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MEETING TARGETS
THE BLURRING OF THE boundaries between transient travel and the meetings sector continues to throw up a plethora of challenges for the world’s travel buyers – and the situation is likely to get worse before it gets better. Meetings specialist Grass Roots Eventcom director, Alan Newton, warns that venues in general, and hoteliers in particular, are taking an increasingly hardline approach in a market which is fast becoming supplier-led.
Launching his company’s latest
Meetings Industry Report, Newton says trends in North America indicate a distinct shift in power away from buyers. The report suggests that
the contracting of meetings is taking longer, while meeting space being held by companies is increasingly being ‘bumped’ for more lucrative bookings by the venues. A number of hotels are refusing to commit to catering-only events – one-day gatherings without the need for accommodation – until a mere 30 days before. The report also warns that
the buyer-supplier imbalance is likely to get worse this year and through 2014, and adds: “Corporate planners need to be prepared to come to market with more certainty regarding whether their events will go ahead and ready – if need be – to
contract sooner to secure their most desired options.” That may prove difficult for some. According to HRG, 56 per cent of its corporate clients do not know how much they spend on events and meetings – although 53 per cent believe they will be spending more over the next year or so. A global survey by payment solutions provider Airplus International goes even further, with nearly 90 per cent of UK travel managers confident that 2013 meetings spend will be as high, or higher, than last year. In a global context, however, the same report reveals that travel managers are responsible for only 33 per cent of meetings activity, with the rest divided between other departments within the same company (which handle 42 per cent of all meetings) and external providers. Yael Klein, managing director
of Airplus UK, said: “We are seeing here in the UK that those responsible for managing travel are more often trying to get a handle on the event piece as well. “We believe this presents an opportunity for travel managers to begin to truly control their meetings and events spend, through better insight and analysis tools.” That‘s quite a tall order.
According an economic impact study conducted for the Meeting Professionals International (MPI) Foundation, more than 1.3 million meetings took place in the UK in 2011, attracting in excess of 116 million participants to more than 10,000 venues. More than 80 per cent of all meetings were held by the corporate sector and – worryingly, given hoteliers’ tough stance on catering-only functions – nearly 54 per cent were for one day or less.
Corporates and their TMC intermediaries are having to come to terms with the fact that the battle- lines have been re-drawn
SOMETHING HAD TO GIVE But while suppliers’ prices have returned to near-normal, the negotiating process certainly hasn’t. Chief financial officers’ demands for year-on-year financial savings were never going to be sustainable for long, and with many suppliers’ costs outstripping the rate of inflation, something had to give. Corporates and their travel
management company (TMC) intermediaries are having to come to terms with the fact that the negotiating battle-lines have been re-drawn, with the emphasis increasingly on ‘savvy travel’ rather than ever-deeper discounts. “That’s absolutely right,” ACTE regional director Caroline Allen says. “The financial turmoil of recent years has led to a definite conservatism around pricing.”
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