MPI: Meeting Buyers Expect Expenses To Expand

Corporate meeting expenses in 2007 are expected to swell by 18 percent from 2006 levels, according to a new survey of 269 corporate planners by Meeting Professionals International and American Express. However, new meetings and more attendees are expected to generate most of the additional expenditures, resulting in a mere 4 percent increase in per-meeting spend.

The fifth annual FutureWatch survey of 1,443 meeting professionals, released last month at MPI's Professional Education Conference in New Orleans, predicted the economic contribution of the meetings industry would reach "new highs" in 2007.

However, the record volume and size of events predicted for this year isn't encouraging planners, according to the survey. Planner respondents named budget changes and workloads as their biggest challenges in 2007, and said corporate belt-tightening makes proving meetings' strategic value even more important.

"Planners need to focus on the value-add they provide to the company and be able to articulate how this value is aligned with the company's current goals, objectives and initiatives," said Julie Lindsey, senior manager of corporate events for San Francisco-based Gap Inc. "This means you need to pay close attention to the corporate messaging you receive and proactively communicate your team's relevance to internal stakeholders and executives."

According to the survey, corporate planner respondents expected their companies to hold 7 percent more meetings this year. The length of events is expected to remain about the same, but attendance is expected to increase by 27 percent.

"There are a lot of planners out there who feel like they are going to be asked to do more with less," said Dawn Myers, MPI's director of research. "Even if they're getting a little bit more, they're being asked to do even more than that."

This year marked the first time MPI members were asked about the centralization of corporate meetings management. According to the survey, 54 percent of corporate planners said their meetings were either mostly or completely centralized across the organization.

Fifty-five percent of corporate planner respondents said their companies tracked data on meetings expenditures. Among companies not currently tracking how much they spend on meetings, 51 percent of corporate planners expected to place more emphasis on tracking meetings spend in the future.

The question of who is buying meeting services, whether that person is from a procurement, marketing or travel background, has a wide impact on the industry, Myers said. One impact from these trends is evidenced in how buyers and suppliers build their relationships.

Buyers and vendors agreed that entertaining prospective clients was the least effective way to build relationships, but buyers preferred competitive pricing and flexible contracts and suppliers preferred quick responses to requests for proposals and a more "consultative relationship." Only 52 percent of hotel respondents identified competitive pricing as a strategy to build loyalty with clients.

Security seems to be surpassing economic conditions as the external factor expected to have the greatest impact on the industry. Terrorism and war ranked among the top three concerns by 38 percent of respondents. Pharmaceutical planners said government regulation would have the greatest impact on their meetings in the coming year.

Planners said they primarily would seek meetings technology tools to help with logistics, but 23 percent of respondents said existing tools are either not affordable or not accessible and 30 percent said there were no adequate tools available.

"Electronic sourcing technologies allow meeting professionals to better track and report on rates and availability, to more easily identify industry trends, and to consolidate proposal data that can be referenced in future negotiations," said Jonathan Davidson, project manager for travel and meetings at Seattle-based Starbucks Coffee Co. While technology helps buyers be more efficient, "the buyer and seller still need to utilize additional communication methods to maintain their relationship," Davidson added.

MPI will reevaluate FutureWatch this year in conjunction with its fifth anniversary, Myers said.

"We want it to be forward-looking, whereas traditionally it has been a tracker. It doesn't always work together," she said. "There are going to be some things you want to track over time but if you keep covering the same topics, like standardization or return on investment, sometimes things lull or they play out or the trend completes itself. We want to make sure that we are looking at the trends that are really important for the upcoming year."

The centralization statistics, for example, are to be used as a baseline for future surveys, Myers said.

"Another small thing that we want to track is the fact that some suppliers say their contact is an agency, like a public relations agency, that is taking over the meetings," Myers said, adding that PR agencies likely are more involved in marketing-type events.

"One question I would like to ask next year is if you expect your budget to increase beyond what your costs will be," she said. "Is it a net increase? Or are you being asked to do more?"

Myers said she also hopes to begin a separate tracking study this spring. The study may use benchmarking statistics already covered by FutureWatch and take a more in-depth look at specific questions. The first study would break down planners' responses by organization size, type or revenue. The tracking study means FutureWatch will be reevaluated, but not abandoned, she said.

"If we have a tracker, theoretically we can use some of the information and put it into context with FutureWatch," she said. "We just have to see how the different products will work together."