A recent study by PKF Consulting and the International Association of Conference Centers found that conference centers — training meccas for corporate America — are actually outperforming hotels in today's tight economy.
Conference centers are a specialized subsegment of the hotel industry, designed to provide meeting and lodging space in specially designed facilities devoted to meetings.
While a hotel's performance is evaluated mainly on occupancy and average rates, conference centers generally are measured on total revenue stream, including the complete meeting package, or CMP. Rates may be lower at conference centers, but the per-guest revenue often is higher and operating profits are more efficient, the report found.
For example, executive conference centers, which pump in 51 percent more revenue per available room than hotels, didn't experience much change in total revenues between 2001 and 2002. But full-service hotel revenues went down 5.3 percent in 2002. While resort conference centers declined 7.4 percent in 2002, compared to resort hotels' decline of 5.6 percent, they still outpaced hotels in revenue last year.
“Compared to hotels, conference centers have generated higher revenues and operating income on both a per-available and per-occupied-room basis,” says Dave Arnold, PKF Consulting executive vice president, who heads the company's Philadelphia office.
“Conference centers occupy a thriving market niche in the hotel industry. Their formula for success is the ability of this segment to provide a distraction-free business environment.”
The International Association of Conference Centers is a not-for-profit organization founded to promote a greater awareness and understanding of the unique features of conference centers. Its members must meet certain criteria, such as providing state-of-the-art media and telecommunications equipment and dedicated business/teaching environments. For more information, see the article on page 35 and visit www.iacconline.org.