Dolce Int'l Expanding European Presence

<B>Dolce Int'l Expanding European Presence</B>

By Chris Davis

Conference center chain Dolce International has secured $100 million from financier George Soros' investment company as part of a $250 million mission to significantly expand the chain's reach in the United States and Europe. Other leading chains have some expansion plans of their own and express little concern that any potential economic downturn will scuttle conference center demand.

Dolce's partnership with New York-based Soros Real Estate Investors C.V. calls for the capital to be infused during the next three years, as Dolce seeks to develop eight to 10 European conference centers in gateway cities.

"We're looking at a few in London, Amsterdam, Frankfurt, Paris, Barcelona, Milan, Madrid and Rome," said Dolce chairman and chief executive Andrew Dolce. "We will use a chunk of the money and, with other investment capital, look at five or six more in the United States over the next two years. We'll look to partner with co-investment, which is a little different strategy than in Europe."

Montvale, N.J.-based Dolce currently owns four properties in England, France and the Netherlands, and is suitably convinced that the conference center concept is attractive to European corporate meeting buyers to significantly expand the company's supply.

"All four are doing extremely well, which speaks well of the concept," Dolce said. "We feel there will be the same type of demand throughout Europe. With all of Soros' investment knowledge and skills, they did a very thorough market study and feel it's a great investment."

With several leading economic indicators signifying that the domestic economy is not expanding at the rate it has during the past few years, it may seem a dangerous time to significantly expand, but Dolce dismissed such notions.

"That will have no effect on our investment strategy," Dolce said. "I've seen downturns in history, and while the nature of the corporate meeting business changes--companies tend to keep their meetings more regional, for example--we can ride out any blip. There will be more price competition, and while many corporations will look to cut costs, they still need to get people together and some even meet more. Everything is so diversified that we do not depend on any one industry, be it pharmaceutical, financial or technological."

Jack Schmidt, vice president of sales and marketing for Benchmark Hospitality of The Woodlands, Texas, agreed. The chain is expanding to Chattanooga , Tenn., in the spring and Weston, W.Va., next year. "We're not projecting less success in terms of room nights or revenue this year, and last year was the best year we've ever had," Schmidt said. "Things may flatten off a bit, and business travel may take a nick, but not yet. It won't head south, but business will change. Corporations still will meet but for different reasons. They'll need to address other issues, like reengineering or downsizing, and they'll meet to do that."

Despite the possibility for a slower year, and the decidedly short-term nature of conference center business, Schmidt believes conference center chains will have less leverage in pricing in the near future.

"Our competition will set the tone, but we'll be less bold and aggressive in pricing strategies," Schmidt said. "Short-term business drives us nuts. It's spontaneous, small and can't get any more short-term than it already has. We may see booking windows increase slightly because it can't go the other way."

Benchmark is undergoing further changes in addition to its new acquisitions, with the goal of becoming more of a true chain and less of a collection of owned or managed properties, Schmidt said.

Benchmark is installing Newmarket International's Delphi property management software in all its conference centers to allow all centers to access a single database of bookings and reservations. The chain also has retrained its sales staff to communicate faster and more efficiently with prospective and existing corporate customers.

"The industry has learned much more about how corporate planners want to be prospected and communicated with, and it's conquering speed and reliability issues regarding the Internet that allow centralized solutions," Schmidt said.

Beverly Hills-based Harrison Conference Centers, swallowed up by Hilton Hotels Corp. in its acquisition of Promus Hotels Corp. in 1999, is also in the process of extending its reach, allaying concerns that its new corporate parent would not seek to do so.

Harrison has properties in Richmond and Atlanta under construction, opened a center in Gainesville, Fla., in May and is considering up to 25 new locations, said senior vice president of operations Jack Kealey.

"We're allowed to operate as an affiliated company, with all the advantages of chain ownership, not the least of which is their sales force," Kealey said. "Hilton has looked to growth and attached the resources needed to do that."

While Harrison isn't panicking at the thought of economic trouble either, Kealey has observed a few signs that corporate concern over such has affected their meetings travel.

"We're seeing more evening sessions and shorter trips, more three-and-a-half day events instead of five," Kealey said. "The bulk of our business is Fortune 1000 companies and we haven't seen any dramatic turndown from them. But there has been some postponement of meetings as some companies decide they're not ready to launch new products or commence large training programs, but I'm not even sure that's tied into the economy.