Is the Price Right?

Meetings & Conventions: Is the Price Right? - April 1998 Current Issue
April 1998
Is the Price Right?

Demystifying Conference Center Packaging


Hotel prices are up and meeting budgets, in many cases, are down. The mantra among meeting planners is "do more with less." Are conference centers the answer?

These facilities, purpose-built for small to mid-size meetings, aim to create an ideal learning environment often with some leisure component thrown in. But at a median price of $255 a head for a complete meeting package (CMP) at resort conference centers in 1996, the daily rate can be intimidating to the uninitiated (see chart). And most facilities are loathe to "unbundle" the package price to show those more accustomed to Æ la carte pricing where those dollars are going.

Just what are you getting for your money? And is it worth it? We asked conference center executives and meeting planners to answer these and other common questions about the mysteries of conference center pricing and negotiations.

What's included? The CMP generally includes meeting rooms, sleeping rooms, all meals, continuous (and often copious) food-and-beverage breaks, gratuities and basic audiovisual. In some urban centers, sleeping rooms and dinner are not included, and users pay a day rate. Some groups have a mix of overnight attendees and day visitors, for which centers will offer both the CMP and day rate. (Expect to pay extra for alcoholic beverages.)

But that's not all there is to it. The CMP is somewhat of a misnomer, believes Dennis Layer, vice president of sales and marketing for Benchmark Hospitality, the conference center management company based in The Woodlands, Texas. "I don't think it ever was a complete meeting package, and it probably is less so now." Variables that will add to the price might include off-site dinners or private dining, additional A/V or other services.

UNWRAPPING THE PACKAGE Here's how conference centers internally allocated CMP dollars in 1996 (based on median price per attendee). Executive Conference Centers1 Corporate Conference Centers2 Resort Conference Centers3 College/University Conference Centers4 Rooms $133 $91 $150 $93 Food and Beverage $56 $44 $58 $49 Conference Services $19 $43 $21 $20 Total CMP $209 $170 $255 $163

Source: International Association of Conference Centers and PKF Consulting 1 Target mid- and upper-level management meetings; 2 Target low- and mid-level employee training and other meetings; 3 Offer extensive recreational amenities; 4 Located on college or university campuses

Can I get a price breakdown? "Unbundling is usually a topic of conversation with someone who's not familiar with the conference center concept," says Ron Naples, a conference center consultant based in Rutherford, N.J. Most centers refuse to provide breakdowns that show what portion of the price goes to rooms, food and beverage, A/V or other services. Once the contract is signed, however, they may be more likely to dissect the numbers.

For Jerry Schmidt, CMP, of the W.K. Kellogg Foundation, cost breakdowns are a necessity.Many of his meeting attendees are grant winners who pay for their own lodging, while the foundation pays the remainder of their meeting expenses. "Unbundling becomes the difficulty. Some places resist it; others easily accommodate us," says Schmidt, director, meetings, travel and facilities for the Battle Creek, Mich.-based organization.

Of course, planners are always free to "unbundle" on their own. At McKinsey &Company, a management consulting firm, "We break the CMP down internally," says Tony Pastor, CMP, New York City-based site and contract specialist. "We make our best guess; for tax reasons, that has to be done. The government treats expenses for foods differently, so I can't list the whole CMP for training."

Can I negotiate? Good luck. Conference centers have traditionally resisted negotiating on price, and that stance seems to have become more implacable in recent years. "There was a time when you would peg a price one way expecting that you were going to sell it lower than that, much like you would sell a car," says Jo Ann Swahn, senior vice president of marketing for Dolce International, the Montvale, N.J.-based conference center management firm. "We really don't adhere to that kind of pricing at all. Conference centers have always tried not to get into the rate wars, because you don't win that way; it's going to have to come out of the product or service in some form."

You can, however, negotiate for more products or services. Rather than saying, "Ican't pay $300," a savvy planner might ask, "How do I get more value for $300?" says Naples. "Some may not need all of the technology, but would love to have a welcome reception."

In short, "One size does not fit all," says Joan Eisenstodt, president of Joan Eisenstodt Associates in Washington, D.C. An independent planner and longtime conference center user, Eisenstodt finds centers to be more flexible than ever in piecing together packages that meet the individual client's needs.

What else can I ask for? Ask for what you need. "I define my own CMP," says Tony Pastor. Items on his wish list vary, but generally include extra A/V, such as roll-play and videotaping equipment, and in some cases complimentary fax and photocopying services, extra breakout rooms and private dining sans surcharge.

Do Ineed all that food? With three all-you-can-eat meals and hefty, nonstop snacks, most conference centers could go head-to-head with major cruise lines in the gluttony department. "Some clients say, 'Geez, you have an awful lot of food here,' but I think the critical thing is to provide a variety of food that meets individual needs," says John Potterton, CMP, co-owner of Conference Center Concepts, LLC, a Chicago-based consulting firm. Most centers will provide some healthy choices, but there will still be people who "just like a good old doughnut," says Potterton, who also serves as director of business development for Summit Executive Center, a nonresidential conference center in Chicago.

And, be careful in assuming you know your group's eating patterns. In Potterton's experience, high-level executives generally eat lighter than middle- and lower-management types. Why? The top executives are used to attending meetings and having a lavish spread in front of them. They tend to favor good, hot coffee at breakfast and a simple sandwich or salad at lunch. "For the others," he adds, "it's like a kid in a candy store."

What if I go off-site for dinner? Generally, you'll get a food-and-beverage credit, which is essentially a deduction from the CMP for that day. Or, to make your job easier, say you'll pay the whole CMP, but you want to go to the restaurant down the street for dinner and have the bill go directly to the facility, suggests Naples. "Many conference centers will do that for you they will actually make the arrangements," he says. If it's a luxury restaurant, he adds, you may need to pay a surcharge on the CMP.

What's "basic" A/V? This is a real hot button. In short, the standard package doesn't generally include what today's groups need. A center should be able to provide whatever technology you need even if it's rented from an outside supplier but expect to pay extra.

"What was standard six or seven years ago is different now, because technology is changing so fast," says Kellogg's Schmidt. "I think the conference center industry ought to look at that more carefully. When's the last time you used a 35 millimeter projector?"

In fact, conference centers are looking closely at the A/V issue. Topping planners' A/V wish lists are LCD projectors. But, while they're in great demand, adding them to the package is not necessarily the answer for conference centers. "Those are two very different machines with two very different price breaks," says Summit's Potterton. Not only are they costly, but rapidly changing technology could render today's models quickly obsolete. And, if centers do make the investment and include LCD projectors in the CMP, that could up the price, even for groups that have no need for them or prefer to bring their own.

Dolce International has stopped using the term "A/V" altogether at least with respect to the CMP. The rate includes "learning tools," says Swahn. The basic tools consist of a meeting room with flip charts, TV and VCR, pads, pencils, water, candies and a slide projector (for those who want one).

LCD projectors are in such high demand that properties were renting them and passing on the exorbitant fees, Swahn admits. To ease the blow, Dolce recently forged an alliance with a manufacturer of LCD projectors, and is now able to lease the latest units at a more reasonable cost, she says.

DAY TRIPPERS Median day package rates per attendee in 1996: Type of CenterDay Rate Executive $67.50 Corporate $40.00 Resort $65.00 College/University $46.00

Source: International Association of Conference Centers and PKF Consulting

Is it worth it? Those unfamiliar with the conference center concept might balk at the price. To put it in perspective, add up what you'd pay to hold the same event at a hotel, including meeting room, A/V, breaks and meals.

"If they're priced correctly, conference centers are probably unbeatable," insists Naples. "For a company that really needs the technology conference centers offer, the CMPis the best deal on earth." while you may pay extra for some equipment, at a hotel not even the basics are included. By the same token, a group that just needs a room with a flip chart and some coffee would be better off at a hotel.

And, consider the benefits of one-stop shopping. "Time is money, and if someone can save time in the planning process, then that is value," says Naples. "I've had customers tell me, 'I would pay anything per person if it made my life easier.'"

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