|Conference center recovery is challenged.|
Tuesday, 28th August 2012
Source : PKF Consulting USA
The conference center industry continues to benefit in many ways from the overall continued recovery in the hotel industry in general.
According to the 2012 edition of Trends® in the Conference Center Industry, the average revenue for U.S. centers that participated in the survey increased by 5.5 percent in 2011 while net operating increase grew by 8.0 percent for the year.
While growth in revenue and profits is certainly welcome news, the conference center segment of the lodging industry continues to be challenged by on-going factors which limit a full recovery.
These include: scarce availability of financing and investment capital for new development; slow recovery of the group meetings market relative to commercial transient and leisure; and cutbacks in government and military spending on external meetings.
While signs of growth in corporate group meetings are in place, a general lack of confidence in the economy by traditional large trainers has restricted the market from finding a firm footing sufficient to justify hiring and, therefore, traditional training programs.
According to the latest issue of Hotel Horizons®, PKFC is forecasting a 2.4 percent increase in occupancy and a 4.2 percent gain in ADR for the overall hotel industry in 2012. Given what we have seen so far this year, it is reasonable to expect somewhat similar gains to be enjoyed by the conference center industry as well.
The lone exception is those centers which rely heavily on government-related training and “think tank” meetings. The proposed cutbacks in government related meetings will negatively impact the large number centers built to service that segment.
Overall, sufficient optimism exists for a continued steady recovery of the conference center industry. We are confident that the positive trends we have seen in this year’s IACC Trends® survey will act as an additional building block for further success.
To purchase a copy of the 2012 Trends® in the Conference Center Industry report, please visit www.pkfc.com/store