Lansdowne Resort is managed
by Benchmark Hospitality
but owned by a real-estate
investment trust, a new twist
in conference center relationships
Has the time come to
rethink what a conference center is and does? Some industry
insiders say yes, and the resultant changes could shake up this
hitherto quiet corner of the meetings industry.
The definition of such a facility as
promulgated by the International Association of Conference Centers
has been relatively consistent since the organization’s inception
in the early 1980s. Ideal for smaller meetings and long-term
training, these properties tend to be purpose-built, using St.
Louis-based IACC’s high-quality specifications, called the
Universal Criteria (see “Gold Standards”), that mold not just the
meeting space, but the catering, technology offerings and even the
guest rooms.
Traditionally, conference centers
certified by IACC belonged to one of two categories: residential,
with an average of about 150 to 200 guest rooms, and nonresidential
day centers offering meeting space only. Conference rooms, services
and guest rooms were sold with an all-inclusive rate called the
complete meetings package (which still is the norm, although some
centers occasionally will break down the pricing).
However, several recent trends are
challenging that focus, causing longtime proponents of the IACC
concept to reconsider what the conference center of the future will
look like.
“Capital funds have bought [many of the
centers], so they’re now owned by pools of other people’s money,”
says Dave Arnold, CEO East of PKF Consulting in Philadelphia and an
industry adviser to the IACC board of directors. “These centers are
being urged to go after as much nonconference business as they can
to fill in the gaps. If we lose focus on the group business, we
lose our advantage and become indistinguishable from hotel meeting
space.”
Combining this trend with the rising
popularity of the ancillary conference center -- IACC-approved
meeting space connected to a hotel whose guest rooms have not been
certified by the association -- might dilute the IACC concept of
offering the ideal place to have a meeting, adds Arnold. “If it’s
not the best place to have a meeting,” he says, “lots of things are
at risk: the image, the complete meetings package. That concept
does not work for the hotel world but is very necessary for
conference centers.”
Owners are heard
While many IACC properties are branded
or managed by companies such as Aramark Harrison Lodging, Benchmark
Hospitality, Destination Hotels & Resorts, Dolce International
and Sodexho Conferencing, an increasing scenario has equity owners
in the background quietly pushing for return on their
investment.
Based on his own research, Arnold
contends groups such as real-estate investment trusts, which have
been putting large amounts of money into the conference center
segment, view the properties as profit centers that must produce
more quickly than might have been expected by previous owners, who
were more invested in the IACC concept itself.
But others in the industry don’t see
the issue in such shades. “I don’t know of two financial
institutions or groups that we deal with who have the same profile
for what their returns are,” says Burt Cabanas, chairman/CEO of The
Woodlands, Texas-based Benchmark Hospitality. “If you make money
within reason, you will get capital that can support you.”
Even though Benchmark has opened some
properties in the past two years that were strictly hotels, Cabanas
says he has no plans to abandon the conference center concept
around which the company has grown for more than 25 years.
“We want to continue to be a big boat
in a small lake,” he says. “If we had to choose between creating a
full-service conference center or a luxury hotel, we would do the
center. We have built them, we have taken them over, we have found
them in disarray and fixed them.”
Also sticking with what has made him
successful is Andy Dolce of Dolce International. “We’re experts in
the meetings business, and we like to perceive ourselves as a
leader,” says the chairman and CEO of the Montvale, N.J.-based
company. “We don’t want to abandon that.”
Still, Dolce acknowledges his company
has to answer to a variety of investors in the 23 properties that
make up the Dolce portfolio. “The dilemma is, if you’re an
operating company and you want to grow in the open market, you’re
going to have to have really good friends in the private equity
business,” he says. “But those investors understand very clearly
that if they don’t reinvest capital, they won’t get the price they
want when they’re ready to sell.”
GOLD STANDARDS
Every member property approved by the St. Louis-based International Association of Conference Centers has to meet a rigid set of criteria. Here are just a few of those standards; the rest can be viewed at
www.iaccglobal.org.
* A minimum of 60 percent of the revenue from guest rooms, meeting space, F&B, A/V and conference services must be conference-related.
* The center must offer and promote a package plan (the complete meetings package, or CMP) that includes conference rooms, guest rooms, three meals, continuous refreshment service, conference services and basic conference technology.
* Dedicated conference rooms are separated from living and leisure areas.
* At least 60 percent of all meeting space can be set up using ergonomically designed chairs that have arms, swivel and tilt synchronously, and that allow height adjustment. (Chair seats have minimum-width and minimum-depth specifications, as well.)
* Acoustical rating for sound transmission through all walls of dedicated conference rooms meets or exceeds 50-60 NIC (Noise Isolation Class) for all fixed walls and 45-50 NIC for all operable walls.
* The conference center provides dining facilities designed to accommodate conference groups on a flexible meeting schedule (at the convenience of the group).
* Continuous refreshment service is available outside of meeting rooms. -- S.B.
All the bells:
IACC has approved
the ancillary center at
the Hotel Orrington
in Evanston, Ill.
Never say never
Those in the conference center
community are a bit more split on the subject of ancillary centers.
For several years, these products have been the fastest-growing
segment of IACC, but industrywide support has been slow to
come.
“I fought this concept when I was on
the board,” says Dolce. “But the fact is, it is there, it’s
growing, and the current [IACC] administration has embraced
it.”
Now, instead of fighting, Dolce is
developing new, branded ancillary centers. One of his investors,
AEW Capital Management, has purchased the Radisson hotel in
Bedford, Mass., and hired Dolce to manage the property, which will
be reflagged as a Doubletree once renovations are complete. “We’re
creating about 25,000 square feet of new meeting space that will be
branded a Dolce conference center,” says Dolce. “I think it will
all be finished by spring 2008.”
Some voices, however, caution against
embracing just any property calling itself a conference center. “We
have to make sure we have strict standards and that the players
plan on being in this game for a long time,” says Jeff Weggeman,
vice president of sales and marketing for Philadelphia-based
Aramark Harrison Lodging and an IACC board member.
Cabaas of Benchmark comments, “The
up-and-coming ancillary center is something you can plug into a
hotel operation, sort of like a Glade deodorizer, and have it
enhance the living environment that already existed. The best way
the conference center concept works is when it is all under one
management and one control, all parts being united to service the
client.”
He acknowledges, however, that the
final judgment will be made by the meeting planner. “If we find
that there is an economic benefit to creating an ancillary center
as part of a project we’re doing, where the property would clearly
not qualify to be an IACC center on the whole, I would consider it
as an economic appendage,” says Cabanas.
Executives at Destination Hotels &
Resorts, which manages six full-service IACC properties, have no
plans of joining this trend. “We’ve been able to prove we can
develop or manage technically proficient conference center
destinations across the country,” says Mark Hickey, senior vice
president of U.S. hospitality operations for the Englewood,
Colo.-based company. “We appeal to different market segments
without losing the edge of what a conference center is all
about.”
IACC’s president for North America,
Neil Pompan, CMP, predicts the controversy surrounding the
ancillary segment will fade within a few years. “The way I see it,
every IACC center provides one thing that’s the same: a fantastic
meeting experience,” says Pompan, whose day job is COO and CFO of
EMCVenues, a conference center sales and marketing firm based in
Annapolis, Md. “However, you can get that at a resort, in an office
building that has an urban conference center with no sleeping rooms
or at an ancillary center.”
Marketing
opportunities
The challenge to conference center
owners and managers always has been communicating to the meeting
planner the differences between an IACC-accredited property and a
run-of-the-mill hotel. That task is heightened by these subtle
shifts in the conference center universe -- only now the management
companies have to educate their owners, as well.
“There isn’t a lot you can do about
these trends except try to sensitize the institutional owners,”
says PKF’s Arnold. “Focused members of IACC should look at this as
an opportunity to increase their position within the group market
by saying, ‘We’re still the real thing.’ ”
IN THE WORKS
The world of conference
centers continues to grow, some of it internationally.
For instance, Benchmark Hospitality has
opened an office for Central and South America in Santiago, Chile.
“We believe that by March we will have three of six [projects]
under contract for construction or conversion to conference centers
on the level of what we have here in the States,” said chairman
Burt Cabanas in January.
Following are some more immediate
projects and their timelines.
Ashman Court
Midland, Mich.
This 131-room Dolce International
property is being renovated, to be completed in July 2008. Total
meeting space is 14,000 square feet.
Aspen Meadows
Aspen, Colo.
A 22,000-square-foot conference center
opens this month at Aspen Meadows, which features 98 guest rooms
currently undergoing a complete renovation.
Bedford Springs Resort
Bedford, Pa.
More than $100 million is being spent
to restore this 210-room historic hotel and its Donald Ross golf
course. Set to reopen in May, the property will offer 19,000 square
feet of meeting space.
Hamilton Park
Florham Park, N.J.
By the end of April, this 219-room
Destination Hotels & Resorts property will have a new fitness
center, lobby bar and library. Some of the 27,000 square feet of
meeting space also is being upgraded.
The Heldrich
New Brunswick, N.J.
Benchmark Hospitality opens this
248-room conference center this month, with 25,000 square feet of
meeting space.
La Hulpe Brussels
Brussels, Belgium
Opened in February was Dolce
International’s newest European destination, a 264-room property
with 43,000 square feet of conference space.
Lakeway Resort and Spa
Austin, Texas
Dolce is just completing upgrades to
the resort’s 168 guest rooms and the addition of a new
5,200-square-foot ballroom for a total of 24,000 square feet of
meeting space.
Landsdowne Resort
Leesburg, Va.
A Greg Norman short course opens in May
to accompany the 18-hole golf course that opened in 2005 at this
305-room Benchmark property. The Spa Minerale opened last April.
Landsdowne has 45,000 square feet of meeting space.
Rizzo National Conference
Center
Chapel Hill, N.C.
The room count at this Aramark Harrison
Lodging property was doubled to 120 to take advantage of its 20,000
square feet of conference space.