PKF Consulting, in conjunction with the International Association of Conference Centers (IACC), has recently completed the 2001 edition of Trends in the Conference Center Industry – North America.  This 53-page report presents a wide variety of operating and financial statistics, as well as commentary on critical current issues.  This year’s edition features a special analysis on E-Procurement within the conference center industry.

Resilient Growth

The continued growth and maturation of the conference center industry is tremendous to observe and be a part of.  We have been pleasantly surprised at how resilient most open-market conference centers have been in the face of the downturn that began in the second half of 2000. (Remember the “New Economy”?)

The following table lists the average daily rate and occupancy for the various types of conference centers in 2000.
 

Our previous experience with economic slowdowns has shown that conference centers tend to be less affected than commercial hotels, and this apparently is still true.  Meetings still occur, but the subjects change from longer-term forward planning to short-term issues.  Also, for competitive reasons, corporate training must continue, regardless of economic conditions.  This steadying influence on occupancies is helpful in our high-fixed-cost business.

The following table lists the sources of demand for North American conference centers in 2000.
 

PKF’s forecast for 2001 from our Research Group is encouraging, in that the rate of growth in revenues may be reduced, but steady overall performance is still expected. Those capital sources who are worried about a slowing in the industry must remember that the profitability of the 1996 to 2000 period was virtually unprecedented.  A return to more historically normal levels of growth and profitability is still a desirable state of affairs.

The following table lists the average financial performance of the various types of conference centers in 2000.
 

Shorter Lead Times

As a result of our market research for various projects over the past year, we have noticed that meeting planners increasingly report that the availability of meeting dates at their desired times is becoming a primary determinant for site selection.  Apparently, as booking lead times have continued to shrink to as short as 30 days, planners in high-demand regions tell us that they are having to settle for their second or third choices.  This may be an unforeseen effect of the relative lack of new conference center construction over the past few years, as overall demand has continued to grow, and the availability of meeting dates has become less flexible.
 
Future Challenges

Three challenges lie ahead for conference centers in 2001.

• Recruiting personnel who can deliver the service level expected in an IACC conference center.
• Developing marketing techniques that validate the benefits of a true conference center.
• Recapturing investments in and delivering technological support to our increasingly sophisticated customers.

To purchase a copy of the 2001 edition of Trends in the Conference Center Industry – North America, please email rmandel@pkfc.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.