At the Crossroads

Will an influx of ancillary facilities dilute the conference center concept?

Lansdowne Resort


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.

The ancillary center at the Hotel Orrington in Evanston, Ill.

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 ParkHamilton 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.

Dolce La Hulpe


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.