Keeping a close watch over corporate travel spending,
companies continue to maximize travel budgets in the wake of the economic
crisis while the meetings industry adapts to satisfy changing demands. Although
2010 marked a steady increase in meeting bookings after last year's sharp
drop-off, the industry is nowhere near pre-recession levels. Increasingly,
factors unrelated to the down economy, such as improved videoconferencing
technology and rising corporate concern over carbon footprints, present
additional challenges to business travel and meetings. The following trends
provide a snapshot of what to expect for successful meetings management in
2011.
The strongest trend in response to the economy is shorter,
leaner meetings—from travel time to content and lead times, the entire meeting
schedule is compacted to maximize cost savings. First, strategically located
meetings, where companies break large, single-location gatherings into several
smaller, regional-level meetings continue to rise. Regional programs require
less air travel and fewer hotel stays, resulting in overall savings. Large
general sessions and expensive teambuilding activities are eliminated, which
can trim down the overall meeting time by half. By limiting non-essential
content, time spent at the meeting is more targeted and employees are back in
the office faster.
Shorter lead times also create challenges for planners and
vendors. Hoteliers and planners used to forecast a year out. They now forecast
just a few months in advance. Companies are discovering they can continue to
meet with cost-savings adjustments and have little incentive to restore
pre-recession systems.
Environmental concerns, along with cost reduction, are
pushing companies to hire increasingly localized planning teams and outsource
the associated administrative work for managing these planners and travel
directors. Companies are less likely to fly meeting planners to multiple
locations to manage multiple meetings. Instead they hire several local,
regional teams in each area to plan smaller meetings. Local staffing often
saves money and reduces the environmental impact of traveling, but increases
administrative load on stressed corporate travel teams. Therefore, companies
are outsourcing administrative tasks like payroll, data tracking and
contracting.
For the past five years, the "collaboration tools"
market—instant messaging, webconferencing, social media and shared-workspace
collaboration platforms—has grown by more than 20 percent, and will continue to
grow through 2012, according to Connecticut-based technology research firm
Gartner. While there is no real substitute for meeting face to face, with
diminished travel budgets companies are using these tools to meet when
appropriate.
Beyond all other price saving measures mentioned,
hospitality pricing structures will be a major budgeting factor for meetings
next year. Over the past 12 to 18 months, hotel rates have held steady or even
decreased slightly. We can expect rates to rise in the mid-single digits in
2011. After months of watching their average daily rates get chipped away,
hotels are eager for more pricing power. Large chains, like Marriott
International, already have announced plans to increase rates as occupancy
builds in 2011. As construction growth remains stagnant, we can expect to see
rates increase fairly soon.
Despite rising rates, expect to continue to see value-driven
discounts and efforts to implement dynamic pricing by larger hoteliers
attempting to woo back group business. Other hotels are trying to implement
chainwide dynamic pricing to supplement flat-rate negotiations and equipping
sales teams to address common buyer criticisms. Even as rates rise, hotels will
continue to offer meeting incentives to secure business.
Accountability for work accomplished and strategic reasoning
for meeting planning increasingly will be emphasized as well. Whereas meetings
were sometimes seen as a luxury in years past, now they are a business
investment and are treated as such.
This report appeared in the Oct. 11, 2010, edition of Business Travel
News.