by Sarah J.F. Braley | March 01, 2015

On March 1, 2013, when the U.S. Congress failed to agree on budget compromises that would have avoided sequestration -- $1.2 trillion in spending cuts over the next nine years, with $85 billion in automatic cuts to occur by the end of the year -- government meetings canceled in droves. With corporate meetings business still lagging from a limp economy, it was a deep blow to the conference center market.

At the Airlie, a 154-room facility in Warrenton, Va., "We started to make a strategic paradigm shift," says Carol Smith, director of sales and marketing. "When government meetings were cut back, we realized if we didn't look at different ways to present our product, we would be lagging. We looked for ways to keep heads in beds."

Leisure business was welcome -- to an extent. For properties like the Airlie to be certified by the International Association of Conference Centres, they must comply with an extensive Quality Assurance Checklist. At the top of that list: The facility must earn at least 60 percent of its revenue from meetings.  

Today, says Smith, "Any conference center that didn't attempt to make a diversification in their revenues -- if they were solely dependent on conferences -- is now lagging behind the rest of the hospitality industry."

Here's how many conference centers weathered some rough years and positioned themselves for better times.

Making some strategic moves
A number of smart owners took the opportunity to make improvements during the downturn. "This was the time to reinvest and put money back into our properties," says Alex Cabañas, president and CEO of The Woodlands, Texas-based Benchmark Hospitality. Among Benchmark's 14 IACC properties are the 500-room Bonaventure Resort &  Spa in Weston, Fla., host of this year's IACC Americas Annual Conference; the 156-room Chaminade Resort & Spa in Santa Cruz, Calif.; and the 295-room Eaglewood Resort & Spa in Itasca, Ill., which currently is undergoing a $4.8 million guest-room renovation.

At the 254-room Skamania Lodge in Stevenson, Wash., a Destination Hotels property, sprucing up meant upgrading technology and more. "We just bought 300 new ergonomic chairs," says Todd Gillespie, director of sales and marketing, "and every piece of our A/V equipment is new. We went from showing presentations on standard screens to 70-inch smart-screen TVs."


Salespeople at Virginia's Airlie
center looked closer to home when
D.C. meetings went south.

Many centers reached out to the leisure market to fill their rooms. "We have always had a strong wedding market here simply due to our setting, with formal gardens, but we made it more of a wedding-destination location," says Smith of the Airlie center. "That was strategic on our part, for sure."

Pursuing leisure was a solid strategy for Skamania, too. "In the past three years, we've grown leisure by at least 1,000 room nights each year, and grown our average daily rate this way by $10," says Gillespie. "This is significant growth in a sector that conference centers often have overlooked over the years. Now that the group market is returning, our goals with leisure business are to fill up our weekends. This wasn't as important several years ago."

Destination Hotels also has an eye trained on leisure, notes André Fournier, executive vice president of sales and marketing, who says the company will begin "softening" its conference center offerings with wellness elements. "We don't send those travelers down the road anymore," Fournier adds. "We'll shut down the Scottsdale Conference Resort next July and August to fix the pool area, the athletic facilities. We're going to make the place more wellness-oriented, which can help the traveler today to be more balanced."

Dolce Hotels & Resorts is looking to help guests juggle their work and leisure, as well. "We are piloting a program in one of our centers, and our intent would be to roll it out to all of them," says Barry Goldstein, chief revenue officer for Dolce Hotels and Resorts, which has 10 IACC centers and six more with IACC-certified meeting space. "We're putting in a yoga studio, a light area for some spa treatments, so when you're on-site, you do have a place to cleanse your brain."