Despite record increases in hotel rates, an air industry that has little to gain in negotiating group business and an overall focus on making corporations economically lean and mean, a new exclusive Meetings Monitor survey of 220 corporate meeting buyers showed that many companies have increased the number of meetings and events held over the past six months versus the second half of 2005.
According to the survey, 48 percent of respondents said meetings expenditures have increased during the past six months. Among that group of respondents, 45 percent said expenditures have increased by more than 10 percent and 38 percent said expenditures have risen between 5 percent and 10 percent.
Buyers said higher air and hotel costs were the primary reason their companies were spending more on meetings, but 56 percent of buyers who reported an increase said their companies had increased meetings volume. The survey results support months of anecdotal evidence that corporations are not cutting back on meetings and events despite a swing to a seller's market in the hotel industry.
Another reason that expenditures are up, buyers said, is that their meetings departments are capturing more data on existing volume. The more events that pass through a central registry, the greater the reported spend and volume is.
Cheryl Hoffard, manager of meeting services for Marshall, Minn.-based Schwan Food Co., said after use of her department was mandated last November (Meetings Today, March 6),
the number of events passing through the department has increased.
"Every contract, even if was a two-person meeting offsite, had to come through us," Hoffard said. "I think the meetings were there before, but once the mandate came through, we saw more meetings."
The department handled as many meetings in the first five months of 2006 as it registered in all of 2005, Hoffard said. The company's overall meetings costs actually may have decreased, as a new approval process has ben put in place to identify and cut unnecessary events. However, since volume reported to the department is up, so are reported expenditures.
Other companies are holding more or larger events because their business growth demands it. Linda Levy, senior manager meeting and event planning for the corporate marketing department of Medco Health Solutions Inc, based in Franklin Lakes, N.J., said senior management has asked the department to aggressively target greater attendance at events. "My department is a true growth department, so year over year, of course my expenses are going up," Levy said.
Overall, corporate meeting volume at Medco is probably steady, but more events have shifted to the meetings department, she said. "I've been given much more aggressive registration goals," Levy said. "The budget increase reflects the attendance goals."
Among buyers who reported higher meeting expenditures, one-third said their events included more attendees.
According to the survey, 56 percent of respondents said their companies spend less than $1 million per year on meetings, 39 percent said meeting expenditures were between $1 million and $5 million, 9 percent said their companies spend more than $5 million on meetings and 16 percent didn't know how much was spent on events.
Scott Graf, president of BCD Meetings & Incentives (see story),
said growth in meetings volume is segmented by type of customer.
"Amongst our strategic meetings management customers that we do multiple meetings for, our numbers are clearly steady or up," Graf said. "There's a couple in particular where we are hiring more employees to service these customers because they have more meetings that they need help with."
The growth of the overall economy has continued to generate a need for meetings, especially training meetings.
"Training is one of those things where the need never goes away. It's just a matter of when the need is great enough that companies act on it," he said. "A lot of meetings are also generated by mergers and acquisitions, so when companies are coming together there's a need for integration meetings, for new offices and new countries or cultures to come together and integrate. That's a big reason for some of it."
Large events are not the only type of meetings on the increase. "Even locally, as much as we live in a world of e-mail, Webconferencing and videoconferencing, there's nothing like a face-to-face interaction with several people," Graf said.
Though saving money always is a concern, there comes a point when companies "need to get people together," Graf said, and "If you're going to spend the money to get people together, it's natural to try and expand the audience."
Graf recommended that companies initially seek savings by using alternate properties, dates or destinations rather than by cutting back on meetings or size. Overall growth seems steady, Graf said, but industry-specific. Financial and pharmaceutical industries are doing well and may have a need for more meetings, he said.