The Big Sit-Down

As a meeting planner, you can appre- ciate how difficult it is to get three industry bigwigs together at one time to engage in frank discussion -- especially when the three are direct competitors. But we managed to coax a trio of heavyweights from the conference center business: Andy Dolce, chairman/CEO of Dolce International Conference Destinat-ions; Sam Haigh, COO of Benchmark Hospitality; and Rory Loberg, executive vice president of Aramark Harrison Lodging -- to come together to answer our questions and respond to each other's opinions.

The three men oversee companies that manage more than 90 private and public conference centers in North America alone, and several more throughout Europe and Asia. From their lofty perches, here's how they see the state of meetings today.

SM: After two years of both fewer events and slashed budgets for the programs that remain, how has the conference center business fared compared to hotels? Are there any segments of the meetings business that are still strong for you?

Dolce: The big drop in corporate travel means that more hotels have thrown themselves big time into the conference business with reduced rates. But management training and education is one area they haven't been able to take from us. We are picking up executive training meetings right now as strongly as we did in 1999 and 2000.

Loberg: The first half of 2003 looks pretty solid for us. We are seeing some switches in the industries that are using our facilities more often or less often, but the industries that have always been with us -- pharmaceutical, finance, accounting -- are still as strong as they ever were. I am seeing, though, that all meetings are more short-term in their planning.

Haigh: We gained market share back from hotels as 2002 went along, and besides our core customers, we are seeing defense contractors and other military- and security-related business come to us more often. And pharmaceutical meetings continue to perform quite consistently.

SM: Is there something about today's climate that favors conference centers?

Loberg: Definitely. With most meetings, I think it's more fiscally responsible and it's more justifiable to come to a conference center than to go to a four-star or five-diamond property.

Haigh: There's a big concern in corporations about the perceptions of the meetings they're having. You can't really take a meeting to an exotic location right now, and that bodes well for conference centers. Also, more programs are ending on a Saturday or beginning Sunday night, because companies say the biggest cost associated with a meeting is not anything in the event budget, but the cost of taking people out of the field.

SM: Is there pressure to lower rates on the complete meeting package (CMP), or to alter what meeting elements it includes?

Dolce: In the U.S., we have not had to unbundle the package, but in Europe, we've had to create a modified CMP -- create a day package offering meeting space and breakfast, and that seems to go very well. We are feeling resistance there regarding the value of the CMP.

Haigh: Rates have been depressed across the board; we can't get rate gains like we saw two years ago. And as we attract new segments to our facilities that aren't traditional buyers of the CMP, we deal with groups for whom the CMP model doesn't fit as well.

SM: So do you need to educate planners better on the CMP?

Loberg: The sophisticated planner understands not only the pricing advantage but the service benefits associated with conference centers. Lately, we've had some hotels try to penetrate our markets with a 150-dollar-a-night type of offer, a one-off discount that does take a meeting or two from us on occasion. But we are not seeing a downturn in our core business at all because of that. Experienced people know the difference.

SM: Are you looking to expand your brands in this climate, or is it a matter of simply keeping your existing properties healthy until things turn around?

Haigh: The major focus is keeping the existing properties healthy, even in good times. But with that said, we've added more properties to the fold in the past two years than during any similar time in our history. In these tough times, facility owners are looking for management companies that are strong on the marketing side; they see we are performing admirably with our portfolio, and they want to be part of that.

As for existing properties staying healthy, we realize that there is also a segment of our customer base that doesn't see us as a conference center at all. The local crowd knows about our restaurants and sports pubs, while others see us as a resort for a weekend getaway. And if they come experience a property that way and are responsible for meetings decisions in their company, then all the better.

Loberg: We've had a great expansion year, adding four properties since the end of September alone, and the plan is to continue to grow at a double-digit rate. The merger with Harrison has helped us dramatically with a presence in the marketplace.

Dolce: We added five properties in the last calendar year, and will add four more this year. But while we do want to grow, we do definitely look to maintain the quality of our existing assets, and make sure we provide the same level of service.

SM: So what is your immediate sales strategy? Where are there segments to be tapped?

Dolce: We are looking for what we call internal growth, meaning we want to get more meetings from throughout an existing client's organization, in addition to external growth, which is getting totally new business. Remember, conference centers still have only 10 percent of the total meetings market, so there are still lots of meetings going to hotels and resorts that we can bid for.

Loberg: We've tried to stay very close to our core customer throughout the downturn, and we've actually added salespeople during the last year to strengthen our national sales structure. I think if you stay close to your customers during bad times, they will stay with you during the good times. We've also tried to penetrate our existing base deeper, and get a series of meetings versus one meeting at a time from a client. We also ask planners to give internal referrals that we can follow up on.

SM: What do the next 18 months look like for meetings?

Loberg: We're very optimistic. We had a much better start compared to last year, and the economy seems like it's in a better place than it was 12 months ago.

Haigh: We've been trying for the past two years to ferret out new areas for business, and I think many of them will come to fruition in 2003. We made headway with some association business and regional, non-traditional conference center business. We also expect that 2003 will be a gradual road back for traditional corporate spending on conferences. Some companies are gearing up for an economic rebound and thus are putting more money into executive-level programs. There is pent up demand, as evidenced by our advance- booking pace compared to last year. We anticipate that the economy will improve by the third or fourth quarter of this year. Then again, we anticipated that for the end of 2002, but it didn't happen. Hopefully, the situation is different for 2003.