In collaboration with the International Association of Conference Center (IACC), PKF Consulting has recently completed the 2000 edition of Trends in the Conference Center Industry.  Highlights of our analysis of this growing and dynamic niche market are presented here.

The success of most IACC-member conference centers continued in 1999, although sporadic down periods, which varied from market to market, occurred throughout the year.  In certain markets, rate gains achieved in 1998 could not be sustained where occupancy held steady.  However, this was to be expected considering that the gains over the last few years have been extraordinary.

Mixed Performance Leads To Mixed Perceptions

The decline in interest by Wall Street toward the hospitality industry has had a depressing influence on overall property valuations which, in the case of conference centers is, in our opinion, unjustified.  In general, unprecedented profitability continues at the higher-end IACC conference centers.  This should result in a more favorable view by investors and the lending community toward the industry.

The concern by capital sources toward the potential for these results to continue, coupled with a diversion of investor capital toward high technology opportunities, is creating a difficult environment for industry growth.  Our research at PKF Consulting consistently shows a supply shortage of well-located conference center venues.  The opportunity thus presented should not be overlooked by capital sources.

Study Highlights

The following paragraphs highlight selecting findings from the 2000 edition of Trends in the Conference Center Industry.
 

Technology And Meetings

The debate continues as to the effect of technology on the conference center industry.  A recent studied conducted by IACC reported that the average center spent $198,950 in new technology during 1999.

When it comes to managing technology, our survey found that only 41 percent of the conference centers surveyed have a dedicated IT Manager.  At other centers, the controller or general manager frequently has the primary responsibility of information technology/systems support.

How will technology affect the meetings business?  Our discussions with knowledgeable sources during the past year have led us to somewhat of a consensus, at least for the short term.  Corporate meetings generally have two purposes:  training and management development.  While training meetings are more adaptable to distance-learning technologies, management development (soft learning) is much more suited to a personal, interactive environment.  While fewer meetings might occur in the training sector, those that do seem to require meeting space that offers a highly productive environment, such as is found in a conference center.  The debate is likely to continue, although perhaps unnecessarily, since the size of the meetings market remains vastly in excess of the supply of conference center facilities. 

To purchase a copy of the 2000 edition of Trends in the Conference Center Industry, please visit the PKF Consulting website at www.pkfonline.com or call (215) 563-5300.

Dave Arnold is an Executive Vice President of PKF Consulting and is located in the firm’s Philadelphia office.  He also serves as Financial Consultant to the IACC Board Of Directors.