Meetings survey points to higher costs and tighter budgets
The niche between the proverbial rock and a hard place that event professionals often inhabit could be even cozier in the coming year, according to the results of a new American Express Meetings & Events study. The 2018 Global Meetings and Events Forecast surveyed 600 event professionals and found that at the same time group hotel rates and airfare are climbing, overall meeting spend could remain flat, and meeting owners are scrutinizing the details more than ever.
Group hotel rates in North America are predicted to move up at a rate of 3.5 percent, the highest expected increase in the world. The study labels this a sellers’ market and notes the impacts that accompanied the recent round of mergers and acquisitions in the hospitality industry. A majority (65 percent) of respondents in North America said that contract negotiations are more challenging now. On the other side of the equation, many noted that they are seeing more investment in hotel renovations, meetings technology and global preferred hotel programs.
With North American group plane tickets expected to rise more than 5 percent, one-third of planners (37 percent) said that would influence their destination choices. The airlines, in turn, say they are influenced by the newfound adventurousness of planners to add new routes. Stefano Mastrantonio, national manager of group sales for Air Canada, told surveyors, “The trend among meeting planners to find new destinations encourages us to add new destinations around the world. We’re partnering with destinations to build awareness and grow those destinations.”
At the same time, meetings have become more complex to produce than ever before as an emphasis is placed on creating “meaningful, quality attendee experiences,” the report found. This can lead to everything from sourcing a nontraditional venue to trying out new tech features such as holograms or virtual reality. One meeting planner told surveyors, “While there is demand for increasingly complex meetings, budgets are not necessarily increasing. So we have to be smarter. Maybe this means smarter in terms of logistics, where we have one bigger meeting rather than several smaller meetings, or smarter in terms of quality, perhaps smaller meetings with enhanced content.”
Linda McNairy, vice president of global operations and shared services for American Express Meetings & Events, says many event professionals are limiting the number of days, but filling them with hyper-local experiences and sessions carefully designed to meet goals. This could mean fewer speakers with PowerPoint presentations and more team-building exercises that allow merged companies to interact in ways that mirror their future roles, or one less dinner and an additional working lunch that results in a list of goals to take back to the company.
Other techniques for reducing the cost without reducing the impact that McNairy has seen include locating a meeting in a mid-size city or negotiating with a property on things such as resort fees or internet charges. Locking in prices early can also help control costs.
Finally, McNairy says, it is important to measure everything. From doorstep-to-doorstep, measuring the quantitative and qualitative experience to understand the value to attendees allows planners to focus on the areas that are getting results, and improve or do away with activities that are not embraced. She says more companies are attempting the difficult job of benchmarking programs.
Top Factors Influencing Meeting Location
|Economic/political instability concerns||12%||26%||50%||43%||36%|
|Perceptions around “resort” destinations for meetings||13%||8%||15%||10%||3%|
|Participation in company or organization’s preferred supplier program||15%||14%||12%||13%||14%|
|Past experience of colleague||7%||7%||4%||11%||14%|
|Ease of air lift/transportation to location for attendees||49%||26%||15%||24%||42%|
|Client directive based on past experience||16%||18%||13%||13%||11%|
|Repeat destination for meeting||16%||11%||6%||6%||7%|
|Specific location type needed—airport, near training facility, near customer location, etc.||52%||44%||33%||25%||29%|