Phelps R. Hope, CMP, is senior vice president of meetings and expositions for Kellen, an association management company with offices and representation in the U.S., Europe, China, the Middle East, India and Southeast Asia. He can be reached at firstname.lastname@example.org or 678-303-2962.
The meetings and conferences industry saw many changes in 2017 and that trend continues through next year. The impact of new technologies, personalization of catered food and beverage (F&B), and the economic effects on the hotel and convention industry’s business practices have created a few key trends to watch in 2018.
There’s been a lot of change in the evolution surrounding food and beverage offerings in the hotel and convention center industry. The continued demand for personalized and boutique-style menus by meeting planners has impacted the costing and resulting F&B pricing with menu offerings. Gone are the days of attendees receiving an across-the-board menu of one-cut-fits-all steak or chicken. Hotels and convention center food service professionals have adopted variety-driven menus to accommodate attendees who suffer from food allergies (such as dairy free or gluten free) or simply want healthier food options (such as vegan, ovo-vegan, etc.). Boutique restaurant-style and enhanced-choice menus are costly for most hotels and convention center caterers because of the continued rising cost in food prices, the increase in labor to prep and serve these different choices, and the cost of the hard-to-find specialty foods. These higher prices are having further upward pressure on F&B profits, so naturally the higher costs are passed along to the consumer (i.e. meeting planner).
To help offset the rising cost of food and the costs associated with the wider variety menus, hotels and food service providers are increasing the automatic service charges on catered events to upwards of 25 or 26 percent, regardless of the type of F&B service your convention receives. So with over one-quarter of the F&B budget going towards an automatic service charge, the budget-minded meetings professional has to work harder to afford to provide their attendees with the culinary experience they are demanding…and this trend will not change in 2018.
Since we have broached the topic of automatic service charges, watch out for a disturbing trend to continue through 2018 where hotels, convention centers and their in-house service providers (AV companies, internet providers, transportation, etc.) are adding upwards of a 25 percent service charge for their services. This is in addition to the labor they typically itemize and charge you for on their final bill. We have even seen a service charge added to meeting room rental on a few occasions!
So, be aware enough to ask early on in the negotiation process what additional charges you can expect to see on your final bill. This will help you determine if that hotel or convention center is worth engaging in business with or if you need to look for a better venue option.
Where should we start? Because technology is changing so fast, it will continue to be one of the strongest influences on the design, promotion and onsite experience, with more leveraged use of social media, attendee tracking at education sessions, and connecting of virtual audiences to live face-to-face events. Extending the convention experience through podcasts, webinars and other virtual tools to connect remote audiences across town, around the country and in global regions for networking, is a major benefit in the use of technology in 2018. This same virtual connectivity will continue to strengthen the pre- and post-convention experience as we all strive to increase engagement from our attendees 365.
Because of technology’s influence in our society, conference and meetings attendees continue to use a multitude of tools to connect to one another, e.g. through apps, social media and other interactive technologies. In order to guide the connectivity between attendees, conference organizers are continuing to invest in the purchase of bandwidth at conferences and providing event-specific technologies for attendees. This investment widens the revenue stream for providers and helps to fuel the growth of internet availability and increased bandwidth. Eventually cities will move towards a citywide Wi-Fi connection service, similar to Singapore, and perhaps even total global coverage. Until that day comes in the U.S., purchasing bandwidth is a necessity and a growing cost line item on all meetings professionals’ budgets.
As associations look to expand their member base, the trend continues that many look outside our country’s borders and to the other regions of the world.
For 2018 you can expect to see an increase in global and non-USA regionally specific events designed to attract future members in select regions and drive overall membership for the association. Technology will continue to help make this exercise more viable and allow for those attendees to remain engaged beyond their own borders, thereby increasing the global footprint of that association. Great news for those meetings professionals with a blossoming global events offering or looking to gain further experience planning global events.
Hotels and hotel chains consolidating with other companies is not a new trend, but it is an accelerating one. Marriott’s merger/acquisition with Starwood, and AccorHotels acquiring Fairmont Raffles are the big headline grabbing deals, but smaller chains acquiring single hotels or mid-size chains acquiring smaller chains are just the normal cycle of business in our industry. What is unusual and a new trend to keep an eye on, is how fast this business cycle has accelerated in the hotel and convention industry — growth that would have taken years now takes one-third of the time. The big players tend to spin off hotel products that are not a good fit for their model, which are acquired by mid-size and smaller chains who reinvest into these properties and rebrand, which in turn enables them to grow. The vacuum created by the big guys is where the entrepreneurial hoteliers get their start, and the cycle continues. All of this activity helps to stimulate the U.S. economy, which is by all reports very healthy, as corporate investors want a place to invest their monies, and the hotel industry continues to be a solid investment. This is good news for us, the meetings professionals, who succeed in negotiations because of the existence of a choice. You can count on more choices being offered in 2018.
The evolution of technology and economics in the meeting and convention industry is a constant cycle. With the possibilities of international expansion, easier negotiations, and a keen awareness of the food and beverage industry’s pricing tactics, 2018 will be a great year for growth and an awesome year for meetings. AC&F