Bookings are up considerably over 2014 at the Edith Macy Conference Center (pictured) in Briarcliff Manor, N.Y.
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."
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."
IACC's Road Show
When CEO Mark Cooper took over as the top staff person at the International Association of Conference Centres in October 2012, one of his goals was to showcase the IACC brand at industry shows to remind the meetings community about this family of purpose-built conference venues.
"Last year, we were at AIBTM, the MPI World Education Congress and at IMEX," Cooper notes. This year, he plans to be at Meeting Professionals International's WEC this August in San Francisco, IMEX America in Las Vegas in October and possibly IBTM America in June, as well as international events like IMEX in Frankfurt.
While educating the planner is the key reason to be at the shows, Cooper also uses the platform to announce initiatives such as the conference center management certification program at New York University that was launched last October, and the focus this year on the group's new facility search platform, IACCmeetings.com
The package vs. á la carte
One of the main distinctions between a true conference center and a hotel is pricing. The Quality Assurance Checklist for IACC members specifies that residential facilities must "offer and actively promote a package plan that includes conference rooms, guest rooms, three meals, continuous refreshment service, conference services and conference technology."
For the uninitiated planner, this can be confusing when comparing a hotel room rate of $129 a night to a conference center's complete meeting package (or CMP) rate of $350. But when the bill comes, the conference center's is simple, without any add-ons.
In the past, conference centers held tight to the CMP philosophy and refused to unbundle prices, but sales teams have become much more flexible in recent times.
"There's always going to be explanations on the package selling," says Fournier of Destination Hotels. "When customers go through a Cvent and they see a package price of $499, nine times out of 10 you don't get a chance to explain." To combat this, Destinations' salespeople are trained so their response to requests for proposal explains effectively what the price is, or starts with an á la carte price to get in the game and then sells the customer on the CMP.
Now, some hotels are testing package pricing. For instance, in February, the JW Marriott Denver Cherry Creek rolled out an all-inclusive rate called the 150 Clayton Lane Meeting Bundle. "The days where conference centers were competing against conference centers are gone," says Goldstein of Dolce.
Yet Fournier argues that hotels don't understand how the concept really works: "Their DNA is not configured for efficient meetings. Take our continuous coffee breaks: They don't understand how to make that work efficiently. On a scale of one to five, they're probably a two."
Seasoned salespeople handle the CMP explanations with ease. "Our team is very good about walking the client through the comparison of rates and additional charges to help the client see the big picture," says David Vogt, general manager of the 58-room Edith Macy Conference Center in Briarcliff Manor, N.Y., a Benchmark Hospitality property. "It really goes back to taking the position of being a consultant to each potential client and offering them our help so that they can make an informed decision."
Catching up to hotels
Fortunately for the hospitality industry, group bookings across the board are on the rise. "Group demand is roaring back," noted Jan Freitag, senior vice president of strategic development for Nashville-based STR, in M&C's "Forecast 2015" (December 2014, mcmag.com/forecast15). That momentum allowed conference centers to see a bit of an uptick last year, as well as to enjoy the first flush of optimism this year.
"We're very bullish on 2015," says Skamania's Gillespie. "We entered the year up about 2,000 room nights over last year. The corporate meetings market -- health care, technology -- has been particularly strong."
At Dolce Hotels and Resorts, "We saw growth in occupancy and, for the first time, growth in rate last year," says Goldstein. "We are starting to see hiring coming back, which is leading to a lot of onboarding programs and training programs. We actually think we'll see 4 to 5 percent growth as we move through the rest of the year."
Spending is on the rise, too. "Our repeat clients are starting to increase their total spend for the first time in years," notes the Edith Macy Center's Vogt. "We also are seeing past clients returning after years of no activity."
Having meetings as the core business of the property makes selling to the meeting planner easier. "We are finding more often than not that people who go elsewhere based on pricing come right back," says Benchmark's Cabañas. "Maybe a hotel renovated its meeting space, but they don't understand running the meeting well, and the planner comes right back. That validates even more how we do what we do. You can't fake it."