ONCE CONSIDERED THE DREGS of the meetings market, this highly budget-conscious, will-gladly-meet-on-weekends market has gained a new cachet in recent years: facilities and bureaus around the country are courtingmeetings following the drop in deep-pocket corporate meetings and a falloff in attendance at professional and trade . As one respondent in our survey put it: “SMERF meetings, many of them, are not as heavily driven by business needs but more by social and personal ties, so in that sense these types of meetings are more recession-proof than most.”
But too little has been known about SMERF meetings in terms of their spending, revenues, and destination preferences, as well as the critical issues and trends that planners in this group face. We surveyed our SMERF readers to get some answers to these questions and to shed some new light on this growing market segment.
Our survey data shows that it's not easy to find a mold that fits the meetings profile of this group. For example, a surprising 40 percent of respondents said that their annual event includes an exposition — undermining the notion that SMERF groups are fairly marginal in scope. Net square footage averaged just over 50,000 square feet, which makes the SMERF market a perfect target for many of the smaller and new midsized convention centers that have opened in recent years. Just over 5 percent of respondents said their expositions range from 100,000 to 299,000 net square feet.
More than 44 percent of respondents said that attendance at their largest annual event was under 500, while 36 percent said that attendance ranged from 500 to 3,000. The median was 600 and the mean 1,294, indicating that responses were fairly spread out. [Editor's note: the mean is the average of all figures, the median is the midpoint. When there is a large disparity between the two numbers, statistically it is best to report the median figure.]
Another area where responses were not clustered concerns the amount of money allocated annually for meetings/expositions. The mean was $950,000 but the median was just $182,758. Indeed, 43 percent said they had less than $100,000 to spend annually, yet 13 percent said they spent from $1 million to $4.99 million annually on their meetings. Clearly, SMERF events span the spectrum.
Not surprisingly, then, room nights used for respondents' largest event ranged from a mean of 1,549 to a median of 485. As far as planning activity goes, about of 32 percent of respondents said they plan between one to three off-site meetings per year, while a surprising 27 percent say they plan more than 10 off-site meetings a year. The average number planned was about six meetings a year.
As for types of facilities used by the SMERF market, this is no longer, if it ever was, a market niche relegated to campgrounds, arenas, and downtown hotels. About 29 percent said they used convention centers, 36 percent conference centers, 32 percent resorts, 65 percent use downtown hotels, 44 percent use suburban hotels, 20 percent use university facilities, and 7 percent arenas/stadiums.
Moreover, fully 47 percent of respondents said that attendees at their largest annual event come primarily from all over the country, with another 20 percent saying that their attendance is primarily from around the country but with a strong international component. Only 15 percent of respondents said that their events drew only a regional attendance.
Do SMERF groups meet outside the United States? Among the respondents, 28 percent said yes, and the average number of offshore meetings for this group was two per year. (See chart, page 26, for list of most popular non-domestic meeting sites.)
When it comes to domestic cities that respondents thought best served their meetings, the top choices were Orlando, Chicago, Atlanta, Dallas, San Diego, and New Orleans. Most popular second-tier cities: St. Louis; Nashville, Tenn.; Phoenix; and Louisville, Ky.
Trends and Issues
A majority of respondents reported that revenues, expenditures, and attendance at their largest 2003 event had increased over the previous year. Clearly, this is not a market in contraction. Moreover, a whopping 53 percent of survey respondents said they expected their largest 2004 event would see an attendance increase over 2003; 43 percent thought meeting revenues would increase, and a solid 38 percent expected expenditures to jump as well.
Despite these leaps, only 33 percent thought their meeting budgets would increase over 2003, while 42 percent (the majority of respondents) expected no change from the year before. How to get more bang for their buck is obviously a big priority for a market that's growing in size but not resources.
A majority of respondents (47 percent) said they didn't expect facilities to be any more negotiable this year than they were last year. The remainder were equally split between thinking the market would be more flexible, and less flexible, in this year as opposed to 2003.
When asked what their biggest challenges were in the year ahead, overwhelmingly respondents indicated the two “A” words: affordability and. Keeping meetings (especially registration, hotel rooms, and food and beverage) affordable has been the age-old quest of this group. But the relatively new challenges that attrition — because of cheaper room rates being available on the Internet — has caused has made the quest all the more ardent. “We're just getting our butts kicked by attrition — too many people booking outside the block,” wrote one respondent.
How About a New Name, Please
Other challenges that readers pointed out in their write-in responses: getting enough meeting space without using a convention center or without booking a proportionate number of sleeping rooms at a hotel or hotels; dealing with hidden costs, such as surcharges; affordable AV; obtaining government rates at hotels; acceptance of groups that aren't highly marketable (like students); and difficulty with visas.
“Because we have a large international component, we are having many more problems in getting visas,” wrote one respondent. “As a result, we are planning to take more of our meetings outside the United States.”
Respondents listed areas where they want more information or need help figuring out solutions. Some of the recurring responses: creative, cost-saving ideas for group meals; sponsorship program information; projections for pricing trends five or more years out; and, of course, tips for room-block management to avoid attrition.
One respondent also asked, “What is the real value of the SMERF meeting market in terms of economic impact nationally? And can we please call it something else other than SMERF?” Two really good questions. We hope this article sheds some light on the former, and if readers have any suggestions for the latter, let's hear them. Send suggestions to firstname.lastname@example.org.
The Primedia Business Marketing Research Department in January e-mailed a 25-question survey to AM readers who had identified themselves as working for SMERF-type organizations. The survey was sent to 1,885 readers and 97 completed surveys were returned for a 5.2 percent response rate.