What is in this article?:
- Crisis or Not, Europe Is Hot
- Destinations: What Excites Potential Incentive Travel Earners?
Financial and insurance companies, many of which spurned overseas meetings in the years after the mortgage crisis, now are booking incentive programs throughout Europe.
The meetings business is back—and so is travel to Europe, despite economic turmoil, outbreaks of political unrest, and the occasional strike (AirFrance was managing disruptions from a walkout in late October). “Following the lean, mean years of volatility there is now pent-up demand for non-domestic destinations, and Europe readily offers that semi-familiar option,” says Padraic Gilligan, managing director, Ovation Global. “Moreover, the undisputed cultural and educational value of Europe is an antidote to the negative perception of incentives as mere fun in the sun.”
Indeed, after several years of Europe being off the table, one financial services meetings vice president has just been asked to present some European destinations for consideration.
Lars Ingelius, vice president, Europe MICE, for Kuoni Destination Management, who monitors the market daily through the company’s 21 offices, says, “My feeling is that bookings from the U.S. are picking up and improving, especially for destinations like Germany, U.K., France, and Spain.”
Isabel Mahon, director,sales, insurance, Fairmont|Raffles|Swissôtel, says Europe fell off the incentive radar in 2009 and 2010, but that leads and came back strong at the end of 2011 and those programs are starting to operate. In fact, she notes, space for peak season in 2014 is becoming hard to find. “If it’s 50 rooms for four nights and you’re flexible, we can find space,” she says. But a large incentive with specific dates will be tough to place.
Risk or Opportunity?
There are some destinations where the euro crisis is giving planners pause, however. “Anti-austerity demonstrations on the streets of Athens, for example, cast glimmers of doubt on the viability of organizing a seamless event in Greece,” Gilligan notes, “but these fears are largely unfounded.”
Jim Schultenover, president, Global Events Partners, checked in with GEP’s destination management company partners in Greece and in Spain, the two countries hardest hit by the euro crisis. In Greece, bookings are strengthening for 2014 and 2015, both in Athens and the islands; new business operating in 2013 might find particular value there.
In Spain, demand from U.S. groups remains strong. In addition, Schultenover points out, “they are starting to see requests beyond the primary destinations of Barcelona and Madrid. This is a trend we are seeing across our GEP partners, as U.S. groups continue to be more adventurous.”
Planners say dealing with exchange rates is always a challenge with international programs. And even though hotels in some destinations will negotiate in U.S. dollars, that only goes so far, says one, because “you’re not doing all your spending with the hotel. You need ‘walking-around’ money, and you might be using restaurants for dine-arounds.” The last time this planner booked in Europe, in fact, the exchange rate with the Euro was $1.29 at the time of booking but ended up at $1.45 when the program operated.
“We constantly monitor the value of the dollar to the Euro,” says Paul Eder, vice president, meetings & incentives, Protective Life Insurance Co., who has programs operating in Italy and Austria in the next two years. “If we think the value of the dollar will be dropping against the Euro, we will try to prepay as much as we can. If the value of the dollar is increasing, we will try to delay payments as long as we can. The key is what the exchange rate was when we originally budgeted and booked the program,” he adds. “We use that as a benchmark. If possible we don't want our overall program cost to increase otherwise we need to look to cut something out of the program to keep our budget in balance. If we have a chance to reduce our overall costs due to a drop in the Euro we always try to take advantage of that by prepaying or purchasing Euros or purchasing an option to buy Euros at a set price.”