Industry Big Picture: Moving On Up (Gradually)
There’s a whiff of optimism in the air, with many meeting professionals predicting that the first shoots of recovery in the industry are starting to sprout.
By Elaine Pofeldt
There’s a whiff of optimism in the air, with many meeting professionals predicting that the first green shoots of recovery in the industry will start to sprout this year.
So how do you define “a whiff of optimism?”
Well according to FutureWatch 2010, it’s all in the numbers—34 percent to be exact.
That’s the percentage of meeting professionals that see a gradual improvement in the market coming in 2010, especially toward the end of the year.
The success of business doesn’t start and end with overall improvement. It’s about the bigger picture. So after such a rocky 2009, what does 2010 hold in store for our every aspect of our industry and beyond?
A look into the minds of our industry’s most influential members in FutureWatch 2010 reveals the top anticipated trends for the coming year. MPI’s FutureWatch 2010 survey was conducted by research firm Association Insights and sponsored by American Express, which will be released in its entirety in the January 2010 issue of One+.
In this issue, we provide you a sneak peak into our annual in-depth study.
What’s Success Look Like?
Does 34 percent really show a great deal of confidence in a turnaround? It does when you consider that only 19 percent of those surveyed expect poor or flat conditions to continue and fewer than 1 percent expect a downturn.
“There is substantially more optimism in the market than in 2008-2009,” said Bill Voegeli, president of Association Insights. “A lot of meetings that were cancelled or postponed in 2009 are being added back to the books in 2010.”
The FutureWatch 2010 survey polled 1,832 industry professionals—most based in the U.S., but with significant numbers of respondents from Canada and Europe, the Middle East and Africa (EMEA).
While 2010 may be a little easier than 2009, most in the industry still expect to hustle to keep their careers and businesses thriving. Some 61 percent of meeting professionals predict at least one of the following factors to affect their work in 2010: cost-cutting measures, tighter budget controls, more time spent evaluating value and ROI, the requirement to “do more with less,” a push for better organizational efficiency and slight staff reductions. Here are some key survey findings from this year’s survey to help you as you plan for the new year.
Although planners report that their companies had bigger budgets last year, that money was often frozen mid-year as companies coped with the downturn, Voegeli says. For 2010, planners have smaller budgets (the average company’s meetings budget dipped by 2.6 percent in 2009 to US$5.7 million), but planners expect to be able to use more of the money, because their budgets have been taken off ice.
“The point is, in many cases, planners are in control of meetings again,” Voegeli said.
Suppliers, too, expect to see more meetings in 2010. Among them, 39 percent see gradual growth in their businesses for this year, with only 20 percent seeing growth remaining flat. About one-third plan to step up or improve their sales and marketing efforts or renew their commitment to building close relationships with clients.
Some sectors seem to be moving full-steam ahead on planning meetings, said Tim Brooks, a 26-year meeting industry veteran and founder and CEO of Meeting Trader, a Chicago-based online marketplace that allows hotels to sell cancelled meetings contracts to planners looking for attractively priced accommodations.
“Pharmaceuticals continue to be strong as a market segment,” he said. “They had layoffs and downsizing but are still doing a lot of events. Companies involved in energy and infrastructure improvements in general will continue to do well.”
Other sweet spots include technology, education and direct selling and multilevel marketing organizations, he says.
It’s not your imagination that many organizations are still having trouble deciding whether to hold meetings at all.
“They’re sitting on their hands a little longer,” Voegeli said.
That is resulting in more scrambling by both planners and suppliers.
“It used to be you would book big meetings a year out,” said Brooks, who previously ran a strategic meetings management consultancy that worked with large companies and organizations. “Now you book them four months out.”
Indeed, about 8 percent of meeting professionals see the trend toward shorter lead times continuing for 2010, compared to 1 percent of respondents last year.
Many organizations are operating with pared down staffs so the meetings they plan are smaller than before, making them easier to organize quickly.
Suppliers seem to be feeling the pinch the most, with about 14 percent expecting shorter lead times to continue in 2010. Even with shorter lead times, many are feeling increased pressure to stay prepared for cancellations, Voegeli says. Suppliers report facing tougher contract negotiations, with demands for more flexibility and greater protection for planners who have to cancel.
Sticking Closer to Home
To keep costs down, many planners are opting to hold events within their own countries. Within the U.S., 80 percent of planners expect to stick to domestic destinations, compared to 61 percent last year. Canadian and EMEA respondents are also staying more local. Among Canadian planners, 70 percent expect to hold their meetings at home. In the EMEA region, 63 percent expect to hold their meetings in Europe.
One pressing factor deterring American planners from making overseas bookings is the weak dollar, Brooks says.
“American customers are very wary of currency risks,” he said. “They are holding back on sending teams to Europe, except for the most important groups. If they are doing an incentive, they are scaling it back. If they used to go the Caribbean, now they go to Florida.”
The top priority for planners around the world in selecting destinations is the overall cost of the meeting, according to 56 percent of FutureWatch 2010 respondents. That was followed by the availability of venues that met space requirements, a concern for 53 percent, and the hotel rates in the area, a deciding factor for 44 percent. U.S. planners were the most concerned about hotel rates, with 48 percent citing this factor. In contrast, 38 percent of Canadian planners and 26 percent of EMEA planners cite hotel rates as an issue.
Working Smarter and Harder
If you feel like you’re putting more time and effort into doing your job, you’re not alone.
“We’re seeing more indications that lower staffing levels are a problem and resulting in a lot of challenges,” Voegeli said. “People are working harder. They’re having to learn to be more efficient and productive in their work.”
Planners report being asked to plan more meetings than last year. The average number they are booking has risen from 159 in 2009 to 163 in 2010, and so has their share of the work. Individual planners expect to handle 30 percent of the meetings for their organizations for 2010, up slightly compared to 27 percent last year. The percentage of their organizations’ meetings budgets that they are managing is also up slightly. But many planners say they are doing so without additional staff to help.
Suppliers also have to power up their productivity to keep pace with the demands of their jobs—it is creating a heavy workload for them to book meetings quickly.
In the open-ended questions in the survey, some expressed worries that the increased pressure will contribute to errors. Even planners worry about suppliers’ ability to cope during the events, concerned about receiving the same level of service as in previous bookings.
ROI Stays Top of Mind
Many companies remain concerned about being able to justify the meetings they book with quantifiable data showing their value.
“It is the era of inconspicuous consumption and ROI justification on everything,” Brooks said.
To that point, 8 percent of meeting professionals see the focus on ROI continuing into 2010.
Pressure on planners to show a high ROI for their meetings is trickling down to suppliers, who have to compete harder to win jobs.
“We’re seeing more RFPs,” Voegeli said. “Suppliers are being pushed harder to guarantee they’re going to perform or the planner won’t pull the trigger.”
And some suppliers report having trouble turning around RFPs as quickly as planners would like because they can’t afford to invest in technology to speed the process.
These trends are likely to continue. Many organizations are looking for better ways to make decisions about ROI, notes John Arenas, founder of Worktopia, a company that offers real-time booking solutions to planners. He says Worktopia has noticed a trend toward big companies bringing together their travel, meetings and technology departments to jointly determine the ROI.
Demand for Better Meetings
Of course, companies that book meetings aren’t just looking for events to contribute to their profits. About 9 percent of planners predict that many organizations will seek more value from meetings in 2010. For instance, among association meeting planners, 10 percent see a demand for more educational content at meetings.
To keep customers happy, the industry needs to listen to them carefully and deliver the best possible opportunities to learn, network and do business, says Nancy Shenker, CEO of marketing firm theONswitch. Many organizations are using options such as teleclasses and Webinars to provide educational opportunities to their employees, so they need compelling reasons to send them to a live event.
“In face-to-face education, the bar is raised much higher,” she said.
Planners should take a page from the playbook of the educational world, where Wikipedia-style interactive lessons are in and droning lectures are out, she says.
“[Unfortunately,] I still attend a lot of conference sessions where there is a presenter standing at the front of the room with an interminable PowerPoint presentation.”
Planners also need to find ways for attendees to do more in less time, she says. For instance, they need to pay attention to the reality that the last day of many events is a “dead day” that many participants prefer to skip.
“People are looking for fast learning and immediate gratification,” she said.
More Virtual Meetings
Once a novelty, virtual meetings are now part of the mainstream. Overall about 12 percent of meeting professionals expect the trend to be among the most important in 2010, with more planners than suppliers predicting this. While last year, many respondents said virtual meetings technology was cumbersome or wasn’t up to snuff, their comfort level with videoconferencing devices, programs and other systems increased this year.
Many companies are mainly adding virtual components to live meetings to make the meetings available to those who can’t afford to attend or to otherwise increase their reach.
“It’s not like there’s an exodus to Web and virtual meetings,” he said. “I don’t think it’s going to displace face-to-face meetings.”
In fact, many organizations now want to create a year-round impact for their meetings using virtual technologies, noted theONswitch’s Shenker.
“I think the days of the two- or three-day event and then nothing happening the other days have come and gone,” she said. “Meeting, event and trade show organizers are looking for ways to keep their show alive, even in the off season. Social media, Web marketing and e-marketing all allow the event organizer to keep the spirit of an even alive 365 days a year, 24/7.”
Expect to see more of this trend as Generation Y influences the industry, Shenker says.
“Shows are going to change and evolve because of digital natives who grew up in the Internet era and are used to communicating remotely as well as face-to-face,” she said.
For instance, some conferences are now including “tweetups,” where participants who met on social media such as Twitter and Facebook can connect in person.
“It’s a great social lubricant,” she said. One+
ELAINE POFELDT is a business journalist based in New Jersey.
80 percent—Amount of U.S. planners expect to stay domestic in 2010, up nearly 20 percent from the previous year.
56 percent—Amount of planners worldwide who cite cost as the top priority in destination selection.
Twice as many suppliers see gradual growth than flat growth in their business next year.
FutureWatch 2010 Leading Trends
1. Gradual Industry Growth
2. Poor or Flat Conditions Continue
3. More Strategic Focus
4. More Web-based or Virtual Meetings
5. Lower Budgets
6. More Outsourcing
7. More Influential Technology
8. Short Lead Times
9. Higher Quality Meetings and Events
10. More Use of Social Media
Rohit Talwar’s Top Ten Forecasts for the Meetings Industry in 2010
Global meeting and event industry futurist Rohit Talwar (Page 22), CEO of Fast Future, shares his forecast for the industry in the coming year.
1. New Product Explosion – We will see a massive expansion of new event launches of varying sizes across multiple sectors. Ideas put on hold in 2009 are now being brought to market. Convention centers, venues and larger meeting planners could increasingly test the water by creating their own public and specialist events.
2. Immerse Me – A number of exciting technology developments will make their way into live events to help create a more immersive delegate experience. Vendors and innovators are keen to showcase their offerings and so the price of bringing such technologies into an event is falling in many cases. Examples include virtual reality, 3D television, 4D experiences and touchable holograms. Augmented reality will also hit the street in the form of visors that provide a visual overlay of additional information on top of real-world objects such as speakers and exhibition displays.
3. Get Busy Living or Get Busy Dying – The effects of the downturn will begin to bite. Big events for 2010 that were cancelled during the downturn may not be replaced and hesitant customers could continue to exert a downward pressure on price. We will see a wave of closures, mergers and acquisitions across the value chain as the industry landscape starts a shake out
4. More, Shorter, Cheaper and Faster – While hopes for a full economic recovery are rising, expectations for further turbulence are also increasing. Businesses will be nervous and will look to events to drive opportunities. We expect to see a lot more corporate events being run of shorter duration to reduce the time attendees spend away from their desks. There could be lower budgets for each such event as marketing departments seek to stretch their resources. The notice period for these events is also likely to get ever-shorter as desperate last minute attempts are made to hit quarterly targets.
5. Gone and Maybe Forgotten – 2009 saw a rash of events and exhibition cancellations—often at short notice. Despite hopes to the contrary, many will not return in 2010. Those involved in the value chain for those cancelled events will need to seek alternative opportunities to occupy unused human or physical capacity.
6. Asia Goes for Gold – 2010 will see a number of Asian events expand their scale and target a more global visitor base. Governments will provide strong backing to help increase international visitor numbers, and fill the capacity of Asian airlines and the rapidly expanding airports that serve them. Asian businesses will also be on the lookout to acquire events, event owners, planners and convention centers in more developed markets.
7. Shared Events – Non-competing corporations and associations could increasingly partner on their events. E.g. a pharmaceutical and IT company joining together to run their internal conferences in parallel at the same venue. Working together they can drive down rates with the venue. Food and beverage stations can be shared with staggered break and meal times to reduce set-up and take down costs. They may also reduce AV costs by having a single supplier with the same staging, and share keynote sessions and some skills training breakouts in order to cut speaker costs.
8. Public Sector Retreat – The accumulated national debt of the G6 economies is expected to rise above 100 percent of their collective GDP in 2010. Cuts in public sector budgets are inevitable in many economies. The knock on effects for public sector events could be immense. However, there may be a short-term spending frenzy before the current financial year ends as public sector organizations face the choice of “use it or lose it” on any unspent budgets.
9. Planners Under Pressure – With many corporations and event agencies making event planning staff redundant in the downturn, there are a number of new self-employed planners on the market competing for business. This will put further pressure on rates. In addition, many convention centers will look to build up their in-house planning teams so they can offer a broader service to win events business. Many will increase their efforts to compete directly with planners to secure an event from the end client, rather than hope for the planner’s request for a quotation.
10. Free or Fantastic – Free online event promotion tools have helped drive a massive explosion in the number of events on offer. Most are run in the evenings, often hosted in cheap or no-cost alternative venues donated by sponsors. Much like what happened to content providers on the Web, competition and customer choice drives price down towards zero for these events unless you can provide truly fantastic content for which customers are willing to pay. Instead the events become a tool for brand building, business promotion and contact generation. The lucky few may find sponsors.