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Signs of recovery on conference market

Conference and event facilities have started to leave behind the worst years of the crisis, and now hope to post figures similar to pre-crisis level. With conference tourism on the rise again, they have good reason to be optimistic.

The conference tourism sector suffered a major downturn during the crisis when companies tightened their belts and postponed or simply cancelled most conferences in order to cut costs. However, last year brought a long-awaited revival.

Conference tourism showed 53.1% growth in 2010 compared to 2009. There were 537 international conferences organized in Hungary, and the number of participants exceeded 125,000, according to data published by national tourism agency Magyar Turizmus Zrt.

Novotel Budapest Congress & World Trade Center, for example, has seen a 40% rise in revenues so far in 2011 compared to the same period of last year. The company thus has managed to mostly compensate the setbacks sustained in the crisis. Novotel Congress suffered turnover declines of around 10–15% in 2009 and 20% in 2010.

Conference centers are not taking anything for granted though. Despite their optimism, the growth expectations for this year were far from being fulfilled as of the end of the first half. Therefore, some facilities are trying to attract events with special offers and discount packages in order to secure increased revenues.

Zsófia Pirczinger of Vista Rendezvényközpont explained to the Budapest Business Journal that it is trying to lure conferences and weddings with special offers. In the case of conferences, instead of asking a fixed rate for the conference room, Vista charges a per capita fee.

With weddings, Vista charges a fixed rate for the room, and imposes no closing time for the event. Customers can also choose whether they want to order drinks from Vista or bring it in themselves, and the same goes for the wedding cake, while Vista staff is available to serve free of charge during the event. However, the company cannot afford to focus only on selected target groups, and has to try to attract the widest possible audience, Pirczinger added.

Other companies seem to be a bit more confident with some market players achieving remarkable growth in the first half of the year.

Kipcor Kft, which manages the Gólyavár Központ conference center, told the BBJ that the company remained profitable during the years of the crisis, and achieved 20% growth in the first half of 2011. However, these results are due to the fact that it is involved in diverse areas of business, and is quite strong financially, sales director Norbert Schvéd noted.

Schvéd said the company is trying to use the crisis to its advantage and carry out investments and developments while prices are still low. “Real estate prices and construction costs dropped remarkably during the crisis, and we decided to carry out investments as long as we can do it cheaper,” he explained. Thus, it will be able to operate with an expanded facility network once the crisis ends.

Others are also optimistic. Novotel Congress expects positive figures this year, after the growth seen in the first half. However, both companies agree that the strong showing was at least partly due to Hungary’s six-month turn at the EU presidency.

Meanwhile, conference centers in the countryside are generally in a less favorable position. The top-ranked ones on the BBJ’s list of conference centers outside Budapest usually fare better than others due to their location or parent institution.

The Tokaj cultural and conference center manages to attract guests due to its proximity to the famous wine region. However, the company wants to further boost turnover with newsletters and a professional website. “We would like to increase the number of our guests with more intense marketing activity, but the resources for this are not available at the moment,” the company told the BBJ.

Conference centers in universities on the other hand, use the contact network of the colleagues of the institution to find clients. The conference center of the University of Szeged uses the widespread networks of the university faculty. “We regard the professors and researchers of the university as a priority target group,” the conference center of the university told the BBJ.