Conference Centers Achieve Modest Gains

According to the 2014 edition of Trends® in the Conference Center Industry, North American International Association of Conference Center (IACC) properties enjoyed a year of modest growth in occupancy, ADR, and total revenue in 2013. The net result was a 3.8 percent improvement in bottom-line profits.

According to IACC CEO Mark Cooper, "Conference Centres -- when benchmarked against hotels -- are showing restraint in hiking prices to their customers, which shows a long-term approach and commitment to their customers." Bottom-line improvements are being generated by greater cost controls, and improving profit margins.

IACC members predicted a 'bumpy ride' for 2014 operating budgets, and they might well prove to be accurate in their predictions. Conference centers are very dependent on training sessions generated by businesses organizations. According to the 2014 IACC Trends® report, the greatest percentage of meetings (57.8%) held at residential conference centers were Training / Continuing Education sessions followed by Management Planning conferences. While the corporate budgets for training activities are improving, they are still under scrutiny. "It is encouraging to see the significant growth in this type of events as organizations invest now to put in place a skilled workforce to cope with further recovery" said Cooper.

The report, compiled by PKF Hospitality Research on behalf of IACC, showed encouraging signs that Executive Conference Centres are experiencing overall rebound which has taken place in revenues and profitability for most of the members reporting. This is consistent with a recovery in the meeting market in general, which has been a long time coming.

Dave Arnold, Co-President and Chief Executive Officer-East with PKF Consulting USA, commented, “With the reality of very little supply growth and demand growth in the five to seven percent range, the foreseeable future bodes well for the health of the conference center industry."

"Certain challenges remain at the forefront", said Arnold, "including a continuing erosion of the CMP to various "modified" meeting packages, a continuing push by asset managers/owners to diversify the market base with non-conference business and dealing with on-line travel agency bookings which heretofore have had only a limited impact on group bookings. On the good news front, the market is showing an increased desire for independent, non-chain properties which, of course, has always been a strength of the conference center industry."

 

 

 

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