Conference market open for business

Perth’s conference market has been a beneficiary of the mining slowdown and increasing infrastructure spend.

In a state as reliant on commodity prices for its economic strength as Western Australia, last year’s minerals slowdown cast a pall over much of the business community.

Companies focused on the resources sector continue to face challenging operating conditions, but it has been a different story for the conferences market. 

It has been among the beneficiaries of the mining slowdown, with conference venues, operators and advocates all reporting an improvement in activity as demand for accommodation remains off its peak and investment in Perth’s infrastructure increases.

Rooms vacant

Just 12 months ago, booking a reasonably priced hotel room in Perth’s CBD was tough; room rates had skyrocketed as demand from booming mining activity put pressure on occupancy rates.

In the March 2012 quarter, room rates reached an average of $214 per night (according to Deloitte), with occupancy rates at a high of 86.4 per cent.

At the time, occupancy rates were forecast to grow to 88 per cent within 12 months.

A loser in that scenario was the state’s conference market, with those wanting to hold events in the city often unable to stump-up the high costs of accommodation – if they could book rooms in the first place, that is.

“The city was busy,” Perth Convention and Exhibition Centre general manager Nigel Keen said. “As a result, associations in particular weren’t coming to Perth because of the costs and low availability.”

It was something also noted by Alison Petrie, managing director of events management business EECW.

“Last year when the hotels were coming up with these quite significant increases in accommodation rates the business, which is 12 to 24 months booked ahead, didn’t come through,” Ms Petrie said.

Perth Convention Bureau chief executive Paul Beeson – who is tasked solely with marketing WA as a conference destination – said the drop in commodity prices had resulted in improved conditions for the conferencing market.

“We’ve found that, since the minerals drop in November, the pressure on companies to accommodate their staff has reduced; this has led to a readjustment of rates,” he said.

Deloitte reported a fall in the occupancy rate over the December quarter to 85 per cent. 

It predicted the rate to increase over the next two years to 86 per cent by the end of 2015 – but that figure was still behind previous forecasts.

Ms Petrie said that had prompted local hotels to reassess the importance placed on obtaining business through conferences.

“One hotel brought their rates down by $40 per night (for a conference), which is a massive decrease,” she said.

“Hotels maybe felt that demand was going to escalate, whereas in actual fact it hasn’t and now they’re coming back to the conference market because the corporate market isn’t filling its rooms as they expected.”

While that was leading to immediate cost reductions in the conferencing space, Ms Petrie said there was still a challenge ahead in dealing with the perception of Perth being an expensive destination.

“There’s a lot of publicity about the expense of coming to Perth and that negative publicity is seeping through; so it might even be that rotational conferences are skipping Western Australia because of the perception that it’s an expensive place to bring delegates,” she said.

Selling Perth

Despite the high costs, Perth has had some key wins when it comes to securing notable international and national events, with its naming as host city for the 18th International Conference and Exhibition on Liquefied Natural Gas (LNG 18) a case in point.

The 2016 conference and exhibition will bring upwards of 3,000 delegates to the PCEC and inject a potential $12 million into the local economy directly from delegate expenditure.

The win also gives indication that, despite the slowdown in mining activity in WA, the resources industry as a whole still remains committed to the dissemination of knowledge through conferences, with LNG playing a larger role.

The cancellation of Paydirt Media’s circa 150-delegate Gold Conference due to low registrations last week appears to have been an anomaly.

The Australian Gas Technology conference being held in July is expected to attract about 4,000 delegates, while planners for the AMMA Mining, Oil and Gas Jobs Expo are anticipating about 10,000 attendees.

Careful planning on the Perth Convention Bureau’s part helps ensure accommodation for delegates is available across a spread of inner-city hotels, with new developments coming on stream making that job easier.

The Hyatt Regency Perth will be one of those to accommodate delegates. General manager Adam Myott said winning the LNG 18 conference proved Perth was no longer a minnow in the conference sector.

“It highlights the potential capacity of Perth to be able to deal with those sorts of events; having CHOGM and Hilary Clinton here proved we’ve got the facilities, good knowledge and not just with hotels but also within Perth as a destination,” he said.

Mr Keen said LNG 18 was going to be “the biggest thing in a long time” to happen to Perth, and the successful bid was testament to efforts to rejuvenate the city centre.

“When it comes to the international market we’re really showcasing Perth as a destination; with the Crown developments, Elizabeth Quay, even BHP’s Brookfield Place – it all brings the CBD alive,” he said.

“It creates a real inner-city vibe, so when you host internationals you can show them the venue and the vibrant inner-city, which really helps attract people.” 

In terms of venues, the construction of Crown Towers in Burswood in particular is being heralded as a turning point for the local conferencing market, with 4,800 square metres of new conferencing space included.

That will almost double Crown Perth’s convention capacity – taking the current 1,100 capacity in banquet seating to about 2,000 once completed in 2016.

Mr Beeson said from the perspective of a bureau that works to raise Perth’s profile as a conference destination, it was a great outcome.

“They’re asking the professional conference organisers what they would like in a convention centre so it’s tailored convention space – that’s the differentiating factor; it’s larger, customised and very high quality,” he said.

Mr Beeson said the opening of Perth Arena in November had also helped Perth’s reputation. 

While the arena only holds conferences in the gaps between its major events, Mr Beeson said it was proving to be a good alternative for an off-site dinner venue or one-day conferences.

In Mr Keen’s view, the state government’s investment in Elizabeth Quay has opened the door for Perth to become a world-class destination for conferences in the region.

“If Elizabeth Quay is done correctly – and I think the vision they have for that is the right one – we’d really like to see the (PCEC) become part of that development; that will really promote this venue,” Mr Keen said.

“In that case the city and the state can become a true competitor to the Asian market … if we miss that opportunity we will slip behind in competitiveness.”

Expansions

Expansions completed in the last year or currently under way are set to increase Perth’s conferencing capacity provided by the 20 largest venues by 19 per cent in the next three years (see Book of Lists page 14).

While Crown will be the biggest contributor, Rendezvous Hotel Perth and Joondalup Resort are also in the mix of venues expanding.

The multi-million dollar expansion at Rendezvous Hotel in Scarborough is increasing the capacity there from 450 to 800 people in banquet setting.

Joondalup Resort is spending about $13 million increasing the capacity of its current 200-person facility to accommodate between 400 and 500.

Chief executive Wayne Carroll said some had questioned the rationale behind the investment, but the resort was confident it was justified.

“At the end of the day we felt that in the city, Fremantle, Burswood and Scarborough there are function rooms that can seat 400-500 people, but just north of Perth there’s just nothing,” he said.

Mr Carroll said perceptions that Joondalup was not easily accessible ignored the ease of driving up the freeway outside of peak hour.

“One big plus on our side versus the city is that so many times I’ve gone to the city to a breakfast and trying to get parking is so difficult and so expensive – whereas here you’ve got free parking and it’s hassle-free,” Mr Carroll said.

Broome’s Cable Beach Resort is also undertaking an expansion in what general manager Rod Sedon said was a response to growing demand for the venue to hold multiple conferences simultaneously.

“Demand out of Perth is starting to increase. I think Broome ... has a strong level of attraction as a specialised conferencing destination, rather than simply going to a CBD location,” Mr Sedon said.

“One of the things that we do find is that here we quite often have multiple conferences, and in the past we’ve found it’s difficult to accommodate…not so much the guests but the conferences.”

Significant demand for Cable Beach’s facility was still coming from the resources and associated industries, Mr Sedon said, echoing comments from other market players that activity in resource-related events remained despite a perceived slowdown in the sector overall.

“More and more of these businesses are establishing themselves in Perth because WA is seen as the economic engine of the nation, and we see that as a great opportunity for us,” he said.

Mr Sedon said the resort was looking at a 30 to 40 per cent increase in business coming from conferencing and events in the current financial year.

Caution 

While more venues appear to be exploring ways to tap into the conferencing market, Perth Convention Bureau’s Paul Beeson advised caution.

“At a local government level, particularly, councils are identifying and converting or expanding existing structures to attract the conference market,” Mr Beeson said.

“(But) these peripheral spaces will draw demand out of the smaller hotels, so it’s important that it be considered when future convention space is mooted.

“Crown’s expansion is a perfect fit for Perth and WA, but when we start talking about the expansion of peripheral convention spaces we must remember you need to have additional marketing resources to fill them.”