Even as the world becomes smaller and companies have increasingly global travel management capabilities, the majority of companies still do not have a meetings management program in place outside of the United States, and many expect international cost per attendee to increase, according to new Meetings Today data.
In an exclusive survey of 134 corporate meeting buyers, 49 percent of respondents said they expected their cost per attendee for meetings outside the United States to remain the same this year, while 48 percent expected the cost to increase. Only 3 percent expected the cost to decrease.
Additionally, 76 percent of respondents said their company did not have a meetings management program in place for meetings outside of the United States. However, 16 percent said they had a program in place, while an additional 8 percent did not have a program in place last year, but were planning on implementing one in 2007. Nearly 84 percent of respondents will hold less than 10 meetings outside the United States in 2007 and 75 percent expect the number to hold steady from last year.
The increase in cost per attendee can be attributed to the U.S. dollar's weakness against euro and the British pound. Many cities in Europe not only have become more expensive due to the the exchange rate, but hotel demand in many markets exceeds supply
(BTN, May 7)."You go to Europe, it's a very expensive market," said Bruce Morgan, senior vice president of marketing and business development for BCD Meetings & Incentives. He added that many of his company's clients are looking to South and Latin America, where exchange rates with the dollar are more favorable.
The exchange rate is "the biggest reason we're not selling more to Europe. Everybody would like to go to Europe, but they'll default to somewhere in the Americas," said Scott Graf, global president of BCD Meetings & Incentives. Mexico and the Caribbean still are popular spots, while some BCD clients are holding meetings in Argentina, where the exchange rate allows for a "wonderful meeting at one-third of the price," he said.
Paul Salvatore, president of events and meetings management and loyalty programs at mega travel management company HRG North America, said that the number of international meetings has stayed steady.
"I don't see North American-based companies changing anything," he said, but one Canadian client who conducted a cost comparison for an upcoming meeting found the cost to stage it in London would be nearly double that in Chicago.
Even when travel stays within foreign countries, negating the effect of the exchange rate, cost per attendee still is rising. Cisco Systems, for example, has increased the number of meetings outside the United States, but those meetings are with salespeople already in those countries.
"It's growing because we're expanding in emerging countries, which includes Eastern Europe and the Middle East. That is where our biggest revenue opportunity is now," said Michele Snock, Cisco's global manager of meeting services.
Cisco holds approximately 600 international meetings a year. "That's where meetings are growing because that's where our employees are, but we're planning out of those countries so the dollar doesn't affect it," she said.
Even without transoceanic travel, "Hotel rates have gone up all over the place. Airfares are going up because of the expense of fuel. The expense of doing a meeting anywhere in the world has gone up for that reason," Snock said.
Airline prices also impact longer trips. "Don't forget, when you go international, you spend a lot of money on airfare," HRG's Salvatore said. "If your budget is half a million dollars, you don't want to put a lot of money into airfare."
The majority of meeting buyers polled did not have a meetings management program in place for meetings outside the United States. However, Cisco's meetings are centralized. Meetings are registered through Cisco's Web site, and relevant details are relayed to a department staff member located where the event will take place.