general manager of Chase MetroTech Conference Center in Brooklyn, N.Y., said that at his firm's "open door" facility in Manhattan's Wall Street area, "we're seeing more business in the last three years than we have in previous year.s."

A systems engineer by training, Illson applied the IACC uniform system of occupancy accounting for a precise measure. "If we have 30 seats in a room, that room isn't 100 percent occupied unless 30 people fill those seats," Illson said. "In other facilities, I've seen measurements where if one person occupies the room, they consider it 100 percent occupied." By his measure, the facility had an occupancy of 98 percent.

He attributed an improvement in the overall business environment and the shortage of dedicated conference space that is peculiar to the New York metro area as driving the current occupancy spree.

Doug Weier, vice president of office services and purchasing for Viacom, agreed that the situation is more acute in major urban centers in general and in New York City in particular. After Viacom--whose divisions include MTV Networks, Simon and Schuster and Prentice Hall--sold the office building that housed its conference facility, the company was in a crunch.

"The problem is we are not a static business," Weier said. "We make and break reservations on short notice. The cancellation fees and penalties can be steep."

A new dedicated facility goes back on line late in 1998. Viacom will outsource management of the facility.

Gordon Gregory, general manager of the Brandywine Creek-Whirlpool Performance Center in Covert, Mich., said his facility is doing a healthy internal business. Whirlpool's philosophy is that the facility ought to remain dedicated to its own personnel. "We think that if you're going to invest money in a training facility, you should keep it available for your own employees so that meetings can be set with limited lead times and the operation can run with fewer glitches.