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Don’t Forget to Spread
the Word: Using Public Relations to Successfully Open
a New Property
Sales & Marketing –
The Driving Force Behind Every Successful Hospitality
Operation
Lifestyle Hospitality -
The New Methodology for Success
What is a Conference Center?
-- Understanding the Conference Center Concept
Marking Public/Private Partnerships
Work for the Hospitality Industry and Community Economic
Development
| Go Top |
By Mark Magarity, President/CEO,
Sentry Hospitality
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When opening a property, it can be
very easy to get bogged down in the many operational
action items necessary to be ready for the magic moment
when you open the doors. Making sure things like lighting,
furniture, décor, A/V equipment, menus, personnel
training, etc. are in order is obviously a must for
opening a new venue. But one very important opening
component that is often overlooked – or left to
the last minute -- is public relations. Managing the
spreading of news about your new facility to the press,
community and industry plays an integral role in a successful
opening. It will also serve to establish the appropriate
image you (not the media) want conveyed about your facility.
At Sentry, we are in the process
of opening of the new Conference Center Niagara Falls
in upstate New York. From the very moment we were awarded
the management contract for the facility, public relations
played an important role in the development of the center.
First order of business was to distribute a press release
to the local business press and trade media, announcing
our management of the facility. From there, our public
relations program took flight with the orchestration
of a strategic communication plan.
PR plans come in various forms, but
following the tried and true formula in support of a
strong marketing plan (below) is a solid way to maximize
your public relations potential:
Identify who your targets are –
in the case of Conference Center Niagara Falls, we identified
the local business community as well as the regional
meetings/event market as our two “primary”
targets. We developed smaller “niche” areas
as well, but these would serve as our main focus.
Gather what you DO know and NEED to know – in
other words, “do your homework.” We studied
the local economic climate, the Northeast meetings/event
market, the successes and failures of previous similar
facilities and so on. This is the perfect time to conduct
a SWOT (Strengths, Weaknesses, Opportunities & Threats)
analysis, review what your competitors are doing and
decide how you want to position your venue.
Define what you are setting out to do – this is
where you develop the goals and objectives of your plan.
Is your goal to simply book a certain number of events
or room nights? Gain editorial coverage? Develop community
standing? Create partnerships? In the case of Conference
Center Niagara Falls, it was all of these and more.
In order to achieve success, you must set some sort
of objective.
Establish the direction you will follow – an important
component of this stage is developing a timeline. With
the conference center, we began our PR initiatives approximately
ten months prior to opening. In some cases, the lead
time may be longer or shorter depending on your target
audience and objectives.
State specifically what you are going to do to accomplish
the mission – i.e. how you will execute your plan.
A great place to start is with the development of a
press kit or information kit. Nothing aggravates the
press more than not having background information available
for a story. A basic press kit usually is kept in a
two-pocket folder, but can be more extravagant as your
budget allows. A good press kit can include the following
items:
Property fact sheet – usually
one page in length, describing very basic information
such as location, amenities, contact information, etc.
Management fact sheet or bios – these can be used
to provide background on your management company or
key management team members
Specific program fact sheets – these can highlight
special or signature programs that you would like to
promote such as meeting facilities, kids programs, recreational
opportunities, etc.
Press releases – any current press releases from
your property should be included as well. This will
assist the media in getting up to speed on happenings
and significant facilities at your property.
Photos/graphics – if you have a selection of photos,
renderings and line art (i.e. map of the area pinpointing
your facility’s location), include these high
resolution images (preferably 300 dpi or higher and
JPEG format) on a CD in the kit.
Obviously, you can develop your kit
to meet your specific needs, but the above is a guideline
for what makes up a basic kit that be welcomed by the
media.
Execute your plan – Now that
you have developed a strategy, have done all of your
homework and have the basic materials available, it’s
time to put your plan into action. Again using Conference
Center Niagara Falls as an example, we took a proactive
approach by providing our target media audiences with
regular updates in the form of press releases that kept
them abreast of the progress of the center. We made
the effort to develop relationships with key media members,
conducted many site tours and distributed press releases
regarding the latest news and milestones. As we approached
the center’s first event, we sent out a series
of announcements and alerts to let everyone know that
the center was opening its doors, and invited media
to cover the opening. For a grand opening, we planned
the traditional ribbon-cutting ceremony involving key
management, local, county and state government officials,
key partners and constituents and area businesses. In
addition, we have planned an open house for the local
public, so that they can see exactly what the center
will provide the community. All of these activities
help us develop a brand, industry awareness and local
good-standing.
State what constitutes success – this final step
plays directly into the objectives you developed as
part of the strategy. Did you book your projected amount
of events or room nights? Did you gain substantial positive
editorial coverage? Have you developed a reputation
as a community partner? Being able to substantiate the
results of your public relations strategy, is a key
element to conveying your management success to stake
holders in the facility.
In addition to utilizing public relations
as a tool for launching a new property, it should be
employed on an ongoing basis as an integrated element
of your marketing effort. It will reinforce your reputation
in your local community and industry, and keep your
name fresh in the minds of key media members. Whenever
something of news value occurs, be proactive in letting
your target audiences know about it. Public relations
also plays a key role in crisis management, should any
negative situations occur. By having already developed
positive relationships with the community and the media,
you will be prepared to handle tough situations with
much greater ease.
By taking a proactive approach to
public relations, you can develop a buzz for your property
before you ever open the doors, and will develop a reputation
with the media and your local community that will keep
your property’s name in their minds and in the
news.
Sentry Hospitality is a leading
developer and management specialists in the upscale
segment of the conference center, resort and hotel industry.
Mr. Mark Magarity is responsible for overall operations
of Sentry Hospitality, Ltd. including hospitality, real
estate, vacation ownership and investment management.
The founder of the company, he is considered one of
the leading resort, hotel and conference center marketing
and development executives in the industry. Previous
to establishing Sentry, Mr. Magarity had over 25 years
of experience in the hospitality industry, most recently
as Chief Development Officer for Benchmark Hospitality.
Mr. Magarity’s professional affiliations include:
American Hotel Resort Association, Urban Land Institute,
Hotel Sales Management Association, International Association
of Conference Centers, New York Hospitality Association
and also serves on the Board of Directors of the Urban
Empire Theatre Group, a non-profit organization in New
York City.
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| Go Top |
By Mark Magarity, President/CEO,
Sentry Hospitality
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No matter what type of hospitality
facility you are involved with, whether it be a conference
or convention center, a small hotel, a luxury resort
or vacation timeshare, proper sales and marketing will
be the vehicle that drives its success. Without a comprehensive,
efficient plan, you may be left spinning your wheels
and not maximizing your facility’s true potential.
What makes up an effective sales
and marketing plan? At Sentry, we believe three core
areas make up the plan to properly position a hospitality
facility for success – research/trend analysis,
demographics and regional/local preferences. Understanding
these concepts will give your sales teams the tools
necessary to reach and sell to your ideal customer.
We accomplish this by staffing our
sales and marketing teams with sales professionals from
top hospitality companies with experience in developing
plans and proven success in selling to their property’s
specific markets. Our teams follow the following process
when developing an effective sales and marketing program
for the properties they represent.
The beginning of any sales program
should include research. Understanding trends in your
industry, local market and what your competitors are
doing will set the direction of your plan. For instance,
if industry reports show that destination weddings are
a hot item and you have the necessary ingredients to
be a player in this market, you might place a greater
emphasis on this area and create special packages or
promotions that make your facility stand out from the
rest. From a local market standpoint, knowing what is
or isn’t selling and what your competitors are
having success with will give you direction on what
areas to place your focus on. Maybe you jump on the
bandwagon of a hot local trend or maybe you focus on
an area you feel your competitors are neglecting that
you feel could be lucrative.
Once you’ve done the proper
research and know where you will focus your sales and
marketing energies, you must then understand the customer
demographics. No matter how many different customers
you may be reaching out to, it is important to understand
them. To illustrate my point, Sentry Hospitality, in
the management of the exclusive Bald Head Island, NC
residential community, researched and analyzed the destinations
key markets. In so doing, we quickly recognized that
corporate travelers, small meeting planners, reunion
planners and vacationing families were our core target
markets. We then set out to educate ourselves on each
of these demographic groups and what made them tick.
We analyzed their buying habits, social characteristics,
education levels and other key personal and socioeconomic
demographic areas so that we fully understood who we
are selling the island to. This determined how, when
and where our message would be presented and exactly
how our sales and marketing plan would be developed.
In addition, we staffed our sales team with hospitality
professionals that are experienced selling to these
groups. As a result, Bald Head Island is enjoying great
success and has developed into a unique destination
for these markets.
Finally, recognizing your local/regional
markets preferences and necessities is crucial for sales
success. Another example of how we are accomplishing
this at Sentry is through our new Conference Center
Niagara Falls, opening in May of this year. The new
$17 million, 116,00 square-foot facility, owned and
developed by USA Niagara Development Corporation, will
play a key role in the revitalization of downtown Niagara
Falls and the local hospitality industry. Upon being
selected by USA Niagara to serve as operator of the
facility, we set out to develop a plan that would not
only bring success for the property itself, but also
benefit the needs of our community partners. As a result,
the center has morphed into a hybrid facility that will
drive foot traffic to our constituencies, partner hotels
and local businesses by bringing in out of town visitors
as well as servicing the meeting space needs of local
business.
By following a plan for effective
sales and marketing, you will develop the ultimate goal
– brand loyalty from your customers. The added
bonus is that typically brand loyalty extends past the
specific facility the customer experienced. Often time,
your customer will have needs for other markets or regions.
If you manage or own a facility in this market, the
customer is more likely to choose you because of the
positive experience they had as a result of your specialized
sales approach. This is extremely beneficial when opening
new facilities, as it leads to pre-sell opportunities
with customers familiar with your brand. At Conference
Center Niagara Falls, our sales team has had great success
in pre-selling the venue, with bookings as far out as
2008, due to the brand loyalty established with other
Sentry-managed properties.
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| Go Top |
During the years of recent economic
distress and the fallout from the 9/11 tragedies, the
hospitality industry has been forced to become very
creative in regards to management philosophies and methodologies.
In the past, resorts and hotels, conference/convention
centers and residential communities all had their own
sets of management philosophies, skills and strategies.
As these properties have morphed into more versatile
hospitality venues, a new management methodology has
developed – Lifestyle Hospitality. This term refers
to the combination of the best management skills drawn
from conference, resort, hotel and residential/community
management experience to enhance the customer experience.
As facilities have diversified their
abilities, this new management plan works perfectly
to keep pace. Conference centers are using the management
skills of luxury resorts when managing their food &
beverage presentation to offer more appealing options
to their visitors. Likewise, resorts and hotels are
borrowing ideas from conference and convention centers
when managing their on-site meeting facilities and packages
in order to create a “one-stop-shop” for
their guests attending meeting and/or events. This cross-referencing
or melding of skills is the core of the Lifestyle Hospitality
philosophy.
Sentry Hospitality, a leading developer
and management specialist in the upscale segment of
the conference center, resort and hotel industry, has
fully embraced this philosophy and is seeing the benefits
and rewards created by it. A perfect example of how
this diversified methodology can work is taking place
at the Sentry-managed Conference Center Niagara Falls
(opening Spring 2004), with advance bookings. Rather
than creating the traditional center, we have created
a hybrid facility that will open the doors to many different
hospitality customers for the Western New York area.
One example of how Lifestyle Hospitality is being used,
we have developed the Cascades Ballroom, a 10,500 square
foot grand ballroom and foyer that will cater to elegant
affairs, social events and weddings. Packages for the
room will feature gourmet menus designed by award winning
chefs, much like the finer hotels and resorts offer.
The Cascades Ballroom will be much more than just your
every-day function room. It will offer elegant décor,
ergonomically designed furniture for guest comfort,
state of the art technology, and innovative package
options. This is just one of many ways that we are using
Lifestyle Hospitality to offer a complete, one-of-kind
experience for our customer.
At Sentry, our use of the Lifestyle
Hospitality methodology is instrumental in achieving
corporate success, which we define as P.L.U.M.E.
Profits
Loyal Customers
Unparalleled Quality of Product
Motivated Employees
Economic Value
Achieving P.L.U.M.E. is our primary
goal as we take on the task of managing each new property.
The right balance of Lifestyle Hospitality and efforts
can lead to P.L.U.M.E, which benefits everyone involved
from developers and investors, to management and staff.
Simply put, P.L.U.M.E spells success.
Another area utilizing Lifestyle
Hospitality is in the management of residential &
vacation communities. A trend currently gaining popularity
in vacation destination and certain residential communities
is to have the homeowner’s association management
coordinated by a hospitality management company. Why?
Hospitality management companies (which manage hotels,
resorts, conference centers), have service-orientation
training programs in place for all level of employee.
Their staffs are hired and trained to manage resort
amenities and services – not simply the real estate.
And, they’re adept at destination marketing to
assist owners in finding seasonal rentals for their
second homes. As a result, management companies like
Sentry, are borrowing management skills and philosophies
from hotels, resorts conference and convention centers
to manage the community’s facilities.
One of Sentry’s similar management
projects is with the exclusive Bald Head Island, NC
residential community. Using our Sentry Hospitality
University (SHU) program, one of the leading hospitality
training programs in the industry, we have provided
Five Star training for all Bald Head associates. Using
philosophies and skills borrowed from the various other
types of hospitality venues, Bald Head Island is enjoying
great success by developing a unique option for meeting
planners, corporate travelers and vacationing families.
Small groups can arrange to be both
accommodated and conduct their meetings in spacious
rental homes – cooking meals, co-mingling and
strategizing - in a cozy, unpretentious vacation home
environment. Co-opting on daily tasks facilitates bonding,
while the island’s temperate climate and recreational
offerings: water sports, golf, hiking, tennis, volleyball
and individually designed activities enhance team building.
For the vacationer, the island features
luxurious homes, condominiums and a seaside inn as well
as a full service marina, grocery store, 18-hole George
Cobb design golf course, Country Club and complete racket
and tennis club.
Utilizing Lifestyle Hospitality,
Bald Head Island has been able to create a unique, memorable
experience for its visitors by combining the best of
residential community, hotel & resort and conference/convention
center management. With its hybrid abilities and diverse
packages, we are confident that the same will hold true
for Conference Center Niagara Falls. These are both
prime examples of how Sentry uses this methodology to
create P.L.U.M.E. – our definition of success.
| Go Top |
By Mark Magarity, President
& CEO, Sentry Hospitality
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With the preponderance of media scrutiny
and public outcry over the misuse of resources for corporate
travel, meetings and entertainment, more executives
today are finding it’s exceedingly prudent to
convene at dedicated conference centers and conference
resorts, to preempt any questions on the legitimacy
of travel spending.
In addition to the legitimizing
effect conference center utilization can provide, there’s
the added bonus of providing welcome relief to tightened
meeting budgets. A conference center’s Complete
Meeting Package (CMP) features a comprehensive service
package with no hidden costs. This is far more cost
effective than paying for negotiated services on an
a la carte basis. Most CMP’s include accommodations,
three meals, continuous refreshments, conference facilities,
audio-visual equipment and other basic conference services.
But what exactly is a conference
center? How do you differentiate it from other types
of meeting facilities? Many times, terms like conference
center, conference resort, convention center and convention
hotel are interchanged and create confusion. As professionals
in the hospitality/meeting industry, we know these are
all different entities, but it is sometimes necessary
to review a “reminder primer” and share
it with our constituencies of employees, clients and
affiliates to maintain a clear understanding of the
differentiation.
At Sentry Hospitality, our portfolio
consists primarily of conference centers and conference
resorts – although we do manage other types of
properties. Giving our staff a clear understanding of
the type of facility at which they work, and where it
fits within the spectrum of meeting and hospitality
facilities, is one of the first things we set out to
do when training employees, and a key to them understanding
who the client is and why they are there so they can
provide the highest level of service to our clients.
Definition of a Conference Center:
A conference center is a stand alone facility specifically
geared to conferences and/or events of less than 75
people where typically 70% of total sales are generated
from conferences. A conference center should provide
packages that include conference space, meals, refreshment
service, specific conference services and basic conference
technology to its conferees. As an example, Sentry Hospitality
was recently selected as the operator of the new Conference
Center Niagara Falls (opening Spring 2004). The 116,000
square foot Conference Center Niagara Falls will contain
15 purpose-built conference rooms including an Executive
Board Room and a 65-tiered seat amphitheater. The Center’s
opening is expected to attract new visitors to the region,
generate more room nights in local hotels, spur new
private investments, and create a complement of full
and part-time positions.
A Conference Hotel or Conference
Resort will offer these same services, and will also
include lodging and such recreational elements as golf,
tennis, spa treatments, etc. This is a popular alternative
because while it offers the classroom-like facilities
and services, it also offers pleasant diversions for
conferees’ free time. An example of this type
of property is the 330-room Riverwinds Golf & Conference
Resort, for which Sentry Hospitality was recently awarded
the development and operational agreement. A prime example
of a conference resort, this facility will include a
championship 18-hole golf course and 120,000 square
foot fitness/health center in addition to state-of-the-art
conference facilities.
Whether you are a full or part-time
meeting planner, understanding these differences is
fundamental to proper planning, and ultimately managing
expectations successfully (for your bosses as well as
conferees). Conference centers/conference resorts are
most conducive as learning environments. However, as
they evolve, they provide an added bonus. Like boutique
hotels, conference facilities are now being built and
operated with individual personalities – hideaway
retreats, if you will – to appeal to individuals’
needs, without taking away from the core functionality
of providing the best learning environment in which
to conduct training and educational sessions. Additionally,
convening at a conference center/resort eliminates concern
over perceptions that the meeting was a frivolous versus
warranted expense.
This knowledge differentiating among
meeting facilities is equally important to owners and
developers, as it assists in determining 1) what type
of facility to construct to meet market demands, and
2) the management company to select to effectively market
and operate your facility. Conference center development
is generally less of a financial risk than is a hotel
because a conference center can operate with higher
revenues at lower occupancy levels through packaging
of the CMP.
A recent trend in conference center
development is its growth as an added amenity to “Class
A” office space. Building a conference center
to support the needs of businesses leasing office space
within executive office complexes seems to be finding
a niche as the center also provides the concierge service
and lodging facilities demanded by these tenants and
their clients.
No matter what type of property
you are developing or managing, there are industry criteria
and guidelines that have been established to ensure
your facility provides conferees with the highest quality
service and experience. The most widely recognized criteria
are those developed by the International Association
of Conference Centers (IACC). IACC membership eligibility
requires that conference centers and conference resorts
meet or exceed their Universal Criteria that includes
30 standards covering priority of business, conference
room design, conference and business service, food &
beverage, technology and guest rooms (where applicable).
In addition, IACC has developed Recommended Guidelines
that go beyond the parameters set by the Universal Criteria.
The IACC frequently reviews the Universal Criteria to
ensure that they are current and have the best interests
of the conference center industry in mind.
To better understand what makes
up an IACC recognized conference center, resort or hotel,
below are the Universal Criteria established by IACC
for membership:
Priority of Business
A minimum of 60% (based on net
area) of meeting space in the conference center is
dedicated, single-purpose conference space.
Dedicated conference rooms are separated from living
and leisure areas.
Dedicated conference rooms available to clients on
a 24-hour basis for storage of materials.
The name of an ancillary conference center (where
the conference center approved by IACC is part of
a larger hospitality complex, resort or convention
hotel) readily identifies the conference center and
clearly differentiates the conference center from
the remainder of the complex (e.g., the Executive
Meeting Center at the Raintree Hotel, not the Raintree
Hotel & Conference Center).
A minimum of 60% of total revenue from guest rooms,
meeting space, food & beverage, conference technology
(A/V) and conference services is conference related.
(If conference center is non-residential or ancillary
to a resort or convention hotel, 70% of total sales
of the conference center is generated from conferences).
Conference center offers and promotes a package plan
which includes conference rooms, guest rooms, three
meals, continuous refreshment service, conference
services and basic conference technology. (Non-residential
package includes conference rooms, lunch, continuous
refreshment service, conference services and basic
conference technology.)
Average group size -- 75 people or less.
Conference Room Design
Conference center has sufficient
inventory so that all dedicated conference space (no
less than 60% of all meeting space) can be set up
using ergonomically designed chairs that have arms
and that swivel and tilt synchronously and that allow
height adjustment. Chairs shall have a rounded or
waterfall edge on the front of the seat pan. Chairs
shall have a minimum width of 18 inches; a depth of
16-17 inches for chairs with non-adjustable seat pans;
and seat height within the range of 15 1/2 to 20 1/2
inches. The seat and inside back of the chair shall
be fully upholstered or constructed of Pellicle(r)
or like material. The arms and outside back of the
chair may be fully upholstered or constructed of ABS
molded plastic, Pellicle(r) or Pellicle-like material.
The base of the chair shall be of five-prong design
with casters.
Conference center has sufficient inventory so that
all dedicated conference space (no less than 60% of
all meeting space) can be set up using tables that
are at least 24 inches wide and that have a non-reflective,
hard writing surface with a high-pressure laminate
or hardwood veneer finish. Tables shall be of sufficient
length to allow at least 30 inches of space per occupant.
The edge of the table shall be comprised of a high-pressure
laminate finish or a decorative edge banding material
that is constructed of vinyl or wood products. Tables
shall have a reverse "T" style leg mechanism
or its equivalent with offset legs that are permanently
affixed or that fold, and that do not impinge upon
the tables' occupants. (Draped, skirted banquet tables
are not acceptable.)
Controllable level of lighting (50-70 foot candles
at tabletop).
Climate-controlled conference rooms; conference rooms
built after 1993 should have individual climate controls.
Dedicated conference rooms have wall surfaces suitable
for tacking or other display of flip chart-type sheets.
Acoustical rating for sound transmission through all
walls of conference rooms meets or exceeds 50-60 NIC
(Noise Isolation Class) for all fixed walls and 45-50
NIC for all operable walls.
Ambient sound levels within all conference rooms range
from 25-35 NC (Background Noise Criteria) or less,
and Reverberation Time (RT) falls between 0.8 and
1.2 seconds at mid-frequencies.
Amplified sound is available for all conference rooms
over 1000 square feet.
Each dedicated conference room has one in-room telephone
outlet, simultaneous Internet connectivity and adequate
electrical outlets throughout the room.
Dedicated conference rooms have unobstructed interior
views.
Conference and Business
Services
Conference center staff includes
skilled conference planners who are thoroughly proficient
in providing effective meeting room setups, menu and
special event planning, conference technology (A/V)
equipment and services, and other special needs of
the client.
If conference center is ancillary to a resort or convention
hotel, it must have a separate, dedicated conference
services department which does not also serve the
overall complex.
A designated conference planner is assigned to each
conference group.
The conference center offers staffed business services
from a central location.
Food & Beverage
Separate dining and conference
facilities, with at least one dining area available
specifically for the convenience of conference groups.
Dining facilities designed to accommodate groups on
a flexible meeting schedule (at convenience of group),
at least for breakfast and lunch.
Conference center provides continuous refreshment
service outside of meeting rooms unless requested
otherwise by the client.
Minimum number of dining seats to accommodate the
capacity of the conference facility for lunch in two
seatings of one hour each.
Technology
On-site standard conference technology
included as part of the conference package: flip charts,
microphones and image and video display equipment.
Conference center offers and promotes a package plan
that includes computer and video image display equipment
in the main meeting room.
Skilled technicians proficient in providing creative
program consultation; equipment setup, operation and
instruction; and immediate response to service needs.
Guest Rooms
(Not applicable to non-residential
centers)
Guest rooms include adequate work
station(s) for the occupant(s), appropriate reading/work
lighting, a phone line with simultaneous Internet
connectivity and appropriate seating.
Guest rooms are separated from conference and leisure
areas to allow maximum privacy and comfort.
You may be asking yourself why should my facility
seek membership with an organization like IACC or
why should I plan my next event at an IACC venue?
It’s simple, this certification brings legitimacy
to the facility because it guarantees that it has
at least met, if not exceeded, strict industry guidelines.
This ensures that there will be virtually no surprises
or shortcomings when event time arrives.
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| Go Top |
By Mark Magarity, President
& CEO/ Sentry Hospitality
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Public/private partnerships involving
the hospitality industry have increasingly become the
centerpiece of urban revitalization and economic development
strategies. At the forefront of this trend is the development
of convention/conference centers in which numerous 2nd
and 3rd tier cities, counties and development authorities
have invested considerable amounts of tax payer dollars
as a means to stimulate economic development. The primary
justification for the investment in convention/conference
centers is providing a tool to attract additional overnight
visitors to a city or region.
When hospitality projects such as
these have a clear link to public interests, hotel/conference
resort/convention center developers are wise to examine
the potential benefits of a public/private partnership.
For the developer, a public/private partnership provides
access to lower cost financing, allows them to structure
favorable land lease terms, tap into redevelopment incentives,
and secure site improvements, among other benefits.
Governments convinced of the merits
of such a partnership do so because they see it as a
means of not only stimulating increased business travel
and tourism, but for the creation of new jobs and tax
revenue sources. Public entities have at their disposal
a wide array of programs and financial vehicles that
can assist in making a hospitality project feasible,
thus contributing to the area’s overall economic
development goals.
Public financing of private hotel/convention/conference
center investment is not a new business phenomenon.
The Small Business Administration (SBA) has financed
the development of hotels since the mid-1950s. Most
public/private partnerships today however, tend to involve
the development of convention headquarters hotels and/or
convention/conference centers. Domestic convention/conference
business is big business, attracting nearly a half billion
attendees per year.
In fact, over half of all U.S. convention
centers are owned in part or wholly by cities, counties,
states or other government authorities. This has been
a standard practice in such top tier convention cities
as New York, Chicago and Las Vegas. But is also becoming
more vital to generating meeting and trade show business
in middle tier or declining markets. For instance, in
markets suffering from urban decay, a decline in property
values can prompt investment in undervalued properties.
There is also a movement toward the conversion of unconventional
properties – retail and office space -- into hospitality
venues.
As an example, Sentry Hospitality
recently negotiated a contract with USA Niagara to transform
a downtown building vacant for 10 years– into
the Conference Center Niagara Falls. This 116,000 square
foot facility in what was previously the Falls Street
Faire Building will feature 32,200 sq. ft. of exhibit
space, a 10,500 sq. ft. ballroom, and 19,000 sq. ft.
conference center with seven meeting rooms, six breakout
rooms and an executive board room. The contract with
Sentry is performance-based and offers incentives for
meeting and exceeding operational profit projections,
a requirement to provide friendly customer services
(as indicated on guest survey cards), and generation
of lodging sales, all factors USA Niagara principals
can measure.
Pre-opening estimates are that the
facility will generate between $13.75 and $18.75 million
in annual direct spending from overnight visitors.
The formula for success may seem
simple: build a bigger better facility than the cities
you compete with for out of town visitors and they will
flock to your community, spend their money and then
go home without the community enduring the cost of educating
their kids or dealing with other social costs.
However, after the initial years
of operation, the realized benefits of convention /
conference center, arena, or stadium are frequently
the subject of much debate regarding the impact on the
local and regional economies. Often communities find
that economic impact projections -- that were the foundation
of the package sold to the public to fund the center
-- never materialize.
As a result of the building boom
of convention centers and the bigger is better mentality,
many industry observers’ perception is that numerous
regional convention markets are overbuilt in terms of
supply. However, Sentry’s industry research has
indicated that the real issue in even extremely weak
regional conference/convention markets like Upstate
New York and Mississippi, is that the problem is not
oversupply, but rather misdirected focus of operation
and facilities not meeting the needs of the key meeting
demand segments.
Unfortunately, since the discussion
of public/private partnerships is dominated by the breakdown
of development costs, funding sources, estimates of
job and tax creation, there is often little or no discussion
of the approach to sales and management for the convention
or conference center. Paramount to a project’s
success is the formulation by the center’s management
company of sound booking policies, pricing structures,
marketing strategies, and sales and service approaches
constructed in a manner which facilitates the realization
of the project’s core economic and community development
goals and objectives. A misalignment in approach to
management can also be further exacerbated by shifts
in political winds and tough fiscal times which lead
to further erosion of the ability of the facility to
attract lodging demand as a result of cutbacks in sales
and marketing budgets and a “we’ll take
what we can get attitude.”
Venturing into a public/private partnership
is not without its landmines. Public sector support
for hospitality development has cultivated staunch devotees
and detractors. The project process, by virtue of its
being a government partnership must go through the public
process to build support and consensus, weather public
scrutiny, and stand tall against political pot shots.
Detractors will say that convention/conference
center hotels are generally more expensive to develop
than a comparable size group or transient market hotel.
And, a convention/conference center hotel’s room
rates may run well below comparable business hotels
due to discounts negotiated for delegates as part of
a convention room block. They may also argue that the
city has insufficient resources to close the transaction
or lacks the understanding for supporting the endeavor.
Politicians have also seen fit to target an opponent
in favor of a project, creating a maelstrom of unwarranted,
inflammatory publicity.
In the recent past Sentry Hospitality
has been on the receiving end of such intense media
scrutiny, enduring the publication of both biased and
false information during its management of the Marietta
Conference Center.
In 1994 Sentry Hospitality partnered
with the City of Marietta, Ga. in the city’s first
foray into the hospitality industry in order to capture
bed tax revenue. After many of the larger hotel company
chains declined management affiliation on the city’s
original conference center concept, Sentry Hospitality
proposed the development of a classically-designed 165,850
square-foot Hotel & Conference Center, including
the historic Brumby Hall and Gardens, an 18-hole municipal
golf course, adjacent club house and pro shop. Sentry
then played a critical role in the center’s development
by securing the financing and playing an important role
in the fight to restore Brumby Hall and Gardens –
which was later placed on the National Registrar of
Historical Places.
Although the combination of conceptualization,
experience and hands-on management style – as
well as Sentry’s reputation as a leading organization
in the hospitality industry --made it the city’s
clear choice for the undertaking, the honeymoon did
not last long.
From development, to opening in 1996,
and through operation of the facility until the conclusion
of the relationship in July 2003, Sentry became the
primary target of political opposition, and faced a
fierce and continuous barrage of negative media. This
sort of political divisiveness occurred in spite of
the fact that the annual economic impact of this project
for the city was consistently over $25 million. For
Sentry Hospitality and their onsite management staff,
these years of contention taught many lessons in understanding
and working within the political process.
Political drama aside, on the plus
side of public/private partnerships, incentives provided
by government entities can trim down hotel development
costs and offset room revenue gaps which set the property
up for profitable operation. Public contributions may
include land at favorable lease terms, tax-exempt public
bond issues for construction, hotel use of public parking
facilities, construction/use rights of public space,
and marketing support. The hotel management company
may also be granted the center’s food and beverage
concession – revenue that can also offset the
lower room rates associated with delegate business.
As a result of the numerous opportunities
across the country to increase penetration of meeting
demand segments at underperforming convention/conference
centers, Sentry has developed a three pron/conference
centers.
The best part of the Sentry approach
is that is does not require any capital expenditures
or public sector investment in support facilities such
as convention headquarters hotels to improve operation
and economic impact.
The first element is to reward management
for the realization of the goals and objectives of the
facility, which in almost every case should be the generation
of lodging revenue.
In order to do this, it is critical
to create a one stop shop for the end-users by having
management of the convention/conference center be responsible
for sales, marketing and all aspects of operation. This
creates accountability for performance of the center
with one organization. The creation of one management
entity may be accomplished by privatizing the convention
sales staff, allowing for the CVB to focus on general
tourism promotion and realize a cost savings in terms
of payroll and befits.
Once brought into the Sentry management
team, the sales staff typically needs to be trained
to target – in addition to the norm -- non-traditional
demand segments which are generally not on the CVB’s
radar screen. However, these demand segments can be
generators of substantial amounts of lodging demand
and occur more frequently throughout the year than large
citywide conventions.
The second element of Sentry’s
approach to enhance performance of convention/conference
centers is to rethink how the existing facility can
be used by all available demand segments. Once this
analysis is complete, specific equipment and room needs
are identified and a cost benefit analysis conducted.
The emergence of new FF& E products with integrated
technology that can be leased creates opportunities
for generic box like convention halls to become appealing
to demand segments that previously would not have considered
using a convention or conference center. A component
of this element also involves upgrading the food and
beverage experience at the center. Sentry's approach
is to operate the convention/conference center in the
same manner we do at one of our 4 star resorts --creating
a very favorable price-to-value relationship, when compared
to the competitive environment.
The collaboration of a public entity
and for-profit company creates many opportunities and
benefits for both parties. As well as sharing resources,
each party shares in the risks and rewards. Additionally,
government entities can offer certain operating guarantees
such as payment of debt service for a specified period
of time; or become the junior equity partner with “first-in”
risk capital and “last-out” return. Even
with such an agreement a municipality’s return
remains on the plus side by a greatly enhanced local
economy, increased visitation and associated tax revenues.
After all is said and done, when the public/private
partnership fit is right, and the center contracts with
the right management company to run the business, it’s
a big win-win for all involved.
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