Meeting Space Dominated by Few

(A list of Northwest Arkansas’ largest hotels and convention centers is available here.)

 

Belly dancer conventions. Gun shows. Upscale wedding receptions. The list goes on from the mundane to the odd.

Managers at the area’s hotels with the largest amount of adjacent meeting space agreed the possibilities are nearly endless.

Of Northwest Arkansas’ 269,751 SF of meeting space, 86 percent – 232,690 SF – is controlled by only six hotels. Room revenue at those hotels accounts for about 27 percent of the market’s total in 2009.

Room revenue is based on each city’s taxes and does not reflect meeting space rentals, food or catering revenue. But in the hotel business, if you’ve got the meeting space, you might rent the rooms as well.

“I don’t want to say it’s cutthroat. It’s not a nasty business,” said Alex Jerde, general manager of Fayetteville’s Cosmopolitan Hotel. “It all really comes down to negotiation skills. You cannot go to school for this. You have to take everything into consideration.

“If you can’t negotiate and wheel and deal and have no flexibility you will lose business because of it. It’s really competitive,” he said.

The Cosmopolitan, with 14,000-SF of meeting space, had about $1.8 million in room revenue last year.

The massive Embassy Suites Northwest Arkansas complex in Rogers has a combined 125,000 SF of meeting space (85,000 in the convention center, the rest in the hotel proper), making it by far the most voluminous hotel in the market.

  Able to be divided into more than two-dozen possible shapes, the convention center can host nearly anything, from upscale social galas to a variety of corporate conferences.

“Any combination, from five people to 3,000,” said David Lang, general manager of the Embassy Suites. “We try to get people to understand it’s not a convention space attached to a hotel. It’s one facility.”

Room revenue is down more than 17 percent, but meeting space business is about even with 2009, Lang said, and down slightly from 2008. But indicators suggest the Embassy Suites will bounce back strongly in 2011.

“It’s not so much related to the economy as an oversupply of hotels in the market right now,” he said. “They just need to be absorbed.”

Besides describing the convention space he’s responsible for as “a major economic driver,” Lang believes all that empty room serves as “an insurance policy for the hotel to encourage groups to book rooms in one facility. Without the meeting space there would be no reason to book there,” Lang said.

Summer might be somewhat slow (corporate business travelers are typically on vacation this time of year) but that doesn’t mean Lang isn’t hard at work. Lang said he and his staff of hundreds are already preparing for events as far out as 2015.

Springdale’s Northwest Arkansas Holiday Inn property has 49,000 SF of meeting space available, including a 29,300-SF convention center that sits beside the hotel.

“With the economy down, places with significant meeting space have done better than limited properties,” said Roger Davis, general manager of the property. “Meeting space is the difference.”

Removed from the hotel by just a few feet, the convention center can serve up to 3,200 people for a sit-down meal. Over the years the room has played host to gun shows, boxing championships, arts and crafts fairs, and even a Willie Nelson concert.

“People seek us out,” Davis said. “We don’t really go looking for events.”

According to Davis, entrepreneur John Q. Hammons (who operates both the Holiday Inn in Springdale and the Embassy Suites in Rogers) wanted to create “a bighotel for all the people coming in. Mr. Hammons built this property knowingthis area would expand significantly.”

The Holiday Inn is currently in the middle of a $6 million renovation. Davis said the guest rooms have already been revamped, as well as the main lobby space. Efforts at refreshing the convention space will cost about $750,000, and should be complete before 2012.

“Right now, until the market demands it, Northwest Arkansas has enough meeting space [for at least] four to five years,” Davis said. “In order to build another convention center you would have to have a significant change in demand. Market drivers would have to significantly increase in business levels to justify that.”

Another sizable link in the area’s meeting space business is Bentonville’s Clarion Hotel & Convention Center, which offers 11 rooms totaling 26,000 SF. Given the property’s proximity to Wal-Mart Stores Inc. headquarters, vendors are well aware of its advantages.

General Manager Patrick Jennings said his revenue numbers for meeting space are up 40 percent from last year, but down from a couple of years ago. Still, on a recent Thursday the hotel was busy hosting five different groups with relative ease.

Jennings believes all the credit rests with a “personal and professional” staff that “understands the client better than the client. We anticipate those needs.”

Opened in 1986, Fayetteville’s Clarion Inn has about 10,000 SF of meeting space and pulled in more than $2 million in room revenue last year.

Managers said some renovation work in its future.

 

Smaller Space

Want to rent out the Fayetteville Town Center? You can – at $7,200 per day.

Marilyn Hefner, director of the Fayetteville Advertising and Promotion Commission, said the structure has evolved into a social space, a place for wedding receptions, nonprofit socials and high school proms.

The Town Center is steadily branching out into corporate events, she said, and filling the space year-round during weekends isn’t a problem.

Still, “a full-service hotel would have been an asset to us,” Hefner said. “We need a close place for people to stay. It makes it tough to book a big convention.”

Down the street is the Cosmopolitan Hotel, which has 14,000 SF of meeting space, and which has been facing financing issues of late.

“We are in an unfortunate position where there has been some bad press,” said Jerde. “We’re not even on people’s radar. [But our] banquet space is capable of holding anything its size is capable of.”

First opened as a Hilton hotel in 1981, Jerde said the Cosmopolitan – visible near and far for its bald-white exterior – is in no danger of closing.

“Being in downtown Fayetteville is a huge advantage,” he said. “I’m excited about the hotel’s future. So is the entire staff.

“Hotels make their money off of sleeping rooms. Convention space brings groups in. Hotels make money when they stay there for the night. If you don’t have banquet space you don’t have those groups.”

Heather Miley, event coordinator with the Inn at Carnall Hall, claims the hotel’s 6,200 SF of meeting space as well as the UARK Ballroom on Dickson Street, which represents 5,600 SF and rents for $2,000.

Miley said the 49-room hotel, which is located on the University of Arkansas campus, is frequently rented out by a single group. A corporate event claimed the whole inn for five days in June.

Its main selling point would be that “we’re a privately owned, very small hotel that’s quaint and cute and not your typical corporate hotel,” she said.

From cocktail parties to wedding receptions, “business has been very good this summer,” Miley said. “It’s looking nice for next year.”