Talk show
One of the less publicised side effects of the 11 September disaster has been the drop in conference bookings. It has been a tough year, and with the possibility now of war with Iraq, the hotelier with a spanking new conference facility could be forgiven for worrying that the UK conference industry is in decline.
In the last year the number of corporate- and association-run conferences dropped by 5% and 3% respectively compared with the previous year, according to the latest survey by the Meetings Industry Association (MIA).
Although conference business from associations appears a little more robust than the corporate sector, neither was immune to the effects of a general decline in business as a result of the foot-and-mouth epidemic and the cancellations that followed the terrorist attacks on 11 September. In the UK, a quarter of corporate organisers cancelled and 26% postponed events in the six months from September 2001 to February 2002. With association events, 11% cancelled, 12% postponed.
A similar drop-off in business was seen on an international scale. "If there's a shock to the economy, it can make the conference industry extraordinarily volatile and we saw that in the aftermath of 11 September," says Martin Sirk, chief executive officer for the International Congress and Convention Association (ICCA).
But despite all the war talk, early signs from the likes of the ICCA and the MIA show that a healthy glow is returning to the conference industry. In a recent survey of MIA members, three-quarters reported occupancy levels for conference facilities in July this year were the same, if not higher, than they were last July. A similar picture is painted on the international field, with the ICCA reporting "strong" forward bookings and the general expectation that 2003 is going to be a good year.
Stewart Elsmore, chairman of the 33-strong consortium Conference Centres of Excellence and director of residential services at the Cranfield Management Development Centre, Bedford, believes much depends on confidence in the economy and how businesses react to it. "There's a threat that the property market is overheating and if that happens there will be a more dramatic effect on the economy," he says. "It's going to be a tough year and very competitive, but there are signs of improvement and I'm confident that there will be a gradual picking-up of business."
When competing for business on an international level, the UK does rather well. So far as association events are concerned, the UK ranks second only to the USA, according to research by the ICCA.
There are no firm international statistics for the corporate sector, but Sirk places the UK among the top five, up against Germany and France. Germany is a particularly strong contender, with Berlin's Estrel hotel and its adjoining convention centre which can accommodate 6,000 guests. It is this kind of competition that could put the UK at a disadvantage, according to the British Tourist Authority (BTA).
"What Britain lacks is really large convention centres. We are losing a lot of business to other destinations overseas because of this," says Susannah Wilson, the BTA's business tourism manager.
The Hilton Group has recognised this need, and last October opened its conference centre at the Hilton London Metropole, catering for up to 3,000 delegates. The £100m investment is beginning to show some results. The hotel, which pulls in 40% of its business from overseas, has seen its turnover almost double in one year.
London remains the UK's most popular destination, taking 54.3% of the market share, followed by Birmingham, which takes 29.5%. London is very much seen as a hub for Europe and, because of Heathrow Airport, its accessibility tends to override price considerations. Independent conference organiser IIR uses London for most of its conferences, which can amount to 500 a year.
"Of course price is a factor, but often decisions are based on other concerns," says Catherine Gray Bennett, managing director of IIR. "It might be to do with the event we're organising and where the hub of that industry is, or if we are looking for a fun city for a winter conference we may choose Barcelona."
The BTA is keen to promote the UK - and not just London - as a serious choice for international business by launching a glossy brochure highlighting accessibility and facilities of key cities.
Meanwhile, Glasgow has been setting out its own stall with marked success. It has been pushing its new £75m Science Centre as a facility to be used in conjunction with its existing conference centre which can cater for 3,000 people. Medical and science experts in Glasgow are being used as ambassadors to promote the city as a destination for international association events and this is clearly paying off. Convention sales have increased by 200% in the last four years. So far this year, international business accounts for two-thirds of convention sales.
Competition in the UK is set to increase during the next year, with new players entering the market. Charles Blowfield, commercial director of the MIA, notes a gain in market share by universities as they become more commercial and professional in the marketing of their facilities. He also cites football stadiums capitalising on empty space during the week with additional facilities being added to many clubs over the past couple of years. "I would say the increased capacity has made venues more aware of prices. They are keener and more flexible and as a result prices are not going up," he says.
Capacity on an international scale is increasing, with plans for massive convention developments in Perth, Australia, and Cape Town in South Africa.
"There are going to be some major players coming on to the market and the level of competition is continuing to grow," Sirk says. "No city can afford to sit back."
Hotels muscle in
"Meetings work - it's official!" states the Meetings Industry Association for those who were in any doubt, writes Helen Adkins. According to the association's latest UK Conference Market Survey, 83% of conference planners said "conferences and events improve business results significantly", while alternatives such as video and teleconferencing have not replaced the "live event".
It's good news for the UK's dedicated conference centres and meetings venues, as well as members of the hotel industry looking to promote themselves as contenders in this increasingly competitive arena. Alongside educational institutes, sporting facilities and dedicated meetings space providers such as Regus, many hotels are looking to fill midweek bed and function room space with the lucrative conference market.
But can hotels truly compete with dedicated conference and meetings providers? Stewart Elsmore, director of residential services at Cranfield Management Centre, Bedford, and chairman of Conference Centres of Excellence, a consortium of dedicated centres and hotels, is not so sure. Cranfield, a residential 186-bed training centre in Bedford with 22 conference rooms, has many of the luxuries of a hotel, yet provides a dedicated training environment unhindered by other considerations.
He argues that while the distinction between what a hotel and a dedicated centre offer is little at face value, the reality is that the two concepts are very different.
"The conference centre is focused at a clearly defined market," he says. "By contrast, hotels have a wider marketplace to provide for. With a dedicated conference facility you get a bespoke product with no busy hotel distractions, with skilled people who understand the needs of the trainer, with dedicated rooms and full-time IT assistance."
Lacy Curtis-Ward, director at the non-residential Church House conference centre near Westminster Abbey in London, couldn't agree more. She spent 15 years working as a meeting planner in the USA and now feels her knowledge gives her a unique insight into her clients' needs.
"One of the difficulties that a lot of meeting planners run into is that the hotel's main business is selling sleeping rooms and the conference facilities often come as a secondary consideration," she says. "Particularly if you are a small- or medium-sized group, you are often further down in the pecking order than other events going on in the hotel. That can have an impact on your meeting."
Curtis-Ward also believes that conference and meeting venues need to keep up with the changing nature of the hospitality industry and more demanding customers. During her 10 months at the centre, she has spent £24,000 on refurbishment, changed the catering offerings and added more catering space. Turnover has increased by 8%, projected this year to reach £3m.
"Hospitality in the UK is maturing," she says. "So you need to make sure that you're offering the best quality service and food. These days people demand a lot of bang for their buck; they want good food and excellent service. Hotels have to work very hard to keep those levels if conferences and meetings are their secondary or third-priority business"
James Alexander, owner of Castle Green hotel, opened in 1997 in Kendal, Cumbria, puts his success down to focusing on one core business. His aim for the 100-room hotel was to achieve up to 70% of commercial business from Monday to Friday into a purpose-built conference and training centre, with weddings and leisure business filling up the weekends. Even so, the commercial side of the business always takes priority and the hotel is careful about what leisure business it accepts.
"You can't be all things to all men," he says. "We always favour commercial business and if any leisure business is likely to affect that business we will say no to it. We proactively provide for the conference and meetings market and so our clients are always in control. They call the shots, tell us what they want and we provide it for them."
As a result, the hotel has since made a cash profit each month, with occupancy projected at 81% for 2002. Turnover was £3.8m last year and is set to reach £4.2m this year. Around £300,000 is spent a year in keeping standards up and a dedicated conference sales team and fully trained staff is employed.
The answer for many hotels lies in the dedicated wing, a concept a number of chains have invested in over the past few years. The Hilton Group opened its £100m conference centre in London last year, while Whitbread's £29m Marriott 390-bedroom conference hotel opened at Heathrow Airport in 1999.
Elsmore is aware of how hotels have eaten into the dedicated conference centres market. He concedes that both have a lot to learn from each other and recently spent £100,000 on refubishment at Cranfield, making the rooms more luxurious and providing facilities previously not offered.
"Hotels now have much better facilities than they did and are knocking on our door," he says. "They are encroaching on our patch by copying our products and we've seen a lot of dedicated business centres growing up.
"We, as dedicated providers, have a lot to give but we need to listen to our customers. There is a perception of grotty conference centres and we need to do something about that."
Most popular UK destinations 2002
London 54.3%
Birmingham 28.5%
Manchester 22.8%
Edinburgh 12.6%
Glasgow 11.6%
Harrogate 9.3%
Brighton 9.3%
Bournemouth 8.3%
Cardiff 7.9%
Blackpool 6.3%
