2020 Association Industry ForecastJanuary 20, 2020

Association Meetings Experts Buoyed by Economic Numbers By
January 20, 2020

2020 Association Industry Forecast

Association Meetings Experts Buoyed by Economic Numbers
Sherrif Karamat, CAE president and CEO of the Professional Convention Management Association (PCMA), addresses the audience at the 2019 European Influencers Summit in Barcelona, Spain.

Sherrif Karamat, CAE president and CEO of the Professional Convention Management Association (PCMA), addresses the audience at the 2019 European Influencers Summit in Barcelona, Spain.

The various trends that characterize today’s convention industry are expected to continue into 2020 and beyond. They include an emphasis on attendee engagement, catering to multiple generations, utilizing attendee-tracking technologies, involving the destination’s community and more. But the most fundamental positive trend is the health of the economy itself, which in turn supports the health of the convention and exhibition industry. The 2019 third-quarter U.S. GDP rose to 2.1%, and the professionals and businesses and families that benefit from that economic growth are more likely to attend or exhibit at conventions.

“We’ve got good, steady economic growth, and that drives meetings, conventions, trade shows and corporate travel,” asserts David DuBois, CMP, CAE, FASAE, CTA, president and CEO of the International Association of Exhibitions and Events (IAEE). “If your family is living in good economic times and you have a good job and are making a good compensation, you might say to your spouse or partner: ‘Let’s go to this show.’ If things are tight, you’re not going. Same thing with exhibitors: If a company is doing really well, the VP of sales or chief marketing officer can say to the CEO, ‘I want to spend $10,000 to buy a booth and send two people to the XYZ show in Orlando next year because we need to sell more.’ When things are tough, they may forgo that.”

“We’ve got good, steady economic growth, and that drives meetings, conventions, trade shows and corporate travel.”
David DuBois, CMP, CAE, FASAE, CTA

ATTENDANCE TO GROW

DuBois’ expectation of increased attendance due to a healthy economy appears to be reflected in one finding of MPI’s Meetings Outlook 2019 Winter Edition. Respondents indicated next year’s live attendance number is expected to grow 2.1%. The exhibition industry in particular should also continue on its upward path, having seen about 40 straight quarters of growth, as reported by the Center for Exhibition Industry Research (CEIR), which is overseen and managed by IAEE.

The hotel industry is part of that strong economy, and the seller’s market is expected to continue into the near future. Negotiation skills for planners will thus remain critical, especially when site sourcing in first-tier cities. “The negotiating climate for 2020 and beyond is becoming more challenging,” says Amy LeDoux, CMP, CAE, senior vice president of Meetings and Expositions at the American Society of Association Executives (ASAE). “The reality is, organizations need to know and present the value of their business to potential destinations. They need to make a business case for why destinations and properties should select their business over another organization’s.”

Yet, there is also an indication of a softening in the seller’s market, which is of course good news for planners. While STR reported positive results for both ADR and RevPAR for Q3 2019 in the U.S. hotel industry, the RevPAR increase of 0.7% was the lowest year-over-year percent change in the metric since the first quarter of 2010, STR also reported. The hotel industry “remains healthy, and I’m not going to say that it’s going to be a buyer’s market in 2020,” says DuBois, who has worked on the hotel side for 13 of his 40-plus years in the hospitality industry. ‘But it’s not going to be the high single or low double digit RevPAR growth the hotel world has enjoyed in the last three or four years.” DuBois points out that over the last 12 months, many of his CVB and hotel contacts have reported “less demand from short-term groups and a little bit of a softening in transient demand.” He also offers anecdotal evidence that these factors have translated into lower rates: “Many of our members are seeing a softening in the rates the hotels are quoting,” he said.

SECOND-TIER CITIES

The stronger seller’s market of recent years prompted many associations to look more closely at second-tier cities, often forging relationships that will continue even if new opportunities open up in first-tier cities. Major players in the second-tier market such as Austin, Nashville and San Diego are benefitting from planners’ greater willingness to look beyond Orlando, Chicago, San Francisco and other top-tier convention hubs. “With the transition many years ago to a seller’s market, associations have been much more open to the idea of second- and third-tier cities for their meetings,” LeDoux says. She lists several potential advantages of selecting second- and third-tier cities: “affordability, accessibility and availability; the engagement of the destination in making sure your event is successful; the financial concessions and/or support the city may lend to win and retain your business; the welcoming attitude and focus that attendees experience; and the opportunity to discover a new destination and the facilities and venues they have that can accommodate your event.”

Tier designations aside, there are also several major cities that are gaining ground in the meetings market thanks to major investments into their hospitality infrastructure, such as Cleveland and Columbus, Ohio. The former hosted the PCMA Education Conference in 2018, while the latter will host PCMA Convening Leaders in 2023. A drive to accommodate meetings and maximize their results remains one of the most important qualifications for a city’s success. “Associations will always look for opportunities to grow their field and business regardless of destination’s perceived tier,” explains Sherrif Karamat, CAE, president and CEO of the Professional Convention Management Association (PCMA). “It is important to note that the easier a destination makes it to do business, the chances of success will be that much greater. PCMA has always embraced a wide range of destinations that focus on using the ‘business events platform’ for economic and social transformation, organizational objectives and our own development. Some of our most recent locations have been Pittsburgh, Los Angeles, Barcelona, Macau and San Francisco.”

The ease of ‘doing business’ with a destination can depend in large part on the CVB, and increasingly these organizations are helping planners coordinate with off-site venues and relevant local organizations to enrich the meeting experience. The idea of “putting people in a ballroom or convention center and talking at them for two-plus days is beginning to be challenged,” says Don Welsh, president and CEO of Destinations International. “How can you do what you need to do — let’s say continuing education — but do it more creatively and engage the destination you’re holding the meeting in?” Thus, there is a trend toward “exploring beyond the convention center and getting into the neighborhoods to activate the community. That’s where meeting planners are realizing that the only true expert that is charged with that are the CVBs,” Welsh notes.

Within the CVB, the vice president of convention services role has often evolved into a “community connector,” Welsh observes. “They are, in many cases, not only charged with working with the sales teams, but far beyond space, rates and dates, they’re now saying, ‘Based on the goal of the meeting, how am I going to help you activate the thought leaders in my community?’ For example, in Chicago where I was president of Choose Chicago, it was very important with organizations that visited annually, particularly the American Society of Clinical Oncologists, that we help them activate the medical community and the civic community to extend the impact of their meeting.” Welsh points to two types of organizations that are becoming more integral to both large and mid-sized meetings: economic development organizations and restaurant associations. Both can activate their membership bases to deliver additional value to the incoming group.

COMMUNITY ENGAGEMENT RISES 

Another type of involvement with the broader destination is of course community service, e.g., attendees working in a local food pantry before the day’s meetings begin. In short, conventions are no longer insulated affairs that take place strictly within convention center and hotel walls, and this community involvement trend is sure to continue into the foreseeable future.

Extending the convention into the community — whether for educational/professional opportunities, entertainment at off-site venues, or community service — can be seen as another way to engage the attendee with the host association that is behind these experiences. Engagement is thus driven by experiences, and DuBois has seen the experiential focus also manifest in booth design. He notes that the exhibit booth designer members of the Experiential Designers and Producers Association have been increasingly collaborating with marketing agencies to create technology-enhanced experiences that go above and beyond. “The typical 8’ by 10’ pipe-and-drape table and a chair is not going to work. Or the pretty guy or lady standing in the booth for 10 hours handing out brochures,” DuBois says. “It’s got to be a robot talking to you, touch screens or virtual reality where you go into a stand and put on some goggles” and other forms of high-tech interactivity. Another factor that is key to attendee engagement is relevance, he adds. As much as possible, the show must speak to the needs of the attendee. “You want to go to a meeting or a show for a couple of days and be able to say ‘I just brought back 8-10 great ideas for my organization or for my own personal development and career growth,’” DuBois says.

Catering to the younger attendee’s professional needs has been a growing priority for many years, as the millennial and Gen Z generations have become more involved in trade associations. “We are seeing more multigenerational presence on boards, panels and in advisory groups,” LeDoux notes. She has seen associations “making great strides incorporating elements into their meetings that attract and hopefully retain the multigenerational audience. Many of these changes are in providing options with regard to learning formats in order to appeal to different learning styles and interests. Other changes are in mentoring programs to help young professionals engage with others in the community.”

For associations looking to ramp up their marketing to millennials and Gen Zers in 2020, LeDoux recommends keeping in mind the values of these professionals, including transparency, relationships, purpose and authenticity. “And frankly most audiences appreciate those values,” she adds. As to the marketing method, a mixed-channel approach with a heavy emphasis on digital is seeing the most success. “A mix of digital strategies, including paid social media, marketing/email automation, re-targeting and others, is particularly successful because it allows organizations to engage with these prospective members and attendees based on their behavior and not just on their demographics, in a way that is measurable and easy to adjust based on results,” she explains.

TECHNOLOGY IMPROVES

There are also ongoing technological advancements in the tracking of attendee behavior on-site, as well as increasing adoption of existing tools among associations. “Attendee tracking tools such as RFID and beacon technology are gaining traction in the industry,” LeDoux says. “Many organizations have been using RFID, and most recently Beacon technology has been used for continuing education credit tracking and to better discern attendee behavior and needs. Both are great in giving you real-time data at your events so you can make logistical changes to improve the attendee experience, provide data to your exhibitors and more.”

While Expo! Expo!, IAEE’s Annual Meeting & Exposition, the ‘show for shows,’ has seen increased representation of augmented reality (AR) and virtual reality (VR) in its tech showcase, the adoption of these systems is not nearly as robust as in the case of tracking technologies. Associations will continue to explore them in 2020, however. “Augmented reality is popping up at meetings,” LeDoux observes. “Associations are a little slower in adopting this technology and are dabbling in it to see the value to the attendees and the organization.”

The adoption of sustainability practices has revived since the economic downturn, which is ultimately good news for the future generations that will inherit the environment. “Sustainability was a hot topic over a decade ago, and then the adoption and focus declined when the economy plummeted,” LeDoux says. “Organizations had to focus on their viability during the economic downturn. But now, sustainability is a topic that more organizations and venues are focusing on again. Attendees from all generations want to see that associations have an eye toward sustainability in their delivery of their events. The issue of making meetings more sustainable from many aspects like food and beverage, recycling, waste reduction, carbon footprint reduction and giving back to the community are all aspects that most associations are making a conscious effort to address.”

Says Karamat: “I’m encouraged by the progress that has been made so far. We’ve seen many events and venues adopt reusable water bottles, eliminate plastic straws or strive to reduce food waste. And, we have seen the increased importance placed on LEED-certified buildings. PCMA wants to do its part, and we signed a commitment to help address the use of single-use plastics at business events. Still, there is more work to be done, but we’re moving in the right direction. What is exciting is that organizations are recognizing that being sustainable is good for business, and I think this will work to propel greater green options.”

A more pressing need than ‘greening’ conventions is to ensure the security of the events for all involved, particularly given all the recent active-shooter incidents. Three years ago, the International Association of Venue Managers (IAVM), IAEE and the Exhibition Services & Contractors Association (ESCA) launched the Exhibitions and Meetings Safety and Security Initiative (EMSSI) to develop national event security guidelines and standards for convention facilities that will be recognized by the U.S. Department of Homeland Security. According to DuBois, EMSSI “has evolved into a program called Secure Venues, owned and operated by IAVM, that is in final pilot stage at three convention centers and will launch first quarter 2020.” Particularly since the Mandalay Bay Resort and Casino Las Vegas tragedy, hotels have increased their training and best practices regulations for security, and now convention centers are doing the same. The reaction from meeting planners to the initiative is “very positive,” says DuBois, “because they are challenged by their management, boards of directors and the CEOs of their organizations to safeguard attendees and exhibitors.”

Of course, planners will not simply be relying on the preparedness of their venue, but also enhancing their own safety and security plans in collaboration with the venue. “It is impossible to plan for all potential scenarios that could happen,” says LeDoux, “but what you can plan for is how you and your team will respond; how you and the various venues will work together; how your meeting attendees can check in to indicate they are safe in case of an emergency; how communication will be disseminated to attendees; and how you will communicate your plans to all involved. Security is top of mind for attendees, so organizations are making sure it is top of mind for the destination and their meeting partners.”

In sum, the forecast for 2020 and beyond is bright on many fronts: a less challenging seller’s market — even if slightly; an increasingly promising second-tier market; more opportunities to interweave conventions with local communities; facilitated by CVBs, more development and exploration of tech tools that enhance both engagement and attendee behavior tracking; and greener, more secure conventions.

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