Convention industry grows as corporate stigma fades

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Doug Price, CEO of the Colorado Springs Convention & Visitors Bureau, at the Cheyenne Mountain Resort.

Doug Price, CEO of the Colorado Springs Convention & Visitors Bureau, at the Cheyenne Mountain Resort.

Meetings and conventions have been called the invisible industry, but hoteliers in Colorado Springs intend to change that.

And if the Convention and Visitors Bureau has its way, the region will be a hotbed for group business.

With the economy starting to turn around, convention business is poised to recover, locally.

Last year, while hotel occupancies increased, average daily rates remained low. This year, however, both are improving.

Some in the industry say that 2011 could be the year that the AIG-effect becomes history — or at least not so noticeable.

American International Group stunned the corporate world in 2008, after executives spent nearly $500,000 dollars mere days after the government bailed out the insurance company for $85 billion dollars.

The business-travel industry came grinding to a halt after corporations and meeting planners scrambled to cancel any meetings or travel that smacked of opulence.

Nearly three years later, executives at hotels and resorts are hoping the effects of the debacle are coming to an end.

“The AIG-effect is slowly going away, especially for 2012 and 2013,” said John E. Ault, area general manager for the Doubletree Hotel Colorado Springs-World Arena, where group business comprises about 35 percent of the hotel’s revenue.

Although the pace of group reservations is starting to increase, the backlash of anti-luxury sentiment can be seen in food and beverage departments and catering. Corporations and associations are venturing back into the world of travel and meetings, but they’re still hesitant about purchasing meals and libations.

“They’re not buying everything for everyone — especially on the alcohol side,” Ault said.

Conventions themselves, however, are no longer viewed as scandalous.

At Cheyenne Mountain Resort, where groups and meetings account for 60 to 70 percent of business, some clients are competing for specific days, said Lee Reijgers, director of group sales at Cheyenne.

Lately, the resort has seen more business and leads from three industries that had especially curtailed meeting business during the recession — pharmaceutical, financial and international companies.

“They weren’t using resort properties,” Reijgers said. “Now they are starting to loosen up a bit over certain times of year or certain groups within their organizations.”

In Manitou Springs, at The Cliff House at Pikes Peak, General Manager Paul York said group business is up 28 percent year-to-date over 2010.

One thing has changed: groups are only planning three months out, instead of the pre-recession nine-or 12-month window.

But even that is beginning to revert to normal. Meeting planners are now starting to book for 2012 and 2013.

At The Broadmoor, one of only four 5-diamond hotels in Colorado, group business is expected to increase 8- to 10-percent this year, said John C. Rovie, director of sales for the Broadmoor. About 70 percent of the resort’s business is group and meetings.

Lower-budget places are seeing even more of an increase in bookings.

Business for the month of July is “off the charts,” at downtown’s Clarion Hotel & Conference Center-Quality Suites, said Darlene Marquardt, director of sales. Last year, meetings were up 5- to 10-percent over the prior year.

“People are starting to let their guard down a bit,” Marquardt said. “They are at least putting feelers out there to see what value they can get for their dollar. They are starting to feel better about traveling.”

Just north of the Springs, at The Inn at Palmer Divide, group business has recovered faster than at many other hotels. The Inn — which attracts some east- and west-coast business, but largely draws regional business from the Denver Tech Center to south Colorado Springs — started rebounding last year.

“By end of 2010, we had just about recovered the conference business that we lost,” said Al Fritts, owner of the Inn at Palmer Divide. “Most of our growth has been in corporate business,” which typically bodes well for long-term growth.

Doug Price, CEO of the CVB, and his colleagues have an edge these days when they tell local and state legislators about the importance of promoting convention business in the state and region.

PricewaterhouseCoopers recently released a report, showing that national convention business hit nearly $1 trillion in 2009, which is far more than, say, the automobile industry, at $78 billion.

Nationwide, 2009 was a dismal year for the hospitality industry. Meeting business could soon surpass the $1 trillion mark, bolstering the entire industry.

The PwC report is being touted by national industry leaders as a way to spotlight the local economic impact of group and meeting business in communities throughout the nation.

Colorado Springs is no exception, and the timing of the report coincides with the beginning of recovery in the industry.

With its budget restored for 2011, the Convention and Visitors Bureau is moving ahead to grab even more market share for the Springs.

Last year, CVB officials went to 35 trade shows to attract business from all the group markets possible — including religious, sports, corporate, association and government. This year it has budgeted 46 visits, and things are already looking up.

At the beginning of last year, when the CVB attended the Destinations Showcase trade show in Washington D.C., officials came back with zero requests for proposal to hold conventions in the Springs.

What a difference a year can make in the hospitality industry.

“Last week we went to that same show and came back with eight requests for proposal,” said Price.

This week, the bureau began subscribing to Empowermint.com, a database service for CVBs.

Membership includes access to 42,000 post-convention reports, compiled by the CVBs of the cities that hosted the conventions.

The Springs CVB can see which organizations or corporations attended the conventions, their meeting planners, the number of delegates who attended, and how much meeting space and room space they used while in a city, etc. The data base also shows which year and what time of year the meetings were held.

All this information will allow the CVB to identify patterns and do queries and searches for groups that are due to book groups and conventions in this region at certain times of year.

“This allows our salespeople to solicit groups at the times we need them, such as off-season and shoulder-season,” he said. “We can really do our research on groups that we think would fit here very well.

Price plans to continue moving briskly.

“I’d like to see our leads for long-term group business grow by 10 percent,” Price said.

Convention & Visitors Bureau convention activity in 2010

Booked groups 251

Booked room nights 118, 489

Overall economic impact $51.95M

Source: Colorado Springs Convention & Visitors Bureau