Price Points

Meetings & Conventions: - April 2001 Current Issue
April 2001 Toby June

Price Points

What’s included in the “complete meeting package,” and is it a fair deal?

By Sarah J.F. Braley

Very rarely in the meeting world does a planner consider a room rate of $250 or $300 a “deal.” For those familiar with the CMP (as in “complete meeting package,” not the planning certification) offered by conference centers, such rates can be a steal, considering all that comes with the price.

At conference centers, the guest room rate covers just about everything, from meeting rooms, ergonomic chairs and basic A/V to three square meals, continuous coffee breaks and gratuities. The centers that offer a CMP are purpose-built facilities, designed for groups from 10 to about 300 people, where meetings account for at least 60 percent of the business.

What else makes the CMP a good buy? The average prices have been rising only about 3 or 4 percent a year, according to David Arnold, executive vice president of PKF Consulting in Philadelphia. “Boston, New York City, Washington, Chicago, San Francisco these cities have had enormous increases in hotel room rates,” he points out. “The CMP generally has not kept up with that growth. I think it’s evidence that conference centers tend to compete with each other rather than with hotels.”

History lesson
The all-in-one meeting package has been around for decades. “The first 3M meeting we placed at a conference center was in 1978,” says Sherry Richert, manager of corporate meeting management for the St. Paul, Minn., company. “I have been a believer in the CMP ever since.” Those running the centers see more and more acceptance among planners. “It’s a lot easier from a budgeting standpoint and makes the bills simpler and easier to understand,” says Toby June, general manager of the Lakeway Inn, a Dolce International conference resort in Austin, Texas. “The CMP also provides us flexibility to make the meeting experience more exciting.”

The CMP concept was institutionalized when the St. Louis-based International Association of Conference Centers was launched in 1981. Member centers now have to comply with 30 requirements set out in the organization’s Universal Criteria, including point number six: “Conference center offers and promotes a package plan that includes conference rooms, guest rooms, three meals, continuous refreshment service, conference services and basic A/V.”

“Originally, our members only needed to comply with three criteria,” says Tom Bolman, IACC’s executive vice president. “Sixty percent of their business had to be related to conferences, they had to provide a ‘total meetings environment’ and they had to be staffed with ‘professionals’ who could serve the special needs of planners and conferees.”

The association’s Universal Criteria continue to evolve. Over the past few years, IACC has recommended that centers offer one LCD projector per meeting in addition to the CMP’s mandatory overhead projectors, flip charts, 35mm slide projectors, microphones and video playback equipment. In March, the association’s board was expected to make LCDs a requirement under the technology section of the criteria. IACC also is adding wording that will require centers to have Internet access available in both meeting rooms and guest rooms.

“The criteria certainly have gotten more sophisticated,” says Bolman in explaining how IACC has worked with technicians to define such items as sound standards. The Universal Criteria states: “Ambient sound levels within all conference rooms range from 25 to 35 NC [background noise criteria] or less, and reverberation time falls between 0.8 and 1.2 seconds at midfrequencies.”

“Our biggest challenge now is to describe an ergonomic chair,” Bolman adds. “They have to have upholstery and ‘ideally’ swivel and tilt, but that’s kind of a weasel word, ‘ideally.’ That’s one of the things we still need to nail down.”

GRAPH

Haggling room
The bottom line for planners, wherever they hold a meeting, is to make sure they get what they need at the best price.

Most conference centers have done their homework, positioning their pricing within the norm for the community. “We know what planners are paying for similar meetings at hotels,” says John Potterton, director of business development for the Chicago-based firm Conference Center Concepts, which owns and operates the nonresidential Summit Executive Center. “We’re not the cheapest, but we’re not the most expensive.”

Wende Blumberg, general manager of the University of Florida Hotel and Conference Center in Gainesville and global president of IACC, describes the CMP as a package of averages. “When planners remember the number of times they’ve had to go back and add 10 gallons of coffee and add in the gratuities, we’re very competitive.”

As with hotel negotiations, planners use the first rate offered by the conference center as a jumping-off point. “It’s no different from knowing the hotel market,” adds independent planner Joan Eisenstodt, who runs Washington, D.C.-based Eisenstodt Associates. “Peak times are peak times wherever you are.” Among the line items she targets, Eisenstodt makes sure she gets a break on staff room packages for her people who arrive early or leave late, as well as on the group’s transportation to and from the airport.

Many planners ask conference centers to break down how the money is spent. For a national sales meeting taking place in May at a conference resort in Arizona, independent planner Bob Ellis, CMP, asked for the details. “The sales manager offered the spreadsheet to me,” says the president of Woodbridge, Conn.-based Ellis Associates. “He said 58 percent went to the room, 35 percent to F&B and 7 percent to A/V. For a daily rate of, say, $300, that’s $105 a day for food, which is not out of line.”

What Ellis didn’t need was all the basic A/V the meeting just uses rear-screen projection, no flip charts, overheads or VCRs. “They reduced the price of the room, and that immediately produced a $25,000 savings,” he says.

If it will help close the sale, properties usually are willing to impart how they allocate the CMP. “It might not necessarily match up with equivalent retail pricing, but we will try to tell them if it helps meet their needs,” says Shelly Tomberg, director of sales and marketing for the Bell Harbor International Conference Center in Seattle.

Bell Harbor also has gone in the other direction to meet customer demand by offering a “super-buyout” package, which includes a dedicated tech person for the day. It’s for clients who don’t want to be nickel-and-dimed as they add technology that isn’t included in the basic CMP. “It’s for planners who just don’t want to get out their calculators and go through the rigmarole,” says Tomberg.

Fred Marquez, with Wells Fargo Home Mortgage in Kennebunk, Maine, likes to know the breakdown. “If the CMP is $300 a night, I want to know where it’s all allocated,” says the sales trainer and facilitator, who helps negotiate packages for 120 to 150 training events at conference centers each year. “It’s our way to compare apples to apples without getting too detailed.”

Untying the package
Planners have long asked centers to “unbundle” the CMP remove elements they don’t need. Whether centers will comply is often a matter of semantics. Some admit they will do so, while others prefer to call it “customizing” the package.

June of Austin’s Lakeway Inn says his property will take the CMP apart piece by piece if asked, mostly because his is a resort center where groups schedule in a lot of free time and don’t necessarily need the continuous break and the meeting rooms in the afternoon. Still, about 75 percent of his groups buy the CMP. “If they’re here for true meeting purposes, it’s more beneficial for them to stick with the package,” he says.

Consultant Arnold of PKF feels asking a conference center to price each element separately undermines the concept. “If you want to unbundle, go to a hotel,” he says. “The center has all that meeting space and the F&B capabilities; if the group isn’t using them, then it is the wrong group for the property.”

Still, even experienced planners like Sherry Richert at 3M need to unbundle at times. “We negotiate a preferred property program with all different elements, and we can unbundle them if we want to,” she says.

Not everything is included in the CMP; some elements cost extra, like additional LCD panels or upgraded or themed dinners. But in the long run, the CMP makes the planning easier.

“With the short-term nature of bookings these days, we can bring in a national sales meeting and plan it in 45 days,” says Kelly Commerford, director of marketing for the Northland Inn Executive Conference Center, a Benchmark Hospitality property in Minneapolis. “Planners don’t have to pick per chicken breast. They can focus on the content of the meeting.”

TYPE CASTING
Conference centers cater to smaller groups, ranging from executive powwows to training sessions for up to 300 people. There are four types of conference centers.

Executive: These are high-end centers, usually in an urban setting, with minimal recreational facilities. A study from PKF Consulting in Philadelphia shows the median CMP rate for executive centers in 1999 was $262.

Corporate: Also high end, these centers are owned by a corporation, often for the exclusive use of its internal meetings; some, however, rent space to outside organizations. The median CMP in 1999 was a relative bargain at $178.

Resort: Here, groups work and play. These centers have extensive recreational facilities and often are in more remote areas or resort destinations. In 1999, the median CMP was the highest of all the types at $278.

College/University: Built mostly on school campuses, these centers cater more to training and employee functions rather than CEO and executive get-togethers. The 1999 median CMP was $215.

Nonresidential: “Day centers” are a subcategory of facilities with no sleeping rooms. Rates cover meals, meeting rooms, A/V and service. In 1999, the median CMP was $75 for executive, $55 for corporate, $62.50 for resort and $57 for college/university centers.

S.B.

BUYING IN BULK
For 136 days this year, about 40 UPS employees a day will be in training at several conference centers, including the Northland Inn in Minneapolis, the Emory Conference Center Hotel in Atlanta and the New England Center in Durham, N.H. Some of the sessions last 11 or 16 days.

“It becomes a partnership when you use these centers so much,” says corporate schools manager Gary Johnson from the package delivery company’s Atlanta headquarters. And Johnson expects a lot from his partners. Last year, UPS contracted with the Northland Inn for the first time, and the property confirmed the booking with a huge notebook full of details on each day’s events. The New England Center knows Johnson’s needs so well, it sent him just one piece of paper with the dates and rates. “This year, the Northland Inn got it down to four pieces of paper,” says Johnson.

It’s more cost effective for UPS to bring in its own A/V equipment, rather than to rent for so many classes, so Johnson tries to get the A/V price knocked out of the CMP. In some cases, he arranges to have the phone lines brought in on UPS’s dime, paying $30 a month for service, rather than the center’s price of $10 a day. “The centers that are flexible will get our business,” he says. “Those that are not, maybe they don’t need our business.”

S.B.