The Business of Running a Business: Hospitality Industry Managing More and More Collegiate Conference Centers
Reyes, Nina, Black Issues in Higher Education
There appears to be a growing trend in the expanding world of campus conference centers.
Colleges and universities that have never before considered the benefits of operating a profitable establishment are suddenly looking at conference centers and hotels as potential sources of support for their more traditional programs. And some institutions that have been operating such properties themselves are turning management of the facilities over to companies experienced in the hospitality industry.
Analysts watching the trend say that there is lots of money to be made in the relatively untapped market of college- and university-owned hotels and conference centers -- troth for the schools and for the management companies.
"It is definitely a trend -- not only to manage them, but to develop them as well," said Rachel Roginsky, a Boston-based hospitality industry consultant who works closely with colleges and universities and is a member of Pinnacle Advisory Group. "Conference business at universities is pretty strong, and [the universities are] using other places -- other hotels that they are paying money out to. They'd rather keep the revenue streams in house and possibly make some money."
A number of factors has contributed to the appearance of conference centers and hotels on campuses across the United States, according to people familiar with the industry. They cite increased interest in executive education, and the wide availability, a decade ago, of financing for building such facilities. Turning the management of conference centers and hotels over to the private sector began a few years ago, when the economy weakened and the hospitality industry became increasingly competitive.
"The academic world is an excellent world in its own right, but it doesn't operate like the hospitality industry," said Burt Cabanas, president and chief executive officer of Benchmark Hospitality, a company based in Texas that manages fourteen privately owned conference centers and is looking to expand to university-owned conference centers. "The open-market mentality toward managing those facilities does not grow in an academic world."
Meanwhile, other schools are looking at building conference facilities both to satisfy their own internal demands for professional meeting space and to provide the sort of executive training that more and more corporations are offering these days. The University of Cincinnati, for example, is building a conference center through which it intends to market its faculty and their availability for executive education. Construction on the center is to begin this summer.
"We have an executive training program, but it's focused fairly locally," said Dale McGirr, the university's vice president for finance. "We think we have the capacity to make it much more regional, so it's taking a platform program that's there now and trying to expand it."
Two companies that have moved into the market of managing university- and college-owned hotels or conference centers are Marriott International and the Doubletree Hotels Corporation. Each currently manages seven, and both companies are looking to expand their operations.
"It is a major part of our future," said Roger Conner, a spokesman for Marriott, noting that the company is in discussions with three additional university-owned conference centers. "We're interested in growing that market. …