After conducting a few recent meetings in Europe and Asia, it is apparent that international hotels and venues are doing well, and our destination partners in APAC and Europe would agree. Having planned five global meetings in the first 2 quarters this year compared to the zero planned last year at this time, we have seen a spike in client willingness to engage their overseas partners and stakeholders with regional meetings held in local markets.
Comparatively, over the past six years, the majority of clients held meetings in the U.S. due to the cost-effective outlook on the market with few international destinations being considered. Recently, however, we have seen an upswing in meetings held in parts of the world that are atypical for North American companies as of late. Carlson Wagonlit Travel recently published a white paper on the economics of international meetings, which supports the behavior we are seeing among our clients across the globe. According to CWT Meetings, the increase in international meetings is a direct result of the affordability and variety of hotels and venues in cities outside the “usual” hot spots. Places like Prague, Shanghai, Istanbul, and Bangkok are among the most attractive due to their affordability and accessibility. The CWT study goes on the mention this is likely a direct result of the rise in hotel rates among international destinations. Latin American hotels are experiencing the highest rises in room rates (up 6.3%). As a result, planners are turning to the regions of the world that are staying flat or rising at slower rates, such as Europe (up 1%) and APAC (up 2.7%).
At MOC&CO, we have helped our clients stay economical by keeping up with the trends and being booking-savvy. Understanding market shifts across the globe can save cost on travel and expenses which ultimately impacts the bottom line of overall meeting budgets. The decision to migrate toward contracting more economical venues instead of the typical 4 or 5-star properties is becoming a more widely accepted practice. This shift in behavior is reflective of the general population shift in attitude – modesty is more. Even among client leadership we have seen this shift, which supports our continued need to be more budget-conscious, savvy planners.
Meeting Planners – Get Your Thinking Caps Out!
[Photo] Conference & Incentive Travel Magazine: Link To Photo
Our trade requires us to wear many hats: registration master, food and beverage guru, decision-maker extraordinaire, tradeshow specialist; and with change on the horizon, it’s time to add a few more hats to our collection.
We at MOC & Co. have a couple of suggestions for the most important hats to add to your closet this fall:
Keeping events on or below budget is always at the forefront of a planner’s mind, usually because it is an expectation of the client. According to the article “Doing More with Less” featured in MPI’s 2014 Summer Edition, 2015 corporate client budgets are expected to be cut up to 50% compared to recent years. This, of course, doesn’t mean that meeting attendance is expected to drop. In fact, it’s projected to rise.
So, how do we as planners rise to the challenge to ensure budgets are on-point?
My guess is you already have one of these hats laying around, but now it’s time to dust off that thrifty budgeting beanie. This hat, over time, gets increasingly more difficult to wear with shrinking budgets, but with these few tips, we’ve made it work:
With technology making it possible to connect people anywhere and anytime, it’s important to keep up with trends and get ahead of the tech curve. A full understanding of the products and technology that are available to make our meetings memorable, will benefit your meeting and its attendees. Another benefit to technology is its ability to help lower some hard meeting costs.
Surprisingly, the anticipated growth over the next year in virtual attendance (+3.9%) is almost twice that of live attendance (+2%) (MPI Meetings Outlook, 2014). As demand for increasingly technology-focused meetings rises, we can anticipate a higher required technology skillset and understanding for planners. Some things that will help you wrap your mind around technology:
With budget constraints being the core of 2015 meetings, planners are being stretched to take a hard look at the way we operate. Thinking innovatively about meetings, decreasing travel costs by keeping it local and bringing in more sponsors are a few ideas that are being implemented to combat decreased corporate spend.
So, planners, it’s time to go shopping for some new hats and firmly secure them to your head as we leap forward to meet this challenge! As you all know, it doesn’t get easier from here…Changing the Game: Hotel Growth Spurs Planner Action
I recently read an article in Smart Meetings Magazine that reaffirmed something I have been noticing for a while. Hotel occupancy is up, and as a result, so are prices.
Reported in 2013, the hotel industry showed gains in all three of its performance metrics which measure success against hotel occupancy and changes in Adjusted Daily Rate (ADR). Last year in the U.S., hotel occupancy rose 1.5 percent to 1.1 billion room nights sold, the average ADR rose 3.9 percent to $110.35, and there were no decreases in ADR reported.
Overall, hotels are doing well and are continuing this trend into 2014. For planners, however, a high-performing hotel industry means challenges ahead.
Consider the RFP process, for example. Think about an RFP you sent out in 2013 or 2014. Did many of your top hotel choices not have your preferred weeks available – even if you bid a year out? Did the room rate shock your client into a budget-cutting panic? Did the hotel request a quick response to hold you at first-option? These are challenges that are not uncommon, but until recently, they were few and far between.
From a planner’s perspective, this upward trend in the hotel industry can only lead to one thing: tougher negotiations on behalf of our clients and companies. We all know our clients and their executives want to beat the rate they had last year or the year before; but now with the hotel industry doing so well, it’s becoming nearly impossible to achieve. We are being pushed to rethink our strategies and operate in ways we haven’t considered before.
So, what can we do to help our clients navigate this upwardly-mobile industry?
No matter how we choose to approach this situation, we can all agree that we must ensure the clients’ needs are met.
While this surge in hotel economics has its challenges, it also brings something positive – companies are hosting meetings again! So – for now – we all still have jobs.
Smart Meetings Magazine, Economic Momentum for Hotel Occupancy. March 2014
Cited stats: Smith Travel Research, str.com; and PricewaterhouseCoopers, pwc.com
Image courtesy of adventure web productions™ http://bit.ly/PapSaZ