Meeting needs
The conference market was already battling against a likely downturn, but as the war against terrorism unfolds, this looks inevitable. Tessa Fox reports.
With the world still reeling from last month's terrorist attacks in the USA, it is too early to assess the impact of the atrocities on the conference business in this country.
But hoteliers, many of whom earn significant revenue from overseas conferences, particularly at this time of the year, are steeling themselves. Just days after the attack, Caterer (20 September) reported the cancellation of three conferences due to be held at Leeds Castle, Kent; and John Benson-Smith at Hazlewood Castle in North Yorkshire reported losing two. Other hotel groups admitted to cancellations or postponements, particularly in London, while Marriott was not alone in predicting "challenging market conditions during forthcoming months".
Exactly how much will be wiped off the £6.5b annual value of the conference and meetings industry in the UK remains to be seen.
Even before the terrorist attack happened, however, there were concerns about the economic slowdown in the USA and the economy here that had already affected conference business in the UK. The impact was reflected in the annual survey from the Meetings Industry Association (MIA), carried out this summer, which revealed that conferences are smaller, shorter, and booked later (see below).
Chartridge Conference Company, a group of three conference venues, has seen such a downturn. "They used to be four or five days at Chartridge, now the average is 2.2," says Peter Darnell, managing director of the group and president of the MIA. At Gleneagles, operations director Patrick Elsmie agrees: "The old four-day meeting of 10-15 years ago has gone. Where previously we'd make one sale, we now have to do two or three. And most consist of 40-50 delegates. Fifteen years ago the norm was 120-150."
Further pressure on operations and sales teams comes from a shorter conference year, with events packed into autumn and spring months, and shortening lead times. Nick Waight, divisional director conference sales at the International Convention Centre (ICC), Birmingham, has had a conference for 1,500 delegates confirmed just two weeks in advance; while Caroline Bull, founding director of Etc Venues, which runs four venues in London and one in Birmingham, says: "Historically, we'd get 50% of our business two to three months ahead. Now it's more like 25%."
Such pressures are compounded by increasingly keen negotiation on price as anxiety about the economy grows. Bull is not alone in noticing clients cut back on extras such as a first-night reception or wine at lunch, particularly over the past three or four months. And the MIA reports a slide in the average budgeted delegate rate per eight hours to £25.65 for the association sector (£36.10 in 2000) and £32.95 (£34.50 in 2000) for the corporate sector.
Nevertheless, hotel operators have been investing significantly in conference facilities, eager to offer the edge on service or technology that could win a lucrative piece of business. Last October Hilton opened a £100m extension to its London Metropole hotel to create Europe's largest hotel conference venue, with a capacity to host 3,000 delegates and accommodate 1,000; and the Novotel London West has just completed a £25m refurbishment including an upgrade of its conference facilities. Marriott, meanwhile, reports a £15m investment in the London Marriott Regent's Park hotel, part of which was spent on conference facilities; a £3m spend at the Peterborough Marriott, where there are now 16 meeting rooms and six new boardrooms; and the opening of the Liverpool Marriott Hotel South, which has nine conference rooms with space for 250 delegates and three boardrooms. There's also been investment in conference facilities at hotels in Grantham, Durham and Bournemouth.
Business marketing manager Samantha Ashdown is ambitious: "Our target is for conferences to account for 25% of total revenue. It's currently standing at 16%." This growth will partly come from a drive to promote Marriott's country club properties, though London, Bristol, Leeds and Manchester will remain key locations.
Elsewhere, the five-star Churchill Inter-Continental London has opened five new meeting rooms as part of an £8m programme; while Gleneagles has committed £500,000 to improving conference facilities and equipment.
Why the spend? Elsmie says: "We'd become aware that companies were having fewer external meetings, because they were creating rooms in their offices with better facilities than in most hotels."
A separate £9.5m extension to Gleneagles will open next autumn. The 59-bedroom Braid House will include two meeting rooms for 60 delegates each, a size that Elsmie says fits the changing market, and an interior design that will make the building equally appropriate for business or leisure use.
Ensuring maximum usage of facilities in the way Gleneagles has done is important, but hotels are also careful not to alienate core leisure customers as they chase conference business. At Gleneagles there's a 50-50 split between business and leisure in terms of revenue and numbers, and Elsmie feels there's no conflict, particularly given the space at the property. At Marriott, Ashdown also dismisses the suggestion: "Conferences are key to midweek business, while leisure is more weekend."
Dedicated conference venues pride themselves on providing a no-conflict situation for conference organisers. At the MIA, Blowfield insists that it is still the dedicated venue that provides the best service, while universities and sporting venues such as football stadia - which, he says, have become serious about the conference industry over the past 12-15 years - offer the best value for money. "A lot of hotel rooms might be compromises," says Waight at the ICC, "but we're dedicated to this sector. It's a different environment."
A leading light among the academic venues is Keele Conference Park at Keele University. Set up 10 years ago, it can host about 600 events a year and numbers are rising, according to director Jenny Deaville. "The space is given over to the commercial world in the vacations," she says. "There's also a stately home for special functions and a purpose-built management centre that can host meetings for 150 delegates year-round."
Commercial activities account for 25% of Keele University's income, and this is an essential revenue stream following the cut in Government funding to universities.
If size matters, then Birmingham's ICC tops the list, with the ability to host 10,000 people on site. With such a space to fill, and dedicated venues being as much affected by industry trends as hotels, the team is working hard. Waight says: "We're involved in Government lobbying to get them to see the importance of business tourism to the UK, which is valued at about £14b a year. We're also looking at ways we can promote ourselves as a country and a city."
A challenger to the ICC is ExCel in London's Docklands, which opened last year. It boasts the flexibility to host a board meeting for eight or a conference for 1,000 in its myriad rooms. Its conference technology, it claims, is state-of-the-art, and with seven hotels due to open near by over the next 18 months, there'll be room to stay over, too. Back in central London, meanwhile, the QEII Conference Centre in Westminster is determined not to be left behind and is currently improving facilities in its 10 conference rooms.
Hotel or dedicated venue, the importance of service cannot be overemphasised, according to Blowfield. And with the MIA survey finding that only a third of those interviewed were asked for feedback from venues, there's room for improvement, he says. The leading hotel chains are clearly beacons in this field: Marriott and Inter-Continental operate similar customer-service policies, such as assigning a single person to each event and requesting follow-up questionnaires be completed; while at the Churchill Inter-Continental, senior events manager Clare Poskitt is also increasing the number of permanent staff on the banqueting team and improving internal communications so that staff at every level know about functions.
The ICC is strict about customer service, too, and for very simple reasons, says Waight. "This is a competitive business. We have regular clients, but if we didn't get the service right they wouldn't come back."
A growing sector
The motorways of this country are a second home to many an employee. The nation's mobile workers clock up an exhausting 43.8 billion in-work miles every year, according to a recent survey from BT, and with the number of mobile workers set to rise by 15-20% a year, there is a growing sector to serve.
Whitbread has tapped into a market with a potential value of £550m (according to NOP) with the launch in April of Touchbase, its brand of business centres that provide affordable but fully-equipped meeting rooms, a "hot-desk" and business lounge in a purpose-built site close to a motorway or A-road. It has invested £2.7m in the project.
Crucially, centres are being built adjacent to Travel Inns - Whitbread's budget hotel chain - so customers have easy access to hotel and restaurant facilities. This synergy is vital, says Travel Inn and Touchbase managing director, Carl Leaver: "The F&B and accommodation are both existing expenses, so Touchbase is efficient operationally. I see Touchbase doing for the meetings market what Travel Inn has done for accommodation."
Sites are open in Swindon, Wiltshire, and Mansfield, Nottinghamshire, and a third is planned for December in Hemel Hempstead, Hertfordshire. Buoyed by user feedback, Whitbread hopes to open more in a bid to capture 30% of the market, the share that Travel Inn has achieved in its sector.
Whitbread is not the only one seeking a slice of the pie. The network of temporary workspace and meeting rooms operated by Regus has expanded to more than 350 locations in 50 countries. Its Touchdown brand, aimed at business travellers, has facilities in the likes of business parks and airports.
Etc Venues has just opened a fourth London site dedicated to out-of-office meetings. Founding director Caroline Bull says the market is thriving and that her company has turned away £3m of business this year alone.
"Everyone's working harder now, and they want a focused, efficient place to meet."
The MIA's UK Conference Market Survey 2001 - key findings
The survey was carried out among 300 national associations and 300 corporate organisations and considered conferences involving at least 15 people.
Association sector
Fewer events - 9% down on 2000.
Shorter events - average 2.1 days (2.5 in 2000).
Fewer delegates - average 118 (147 in 2000).
Popular events: technical information updates; member communication.
Fewer fundraising and annual events.
Top destinations: London, Birmingham, Manchester.
Top venue types: city centre hotels; academic venues; purpose-built centres.
Top factors influencing venue selection: location; price; access; availability; service.
Corporate sector
More events - 15% up on 2000, but 21% down on 1999.
Slightly shorter events - average 1.61 days (1.63 in 2000).
Fewer delegates - average 128 (138 in 2000).
Popular events: sales conferences; presentations.
Fewer management meetings and training.
Top three destinations: central England, London, South-east.
Top three venue types: out-of-town hotels; city-centre hotels; airport hotels.
Top factors influencing venue selection: location; capacity; quality; access; service.
Copies of the survey are available from the MIA on 01386 858572. Web site:www.meetings.org.
London's competition
Location remains the number-one buying factor for conference organisers, says Charles Blowfield, MIA commercial director, and although London's position as an international destination is hard to challenge, other cities such as Birmingham have become cost-effective options, particularly as access improves.
At Gleneagles, Patrick Elsmie says he's won business from London on the basis of price, despite the Scottish hotel's remoteness. A 24-hour rate at Gleneagles is £270, compared with an equivalent £350-plus in London. "We have low occupancy in winter, so we can be more competitive at the time when most conferences are held," he says. "Also, the low-cost airlines are making travel cheaper." Another factor has been attendance. "Research has shown that events at Gleneagles are more likely to get good attendance, because there's an aspiration to be here."
Marriott is feeling the pull out of London, too. The hotel group's Samantha Ashdown notes the trend to more regional events as companies try to reduce travel costs. "We're fortunate in having hotels across the UK," she says.
Further afield, Jersey is making waves following the creation three years ago of the Jersey Conference Bureau. Robert McKenzie, of the Seymour Hotel Group, says: "The island is much more together from a marketing point of view. At Seymour we've seen revenue from conferences rise 25% in the year to date." Its key corporate hotel, the Pomme d'Or, has just been through a £250,000 refurbishment to its conference facilities, which can accommodate 300 delegates.
And while the island is an attractive destination for mainland clients, business from the island is also thriving. "There's such a big finance industry here, and there are lots of changes to regulations," says McKenzie. "That means business for us." Marriott has seen the potential and is believed to be opening a 270-bedroom waterfront hotel in spring 2004, he adds.
There's a pull from overseas destinations, too, that UK operators should be wary of. At the Churchill Inter-Continental, Clare Poskitt says eastern European destinations are emerging as popular alternative venues. It can be as cheap to go to Portugal as stay in London at certain times of the year, adds Peter Darnell, while Nick Waight mentions Barcelona and Sydney, both well marketed and with good facilities, as key competitors.
