MPI: Suppliers, Buyers At Odds

Though both planners and suppliers anticipate higher levels of meeting spending in 2004, suppliers' optimism about an industry recovery substantially outpaces planners' spending expectations, according to an extensive new study.

Suppliers predict meeting-generated revenue to increase 10 percent this year over 2003 levels, while planners see their expenditures rising by 3 percent over the same timeframe, according to FutureWatch 2004, a survey released last month and co-sponsored by Meeting Professionals International and American Express.

The study, conducted in late October via e-mailed invitations to all 16,730 members of MPI, generated more than 1,100 responses from planners and 959 from suppliers.

Supplier exuberance aside, the fact that planners representing corporations, associations and third parties aggregately forecasted spending increases in 2004 is another sign that the meetings industry—beset for more than two years by major spending cutbacks and job losses—may have put its worst times in its rearview mirror.

"It's a better picture than 2003. It's a continuation of the focus on the economy, and we have to see how strong a recovery will be," said Meeting Professionals International president and CEO Colin Rorrie. "They are optimistic but still a little bit hesitant." As for the difference in projections between suppliers and planners, Rorrie said, "We'll have to monitor that. We do enough polling here on a variety of topics that we'll get verification."

In addition to forecasting expenditure levels, the survey also considers what it termed, "the conjecture that meetings management is moving toward a strategic sourcing model similar to that of business travel."

The survey polled respondents to the degree of implementation of certain enterprisewide meetings management precepts and found many organizations have created or soon will create meeting purchasing policies and preferred supplier programs for meetings.

About 42 percent of planner respondents fully have implemented meetings purchasing policies and procedures, with an additional 11 percent planning to adopt them within two years. Only 2 percent of planners have considered and dismissed their use, while the rest of the respondents have not considered meetings policies or currently are considering their use.

About 37 percent of respondents have standardized purchasing channels for meetings, with an additional 12 percent expecting to do so within two years. Preferred travel, lodging and meetings management suppliers have been established for meetings by 34 percent of respondents, with 8 percent more expecting to do so by the end of 2005.

"This is a reflection of the economic environment, as companies are taking a focused look at expenditures and how they're occurring," Rorrie said. "Some corporations have decided that the best way to get the maximum dollar value is to use their purchasing systems. We need to understand that. Purchasing is purchasing, and I'm not sure they all have the understanding of what meetings are all about, and the value that meetings can bring to a company in terms of achieving the organization's goals. We need to see how we might build bridges there."

FutureWatch 2004 was conducted by Smyrna, Ga.-based market research firm Association Insights, which also interpreted qualitative data—some survey questions were open-ended—and performed statistical analysis.