Increases in meeting budgets generally are tracking with higher hotel rates, but financial services firms are expected to be the strongest players in the meetings industry in 2007, according to consultants. Buyers for such companies report receiving strong support from their senior management for new initiatives.
The Financial and Insurance Conference Planners association recently conducted a survey of its more than 400 corporate planners, in which one-third of respondents said their companies had increased their meeting budgets for 2007, according to FICP board chairman Michael Burke.
"For the most part, it's split. We have just under 60 percent that say their budgets are going to stay the same in 2007, and about 32 percent who said it's going to increase," said Burke, who also is manager of conference and travel services for The Hanover Insurance Group, based in Worcester, Mass. "About 10 percent are going to have decreasing budgets, but we don't see a significant cutback in spending."
Meetings management consultants from the travel industry's four largest management companies, American Express, BCD Meetings & Incentives, Carlson Marketing, and HRG Events & Meetings Management, all said the financial services industry, a longtime pillar in the meetings market, would post the biggest increases to budgets in 2007
(Meetings Today, Sept. 11).With 30 percent growth in revenue and headcount during the past two years, Chicago-based Grant Thornton LLP has had a flood of training meetings during the same time period. Travel and meetings manager Cheryl Geib said the accounting and consulting firm is using second-tier cities where possible to trim costs, but expenditures naturally have risen along with increased volume.
More meetings volume means greater power in rate negotiations. Long-term hotel partners have responded favorably to attempts to combine transient and group volume, Geib said, but not every property is so willing. In the past, the company required hotels to consider corporate group volume when negotiating transient rates, but those agreements have become shakier as the seller's market takes hold.
"On a property-by-property basis, we have been able to accomplish leveraging with most of our contracted transient properties. The properties that we are successful with have been doing it with us for quite a while and see the value in keeping that business." Geib said, adding that to focus of cost savings has shifted to negotiating meeting room charges, food and beverage and other value adds.
Accounting powerhouse PricewaterhouseCoopers, based in New York, is in the midst of a massive initiative to improve management and sourcing of corporate events. Debi Scholar, director of meeting and event services for the company, said her senior management has approved the expansion of the meetings services department. With the additional resources, PwC is on track to save 10 percent to 15 percent of meetings expenditures over the next three years.
The volume of meetings passing through the approved process in PwC's marketing and human resources departments—two areas with significant untracked spend—increased by about 20 percent for fiscal year 2006 over 2005, Scholar said.
Financial meeting buyers next year will continue to focus on doing more with less, Burke said.
"It seems like it's always the same: budget constraints, time constraints. Obviously, the health of the hotel industry right now is good for them but not so good for planners. There are not as many deals to be had and it's really a seller's market," Burke said. "That's definitely one of the challenges right now: doing more with less."