Global economic pressures will continue to negatively affect the meetings industry "until the broader economy begins to rebound," according to the 2009 version of FutureWatch, an annual report issued by Meeting Professionals International in partnership with American Express. Despite the challenges, the report suggested that meeting buyers may find opportunities related to improved rates and closer scrutiny on spending.
Based on a survey of 2,740 meetings management professionals in 53 countries (mostly in the United States, but including more than 500 respondents based elsewhere), the report concluded that corporate budgets and meetings attendance would be noticeably down in 2009, echoing findings from a global report issued recently by Reed Travel Exhibitions and The Right Solution Ltd.
"The overall relationship between planners and suppliers is becoming a buyer's market, where planners can expect to negotiate more generous concessions, incentives, rates and other contract provisions," according to FutureWatch's authors. "Planners and suppliers alike expect to build more flexibility into their contracts to account for an uncertain market."
Overall, the 1,032 client-side meeting planners surveyed (half of which represented corporations, with the balance coming from associations and government entities) expected a 9 percent cut in the number of meetings their organizations would hold this year. A higher proportion of corporate planners (17 percent) expected overall meeting budget cuts for 2009, compared with association planners (12 percent) and government planners (10 percent).
At the time they answered the survey in November 2008, the respondents' organizations had canceled an average of 3.4 meetings for 2009, or "7 percent of all scheduled activity, at an average value of US$200,000 per meeting."
The report also suggested that meeting professionals expected "a greater effort to anticipate return on investment before a meeting is booked, based on past performance, attendee satisfaction, adherence to budget and the ability to negotiate 'extras' like free transportation and complimentary meals." At the same time, such items as "open bars, gifts, formal dinners and entertainment for accompanying persons will face greater scrutiny."
Other Findings
- Planners predicted a 2 percent increase in average expenditure per meeting, compared with a 22.6 percent expected increase in the 2008 edition of the report.
- Across all respondents, net profit per meeting was expected to rise by 2 percent, with corporate planners in particular expecting about one-quarter of all meetings to generate a profit, up a few percentage points from a year earlier.
- As a percentage of organizations' overall budgets, "meetings will decrease by 6 percent in 2009."
Given economic challenges, respondents unsurprisingly said the top factor for selecting hotels, meeting venues and destinations in 2009 would be overall cost. Customer service ranked second for both hotel and venue selection. Airlift ranked second for destination selection. About one-quarter of all respondents expected that "a reduction in the number of available flights will reshape the way they plan and conduct meetings. Arrival and departure windows will be extended, and air travel will be booked further ahead whenever possible. Meetings will be concentrated more heavily in destinations with the most frequent, reliable air service, and more planners will locate their meetings with drive times in mind."
Meanwhile, tools for compiling attendee feedback were the most sought-after technology. "More than half of respondents said the technology is adequate and affordable," according to the report. "But other technology options received more critical review." For example, 70 percent of client-side planners suggested current arrangements for providing Internet access at meeting venues and hotels "are inadequate or unaffordable." About half of all supplier-side respondents indicated that customer relationship management tools "are either inadequate or unaffordable."
Regional Differences
Overall, "the biggest changes have occurred in the United States, but the pattern is repeating in the Europe, Middle East, and Africa region and Canada," according to FutureWatch. For example, among corporate planners, 40 percent already had reported cancellations for 2009. In EMEA, that percentage was 30 percent.
In the United States, the average expected change in 2009 attendance per meeting was a 5 percent reduction, compared with a 3 percent increase in EMEA and a 9 percent increase in Canada. [U.S. association planners expected a 15 percent drop in per meeting attendees, while their corporate counterparts expected a 12 percent increase.]
Based on region, client-side planners also had differing perspectives regarding the top influences on meetings management in 2009. In the United States, for example, "more remote/virtual meetings" ranked number one on that list, whereas it placed third in importance in EMEA and fourth in Canada. At the same time, "more economic concerns" was top of mind for planners in EMEA and Canada but not among the top six for those in the United States. U.S. planners, however, did rank "lower budgets" second and "fewer face to face meetings" third. "More green" concerns ranked fourth among U.S. planners but second among those from EMEA and Canada.
Generally, corporate social responsibility "was a more significant area of concern for meeting professionals outside the United States, and particularly in EMEA," where some organizations have "dedicated CSR departments," according to the report.
Report authors further determined that "a focus on green meetings" in North America was more noticeable among planners and other meeting management professionals, and less noticeable among suppliers. In EMEA, the opposite was true, as suppliers prioritzed "recycling, reuse and CSR."
FutureWatch uncovered another distinction between suppliers based on geography: "North American suppliers generally favor a more transactional approach to customer outreach and constant follow-up. In EMEA, by contrast, supplier respondents emphasized relationship building, customization, cost control and an interest in measuring outcomes and results."