Meeting Buyers Looking To Keep Down Attendee Costs

The vast majority of meeting buyers anticipate per-attendee costs to hold steady or even decrease this year, compared with the lows of 2009, as planners cope with sustained budgetary pressure, and suppliers continue to provide attractive rates. Indicators point to per-attendee costs gradually firming up as the year wears on and into 2011.

According to a survey by Business Travel News sister publication MeetingNews of 215 association, corporate and independent meeting planners, only 18 percent expect per-attendee costs to trend upward this year, while 70 percent expect flat costs and 18 percent even are expecting a decrease.

"Obviously, last year was down markedly from 2008," HelmsBriscoe chief operating officer Greg Malark said. "We're seeing 2010 rates being very similar to 2009. We're seeing some excellent short-term values because there doesn't appear to be much pressure in the market on a short-term basis. Looking at quotes into late 2010 and early 2011, we are seeing increases in ask-for rates."

Though the biggest spending category that drives per-attendee costs can vary by the type and size of event, industry watchers said hotel pricing remains a good indicator of pricing trends.

Citing client data released this month, Maxvantage, an alliance between American Express and Maritz Travel, said, "The market continues to put purchasing power in the hands of buyers. Compared to six months ago, nearly 40 percent of travel buyers are still finding it easier to negotiate lower group rates." Maxvantage found first-quote rates from hotels declined every consecutive month from May 2008 through September 2009, starting at $232 and bottoming out at $140. Rates have stabilized to a degree, but the average continued to hover around $155 for the first three months this year.

"Last year at this time is when the industry had one of the steepest slopes down, when everybody was feeling it more, but it probably bottomed out toward the middle of the year," Advito senior director of business development George Odom said. "Then, the end of the year didn't see a lot of increase, but that's when people start looking at budgets and taking things out to make their financial numbers."

Tim Bone, director of union conventions, events and meetings for the Service Employees International Union, deals with a lot of tight lead times and quickly planned meetings.

"From a supplier side, everything is ad hoc," he said of his planning patterns. "The hotels have been, to some degree, aggressive in their price points, but I don't think it's a fire sale as some have been led to believe, and it shouldn't be. It's all about value for dollar."

The sustained cost-consciousness of meeting planners also is impacting the trends. For example, HelmsBriscoe's Malark said planners are favoring shorter meetings with compressed lead times, held at more affordable locations.

"Companies are back in the marketplace. They're certainly buying with much shorter lead times, and their meetings are smaller and shorter," Malark said. "When you're talking about cost per attendee, buyers definitely still have a conservative mindset. We're not seeing as much expenditures on things like golf and food and beverage, but the biggest savings seems to come from shorter, smaller meetings."

Advito's Odom said that represents a shift from two or three years ago.

"People are planning shorter term, so the near-term becomes five or six months out," he said. "Those times when you plan 18 months to 2 years—there are still a few of those out there, but not as many. People are having their budgets scrutinized much more closely every year, therefore they have to make decisions in this 12-month timeframe because that's the only time they have semi-guaranteed budgets."

Association, corporate and independent meeting planners responding to the MeetingNews survey are seeing prices firm next year, with respondents expecting per-attendee cost increases nearly doubling to 34 percent. Still, about 60 percent expect per-attendee costs to remain flat.

Planners have yet to report a surge in attendance this year, but at the very least the bleeding has stopped. As Odom said, "I'm seeing the number of people going to meetings has stabilized from where it was before."