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A common meetings industry perspective is that group business will be the last sector of the travel industry to recover, and it's still anyone's guess as to when that will happen. In late January, BTN meetings editor Donna M. Airoldi spoke with Cvent senior director of analytics Jeffrey Emenecker, American Express Meetings & Events VP Americas Linda McNairy, and i-Meet founder, chairman and CEO John Pino about their analysis of recent meetings trends data to try to project the trajectory of recovery. The following has been edited for length and clarity.
BTN: What are some current findings you can share from your analysis of Cvent activity?
Jeffrey Emenecker: The data I'm talking about represents our request-for-proposals volume. January is off to a good start, relatively speaking. The volume of RFPs sent the first few weeks of the year were the best weeks we've seen since Covid hit. Once the vaccine news hit in early December, we saw a marked shift from a lot of short-term meetings toward more meetings in the second half of this year and first half of 2022. That trend has continued. If you look at the number of RFPs in aggregate sent through our system, as of today, we're probably at about 44 percent of where we would normally expect to be in terms of demand for 2021. For 2022, it's at 58 percent. Still, both are way off where we would want them to be.
BTN: Is that for in-person, virtual and hybrid combined?
Emenecker: Only in-person or potentially hybrid. There are no virtual numbers in there. But if you look at another part of our business, which is event registration, regardless of the kind of event—virtual, hybrid, in-person—the number of people registering for events is up year-over-year for the fourth quarter and so far in January. Most of that is driven by virtual. But for hoteliers, the encouraging thing is that there is a bridge there where there are still a lot of people who are engaged, who want to meet.
BTN: What about average size or length of stay for the in-person events?
Emenecker: Size has been small, for obvious reasons. The kind of meetings being sourced now for dates in the second half of 2021 and into 2022, they look pretty normal to what we would see in the channel. Probably half of those meetings are between 10 to 50 people, maybe 25 percent bigger, 25 percent smaller, roughly. Anything sourced for the first half of this year is smaller; 90 percent are for fewer than 50 people. Length of stay is pretty normal in terms of what things look like for the second half of 2021 and 2022. That's really positive from that perspective.
People are starting to do things. We see small meetings at the top of the list, and that includes hybrids. But people have RFPs in progress, and over 80 percent have business on the books."
John Pino: [In our weekly surveys], we've seen the question 'When will your next meeting resume?' constantly shift out. For the first time, the fourth quarter surpassed the third quarter [of 2021]. I didn't expect that. I also agree that something changed at the beginning of the year. As we resumed our weekly surveys in January, we saw an uptick in confidence. For example, the [share] of undecided planners who didn't know what they were going to do had always hovered around 12 percent to 14 percent. That dipped to 2 percent last week. The amount of business on the books has gone up for any future date. And RFP flow seems to be mirroring that. Ninety percent of planners we've polled have RFPs working right now for some point in the future. People are starting to do things. We see small meetings at the top of the list, and that includes hybrids. But people have RFPs in progress, and over 80 percent have business on the books.
Linda McNairy: I agree with both and can expand with more around conversations with planners and meeting owners. It's about taking a thoughtful look at the objective of the meeting, and how we can execute it responsibly. Rather than seeing that business unit meeting of 200 to 300 people, we are working with our customers on how to divide that by region so we can safely get groups of less than 50 people responsibly into locations either for a true hybrid meeting, hooking everybody together for portions of the meeting, or for a series of meetings, going from region to region. We also are having a lot of conversations around the meeting audience, and the need to get with customers and external stakeholders is higher than ever. That pent-up demand is very real. But you need to do it responsibly.
Pino: We also are starting to track when planners expect to return to pre-Covid levels. Most believe it's going to take until 2023 to get to 80 percent or more of their 2019 volume.
BTN: How are budgets coming in for 2021 and 2022?
McNairy: The budget conversation is interesting. We saw the customer trying to wrestle with this notion of virtual or hybrid meetings being less expensive: “It's just an online call; it's got to be cheaper.” But there have been lessons learned as people have explored true high-quality, fully produced virtual meetings. There is still a high price to that. Similarly, for returning to face-to-face meetings responsibly, you need greater space requirements to accommodate smaller numbers of people to allow for social distancing. [Venues] want a return to meetings, and they want the volume in-house, but they also need to be compensated for the extra work that happens on their side to make this happen. We are seeing a lot of different swings. There are no dramatic decreases in overall budgets. Some are edging toward smaller budgets. But what we are seeing is the reallocation of where the money is being spent, and possibly holding fewer face-to-face, but maybe a higher investment in technology to reach more people in the aggregate.
Hoteliers, at least at this point, are feeling fairly bullish around rates for next year. I expected the discounts to be more dramatic. We kind of know why, and the main reason is that rates are not the reason why people are not traveling. You can discount all you want, but if people don't feel safe, they will not go."
Emenecker: What we see from the hotelier side is what kind of rates they are proposing to planners and how that is changing over time. You can see a lot of discounting going on for near-term dates, the first half of this year. But as you get into the second half, if you look at rates year over year, they are still down a little, 5 percent to 10 percent. When you get into 2022 and beyond, rates are above where they were in 2019. Hoteliers, at least at this point, are feeling fairly bullish around rates for next year. I expected the discounts to be more dramatic. We kind of know why, and the main reason is that rates are not the reason why people are not traveling. You can discount all you want, but if people don't feel safe, they will not go. But I'm a bit surprised there wasn't more of that early on to try to get people to go. I've also been on several calls where I heard anecdotally from planners and the hotelier side that there's some chances of compression in some markets in early 2022. You've got a lot of pent-up demand, and if things go as well as everyone hopes, you may all of a sudden have a lot of people wanting to meet in a narrower band of time than usual, and space might become tight. We're too early in the vaccine rollout to know how that will play out. But there are some rumblings around how something like that could happen.
Pino: From our conversations at the enterprise level, there is an acknowledgement at least in the short term that face-to-face will be more expensive than it was in the past for all the reasons already described. And we are hearing that it's worth it in the short term to be safe in terms of how you conduct your meetings, even though it's probably going to cost a little bit more based on where you were in the past. Most on the enterprise side are very careful about doing it right as opposed to finding the absolute cheapest possible price.
BTN: What about trends on the venue side?
Emenecker: Within “traditional” hotels, there was a shift right after Covid hit, with RFPs being sourced to lower-cost chain scales. Normally, upper upscale and luxury hotels would be the ones to receive the highest share on our network. That changed. Some of that is budgetary. A lot of it is the kinds of groups that were traveling were not [typical corporate groups]. In general, essential workers are a lot less likely to stay at the Fairmont. That trend is still true, and we are starting to see it turn a little bit, but it still hasn't flipped back to normal yet. I suspect that is a sign everybody is watching for.
I've had conversations in the past few weeks with customers who said right now it’s a buyers' market. … Maybe a meeting that previously couldn't have been held at a property with resort in the name, right now [clients] are pushing the limits a little bit."
McNairy: I agree, there is a shift toward the smaller properties and the midscale service. That has continued as we look at some of these smaller roadshows and things. But at the same time, I've had conversations in the past few weeks with customers who said right now it's a buyers' market: “If I can hold this meeting at a premium brand, why not, and I'll fight with my compliance team to justify the expenditure.” Maybe a meeting that previously couldn't have been held at a property with resort in the name, right now [clients] are pushing the limits a little bit. Nontraditional venues were emerging prior to the onset of Covid, and I think the owners of those venues, the ones that we've worked with, are doing a really smart job of staying ahead of the protocols necessary to make it safe and make sure they can stay on the market. But we have seen some closures. With a shift in perhaps wanting to do more day meetings so folks can return home and not worry about the protocols for an overnight room, we are still booking a lot of those nontraditional venues.
Pino: Another thing is, the other parts of the supply chain have been decimated. I'm not just talking about the hotels or airlines, but some of the services that support [meetings and events]. In the ground transport sector, there is as much as 40 percent of the capacity, and the companies aren't returning. One thing planners really have to figure out is what they are going to do. It is not going to be as simple as it was before. Vetting suppliers, you almost have to start over from scratch. How they buy those other services in the new environment is going to be somewhat challenging from capacity and vetting and liability viewpoints. There is a lot of anxiety about how we are going to do it. It will be a fantastic learning experience for planners, but it will not be business as usual.
Emenecker: I think it's also true there will be a big opportunity in this space for hotels and venues that say “We know how to do hybrid.” There just hasn't been much of it done yet. And certainly not a lot of it has been done well. A lot of planners have never done this and will need help. If you are a hotel, and you are showing me you've pulled something like this off before, that will count for something when I'm trying to make my decision on where to go. There is a lot of opportunity because [hybrid] is very different than just an in-person event. … I also think a lot of folks think hybrid-ready means we have really fast Wi-Fi, we have a lot of bandwidth, and we have two cameras in our ballroom. But as things get more sophisticated, planners will realize they will need a lot more than that.
McNairy: You bring up a good point—it's not just the facility readiness and the equipment within, but it's also the soft skills and the training of the staff and ability of the staff to help the planner to achieve success. It's a lot more than the equipment.
BTN: Have you seen any pullback from virtual components in the quarters ahead?
Emenecker: When an RFP goes out in our system today, we don't know if there's a virtual component to it or not. We know there's an in-person component, but we don't know if there's a virtual component too, and if so to what extent. That is about to change. We are about to add some features on our system so that a planner can designate how many in-person attendees and how many virtual attendees they expect to have. But we have developed new technology called Virtual Attendee Hub, which is a virtual platform, launched in August. We haven't seen any let-up at all in terms of demand for that platform.
Pino: On holding future virtual or future hybrid meetings, [on our survey] the yes answer peaked at about 78 percent in the third quarter. Everybody thought meetings would absolutely go that way. Today that number stands at 59 percent, so it has gone down. The other interesting thing is that the undecided answer, which was pretty low for lots of weeks, is now over 30 percent. The only interpretation I can offer is people originally knew they had to do virtual, and it would last a while. I think as this thing goes longer, people are at least questioning whether that should be a long-term strategy.
McNairy: A conversation we are having with our customers is, if you really want to manage your meetings program, you need to track all of your meetings. Don't allow meetings that are happening now in different formats to fall outside of your tracking. Who is going to it? What were you trying to accomplish? Keep it within that same mindset. Because if you fast-forward, you could [at one point] say, “How do we compare year-over-year information?” or “How do we draw long-term insights?” But if you have a gap around this meeting type or this timeframe, you're going to be at a loss.
BTN: What factors besides vaccine distribution will influence the return of in-person meetings?
Pino: In the beginning when people get back, they're a little uncertain, so the contracting piece with hotels is looming big. The cancellation and attrition clauses are at the heart of that.
Emenecker: Budgets. We've discussed it a bit, but in general, a lot of companies are not in the same financial position as they were 12 months ago. That still will have an impact even once you get past the safe point.
McNairy: Another thing to monitor is paying attention to the different [international] governments. They are interpreting things in different ways. We don't have a universal approach to how we return. How quickly our leaders can come together for consistent and safe approaches is another influence, an impact on the situation.
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