BTN's annual answer book for business travel managers.
Renaissance Atlanta Waverly - May 12, 2019
New York City - May 17, 2019
Seattle Marriott Waterfront Hotel - May 21, 2019
It's that time of
year. The big meetings agencies are starting to roll out their forecasts for
2019, and the future looks bright for group business. CWT Meetings & Events
VP of the Americas and South Pacific Tony Wagner, strategic meetings consultant
Betsy Bondurant and Cvent SVP of enterprise sales and partnerships Anil Punyapu
spoke with BTN editor-in-chief Elizabeth West about what to expect in the
BTN: Tony, tell us some of the general trends that CWT
M&E forecasted for next year.
Tony Wagner: Demand is up everywhere, even in
economies that are still a bit challenged. Latin American markets like Brazil
and Argentina, where the peso has dropped by 40-plus percent, are still seeing
rising [group] demand. That's tied to broad, global economic activity. Here in
North America, we're seeing demand up fairly consistently. It's not a huge
spike, but it continues to grow year over year. [What we're seeing] more than
we've seen in the past, though, is an increase in average group size, and it's consistent
across our segments.
Meetings demand will grow 5% globally.
Average group size will increase 14%.
Construction of "big-box" hotels with meeting space is
not keeping pace with demand.
More meetings activity is pushing into luxury properties
as demand outpaces supply & because meeting location matters.
Meetings & Events' 2019 Meetings & Events Future Trends Report
BTN: And that's tied to business confidence?
Wagner: There's a general confidence in the
economy, but I also think that corporates are viewing events as a growing share
of their budget to drive topline revenue. That type of sentiment equates to
more meetings demand.
Anil Punyapu: There has been a lot of RFP activity
to place business ahead of the expiration date on 10 percent commissions. We
agree that demand is rising overall, but at least part of it has been an
artificial uptick that will begin to correct itself in the fourth quarter of
BTN: The commission situation is key, but let's table that
for a moment and follow Tony's lead for now: topline revenue associated with
meetings. Are we going to see companies proving that out with metrics in 2019?
Betsy Bondurant: Not all corporates are mature enough
in their programs to have exact metrics, but more companies are looking at that
and using technology to help gauge it. I see companies getting smarter about
how they are using their money. They are using engagement measures in
thoughtful ways to inform how they spend and how they interact with attendees.
Meetings negotiations will focus heavily on terms & conditions.
Optimum lead time for booking is 30-plus days for small
meetings & 75 or more for large meetings.
Hotel sleeping room rates will increase 3.7% globally.
Companies with best-in-class strategic meetings programs
save 22% on personnel hours & 19% on hotel room rates.
Punyapu: We see companies maturing in this
regard, particularly technology companies. [They] are designing data lakes and
looking at information across all the events they care about and then using
that data to relate to the rest of the marketing process. Pharmaceutical,
financial and manufacturing companies will get into these practices in 2019,
and they'll bring in that marketing operations person to start to relate this
data to the rest of the cycle.
Wagner: We also see that. It's not necessarily
the individual event they are looking for in the data. It is the life cycle of
the customer. That event itself may not have a return; that may not be the best
calculation. Clients are focusing [analytics] on their customer acquisition or
retention cycle or their revenue growth setter.
BTN: One challenge here is that the industry hasn't
established standard metrics that can get at the impact of different kinds of
events or different kinds of attendee interactions. Is that something Cvent is
working on for 2019?
Punyapu: We've invested a lot in analytics and
have done some of that work, but it also has to be a fluid process. We
continuously learn from our clients and what they need to learn from the data.
BTN: Let's go back to Anil's assertion that impending
commission cuts have precipitated at least part of the increase in meetings
Wagner: There was a phenomenon of trying to
get ahead of the commission cuts. It increased acute demand but also influenced
average lead times, [according to] our research. We [hadn't] seen movement in
that regard in a long time. The commissions cut contributed to that trend.
Bondurant: With commissions cuts, there's a lot
more scrutiny now around strategic meetings programs and being able to
articulate the value of the meetings, especially those that are driving
revenue. As an example, internal training is being done in alternate ways,
online and a lot of pre- and post-work [to optimize] the face-to-face element
and maybe reduce time onsite. [This reserves] face-to-face resources for
revenue-generating events that can more directly justify costs.
BTN: Do you think more brands will join them in lowering
commissions in 2019?
Bondurant: My personal thought is that eventually
commissions may go to more of a dynamic pricing. I don't know why any hotel in
New York City is giving commission when they get so many RFPs and they have
such high occupancy. I would be shocked if more chains are not [moving to]
Wagner: I definitely agree with that. And I
think that other brands are looking to be opportunistic, and they may
experience a lift for the short term.
BTN: What other trends are you seeing going into 2019?
Wagner: There's actually a piece missing in
this discussion about commissions. Hotels have treated all meetings the same
way when it comes to commissions—from huge association deals to small meetings
with 25 people. It's hard to get value out of those 25-person meetings. It's
hard for an agency to add value; it's hard for the hotel. At this point, there
is a need for much greater inventory access and automation versus the kind of
system [workarounds] we do right now to try to make this work. I know there are
small meetings tools emerging, but they are basically simplified RFP systems.
We need to see more attention given to small meetings automation with the major
BTN: Anil, this sounds similar to what your CEO, Reggie
Aggarwal, was talking about at the Cvent Connect conference in July.
Punyapu: Simple events like field marketing
events or seminars are an area where our competitors are challenging us to
expand our solution and we welcome that. It's definitely an area Cvent is
BTN: Betsy, what keeps you up thinking about next year?
Bondurant: I was going to say the war for talent.
I think we're looking at 3 percent unemployment, and hotels continue to
struggle. You go to a hotel and they ask you if you want to take a pass on
housekeeping for your stay. I've got a love-hate relationship with that. I love
the idea, but I also don't want to put a housekeeper out of business. On the
sales side, there are a lot of hotel sales folks onboard who have never been in
a buyer's market. If this changes, will these representatives know how to keep
a preferred partner and will they understand how important the corporate group
Punyapu: I also think about the employment issue but from a
different perspective that centers around employee engagement and loyalty.
Unemployment is at its lowest rate. Productivity is high. Every company is
trying to engage employees and drive productivity and retention. They have to
start practicing some of the same marketing and engagement tactics for their
internal meetings. They need to digitize the employee journey in the meetings
environment, see what engages them and for how long. I think some companies in
2019 will start to correlate internal meeting experience and engagement to
employee retention rates.
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