Master of the House

What do Atlantic City, Charlotte, Dallas, San Jose, and Lyon, France have in common? They're all Passkey-enabled cities, which means if you're using the local convention and visitors bureau (CVB) for group housing management, it's the services of the Quincy, MA-based Internet success story that are really behind your block. And with housing departments at 50 other North American CVBs also powered by Passkey, it's highly possible that your favorite CVB housing department has a Passkey deal, whether you know it or not.

Passkey is an anomaly in the crowded and competitive field of meetings technology: The seven-year-old company enjoys an unusual level of market saturation in its niche, and unlike many tech startups of the '90s, Passkey managed to survive the Internet bust without slowing its growth. But can Passkey continue to dominate an evolving housing market while facing scrappy competitors like ITS and eMeetingsOnline? The housing game is still very much in play.

Keys to Success

Perhaps because the company was first to market back in 1996, Passkey is "far and away the dominant shareholder in electronic housing management," says Seattle-based technology expert Corbin Ball. And business is booming, because housing is an area of meeting planning that's received a lot of attention lately. "The industry's focus on attrition means that managing housing is more important than ever," says Ball. "I think most citywide events are looking to use Passkey or something like it."

Passkey was founded by two Boston entrepreneurs with backgrounds in the hospitality business: meeting planner Brian Layton and hotelier Bob Motley. Both men saw the convention industry struggling to come up with a flexible, affordable system that could bring together all the parties involved in group housing and allow planners to manage complex multiproperty housing programs with a single tool. As it turned out, their Web-based platform for doing all this was the right invention for the times, and borne along by an industry-wide trend towards automation, Passkey made early progress selling its services to CVBs, which in turn provided the system to their planner clients. By 2000, Passkey had gained a solid foothold in the marketplace, and today most major convention cities in the U.S. use Passkey as their preferred provider for housing management.

"I think early on our success was partially attributable to the fact that we were first to market," admits Passkey CEO Greg Pasik. "But we've been able to maintain leadership due to a few different factors." Some of those factors, observers say, include Passkey's single-minded focus on housing management, and the company's ability to work with nearly every registration vendor and hotel in the market.

The Passkey/CVB/planner housing process works something like this: When a planner taps a CVB to manage housing for a convention, the CVB loads the specifications of the event's room block into the Passkey database. Then, when attendees register online for the event, they're directed to the room blocks on a Passkey Web page where they enter their credit card information and reserve their rooms. All the attendees' housing information is stored with Passkey, and it's passed to the hotels just before the event begins. Although Passkey charges CVBs a licensing fee for its product as well as a small charge for each booking, the CVBs pass these costs off to hotels as booking fees, and the bureaus are able to offer the service to planners free of charge.

This model, which is probably Passkey's invention, and the company's sole focus on managing housing for multi-property events, gained it entree to a record number of CVB housing departments. "Passkey's system was focused on us," says Denver Metro CVB convention housing manager Amy Meyer, who chose Passkey in a competitive bidding process in 2001. "They asked what we needed, and they built their system around that. We fly out to their headquarters for client events every year, and the first thing they ask us is, 'What do you need?' And they put a lot of our ideas to work really quickly."

Meeting planners say they like Passkey because it allows them good access to housing data and it's portable. "The biggest value for me is the real-time reporting and reservation management," explains Rita Pierson, meetings director at the Alexandria, VA-based American Physical Therapy Association. "The planner, the housing department at the bureau, and the hotel all have the same information, so there's no bluffing. I can make changes to reservations instantaneously, and make changes to room blocks as well. I travel forty weeks out of the year, so it's important for me to be able to access information over the Internet, which Passkey allows."

Cracking the Block

Although Passkey is the giant in its field, other housing management companies have managed to survive, even thrive, in its shadow. Ironically, Passkey's strategy of sticking to housing, to the exclusion other aspects of meeting management, gave it the resources to become a leader, but left it vulnerable to competitors that provided more comprehensive programs. Chicago-based ITS, which is used by cities including Chicago, Honolulu, Philadelphia, and San Francisco, uses this weakness to its advantage.

Like Passkey, ITS offers a Web-based platform for housing management. But unlike Passkey, ITS made it a central part of its strategy to provide other services to its clients. "Passkey is a successful housing software provider -- in my opinion, the best in the business -- but we do twenty other things in addition to housing," says ITS president Ed Harris, referring to such services as event registration, promotion, and IT support.

For this reason, Harris says, ITS, which entered the market around the same time as Passkey, "coexists nicely" with its larger counterpart, even though Passkey commands a much larger chunk of the CVB market, at least as measured by the sheer number of CVBs that use its service. "We feel comfortable, because our cities are the top cities for our clients," says Harris; the latter include huge associations like the Radiological Society of North America and the American Bar Association.

Meanwhile, a new company called eMeetingsOnline, based in Fort Lauderdale, FL, is nipping at the heels of both Passkey and ITS. Both of the larger companies, which together have a near-total domination of the CVB housing market, base their services on the room-block model of event housing, where rooming lists are compiled by the housing provider and then sent to hotels. But eMeetingsOnline CEO Jack Schaufele is betting that his company's ability to provide Internet access to GDS (global distribution system) hotel inventory, a model that owes as much to Expedia or Orbitz as it does to Passkey and ITS, will win him converts.

Currently, the 18-month-old housing provider has a just single CVB signed on for its services, in Colorado Springs, CO, but more are on the way, says Schaufele, an industry veteran who years ago led the development of Event Manager, an early player in desktop-based meetings management software. "Because [Passkey and ITS] have to support their existing technology, they're ingrained in their ways," he says. "We're able to offer direct transient bookings and new technologies that leapfrog over what they're doing." In addition to GDS access, eMeetingsOnline can also provide traditional block housing, Schaufele says.

The new company has at least one fan: longtime planner Fred Hufnagel, president of Blue Ridge Management Group, an independent firm based in Warrenton, VA. Hufnagel has used eMeetingsOnline for groups of up to 2,000, and he says its direct access to hotel inventory saves a lot of headaches. "With eMeetingsOnline's GDS access, you can get immediate confirmation on housing for the registrant," he explains. "With other programs, you have to compile the booking information, then send it to the hotel, and then they enter it into their system, and then they get back to you with confirmation. Now, I can get directly to the hotel inventory." And Hufnagel is not the only one to take a chance on the new company: eMeetingsOnline will handle the housing program for Super Bowl XXXVIII, held this month in Houston, TX, a coup that could generate both positive press and word-of-mouth buzz for the new upstart.