Employers are turning to face to face experiences to engage and develop their teams. Courtesy of Stephanie Harris / Incentive Research Foundation

As we closed the door on 2023, meeting and event planners looked back — and forward — at their industry. While no one can predict the future of meetings, planners’ focus is on making better meetings matter. On venues designed for the digital age with state-of-the-art technology that provide seamless integration for various tools. On looking closely at the latest trends in travel, hospitality and the business of meetings. And that, of course, includes budgets that are out of sync with real costs and the repercussions of widespread staffing shortages, which are among the top issues planners face.

From a planner’s perspective, 2024 still looks positive, even though budgeting continues to be an unresolved problem — and the number one most challenging aspect of event planning.

“We’re paying more and getting less for what we’re paying for. Everything related to a meeting is more expensive,” said Julie S. Nack Locke, CMM, CMP, regional vice president with HelmsBriscoe. “Demand is high, and negotiating is tougher than ever. Concessions are less than they use to be and most of the time we’re seeing room rental that is minimally negotiable.”

AV costs are astronomical and unaffordable, according to Locke, who negotiates for groups to bring in outside AV and bid it out. Most of the time, outside AV companies are 30% less even while paying a liaison fee to bring them in.

Unfortunately, it’s not just a matter of the higher prices. Locke said some organizations are ill prepared to meet these costs, as they haven’t budgeted properly and can’t afford what’s out there.

Although not new, staff shortages continue to affect meetings, attendees and planners. “Service has gone downhill in many properties because of staff challenges or staff from outside the industry who don’t understand customer service and what hospitality actually means,” Locke said. “Hotel owners want more profit, so costs keep rising and demand on staff keeps increasing.” Still, Locke said, 2023 was a good year. “I’ve been busy; meetings came back fast and furious post Covid. People need to see each other and have human connection.”

That said, she believes the work of planning has changed, in part due to repercussions of staffing problems. In addition to lack of experience and training in the industry, Locke noted, “Many don’t have autonomy and can’t make decisions without their managers and sometimes even without ownership involvement.”

These issues create roadblocks in the planning process, and Locke believes they threaten the industry in multiple ways. She sees staff training as key. “Organizations need to focus on training, otherwise our incredible industry is going to lose the impact of true hospitality. For example, on Sept 30, I got two demands from hotels that if the group didn’t sign that day the rate would increase, and they’d lose their concessions. In 22 years, I’ve never seen that behavior or ultimatum.”

The actions of some hotels, she continued, are driving clients away. “A client recently was charged $72+ (about $100 pp) for breakfast. I asked the sales manager if he was going to serve diamonds on the side. It doesn’t make sense for anyone to serve $100 eggs and toast.  The group will never return to that hotel and their offices are next door.”

As for what companies and corporate executives can do to improve things, Locke suggests they look at the bigger economic picture so they can create realistic budgets. “Prices in supermarkets have increased and thus F&B at hotels has also increased. Gas prices and trucking costs have increased, which causes almost everything to be more expensive. And staff costs have increased as unions demand more for employees, which also causes a rise in pricing.”

Finally, Locke noted that political topics impact meetings as well, particularly meeting destinations. “Politics definitely affect some of my groups because of women’s rights, abortion, LGBTQ rights and other political issues. Right now, I have three groups that have told me I cannot consider certain states for future meetings.”

Susan Adams, vice president of engagement strategy & corporate services with Next Level Performance, works with incentives and sees many of the same issues, but overall believes things are stabilizing.

“After the dramatic drop in group travel during the height of the pandemic, and the subsequent explosive return in demand, we’re beginning to see the market stabilize. The times of limited travel seem to have cemented the understanding that face-to-face meetings and experiences are important to organizations, and inquiries and bookings are still very brisk.”

Adams, who became chair of the Incentive Research Foundation (IRF) this month, noted that the recent Incentive Travel Index Survey by the IRF and SITE Foundation showed that incentive travel buyers expect activity and spend to rise for the next two years.

“While staffing is still a challenge in many corners of the industry,” she said, “new hires are beginning to be more established in their roles and overall satisfaction in service seems to be improving. Now that we’re two years past the initial reopening for business, clients and planners expect the guest and planner experience to be at the same level as pre-pandemic. However, service levels remain the second most concerning issue facing planners today, according to the IRF’s Incentive Travel Programs — Expectations and Challenges study.”

Adams believes the combined effect of high demand, a need to attract more qualified staff and inflation has significantly increased costs. “This puts pressure on every partner in the supply chain, as well as on clients, as they forecast for the future are faced with absorbing unexpected expenses now.”

Like Locke, Adams said 2023 was a good year. “It’s been a robust and successful year for incentive travel. We work with clients across many industries. Consistently, they’ve prioritized connecting with employees and customers this year. This may be in part due to an increasingly remote and/or hybrid workforce. But taking time to share experiences, network and engage is a successful strategy to achieve goals and strengthen all-important relationships.”

Most incentive programs for 2024 are already set, but things may change as we go into 2025. For 2024, we’re seeing continued increase in demand for international programs, most notably in Western Europe and Asia.

“Many clients are finding international destinations not only highly desirable for program audiences but also cost effective because of currency exchange or the local economy,” Adams explained.

As he noted, we live in volatile times and that probably means change is likely. With a 2024 general election, high costs for air and ground services and an economy that benefits some industries and challenges others, there’s a good deal of instability. “Add to that global unrest due to conflicts in other regions and we can expect surprises. If conflicts continue, I anticipate greater interest in domestic destinations in 2025 and beyond.”

Despite the volatility, Adams said, “Senior leaders are showing commitment to finding time to gather, deliver the message of the organization, recognize and reward partners and deepen connections.”

Even in the best of times, Adams calls planning challenging work. “Balancing the art of the guest experience, the goals of the program owners and maintaining careful control over budgets — particularly in a time of inflation — requires great skill and dedication. But in the past few years, the pandemic created unique obstacles to program delivery that are just now beginning to fade. As staffing levels increase and services are more predictable, planners can rely on partners such as DMCs and CVBs to collaborate on successful programs.”

Yet new expectations have also emerged, Adams noted, including an increased focus on branding and sponsorship dynamics at incentive programs. “Marketing and communications teams have a greater role to play in communicating using new technologies. Additionally, many clients are integrating their travel and non-travel rewards programs to be more cohesive and more naturally carve a path for employees or customers as they navigate toward achievements.”

When asked what industry leaders can do to improve the industry and the work of planners, Adams said, “Leaders must always be on the lookout for ways to provide better options, more efficiently and with accuracy. For example, industry leaders must provide the tools and resources needed for planners to deliver the best programs.”

She gives examples such as a DMC that can provide quick turnaround and creative event ideas no one has seen before, or a technology company with a new activation that makes it more fun for attendees to receive information at an event.

Additionally, she said, “We’d love to see more involvement from leaders in the airline industry. From corporate to incentive travel, business travel has a great role to play in the future of the travel industry as a whole. A more effective partnership in delivering a guest experience seamlessly from the moment the guest leaves their home city until they return would be most welcome. Air lift is often a deciding factor in choosing destinations, so having a good handle on existing flights and any plans to further develop capacity on a specific route is important to us and our clients. Airlines have had their hands full with recovery and rebuild, and we hope to find ways to work collaboratively going forward.”

The C-suite has a part to play, too. “As we move into 2025 and beyond, we look forward to discussions around evolving budgets reflecting the marketplace,” Adams said. “We also recommend committing to 2025 and 2026 programs soon if they have not already been scheduled. In many of the most desirable destinations, ideal dates continue to be in high demand. Being able to secure space and any special venues or activities early will go a long way toward controlling spend and reducing risk.”

Taya Paige, CMM, CIS, DES, HMCC, strategic advisor with ITA Group, said 2023 was a strong year but cautions that much in the industry has changed.

“Events came roaring back in 2023. There were more programs operated than ever before at ITA and it seemed everyone was making up for nearly two years of ‘pivoting’ due to Covid. As part of the comeback, however, attendee values changed. They want to feel emotionally connected to a brand and expect more immersive, participatory and authentic event experiences to make attending worth their time.”

With that change in attitudes, Paige added, “comes increased pressure for events to be ‘reimagined’ and more aligned with marketing objectives and attendee needs. With rising costs and labor shortages still impacting operations and budgets, purposeful, attendee-driven experiences and investment in the right places are necessary for events to stay competitive and attract attendees.”

Budgets are an unresolved problem. Inflation, the continuation of leisure travel’s impact on air and room rates, and “a transition of industry knowledge” resulting from the outflow of experienced workers during the pandemic and new people coming in without deep experience, all play a part. How organizations view themselves and their events in the context of the larger world also matters in terms of sustainability, diversity and inclusion, which can also impact budgets.

“Brands are challenged with having a more nuanced understanding of not only their impact on the environment, but also larger issues related to societal impact and diversity and inclusion (ESG and DEI). Moving from promises to action starts with all of us — clients holding event agencies responsible and event agencies holding supplier partners accountable. Developing strong action plans with supplier partners is critical for ensuring that high-level goals are met with on-the-ground action. This requires thinking about having the right measurement and reporting in place to show the impact.”

In terms of how the actual work of planning has evolved, Paige pointed to shorter windows and delayed decisions. “Planning timeframes have been condensed for some time and important decisions have been delayed, which only adds to the issue. Being able to source and get driving decisions made earlier would make the work much smoother. We’re starting to see that shift in 2025, but the issue remains for many programs/clients this year. It will just take time to get out of the cycle.”

The planner’s job has expanded. “We’re increasingly involved in the overall strategy and end-to-end planning, including content design, engaging learning and development (pre-, during and post-event), hybrid attendee engagement, experiential production and overall run-of-show.”

Embracing change, she added, is a crucial step in the process, as they have so much data to work with now to personalize the experience for attendees.

“We must lean into this data and leverage it wherever possible, but also be sure we don’t lose gut instinct. We should be afraid to not make changes,” she said. “Let’s be honest, it’s more fun to play and try things that are different, which makes for a more amazing journey for your attendees year after year.”

The solution to many industry issues, Paige believes, is purposeful collaboration and communication. “There’s a common desire for open lines of communication, reciprocity and a mutual understanding that we’re striving for the same goal. Understanding how we can all work together and the complexity we all face at a personal, human level will help us meet these challenges. Having strong, reliable partnerships with DMCs, hotels and security teams is critical for successful programs.”

Stephanie Harris, president of the Incentive Research Foundation, said the industry continues to see strong performance even as post-pandemic volume pushes start to level out. The demands of a changing workforce, both working from home and a generational shift, are creating more and more need for meetings and incentives.

“As employers look to engage and develop their teams, they’re continuing to turn to face-to-face experiences, which are driving current volume. An increase in volume is predicted in most sectors into 2025,” said Harris.

This as a year in which organizations shift destination choices. “There’s a strong drive within organizations to utilize destinations that are new to their group. For U.S. buyers, destinations like the Caribbean and Western Europe are higher in the consideration set than a year ago. We’re also seeing U.S. buyers look at Canada as an opportunity to experience a new destination or new type of program while remaining close to home and taking advantage of a strong dollar in a challenging economy.”

Harris sees rising costs coupled with a seller’s market continuing into 2025, meaning hard choices must still be made about program destinations, length, attendee numbers and other elements. The goal, however, remains the same: ensuring a great experience for participants that makes attending the program worth their time and money.

“The economy is incredibly challenging,” said Harris. “Program owners faced with budget challenges may do well to step back and look at the qualifying criteria for their incentives. Are there opportunities to make the programs self-funding? Are there opportunities to change the thresholds? This is a delicate area as it’s important not to alienate potential incentive earners.” The good news, Harris said, is, “While C-suites are familiar with rising costs, they also see the need to bring their people together. And when it comes to incentives, the people earning them are the very people you need to retain and keep engaged.”

Like Paige, Harris believes better communication is critical. “Across the industry there’s a sense that relationships between buyers and sellers are more challenging and complex than they’ve been historically. Whether related to speed of RFP or availability of responses, budget challenges or service-level challenges, the biggest gap is often communication. In a high-volume landscape, people often don’t take the time to understand what the other side is saying or asking for and instead work on assumptions. Both buyers and sellers want more clarity throughout the process. That time investment can make a tremendous difference during program operation.”

Budgets, staffing, volatility, partnerships, communication — these are the watchwords in the industry today and it seems for at least another year as well. Yet in spite of ongoing challenges, the planners’ perspective is clear: the meetings of the future will be about breaking down barriers and meeting people where they are, in the ways they want.  C&IT