Latest PKF Consulting Study Shows Conference Centres Outperforming Rest Of Hotel Industry

Despite a slow economy and a decline in business travel, the conference center segment is holding up well, and in general, outperforming the hotel industry as a whole, according to the 2003 edition of Trends in the Conference Centre-North America, released recently by PKF Consulting and the International Association of Conference Centres (IACC).

“Compared to their hotel counterparts, conference centres have generated higher revenues and operating income on both a per-available and per-occupied-room basis,” says PKF Consulting executive vice-president Dave Arnold, who heads the firm’s Philadelphia office. Arnold also serves as financial consultant to the IACC Board of Directors.

A specialised sub-segment of the hotel industry, conference centres are designed to provide meeting and lodging space in specially designed facilities devoted to meetings and conferences of up to 75 attendees. Conference centres typically contain state-of-the-art media and telecommunications equipment and are dedicated business/teaching environments.

The leading advisory firm for the conference center industry, PKF Consulting has compiled Trends in the Conference Centre-North America for over a decade. The 2003 edition of this annual report on the health of this hotel segment is published in conjunction with the IACC. The current 78-page edition presents a wide variety of operating and financial statistics compiled from conference centres across North America. The report also presents commentary on current issues critical to this specialised industry segment.

Unlike hotels, where occupancy and average rate are the primary measurements of performance, conference centres are more aptly evaluated on the basis of their total revenue steam. According to the Trends report, average room rates are an internal function of an allocation of the “Complete Meeting Package” (CMP) rate, with many conference centres also attracting numerous attendees for day meetings. Whereas conference center occupancy rates are typically lower than those for hotels, the revenue generated per guest tends to be higher and operating profits are more efficient.

Executive conference centres, which generate 51 percent more revenue per available room than do hotels, essentially maintained their 2001 revenues in 2002. In contrast, full-service hotel revenues declined 5.3 percent in 2002. Resort conference center revenue for 2002 declined 7.4 per cent, somewhat more than resort hotels’ 5.6 per cent decline, but still managed to achieve 31 per cent more revenue per available room than did hotels.

“Conference centres occupy a thriving market niche in the hotel industry,” says Arnold. “Their formula for success is the ability of this segment to provide a distraction-free business environment conducive to the serious business needs of Corporate America,” he explains.