Carlson Wagonlit Travel's Travel Management Institute recently found that corporations annually spend more than $357 billion on meetings and events (or 55 percent of an estimated $650 billion global meetings and events market), yet few companies have implemented a global meetings and events strategy or policy necessary to drive savings. (Read Meetings Perspectivefor insight into the obstacles and ways to overcome them.)
Adopting a global strategy, policy and other best practices detailed in the study could deliver to the average corporation savings of 10 percent to 25 percent over three years, the study found. The bulk of the savings, 8.5 per- cent, would come from sourcing, with 5 percent from improved processes and 4 percent from policy and compliance.
For the average corporation, meetings and events represent an estimated 0.5 per- cent to 1.5 percent of company revenues, "or about 35 percent to 60 percent of the amount spent separately on business travel," according to the report. Some industries, such as banking and finance, information technology and pharmaceutical, could spend as much as 4 percent of company revenues on meetings and events.
CWT between September 2009 and March 2010 surveyed 222 meeting and event planners in 15 countries and found that "only half are able to estimate their meetings and events spend, arriving at 2.3 percent of revenues." TMI also interviewed more than 40 meeting and event experts, analyzed diagnostic data from 988 companies, reviewed prior studies and models and surveyed more than 2,360 meeting attendees from six countries to underscore the study's findings.
Five Major Meeting Types
The CWT study identified five major meeting types:
- Meetings of 10-50 participants;
- Simple events for 50-250 participants;
- Major/large/special events involving more than 250 participants that feature "a high level of customization/creativity" and are "often held in exotic locations"
- Congresses/conventions for hundreds of people; and
- Exhibitions/trade shows/sports events for hundreds of people
Corporations primarily focus on the first three types of meetings--simple events typically represent about half of a company's meeting expenditures--while the other two types each represent 25 percent. Few Global M&E PoliciesLooking at diagnostic data from 49 companies, TMI found only 28 percent had a global M&E strategy. Additionally, only 8 percent of 988 companies had a global M&E policy, while 5 percent had a regional policy and 20 percent had country policies. The vast majority--67 percent--had no M&E policy. Only one-third of companies managed meetings centrally, the study noted, with more mature meeting and event programs in the banking/finance, pharmaceutical and consulting industries more likely to do so. The study found that nearly 60 percent of 222 planners and meeting requestors leverage transient travel volumes when negotiating with airlines and hotels. However, in analyzing diagnostic data from 21 companies, TMI found that 70 percent of meeting planners don't measure or know the compliance rate to their preferred supplier policy. The diagnostic data also revealed that only 10 percent of 988 companies used dedicated meeting cards--which TMI identified as a best practice--and just 29 percent had a mandatory approval process for M&E. To effectively manage meetings and events, CWT said companies should follow an eight-step process to first analyze spend and then set up the right M&E organization, design a strategy and policy, create a budget and calendar, select and negotiate with suppliers, establish formal planning and attendee registration processes, handle payment and reimbursement, and evaluate M&E performance and compliance. Rebound, Procurement AnticipatedThe M&E market is expected to quickly rebound to typical annual growth rates of 4 percent to 5 percent. The report stated that the global market from 2008 to 2009 experienced a significant downturn--as much as 30 percent in advanced economies. Researchers found that "M&E spend grows at around 1.8 times the rate of GDP." Meanwhile, procurement hasn't yet played much of a role in M&E, but more than one-third of respondents expect procurement's involvement to increase in coming years. In Europe, Middle East and Africa, 45 percent of respondents expect procurement's role to rise.