Meetings & Conventions: Affordable Cities - May
As rates skyrocket in the first tier, where can you meet
BY MARIA LENHARTW
elcome to the age of "anything goes" site
selection. With hotel rates averaging $191 in New York City in 1997
- and other major convention cities not far behind - many planners
are simply closed out of the traditional first-tier choices. So,
they're looking elsewhere - often with great satisfaction.
Many are finding refuge in second- and third-tier cities,
suburbs and even in small towns. Some are meeting at airports,
while others are making tracks for the border. Still another
faction is hanging tough to get the rates and dates they want in
"Things are changing so fast right now that there's no
tried-and-true formula anymore for finding good rates," says
Michael Burns, director of account management for Conferon, a
meeting planning company based in Twinsburg, Ohio. "You can't
assume all first-tier locations are the same. You need to look at
more places and keep an open mind."
For planners willing to venture beyond downtown areas in the
most popular convention cities, which frequently carry the double
whammy of also attracting strong transient business, decent rates
and space can be found in a surprising variety of locations. For
instance, hotel and convention center development trends are
changing the face of many second- and third-tier cities and making
serious meeting destinations out of suburban and airport locations.
At the same time, current economic factors are turning Canada and
Hawaii into value-priced options for meetings, even at upscale
hotels and resorts.
Traditionally eager to win the business that major convention
cities no longer seem to want, second-tier cities are sporting new
and improved meeting facilities. But with hotel rates still on the
rise in almost every U.S. city, are second-tier locations still
The answer is "yes." "Second-tier cities are getting more
business, but the price difference between first- and second-tier
cities remains," says planner Sherri Cook, president of Sherri Cook
& Associates in Plano, Texas.
If anything, the rate difference between the most expensive
convention cities and almost everywhere else seems to be widening,
according to a survey by PKF Consulting that compared 1996 and 1997
hotel rates in 42 U.S. cities. For example, the rates in New York
City, Boston and San Francisco rose more than $15 per room night
last year, compared to an average increase across all markets of
In some cases, the rate differences between first- and
second-tier cities was stark: In 1997, room rates averaged $191 in
New York City and $163 in Boston, versus $73 in San Antonio and $88
in St. Louis. In smaller cities, the gap was even more pronounced:
Average hotel rates in El Paso, Texas, and Little Rock, Ark., were
only about $50.
Cook, who rules out cities only if air service is too limited,
finds that improved hotels and convention facilities are making
second- and even third-tier cities better choices than ever. "Some
places will surprise you with what they offer," says Cook, who
recently booked a regional meeting in Shreveport, La. "We got very
affordable rates at a new, all-suite casino hotel comparable in
quality to a luxury resort in Las Vegas or Scottsdale, Ariz."
Frustrated by big-city rates and indifference, independent
planner Linda Nelson, president of Plan Ahead in Cupertino, Calif.,
has taken her quest for affordable alternatives to Tucson, Ariz.,
and Greenville, N.C. "I've had lots of luck in these places, with
plenty of hotels eager to bid for even a small meeting," she says.
"I've also been surprised by how much there is to see and do in
some of these locations. Too often as planners, we put blinders on
and automatically think of only the high-profile destinations."
Planners who want to deliver the climate, flavor and
recreational amenities of a certain region should compare rates and
availability within an area. In fact, PKF reveals some marked
differences between room rates in nearby cities. For instance,
sleeping rooms averaged $72 in Albuquerque, N.M., in 1997, compared
to $130 in Santa Fe, N.M., just 50 miles away.
For Zev Lewis, director of meetings for the American Association
for Geriatric Psychiatry in Bethesda, Md., comparison shopping for
a Florida meeting meant choosing Tampa over Orlando. "Tampa might
not have been quite the draw for attendance that Orlando is, but we
still had great weather and plenty of things to do," says Lewis.
"Plus, we saved money, and the CVB really worked hard to please
But service in smaller cities can be less than polished, Nelson
warns. "Sometimes, you have to educate the hotels about meeting
Planners also may have to more heavily market the location to
potential attendees, adds Cook. "Some of these cities are really
great, but people don't know about them. You have to step up
promotion about the attractions they have."
Moving to the 'burbs
"Don't rule out a first-tier city without checking the entire metro
region," stresses David Moulder, director of convention services
for Coopers & Lybrand in Dallas. "Ask the CVB about the
outlying hotels and meeting facilities. Don't settle for a location
where airlift could be a problem."
Both Moulder and Robert Mandelbaum, director of research for PKF
Consulting in Atlanta, note that many new properties have been
developed in outlying areas. "Suburban and airport areas are
emerging as full-fledged convention destinations," says Mandelbaum,
citing Rosemont, Ill., and Hartsfield International Airport,
outside of Atlanta. Both areas have sizeable convention centers
supported by a large hotel inventory. Moulder notes that many
suburban cities are requesting feasibility studies for convention
"Most high-tech firms are based in the suburbs," says Pat Berg,
president of Conference Resources in San Carlos, Calif. Berg's
recent meeting sites have included Elmhurst, N.Y., outside of New
York City, and Kissimmee, Fla., near Orlando. "These attendees are
used to a casual dress code. A suburban setting fits their
Airport areas can work, too, says Gary Rosenberg, executive vice
president of Rosenberg & Risinger, Inc., in Los Angeles, a
meeting planning company specializing in association business.
"L.A. and Orange County hotels didn't want to book the year 2000,
hoping to fill up with more lucrative corporate business," says
Rosenberg. He finally found a welcome mat at the Hilton &
Towers Los Angeles Airport. "We're not making any compromises on
quality - it's a beautiful hotel in a very convenient place, and
it's close to the beaches and major attractions."
Thanks to a favorable exchange rate, meeting values can be found
north of the border. Marilyn Maury, meetings manager for the
American Institute of Biological Sciences in Sterling, Va., took
her annual convention to Montreal last year and plans to return
with 4,000 delegates in 2004. "Montreal is putting forth an all-out
effort to attract meetings business, and the service we got from
the CVB was tremendous," she says.
Similarly, Lauren Kramer-Whelan, director of meeting services
for the Society of Nuclear Medicine in Reston, Va., has booked
annual conventions in Toronto in 1998, 2001 and 2005. "About
one-third of our attendees are international, and we need a
location that will be a good draw and have good airlift," she says.
"With Toronto, we're getting a first-tier location at a second-tier
With the current Asian economic crisis eroding Hawaii's strong
tourism base among Japanese visitors, increasing room availability
promises to make the state more affordable. "Now is a great time
for meeting planners to negotiate group rates," says hotel
consultant Ernest Watari, chairman of PKF Hawaii, based in
Honolulu. "There is an oversupply of hotel rooms, especially in
Waikiki, where upscale hotels are heavily dependent on Japanese
PKF Hawaii's most recent hotel survey shows that, for the first
time in 15 years, the January 1998 occupancy rate in Waikiki fell
below 80 percent. And while PKF figures show January rack rates
averaging a robust $148 statewide, another recent PKF study found
that many hotels throughout Hawaii are offering deep discounts off
their published rates. "It's not unusual to get a 50 percent
discount off rack rates," says Watari.THEY'VE GOT SPACE, BUT
AT WHAT PRICE?
The good news: Hotel
development has increased and room occupancies are opening up in
many areas. The bad news: rates keep rising anyway.
In a survey of 42 U.S. cities, PKF Consulting in Atlanta
found that 22 experienced declining occupancies in 1997. Despite
this, room rates climbed, usually above the consumer price index.
Nationwide, hotel occupancies averaged 73.6 percent in 1997, close
to the 73.4 percent total in 1996. The average room rate, however,
increased from $98.23 in 1996 to $105.76 in 1997.
Is relief in sight? Cities like Salt Lake City, Utah;
Portland, Ore.; San Antonio, Texas; and Sacramento, Calif., will
have new convention hotels up in a few years, boosting supply and -
ideally - easing rates.
Don't go near the water
if you want good hotel rates. Room rates tend to be higher in
coastal cities. PKF Consulting's 1997 survery of 42 U.S. cities
reveals that the six most expensive cities are on or near water:
Boston ($163); New York City ($191); Philadelphia ($126); San
Fransisco ($134); Washington, D.C. ($128); and Miami
Conversely, some of the lowest hotel rates are in the
South: Little Rock, Ark. ($48); El Paso, Texas ($52); Baton Rouge
($59); and Knoxville, Tenn. ($68).
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