Summer venues: Discount = damage

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Will venues raise their prices in 2011, and will the next 12 months see an end to the pricing wars and discounting. Stand Out talks to venues about their pricing strategies and looks at some of the new openings planned for 2011…

Price wars often instigate a reaction, and most of the time they cause your target audience to think something’s afoot. Are you genuinely having a sale to give your customer a bargain or are your reasons for heavy discounting a sign that you are struggling?

For almost two years, it seems that the events industry has been dogged by price wars and even underhand monetary games, but we now have to question whether this attitude to winning business is damaging industry and devaluing your offer.

Robin Parker, general manager, Church House Conference Centre, explains that the venue will hold its hire rates at 2010 levels, yet will have to increase its menu prices for the first time since March 2009 to accommodate increased costs in food and staffing.

He continues: “2011 will be a difficult year, particularly for those venues who deal with the public sector and as a result venue rates will remain very competitive. Reassuringly, there are definite signs that the corporate market is recovering and we have seen an increase in business from this sector, however the recovery is still fragile and companies are still looking for value and will continue to question rates. We therefore believe that 2011 will be a year of consolidation, with the challenge being to hold on to existing clients while bringing in new clients from all sectors wherever possible.”

Jonathan Morris, commercial director, No.11 Cavendish Square, shares Parker’s argument that the hire market is extremely competitive with organisers wanting value for money. As a result, venues are freezing rates.

Morris warns: “Continual discounting is unsustainable and devalues the business, leaving many venues unable to compete.

“The events industry is making a steady recovery and many corporate and private clients are looking at booking events. With the Olympics in 2012 entertaining and hospitality bookings are set to increase as companies look at networking and securing events for entertaining in the Olympic year. Instead of discounting I think most venues will keep their current rates so organisers don’t feel a sharp increase in price. Discounting will be replaced by free add-ons or upgrades, like half a bottle of wine per table for sit down dinners or croissants to go with coffee for breakfast meetings. “Although the cost of food has increased by about 15 per cent and the price of energy, gas and electricity has gone up; No.11 will absorb the costs and not pass them on to clients. We will continue using the same rates for room hire, catering and AV, which has stayed the same for the last two years. Efficient running of the business, using trusted suppliers and widening our events offering to include wedding ceremonies and receptions enables us to maintain prices.”

No.11 Cavendish Square is currently having its 200 capacity conservatory refurbished. The work is due to be completed on January 4, and will see the event space transformed into an 18th Century-inspired scented Orangery, complete with brass sculptures and mandarin trees.

Also undergoing refurbishment, yet on a major scale, is Scarborough Spa. The work is on course for completion in the spring, and the £6.5 million project will see major alterations to the Spa’s Grand Hall alongside other areas of the Grade II Victorian building, which will provide facilities to host and stage larger and a more varied program of conferences, events and functions.

The newly developed Spa will have the capacity to host over 1,600 delegates with a 2,000 square metre exhibition space, ideally suited to large association events as well as conferences and smaller meetings.

But what of its new pricing strategy? Will the refurbishment costs impact on hire rates? Jo Ager, sales development manager, The Spa Scarborough, comments: “Pricing strategies have changed considerably over the last couple of years, with venues reviewing how they offer pricing and a competitive product. The Spa has been very successful at securing association business. It differs from the corporate market; they are looking for the complete experience – venue, location and accommodation. “Naturally, corporates are very price driven and have reduced conference spend as well as travel and accommodation. This market is not the Spa’s key target audience. It is increasingly difficult to compete with city-based large hotel conference venues.

“The conference market has been affected by current climate and there is always a need to offer an element of incentive to win business, however having a unique product offering allows the Spa to keep a consistent pricing strategy. The Spa no longer offers complicated incentive programmes or discounting. It offers a competitive price and an excellent experience. For 2011 this is not due to change. Naturally, when a venue has significant funds invested in it, it will have an impact on pricing. However, many of our clients are secured for several years and we will not be looking to change our pricing considerably. We treat each client as an individual and offer a tailored solution to meet their needs. It the current climate the key objective is to retain existing client base and encourage new business by offering competitive affordable value.”

Spring 2011 also sees Brockholes Visitor and Conference Centre, near Preston, open at the 106 hectare reclaimed wetland habitat, owned by The Lancashire Wildlife Trust (LWT). The Northwest natural visitor attraction hopes to attract businesses from across the UK to its floating conference facilities. The brand new site will have facilities for up to 130 delegates, a break-out room and team building opportunities on the reserve itself.

Dawn Hooper, Brockholes sales co-ordinator, comments: “In 2011 event organisers will stay savvy and continue to demand value for money, which Brockholes will provide. And it will be important for venues to have distinctive features that add value to the conference offer. The very nature of Brockholes makes it the perfect place to stand out from the crowd. This carbon neutral conference centre is the UK’s only floating venue and what’s more, the profits from conference bookings are invested into conservation work on the nature reserve itself. This unique offer will help Brockholes to stand out as it emerges into a competitive market, positioning itself as providing an ‘unconventional convention’.”