 | • What will the meetings market look like in 2017? • Economic growth assumptions that could affect the industry |
Economies continuously fluctuate: locally, regionally, and nationally. While the elections created uncertainty from all sides, only time can truly tell the story for the 2017 meetings and events markets. Luckily for us, Advito, the travel industry’s most progressive consultancy, gathered facts to create solid projections of the future in their 2017 Industry Forecast report.
Here is what Advito’s 2017 Industry Forecast had to say about the meetings industry:
The US remained a very challenging market for meetings buyers in 2016, with demand significantly outstripping supply. Companies want to organize more meetings, but there is very limited expansion in meeting space, especially for larger groups.
Most recent hotel construction in the US has been in lower tier categories, which are aimed at transient business and leisure travelers. On average, hotels built over the past six years have 24% less meeting space than those built between 2000 and 2009.*
As a result, booking the desired city on the desired dates without paying a steep price is harder than ever. Buyers are responding to the problem in different ways. Some are staging more but smaller meetings, for which space is easier to find. Availability and high pricing are issues in the biggest cities, so buyers are looking at the next tier down – so much so that cities such as Denver and Nashville are now almost as popular as first tier destinations.
Buyers are giving internal clients a clear message that they need to be more flexible about when and where they stage their meetings, and to book earlier. As well as considering second-tier and even third-tier US cities, buyers are also looking at Sunday-Tuesday meetings instead of Tuesday-Thursday (which can save $20-$50 per room night in many cities), and also to less popular times of the year. However, even this tactic won’t necessarily generate savings: Hotels in Florida and Arizona have extended the windows for their high-season rates making off-season bargains harder to find.
Strong demand and limited supply have inevitably pushed up rates – around 3% to 6% this year on average. However, given the mismatch, it could be worse. Hotels are still cautious after several bad years following the 2008 recession, so they are taking some of the heat off headline rates by increasing total price in other ways. They have raised food and beverage prices, and enforced service charges as well.
Charges for meeting space are also on the increase, especially for smaller meetings and catering-only events like dinners. Even if buyers avoid charges for the main meeting room, they are likely to be charged for breakout rooms – which means “space hogs” need to think twice about blocking extra rooms “just in case.” Hotels are also charging clients if they go beyond agreed set-up and dismantle times. And they are simply saying “no” more often to business which is unlikely to deliver a good financial return.
*PKF Hotel Horizons
Advito’s recommendations
• Be as flexible as possible in your choice of destination, time of year, and day of week.
• Review your meetings history to ensure you do not ask for more space than you really need.
• Be realistic about what concessions you can negotiate with suppliers in a seller’s market. Only push for what is truly important to you.
• Seek multi-year deals with suppliers to leverage a better discount.
• Bundle together as many meetings as you can with the same supplier – as long as it genuinely meets your internal needs too.
• Be prepared for hotels trying to re-negotiate existing master service agreements. Decide what you can give ground on and what you can’t.
For more insights see Advito’s full 2017 Industry Forecast at www.Advito.com/Advito-Industry-Forecast-2017/
Here is what Advito’s 2017 Industry Forecast had to say about the meetings industry:
The US remained a very challenging market for meetings buyers in 2016, with demand significantly outstripping supply. Companies want to organize more meetings, but there is very limited expansion in meeting space, especially for larger groups.
Most recent hotel construction in the US has been in lower tier categories, which are aimed at transient business and leisure travelers. On average, hotels built over the past six years have 24% less meeting space than those built between 2000 and 2009.*
As a result, booking the desired city on the desired dates without paying a steep price is harder than ever. Buyers are responding to the problem in different ways. Some are staging more but smaller meetings, for which space is easier to find. Availability and high pricing are issues in the biggest cities, so buyers are looking at the next tier down – so much so that cities such as Denver and Nashville are now almost as popular as first tier destinations.
Buyers are giving internal clients a clear message that they need to be more flexible about when and where they stage their meetings, and to book earlier. As well as considering second-tier and even third-tier US cities, buyers are also looking at Sunday-Tuesday meetings instead of Tuesday-Thursday (which can save $20-$50 per room night in many cities), and also to less popular times of the year. However, even this tactic won’t necessarily generate savings: Hotels in Florida and Arizona have extended the windows for their high-season rates making off-season bargains harder to find.
Strong demand and limited supply have inevitably pushed up rates – around 3% to 6% this year on average. However, given the mismatch, it could be worse. Hotels are still cautious after several bad years following the 2008 recession, so they are taking some of the heat off headline rates by increasing total price in other ways. They have raised food and beverage prices, and enforced service charges as well.
Charges for meeting space are also on the increase, especially for smaller meetings and catering-only events like dinners. Even if buyers avoid charges for the main meeting room, they are likely to be charged for breakout rooms – which means “space hogs” need to think twice about blocking extra rooms “just in case.” Hotels are also charging clients if they go beyond agreed set-up and dismantle times. And they are simply saying “no” more often to business which is unlikely to deliver a good financial return.
*PKF Hotel Horizons
Advito’s recommendations
• Be as flexible as possible in your choice of destination, time of year, and day of week.
• Review your meetings history to ensure you do not ask for more space than you really need.
• Be realistic about what concessions you can negotiate with suppliers in a seller’s market. Only push for what is truly important to you.
• Seek multi-year deals with suppliers to leverage a better discount.
• Bundle together as many meetings as you can with the same supplier – as long as it genuinely meets your internal needs too.
• Be prepared for hotels trying to re-negotiate existing master service agreements. Decide what you can give ground on and what you can’t.
For more insights see Advito’s full 2017 Industry Forecast at www.Advito.com/Advito-Industry-Forecast-2017/
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