Corporations tighten belts for lean and mean meetings and conferences

As seen in Pacific Coast Business Times

By Betsy Crowfoot

After a capricious two years, conference and business meeting facilities are seeing an increase in business. But don’t be misled: this industry has experienced a dramatic change. Lead times are shorter, stays are briefer, and a general “belt-tightening” has taken place.

“These trends are the most noticeable things about 2003 that we did not see in prior years,” said Ed Galsterer, Director of Marketing at the Four Seasons Resort (Biltmore) Santa Barbara. “There is a general belt-tightening going on. There are fewer attendees, the length of stay is reduced from five days to three, there are not as many spouse programs.”

Galsterer attributed the “weakened economy and the war” to soft sales until recently. “We came out of the gate slower than anticipated in early 2003. But the third and fourth quarter have been excellent.”

A new spa with pool and fitness center helped the 213-room property’s leisure sales make up the shortfall in group business, Galsterer said. “And all that pent-up business has really came on strong in the months of September, October and November,” drawing on 15,000 sq. feet of meeting space.

Still, Galsterer indicated, “Lead time is very short. Which tells us it is still a wary situation. So they’re not giving us the advance notice that was typical of the whole resort industry. We have to react a lot quicker; it requires a lot of quick work on behalf of our catering and banquet teams.”

Beth Olson, Director of Sales and Marketing at Fess Parker Doubletree Resort in Santa Barbara, agreed. “Meetings that used to book two years out, now book one month, even one day. Lead time and planning has been shortened. People don’t decide until their quarterly reports come out.”

 “A lot of fluff has gone out,” Olson continued. “There is still some fun, like beach parties. And the guests are more sophisticated with their food; they want a restaurant quality event.” Nearly 50-percent of Fess Parker’s business is in corporate group sales, tapping 23,000 sq. ft. of meeting space, 360 guest rooms and three restaurants.

“But what used to be a national meeting is now smaller more frequent regional meetings,” Olson said. “And we’ve seen our customers raise the bar with regard to educational content. Now, there has to be a return on investment.”

Sycamore Mineral Spring Resort in San Luis Obispo saw a surge in travel shortly after the terrorist attacks of 2001. “It mostly came from the fact that people didn’t want to fly,” said Gabriel Rivas, Head of Group Sales for the century-old resort, with meeting space for 100 and 74 guest rooms. 

But by December 2001, “People who were able to alter their plans just stopped traveling. It has been pretty slow,” said Rivas, “lower than we’ve seen in the years before September 11.”

Rivas also attributed the decline to the California budget crunch, noting, “A lot of regional groups were tied in to the State budget, and that has been a big blow to us.” 

Partly as a result of this, and new ownership, the Resort recently beefed up its’ health and wellness facilities. “We have a new yoga dome and retreat center; we are shifting the focus to pull in new people,” Rivas said.

Mandalay Beach Resort has been able to weather peaks and valleys by building good will, while banking on a prime location.

“Immediately after September 11 our corporate office (Hilton) worked with customers to forego penalties on the groups we did lose immediately, and encouraged them to come back,” said Susan Koehler, Director of Sales and Marketing.

“They were appreciative of the stance we took and all but one rebooked by the end of a year.”

Koehler said Mandalay Beach Resort also benefits from an “offshore experience without the air travel.” The beachfront property has 248 two-room suites and continental breakfast. “Many attendees bring their families. Tying together business and pleasure is a growing trend, and as a result we have a high percentage of materialization at conferences here.”

“There has been a little bit of change, there are other modes of communication,” Koehler said. “But it’s still important to bring people together to network and disseminate information successfully.”

Even the smaller venues are gearing up for what they hope will be an upswing in business as they enter the holiday season and fourth quarter. Sage and Onion recently added a separate boardroom dining facility to their upscale Santa Barbara restaurant.

“I’ve increasingly seen a demand for this from our area businesses,” said proprietor Steven Giles. His “Table For Twelve” seats 12 to 20 in a subdued 360 sq. ft. private room, suitable for breakfast meetings, sales presentations or client parties. “In lieu of meeting out-of-town, they’ll have their meeting at their facility, but top it off with a special dinner here.”

And the potential rebound holds so much promise, the city of Grover Beach has reincarnated a task force assigned to lure a major hotel or conference center to Pismo Beach.

The idea, originally conceived in the early 1980s, had been, “a very agonizingly slow process,” said Ronald Anderson, Grover Beach City Manager. But recently the City adopted 17 goals and at the top of the list was the conference center, Anderson said. “Our goal is to facilitate it to the fullest extent of the city’s ability and accomplish this as soon as possible.”

As a member of the San Luis Obispo County Visitor and Conference Bureau, Anderson has been monitoring travel industry trends. “When we analyzed the post-September 11 situation and looked at what happened to San Francisco and Los Angeles, who rely on visitors flying in, we held our own.”

Adding a facility of 150 or more guest rooms and roughly 80,000 sq. ft. of meeting and conference space, would increase tourism, jobs and tax revenue, he said.

 “There are a number of state-wide and regional conferences that don’t even consider this part of the Central Coast, because there is not sufficient meeting space. We could easily be in that rotation,” said Anderson. “Where other areas may not be as attractive weather wise, we have that and other attractions: Hearst Castle, the beach, Wine country. And we could be very competitive.”

In fact, most properties indicated their confidence in the Tri-Counties’ strong regional market, rich in industry, that does not rely on customers who fly in.

“We really don’t anticipate a dramatic decrease in occupancy,” said Four Seasons’ Galsterer, “because we still have the country’s number two market base only 90 miles down the road.”