The question for meeting planners in 2011 is: Will you be a shining star or a deer in the headlights?
The way Kevin Iwamoto sees it, the price of meetings is going up, c-level executives are paying attention, and that means you will be getting some questions. “For the meetings that you believe are critical, you need to get your ducks in a row. Have your case made and your numbers ready because you will be asked,” says Iwamoto, vice president, enterprise strategy, at StarCite. Planners with answers will boost their visibility and their credibility.
Here is a look behind the trends in play this year:
1. The Second Tier Could Come in First
“The seller’s market gathered steam through 2010,” Iwamoto says, as companies “loosened the purse strings” and demand increased dramatically. Evidence of that increase: the number of RFPs going through the StarCite system was up 80 percent in the first three quarters of 2010. That allowed pricing in top meeting cities such as New York to bounce back. “Those cities are saturated, so they are being selective. When suppliers get picky about what pieces of business they want to bring in, that’s a sign the seller’s market is back.”
Second-tier cities are recovering more slowly, and as such are becoming attractive for. “They are more popular as a way to meet closer to a client or to meet closer to home,” Iwamoto says. “And many second-tier cities have put a lot of money into expanding and improving convention centers and meeting facilities. They have been heavily to site-selection firms, corporations, and professional meeting management firms, and they’ve been throwing in extra incentives, too. They want to lock in business.”
2. Oil Could Kill the Seller’s Market
“When a gallon of gas is over $3, that’s an immediate red flag,” Iwamoto says. “The magic number for oil is $90 a barrel and above. When it reaches or exceeds that level, if airlines haven’t hedged their fuel prices, they’ll start paying more for fuel. Then it’s a snowball. The cost for air goes up, and the cost of fuel starts to trickle down to hotels, sedan services and taxis, and then travel costs overall will become more expensive, and then companies will begin their infamous meeting and travel reductions.”
So even though the pendulum is swinging back to the seller’s market, he says, “this may be the shortest-lived seller’s advantage we’ve seen.”
3. The C-Suite Sees Meetings
“The C-level wants to be more involved in strategic decisions regarding meetings. In most companies, meeting spending is hidden in travel spending. Now, the C-level wants greater granularity, wants to know who is spending the money, why they are spending the money, and what meetings are in the pipeline so they can figure out where to cancel or reduce if necessary.”
Meeting planners need to be able to run through all the meetings in the pipeline, and to say, “These are the revenue-generating meetings, these are the non-revenue-generating meetings. These are internal-facing, these are external-facing. These are incentive conferences, these are product launches, and so on,” he explains. And given all that, planners can then offer recommendations for where best to cut and where not to cancel.
4. SMM: Do Something
Iwamoto sees a great deal of awareness of in corporate America, but it’s time for the rubber to meet the road. “People have learned about it, but there is still a lot of room for companies to actually do it,” he says. “It takes a lot of work and requires resources. Some companies just don’t have the budget or the headcount. I spend a lot of time with clients strategizing about where they can find additional funds to invest in technology and start their programs from infancy.”
What could help: Just get started. “There are two schools of thought with SMM: Some believe that you must have all seven elements or you don’t truly have an SMMP, while others believe that as long as you have some of the elements, you’re on the right road. I tend to agree more with the second camp.”
Iwamoto says that the new SMM Maturity Model, a tool that StarCite has invested in developing along with the Groups and Meetings Committee of the National Business Travel Association, will help a lot of companies that have started down the SMM road. “Companies will be able to self-assess, and the tool will pinpoint the areas they need to focus on in order to take their program to the next level—if they want to take their program to the next level.” The model is to be released by April.
5. American Airlines Could Change the Landscape
American’s “direct connect” move—its play to reduce its own distribution costs and bypass distribution systems and online travel agencies—has the potential to fragment travel itineraries and increase costs for meeting planners because they will have to change the way that air travel for meetings is booked. This will also impact any negotiated airline deals that are currently available via the GDS and self-booking tools.
“Meeting managers must look at this seriously and review their booking processes,” Iwamoto says. “The change management could be significant, affecting the way flights are reviewed, discounted, and ticketed. When you start fragmenting the sourcing of air tickets, you need a [technology] workaround. It is not impossible, but it adds costs to bring the information into your existing infrastructure.”