Worldwide, the incentive event market is again looking good. The latest World Economic Forum and Society of Incentive Travel Executives (SITE) research was positive. To say that the market has returned to the good old days of pre-recession would be misleading, however. In particular, the more lavish client events are yet to come back. Companies remain very rate sensitive and want venues that are fit for purpose rather than those that impress.
The leisure market has done much to prop up hotels during the downturn in meetings and business travel. With the global economy seeing minimum inflation, and with attractive rates and airfares on offer, destination cities have benefitted.
It’s a mixed picture: Vancouver and South American cities reported up to 40 per cent growth last year and the Asia-Pacific expects a full recovery by the end of 2011.
Business actually increased across all venue types in 2010, according to our research, with the sectors benefitting most being independent hotels (up 37% on 2009) and non-residential training venues (up 32%). Clients are also making greater use of their internal meetings space.
Meetings Professional International’s FutureWatch 2011 study predicted the number of meetings will rise by eight per cent by the end of the year and average spend by five per cent.
Mandating meetings and supplier spend
Sixty per cent of meetings buyers surveyed believe senior management should mandate meeting and events programmes and procurement continues to make great strides in managing meetings spend.
Many businesses now understand their venue spend but are often far less certain of spend around associated services such as equipment, production, registration, etc. With these costs often accounting for half of companies’ meetings spend it is an area that cannot be ignored.
It also seems strange that at a time when companies are looking to rationalise their meetings spend; the culture of pitching for events is still so prevalent. Although the costs of tendering are borne by the agent, common sense says that ultimately they have to be passed on to clients in some way. Much better then that clients look to work with one supplier for the majority of their events. Companies will then benefit from better purchasing through bundling their events as well as building stronger, working relationships with the agent.
Delegate registration trends
Late booking trends have resulted in a greater use of credit card payment for fee-paying events, and in some cases where there is a combination of short lead time and late booking trends attendance is with credit card payment only.
Over the past decade ICCA reports that associations have seen average registration fees steadily increase. However clients running fee-paying events for the first time have been cautious in their pricing strategy.
The US-based Event Marketing Institute reported overall convention attendance grew three per cent last year and planners are now expecting growth for 2011 will come in at five per cent.
Live event arena
Specifically within the live event space product launch activity has been cut right back. Fundamental corporate messages are being communicated either digitally or through a myriad of virtual channels.
Two clear trends have begun to evolve. Firstly, in many instances where a decision has been made to hold a live event clients have re-directed spend away from expensive venues requiring an audience to travel and stay over, to sourcing local unglamorous venues but with a focus on producing a more impactful show centred on key business objectives. The further development of Augmented Reality in the communication of the event has helped build anticipation.
Secondly, clients continue to invest heavily in experiential marketing, perhaps the most measurable brand immersion platform. The deep seated desire by procurement departments to be able to accurately measure ROI has encouraged product owner stakeholders to explore with ever greater creativity routes to capture a greater share of voice and consumer data. We envisage that this one area will see an uplift of at least 100 per cent year-on-year for the next three years.
Virtual and on-line meetings
While virtual meetings may in time prove to have a greater impact in the meetings market as more companies and venues invest in the technology, it is currently best used for small numbers.
Online meetings are still growing and events such as IBM’s Service Jam held in October 2010 attracted 15,000 participants from 119 countries. While virtual meetings are very much part of the future, it’s interesting that the Online Marketing Summit 2011 was not held online as one might expect, but instead at The Westin Hotel, San Diego. Online training was very much seen as the future a decade ago but has not had the impact that many predicted.
One key opportunity for virtual meetings is around extending audiences to those who cannot attend in person. Virtual meetings need additional thinking if coupled with live events, so that audience participation is maximised. A further opportunity for virtual events is around servicing additional interim meeting needs, such as a mid-year communication updates.
Apps
One area of technology that is growing is the meetings app. Apple launched their Go To Meeting app last year which allows people to join a meeting on their iPad through a link. They can then view slide presentations, design mock-ups, spreadsheets, reports or whatever the presenters choose to share on-screen.
Super Planner, another Apple app, provides a variety of planning tools, including calculators for venue capacity, staffing, catering, and staging.
OotoWeb has also created an iPhone app that enables the planner to access reports such as attendee list, activity pickup and accommodation pickup while away from their computer.
Hotels are also beginning to get in on the act. Starwood Hotels’ app allows loyalty members to access their account and the chain reported 2,000 downloads a week following its launch.
Booking technology
There are signs that it will become much easier to send RFP’s to venues. To date it has been difficult for agents and hotels to link to one another through their systems due to the host of different technology used. However, this will change as independent technology is developed that can be accessed by all.
The natural progression will then be to use this channel to book meetings online. There will be issues to resolve around hotels maintaining control of inventory and it may only be practical for smaller meetings but it will represent a big step forward in streamlining what is currently a very labour intensive process.
Having enjoyed huge growth in North America, Cvent is now providing European clients seeking an independent tool with a genuine alternative to Starcite.
Cvent’s pricing is built around a pay per click model like Google’s sponsored links. This effectively transfers much of the costs to venues and away from the user.
Global thinking
While there has been a meetings downturn in recent times in the established markets, emerging economies have bucked this trend. China is leading the world in terms of new hotel openings and expansion is also rife in India and South America.
Rates
We expect rates to begin to creep up with the highest increases in Latin America.
Costs will again remain a deciding factor around many of the decisions clients make. As measurement becomes more sophisticated and ROI and ROO become better understood though, it may no longer be the only criteria that some buyers use for evaluation. Meetings procurement will continue to make inroads into regions that are not currently buying in this way.
In an ever changing world some things never change, such as people buying people, and that quite simply is why meetings work.
What they say …
Tony Reilly, Dell – buyer
“The key drivers in our events procurement strategy are efficiency of spend, return on investment and return on objectives in lead generation and relationship building. Customers will only choose an event that meets the closest need to their business, or if the benefits of attending are outstanding. As a result, we will do fewer events, but bigger and better. If we are going to commit, it is all or nothing.
Gemma King, KPMG – buyer
Cost avoidance is more important than cost reduction because events need to have a positive impact. If you cut the quality of venue, production or content, it reduces the return on the objectives of that event. You don’t get the same outcome by halving budget.
Any comments? Email cmw@mashmedia.net
