The meetings outlook for 2018 is positive as the demand for meetings remains consistent. But along with that demand come the challenges: The industry continues to be a seller’s market due to an imbalance in supply of hotels and meeting venues, causing rates to rise. And concern with security risks is top of mind as companies implement plans for the first time or adapt their existing plans to meet a rise in terrorist attacks and natural disasters. On the positive side, creating unique attendee experiences with new technology tools continues to be a main goal.
“Following the shifting sentiment in 2017, next year should be more positive around the world in terms of spend, number of meetings and attendees,” says Issa Jouaneh, senior vice president and general manager, American Express Meetings & Events. “Meanwhile, meeting owners are prioritizing attendee experience and engagement over scale. As a result, we expect to see shorter, more focused meetings. Economic and geopolitical influences will continue to create uncertainty, but we anticipate ongoing industry resilience and continued focus on successful experiences.”
According to American Express’ 2018 Global Meetings Forecast, the number of meetings held in 2018 is predicted to remain flat with a change in numbers of less than 0.5 percent. International hoteliers are suggesting a slightly greater increase in the number of meetings — 2 percent to 2.3 percent for product launches, incentives, conferences and trade shows. The length of meetings will remain static while the number of attendees will increase by 1.8 percent, especially in the conference and trade show meeting type.
Rhea Stagner, CIS, DVP, sourcing and supplier relations for Maritz Travel – a Maritz Global Events Company, is seeing a larger spend per attendee in the area of incentive meetings. “As all expense categories have risen in costs — air, hotel rooms, food and beverage and more complex technology — the total cost will be about $3,000 to $4,000 per attendee,” Stagner says.
Stagner points to the imbalance in the ratio of meeting space to hotel rooms as the main reason for pressure on space. “There are not a lot of upper upscale or luxury new builds in North America, which is another reason for the pressure on space and increase in room rates,” Stagner says. “Booking windows are getting longer as planners compete for space availability.”
According to the BCD Meetings & Events Global Industry Trends Report, even when new convention hotels have opened up in cities such as Austin and Denver, they are booked at a face past for as much as five years in advance. The high demand is causing planners to miss out on their first choice of a destination or they are having to change the time of year the meeting is held.
The BCD report suggests that higher prices are not necessarily due to higher rates, but due to a decrease in discounts for an existing rate, especially for bookings during peak times. A planner’s power of negotiation is then reduced in areas that were formally complimentary. BCD points to the addition of meeting space rental costs, which were traditionally waived based on achieving a guarantee in overall spend.
While room rates are rising, Michael Dominguez, chief sales officer for MGM Resorts International, says static airline prices and a weakening dollar could help meeting budgets. Decreasing oil prices have helped airfares to stay stable or decrease compared to 18–24 months ago when oil was priced at $100 a barrel. “This is the first time since the recession that all major economies — North America, Europe and China — are on the uptick,” Dominguez says. “And with the shrinking dollar, exports are less expensive, and more people are looking at taking groups to the U.S.”
In response to higher costs, planners are forced to increase their budgets. MPI’s Meetings Outlook report shows that 47 percent of planners are increasing their budgets over the next year. The amount of increase, however, is not a large percentage. “Meeting and event budgets are increasing by a rate of only about 0.8 percent, and the majority of that isn’t going to increased costs in food and beverage or space rental or transportation,” says Jessie States, CMM, manager of professional development for MPI. “It’s going to safety and security and risk management.”
After guest rooms, food and beverage spend is the largest area of a meeting budget. Dominguez sees a disconnect in this area between planners and the hotel. “Planners’ budgets are getting less, but they don’t always understand that the food costs have increased,” Dominguez says. “By creating flexible menus, not necessarily discounting menu items, planners will see a savings to their overall budget.”
As an example, Dominguez points to the cost of shrimp, which was at an all-time high three years ago due to the oil spill and disease in Asia. As the price has come down, it’s more sensible to replace lobster with shrimp.
Dominguez also sees a trend in passing bite-size and small plates portions. “This ‘feast on the move’ allows for a better return on engagement as attendees are able to interact with a greater number of attendees rather than a sit-down meal where they are locked into a table,” Dominguez says.
Stagner is seeing an increase in the food and beverage budget, typically for higher-end meetings. “Planners are trying to be more thoughtful on how they spend their money and are getting away from the traditional banquet menus,” Stagner says. “There is more conversation on what is best for the customer as the trend is on a healthier lifestyle and quality food.”
Stagner says more planners are going offsite for their meals, allowing attendees to better experience the local flair. “The restaurants don’t have to be high-end; it could be barbecue and food trucks, but an authentic local experience,” Stagner says.
Venues are responding to an increased call for health-oriented foods. The IACC survey “Trends in Nutrition and Delegate Wellbeing” reports that venues are changing how their menus are prepared and are using less salt, sugar and fat in their menus. They are increasing the amount of dairy-free and gluten-free options and are preparing smaller portions.
The IACC survey revealed a need for venues to take a proactive approach in promoting healthy options rather than waiting for the planner to raise the issue. In response to this, 87 percent of venues made changes to their menus based on health and wellness principals or feedback from clients.
“Meeting professionals are also continuously asking for continuous food breaks to fuel their attendees,” says States. “The nutritional needs of an audience are as diverse as the individuals who comprise it. And people need the food that fuels them at a variety of different times. As organizers look to customize the onsite experiences of diverse audiences, food becomes a major player in the design of welcoming and inclusive experiences.”
While some companies are booking their meetings farther out due to increased demand, other companies continue to book late. That window can be as short as 60 to 90 days. However, lead time shortens as buyers are concerned with political volatility.
“Geopolitical risks, uncertainties in emerging markets and ever-changing political environments in Europe and the United States mean today’s travel professionals more than ever have to take into account when building their travel programs,” says Jeanne Liu, GBTA Foundation vice president of research. “The most successful programs will have to keep a watchful eye on both geopolitical risks and a rapidly changing supplier landscape as they reevaluate strategy often and adapt as necessary.”
According to the BCD Meetings & Events Survey, the demand for meeting space is causing hotels to hold bookings for a shorter period of time and selling on a first-come, first-served basis. And, hotels are being more selective about their customers, choosing those they believe will bring a higher overall revenue once food and beverage spend is taken into consideration.
On the airfare front, Stagner says lift continues to be a problem especially in cities such as Nashville that were once considered second tier, but are now popular. “The airlines’ available flights haven’t caught up with cities in demand,” Stagner says.
The lift issue might improve in 2018. GBTA’s 2018 Global Travel Forecast shows that airlines will add 6 percent capacity next year. Their predicted 2.3 percent rise in U.S. airfares will force travelers to look at basic economy fares and restricted fares versus upgraded options.
GBTA estimates ground transportation rates will rise only 0.6 percent in 2018. An increase in corporate travel will cause rental car rates to rise. Rental car companies are using this revenue to invest in technology to better manage fleets and improve utilization. Sharing economy companies such as Uber and Lyft will see growth of more than 10 percent. However, their growth is threatened by government bans and costly regulations.
Experience-driven meetings will continue to be the focus into 2018. Stagner sees a turn in conventional room design to a format that fosters better networking. “I’ve seen room sets that represent a coffee shop with espresso machines,” Stagner says.
Hotels are now building their meeting rooms with environments intended to stimulate learning. Dominguez points to the Monte Carlo hotel in Las Vegas, which is being redesigned to the Park MGM hotel. Meeting rooms will have conference tables that are 12 inches taller than traditional tables. “This allows attendees to be eye-to-eye with the presenter,” Dominguez says. “Everything from lighting to air quality will be focused on boosting mental acuity.”
Embracing adult learning is a key factor in designing engaging content. States sees meeting owners creating hands-on learning experiences and designing peer-on-peer classes to better foster learning. “They are building an arsenal of unique session formats and learning autopsies, finding the experts in the room and ultimately delivering education that capitalizes on the way adults learn, remember, recollect and apply knowledge,” States says.
Kelly Peacy, CAE, CMP, founder and CEO of Insight Event Strategy LLC, sees a trend toward more informal learning environments and a need to move attendees from passive observers to active and engaged participants. “Adults learn differently, and research shows that adults retain content when it’s applied learning and interactive or in small groups,” Peacy says. “This is affecting room sets and the desire/need to be flexible with movable furniture and/or walls that can be used to share information with magnets, push pins or dry-erase boards.”
Incentive travel programs will continue to be popular in 2018, increasing at a rate of about 1.2 percent according to MPI. However, in an effort to cut costs, many groups will stay in North America. Others will look to Mexico and the Caribbean as popular destinations. City experiences and individual customization are high priorities. “It’s as much about what the group does once they get to a destination as it is the destination itself,” Stagner says.
On the international front, luxury cruises and river cruises are popular as well as untouched destinations such as Slovenia and Iceland. Stagner also sees Cuba as a future target after issues with the country’s infrastructure are resolved.
Dominguez agrees that experiential incentive trips provide the best attendee engagement. “Planners are focused on the unique aspects of a destination,” Dominguez says. “In Vegas they are not just staying on The Strip. They are taking a helicopter to the Grand Canyon and having a picnic on the base of the canyon.”
According to Linda McNairy, vice president of global operations for American Express Meetings & Events, Orlando, Las Vegas and Chicago are the most popular destinations for incentives in the U.S. In Latin America, Rio de Janeiro, Cancun and Mexico City are favorites. London, Barcelona and Berlin are at the top of the list in Europe, and Singapore, Sydney and Bangkok are the most popular in Asia.
While many event budgets reduced CSR initiatives during the recession, 2018 sees a strong return. Rather than simply donating money to a cause, attendees are looking for experiences that put them in the community. Dominguez says many venues assist planners by having a menu of CSR options to choose from, making it easier for the organization to implement the program.
And if a CSR activity doesn’t fit into the agenda, Stagner says organizations are placing donations in an attendee’s name or removing an element of the program — an attendee room drop, for example — and giving the equivalent cost to charity.
On the sustainability side, Dominguez says planners have become more conscious of waste, especially in the banquet areas. They are giving better attendee numbers to help reduce unused food.
Technology tools are being used to foster attendee engagement on a greater level. Innovations in virtual reality and artificial intelligence are creating unique opportunities for attendee interaction. Human-shaped holograms, for example, are being used to provide attendees with directions and soon will be able to answer questions. Other tools, such as Social Tables, are helping planners create better room setups, and Slido, a crowdsourcing tool, allows attendees to interact during sessions from their mobile device.
“Technologies that help participants connect and engage with each other are increasingly important in the eyes of meeting organizers,” States says. “As the reasons for attendance continue to evolve and as attendees look increasingly for answers to their specific challenges and problems, meeting professionals are turning to technologies that help their participants curate unique experiences. These are technologies that recommend courses, subject matter experts and peers based on attendee profile, that connect buyers to the suppliers who directly meet their needs, that bring like minds together to solve problems and find solutions.”
Planners are continuing to use hybrid meetings to increase the audience, but not to replace live events. The AMEX forecast reports that fewer than one-third of planners said hybrid meetings would be more than 10 percent of their meetings. Rather, hybrid meetings are being used to join regional offices that cannot participate onsite. They hybrid experience is becoming richer as well, offering virtual attendees a greater depth of learning.
“They are no longer simply streaming content from their keynotes and concurrents, but creating an exclusive online experience during which facilitators and speakers talk directly to the online audience, devise homework or group work for virtual attendees and host private Q&As with the online cohort,” States says.
Planners are looking to create new risk management plans or redesign what they have in response to heightened security concerns. MPI reports that although meeting budgets are increasing by only 0.8 percent, the majority of this increase is going to safety and security measures.
Pete Murphy, operations director for Priavo Security, performs risk assessments for events and advances venues to assess the threat mitigation measures put in place. More often than not, his team finds areas for improvement in the security infrastructure.
“There is still a need for organizations to be more proactive when considering security,” Murphy says. “Terrorists are quick to evolve their tactics, techniques and procedures; currently doing so at a higher tempo than the counter terror policies and measures put in place to prevent them.”
Cyber security is another concern for planners. In many cases, planners are not even aware that they have suffered a security incident or data breach. Murphy says that attackers are motivated to keep an initial breach hidden so they can penetrate deeper into the organization to perform identity theft or deploy large-scale fraud. “Monitoring, threat analytics and incident response are key as we see clients, event organizers, venues and agents targeted with what is frequently a blended attack where cyber is only one component,” Murphy says.
Medical risk management is another area of focus for planners. With recent natural disasters, clinical assessments can help organizers understand country health risks, medical considerations and capabilities. “Deployments for large-scale events include the setup of remote medical clinics, and clinical and medical staff globally,” Murphy says. C&IT