Private equity funds are becoming increasingly interested in investing in training and conference centres (TCCs), according to a report by PricewaterhouseCoopers.
This growing market saw an increase in supply of 11% between 2002 and 2004, and 20% more for accommodation and meeting rooms over the same period. Residential conferences accounted for 70% of the estimated £11.7bn made by conferences in total in 2004. TCCs alone accounted for an average of 622 conferences per venue in 2004.
Julie Clark, leisure sector leader at PwC, says: “Industry growth and opportunities for cash generation have attracted private equity houses to TCCs. It is their clear focus and ability to attract higher value business demand that has helped TCCs deliver above average revenue growth. They can generate higher RevPAR levels (a measurement that usually only includes revenue associated with the bedroom) than hotels as they capture all expenditure at an event, not just room revenue. This goes a long way to explaining their investment appeal. The recent investment in the two largest TCC operators is a clear indication of the growing interest in the sector.”
3i paid LG&V £41m for a minority stake in Hayley Conference Centres in September, and in November The Alternative Hotel Group (a consortium of investors led by MWB CEO Richard Balfour-Lynn and 50% owned by Bank of Scotland) agreed terms for the acquisition of Initial Style Conferences, Rentokil’s training and conference business, for £325m.