Meeting buyers are not deterred by the rapidly rising cost of rolling out strategic meeting management initiatives overseas, according to an exclusive Meetings Monitor survey of 220 corporate meeting buyers, and a growing number of U.S.-based multinationals appear ready to spend even more to hold events abroad.
According to the survey, 18 percent of respondents expected their companies to hold more meetings outside the United States in 2007 compared with 2006. However, 53 percent of respondents expected to spend more per attendee for non-U.S. meetings next year. Even companies that hold the same number of events overseas in 2007 as they did during the past 12 months may find they are spending more on hotels and transportation. Higher sourcing costs may be exacerbated by unfavorable exchange rates.
Among survey respondents, one-third of whom did not purchase meeting services outside the United States, 53 percent held between one and 10 overseas meetings in 2006. Ten percent held 11 to 25 non-U.S. events and 5 percent held more than 26 such events.
An overwhelming 77 percent said the companies did not have a meetings management program in place for meetings outside the United States, and 65 percent said their companies did not use preferred vendor arrangements for non-U.S. meetings. Consultants, however, said the statistics indicate the burgeoning need for meetings management services abroad, especially in Europe and Asia.
Patricia Carlin, global travel manager for Dublin, Calif.-based database firm Sybase, said her company is in the midst of rolling out a global meetings program.
"We're on a path toward international deployment. In 2004 and 2005, we got several countries in Europe, 2006 was Hong Kong and in 2007 I'm targeting China," Sybase's Carlin said. "I'm being asked to review some of the things for kickoffs and meetings in various regions of the world."
The biggest hurdle in rolling out strategic meetings programs overseas is the initial data consolidation and determining the best management method.
"The tough part is getting your arms around it," Carlin said. "I have no idea what's going on in the realm of small meetings. No window into that at all. For the larger meetings, such as 300 people, I have some window into. The department that I roll up into, purchasing, has been involved in those for a while."
Having the purchasing department review overseas contracts protects the company from risk, but still makes it difficult to consolidate the transient, expense and group programs, she said.
Rolling out a meetings program in Asia and other parts of the globe certainly isn't easy, but localization is key.
"You have special challenges as a U.S.-based, multinational company trying to manage overseas—certainly in culture and language. It doesn't mean in the U.S. you get any more cooperation, but at least in the U.S. you're speaking the same language," Carlin said. "Culture and language are a big deal, and how do you develop those things from the other side of the world?"
Carlin said that though she and her team are as hands-on as they can be during the implementation of the travel and meetings programs, there are limits to their effectiveness without being a local expert.
"We're not as knowledgeable, but as long as we can provide some value to our internal customers, provide support and show a value-add then more and more we will become involved," she said.
The initial project to collect data on volume and expenditures for international meetings likely will be completed internally, rather than through a third-party management or technology tool, such as Philadelphia-based StarCite Inc.
"We looked at StarCite six years ago. I love technology. It has never been something that I've been able to put really high on my project and priority list and goals," she said, "but things will come along."
StarCite managing director of international markets Mark Phillips said an increasing number of U.S.-based multinational customers are seeking to roll out strategic meetings programs overseas.
"It comes as natural extension as the whole world is globalizing. Every business line in the U.S. is starting to have to interact overseas," Phillips said. "They're either moving to emerging markets where they don't have established operations or it's having to meet already established teams."
StarCite sees pharmaceutical companies as the fastest-growing customer group in Latin America, he said. During the past eight months, that business line has accelerated as more U.S.-based pharma companies expand operations in the region.
"We've seen a lot of growth in research meetings, sales meetings and regulatory-approval-type meetings," he said.
Even unfavorable exchange rates are not deterring customers from holding more meetings overseas, Phillips said. However, exchange rates certainly are adding to higher sourcing costs.
"We've never seen so much business to London in our life. The city is still sold out in November, and it has a lot to do with American and worldwide traffic," he said.
Another factor adding to global meetings expenditures is the extent of the seller's market across many regions and countries, Phillips said.
"The factors that exist in the U.S. exist in the extreme overseas. There's a lot of holdback by hoteliers on building new properties in the U.S. and we've seen a lot properties go condo. That trend is happening worldwide at a greater pace," Phillips said.
Some companies are using remote conferencing tools to reduce their meetings-related expenditures overseas. According to the Business Travel News European Travel Management Technology Survey of 457 companies
(BTN, July 17), 58 percent of large respondent companies and 46 percent of midmarket respondent companies said they use Webconferencing tools in Europe. Usage levels of remote conferencing tools in Europe are comparable to levels reported in the U.S. three years ago.
Accounting giant Grant Thornton six years ago deployed Centra Software, now owned by Redwood Shores, Calif.-based Saba, to link its 50 U.S. offices and 585 international offices in 110 countries.
The decision was made because of volatile business travel costs and increasing demands on employees' time, according to David Holyoak, chief information officer and partner at Grant Thornton, in a Centra case study.
"We needed to improve the continuing education process and looked to augment our traditional classroom approach of regularly scheduled courses with a flexible Web-based program that could deliver on-demand training and communications," Holyoak said. "We also felt that the rising cost of business travel for meetings and training, in terms of employee time away from work and corporate expenses, could be offset by the Centra solution."