While globalization of the meetings industry continues, planners polled for the 2007 FutureWatch survey conducted by Meeting Professionals International and American Express predicted that they would hold a greater percentage of meetings closer to home this year. Concerns over terrorism and new passport rules in the United States appear to be contributing to the shift toward more domestic sites.
Those concerns are by no means tempering growth. Corporate planners surveyed expected the number of meetings held by their organizations to rise by 7 percent this year, spending per meeting to increase by 4 percent and overall meeting budgets to rise by 18 percent. Association and non-profit planners forecast slightly more robust growth: an 18 percent rise in the number of meetings, 8 percent rise in spending per meeting and 21 percent increase in the overall meeting budget.
The fifth annual survey presented a snapshot of the meetings industry, as pictured by 1,443 meeting professionals across the United States, Canada and Europe, including 441 corporate, association, government or non-profit planners; 180 meeting management or service professionals; and 814 suppliers from hotels or other venues, caterers or production companies.
Planners based in the United States predicted that 90 percent of meetings this year would be held in the U.S., compared with 83 percent predicted last year and 77 percent in 2005. Of the 10 percent expected to be held outside the United States this year, 3 percent would be in Europe and 1 percent each in Canada, Asia, Mexico, the Caribbean or other locales.
Planners based in Europe forecast that 81 percent of their 2007 meetings would be held there, compared with just 71 percent forecast in 2006. International meetings would be held in various regions with 7 percent in the United States, 3 percent in Asia, 1 percent each in South America and Canada, and 6 percent in other regions. Last year, European planners forecast far more meetings in the U.S., Asia, Central America and South America.
Among the three geographic groups polled, only Canadians forecast that more meetings would be held outside their borders. Planners in Canada expected to hold nearly 20 percent more meetings outside of Canada, with the bulk (15 percent) of those in the United States, 5 percent in Europe, 2 percent each in the Caribbean and Mexico, 1 percent in Asia and 2 percent elsewhere. Given the indications of lower demand for meeting services in Canada, suppliers there may face a challenging year. Surpassing terrorism, the top concern of Canadian respondents was the possible impact of the Western Hemisphere Travel Initiative's new passport and visa regulations. Unlike those in other regions, Canadians also fretted about health pandemics and diseases, such as SARS and avian flu.
Forecasts for a reduction in international meetings contrasted with the transnational growth forecast by 27 percent of all respondents. "Hotel companies plan to expand to new countries at the highest rate (47 percent), followed by meeting management and service companies (36 percent) and corporate planners' organizations (26 percent) ... Organizations operating in five or more countries are more than eight times more likely than single-country organizations to expand globally in the next year," according to FutureWatch. Of those surveyed, 57 percent were from organizations located in only one country but "over half of the other 43 percent operate in more than five countries."
Among the top external or global trends expected to impact the industry in 2007, the impact of terrorism and war on business and travel topped the list for the first time in the survey's five-year history. This was followed by the usual economic concerns: the cost of oil and gas, inflation and a "current or impending economic downturn or recession." But some also ranked among external trends a "current or impending economic upturn or improvement," technology changes and increasing globalization. Last year, the top three external trends were related to the economy and costs.
Despite the external concerns, respondents "paint a picture of sustained industry growth," the authors reported. If such robust growth is realized, the heightened demand could drive rates even higher in the under-supplied market.
Pressures on city hotels could intensify as these locales appear to be gaining favor with U.S. and Canadian respondents, while interest in conference centers and universities rose slightly for Europeans, as compared with last year. Europeans expected to take 28 percent of their meetings to city hotels, 20 percent to conference centers and universities, 17 percent to convention centers, 13 percent to resort hotels, 9 percent to restaurants/country clubs/unique venues, 5 percent to airport and suburban hotels and the rest to other venues. U.S. planners expected to take 35 percent of their meetings to city hotels, 30 percent to resorts, 10 percent to airport and suburban hotels and less than 8 percent each to conference centers and universities, convention centers and restaurants/country clubs/unique venues. Canadians expected to book 49 percent in city hotels, 15 percent in convention centers, 14 percent in resort hotels, 9 percent in conferences and universities and the rest in airport and suburban hotels, restaurants or other sites.
Procurement's involvement in meeting purchasing decisions and centralization of meetings were also among the issues for which MPI tried to establish baselines this year. More than 60 percent of corporate and government planners said procurement plays a role in purchasing decisions, with 30 percent classifying it as "major" and 34 percent as "some participation." On procurement's role in meeting buying, 27 percent expected procurement to be more involved in such decisions in 2007, 23 percent expected such professionals to become more knowledgeable about meetings and events--and therefore more helpful to the meetings department--21 percent expected procurement to become a stronger collaborative partner, while 15 percent said procurement would "become more of an obstacle to high-quality, high-impact meetings in 2007."
Centralization of the meeting function and spending finally appeared to have hit critical mass, as 54 percent of all corporate planners surveyed reported centralization of this function across the organization and 49 percent across geographical locations or regions. Fifty-five percent said total organizational meeting spend is currently calculated and reported. "Of those not currently calculating total spend, 51 percent expect more emphasis to be placed on this in the future," but more than a third did not expect their organizations to move in this direction, according to the survey.