Capital Losses

Event planners have had enough of London’s high prices, and are taking their functions to other cities. Is the capital about to lose its status as the UK’s top conference destination?

For the first time, cracks are beginning to appear in London’s traditionally rock solid position as the UK’s top conference destination. High prices, a lack of suitable accommodation and a shortage of large enough venues have prompted the conference industry to issue a stark warning that the capital can no longer take its business for granted.

One senior executive says many London venues are refusing to address the concerns of conference organisers and an increasing number of hotels regard conferences as a necessary evil nowadays. From a purely commercial standpoint, he says, they would rather rent their rooms to tourists than negotiate reduced block booking rates for corporate parties of 250 or more.

Such is the discontent with London that many event planners are encouraging their clients to move their conferences to locations such as Birmingham and Paris. They are also waiting to see how venues such as the Manchester International Conference Centre, which opens in 2001, and the National Conference Centre in Dublin, which opens a year later, position and market themselves.

Law firm Allen & Overy has decided to move its annual meeting of 250 worldwide partners away from London for the first time in ten years. Marianne Hadley, director of event company MVM which arranged the March conference at The Grand Intercontinental in Paris, says London is in danger of pricing itself out of the conference market.

“The cost of transporting so many people from around the world to Paris and accommodating them was about 50 per cent cheaper than if we’d held the same event in London,” she says. “Our clients have five-star budgets, but are finding better deals on mainland Europe and elsewhere in the UK. Money saved on accommodation can be spent on the gala dinner or on an extra day’s activities.”

Sally Greenhill, director of event organisers The Right Solution and president of the Meetings Industry Association (MIA), agrees that London is facing competition from other cities but says there remains a huge demand for venues in the city.

“You cannot ignore the fact that London is a very attractive city and is the centre for a number of international and national businesses. It is the supply and demand equation that is pushing costs up, but there is evidence that event organisers can still negotiate keen prices,” she says.

The MIA publishes an annual study called The UK Conference Market Survey, which researches the views of 300 associations and 300 corporate event organisers. The report reveals that while 73 per cent of associations and 52 per cent of corporate organisations held events in London in 1997, these figures fell to 63 per cent and 60 per cent in 1998.

Birmingham is the second most popular destination and the MIA says members have begun to book smaller regional events rather than one large conference in London. Greenhill says: “It will be interesting to see from the 1999 figures if this trend has continued.”

Regional rivals

Along with Birmingham and Manchester, Cardiff is another regional city that is picking up conference business. Gill Smillie, chief executive of Conference Venues Countrywide, says London venues need to show loyalty towards their regular clients or face losing more business to the regions.

“Our clients tend to stress whether they want a UK or overseas venue, and while London venues will cut their rates during a recession, they will hike them to the ceiling when the economy is strong,” she says. “Client lead times are getting increasingly shorter and organisers are under pressure to find suitable venues . We no longer worry about taking events to other cities.”

Tony Rogers, executive director of the British Association of Conference Destinations (BACD) of which the London Convention Bureau is a key member, says the strength of sterling combined with high prices is making London less competitive than it should be. He says: “I hope London will adopt more realistic pricing while the capital still needs a purpose-built conference venue with a capacity of between 3,000 and 5,000. Maybe this is something that will be addressed by the new London mayor.”

Not surprisingly perhaps, head of The London Convention Bureau Mady Kaup vigorously defends her city and says the meetings sector is booming with large numbers of bookings from the US, France and Germany. She believes conference and meeting organisers should shop around for affordable facilities and need to realise they can save money by being more selective about when they hold events.

“I will not pretend people do not mention that the pricing of venues in London is a problem, but if you are comparing London to regional cities in the UK you are not comparing like for like,” she says.

“But not all London hotels are five star and there are many venues for companies worried about their budget. We would urge organisers to consider slacker times of the year, such as January and February or in the summer. If their clients are foreign companies booking long-weekend meetings, they can also save money by considering a date that is a bank holiday in the UK but not in their own country.”

Despite the criticism of London, there are a number of important developments taking place in the city that could improve the situation for conference planners. In November, the £250m first phase of the ExCel international exhibition, conference and event centre will open in London’s Docklands. Its developers claim it will solve many of the problems associated with some of London’s traditional venues, such as a lack of parking and a limited choice of accommodation.

ExCel is just 15 minutes tube-ride from Waterloo Station on the extended Jubilee line. There are over 5,000 parking spaces and exhibitors’ lorries can negotiate the halls using three-lane roadways. There is also a selection of hotels on the 100-acre site, which currently has 90,000sq ft of event space with conference suites for 1,000 delegates and 65 seminar rooms.

UK’s largest venue

When phase two is completed in 2003, ExCel will be the UK’s largest single building for the events industry, claims chief executive Iain Shearer, who has been working on the project for seven years. He says the conference and exhibition industry has been trying to create such a venue for 20 years.

“London is arguably the only city in Europe where demand for exhibitions and conferences outstrips suitable venue supply. One of the problems in the past has been the cost of hotel accommodation, so we have a selection of hotels near the halls for people to choose the price range they want. Hopefully, we will ensure key events continue to be held in London,” Shearer says.

Among the hotels reacting to the perceived lack of suitable conference facilities in central London is the London Hilton Metropole. It is adding bedrooms to meet the increase in demand it hopes will be generated by its new conference centre opening later in the year. There will be two large function rooms, each capable of accommodating 1,200 people, creating one of Europe’s largest conference facilities.

More facilities

The Shaw Park Plaza in Euston Road has already opened new conference and meeting facilities. One suite can hold 300 delegates, while there are 14 syndicate rooms and a renovated 466-seat theatre-style auditorium. Glenn Carroll, director of sales and marketing, says 35 conferences are already booked for this year.

Carroll says: “I have worked in the conference hotel market for ten years and have been aware of London’s problems. Some event organisers were getting to the stage where they would not even consider London because they just assumed it would be too expensive and logistics would be a nightmare. We are close to Kings Cross, St Pancras and Euston stations and our day delegate rate is £58 with a 24-hour package of £190 per day.”

London’s traditional conference venues, such as Wembley, claim the capital’s abundance of tourist attractions means its future as a popular destination for UK and overseas business events should be secure. However, Wembley (London) managing director Janet Garner says London needs more local authority support if it is not to lose out to other UK and European destinations.

Garner says: “Business goes to cities where local government proactively motivates and supports the major venues. In London, the venues sit in different boroughs which apply legislation in different ways and focus only on marketing in their own patch, which dilutes what the city as a whole is trying to do.”

Package services

In response, Wembley launched The London Package, linking with British Midland and In Business Reservations, to attract conference and incentive organisers. It provides a venue booking, travel and accommodation facility. The next phase is Wembley Event Management Services, which will work with companies such as corporate hospitality businesses to provide a more tailored service for conference organisers.

Event planners are often asked by their clients to find more unusual locations for conferences, and it is in this area that London still has the edge over many other cities. Untraditional venues such as museums have invested large sums to win lucrative conference and meetings business.

The Natural History Museum joined the MIA before Christmas, while the Science Museum has been hosting corporate functions since 1993. It has spent £50m on its new Wellcome Wing, which includes a 450-seat Imax cinema. Corporate clients cannot book the room during the day when the museum is open to the public, but the wing is available for breakfast meetings and in the evenings, when delegates are surrounded by museum exhibits and moving displays.

Unique venue

Melanie Gerdes, event sales and marketing executive of the Science Museum, says: “There has been a lot of criticism about London being too expensive. We carried out extensive research to ensure we would be competitive, but it is difficult to know exactly where to pitch a venue like ours because it is so unique.”

One of the first bookings for the new Wellcome Wing was Headache World 2000, which will take place in September. Conference director Sue Potten, of MediaTech Media, says London was a natural choice to host the event as both the Migraine Trust and the British Association for the Study of Headache are based in the capital.

“London is expensive, but so are other cities that cater for an international corporate market, such as New York. People will pay to come to London if the facilities are good, and there is a lot of entertainment already in place at the Science Museum, which means we do not have to spend money dressing up the conference room,” Potten says.

If London is to retain its role as the preferred choice for UK conferences, it must address the fundamental issue that however good its facilities, the conference market is not satisfied with the service it receives. As long as demand for venues remains at such a high level, however, event planners are unlikely to see any significant change.

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