In this week's guest blog, Todd Bludworth and Andy McNeill, president and CEO of American Meetings, Inc, provide their analysis of upcoming trends for meetings. The upshot? Expanding business in China, the Sunshine Act's physician reporting requirements in pharma, and a slow and steady economic recovery will all impact the meetings industry next year. Here's their take.
As we move towards the 4th quarter of 2012, it’s time to start searching for trends that will affect the meetings industry in 2013. Each year, we analyze and summarize what hoteliers and travel and meeting industry professionals are saying and doing. We use that information, along with our monitoring of the economic indicators from around the world, to forecast and budget for the upcoming year’s meetings and events—something that has become increasingly important given the financial uncertainty our clients have encountered over the last few years.
Overall, what we're seeing is positive. Because most meetings and events are planned on average four to six months out, they can serve as good forecasters for the overall economy. Currently, we are not seeing any signs of a downturn, with bookings for 2013 matching those of 2012. With the economies of North America showing steady improvement, significant growth is not expected and should help assist in keeping the meeting line-items spending for accommodations, food and beverage, promotional products, and other soft goods in line. However, according to Carson Wagonlit, a major supplier of air travel, increase consumer demand of airline tickets will cause an uptick in airline fees of 2.8 percent. Plan accordingly when budgeting your airline spend.
Latin and South America continue to grow, especially on the incentives front. Look to Costa Rica and Argentina to provide good value for your money. Fueled by the economic growth, hotels in Brazil are outpacing price increases compared to others in the region, and will not provide as much value as Tier 2 countries.
If you are looking for value, you also should consider Western Europe. The European debt crisis has created uncertainty in markets including Ireland, Spain, and Greece. Tourism boards in affected countries are implementing huge pushes to fill room blocks. For example, Ireland is promoting an event called “The Gathering” to encourage family reunions to fill unused hotels rooms from lost corporate group space on the Emerald Isle. If you have an incentive program for 2013, Ireland will provide tremendous value for your dollar. London’s post-Olympic boom will bring down prices in the city, though it will still be more expensive than lower tiered cities in the region.
Moving down to the Middle Eastern and African countries, economies are relatively steady, which should keep any price increase in hotel, travel, and soft goods modest. Dubai and Abu Dhabi hotel booms are back on track. For companies looking to have meetings in these regions, hotels are outstanding and very Western-friendly.
The Asia-Pacific, which has kept pace with North America, will continue to see modest increases. According to Zacks, “China is set to fuel a recovery intourism, and by 2020 is expected to be the world's most popular travel destination. Both Starwood and Marriott generate their second largest revenue chunk from China. Apart from China, India is another hot spot for the western hoteliers. India possesses a compelling investment proposition with its rising importance as a global business hub, where the demand for moderate-tier as well as upscale branded hotels is expected to considerably outpace the supply.“
Finally, 2013 will show growth in some industries and contraction in others. Consumer product- and technology-based meetings will continue to pace slightly ahead of the economic recovery, though cost containment is still a strong focus. The Sunshine Physician Reporting Act goes into effect in 2013 for the pharmaceutical and medical device industries. Companies have had more than two years to prepare, but meeting spend will be scrutinized like never before. The great unknown is the physician response to the reporting. Will it affect their decisions to attend meetings? We have seen little in the way of negative indicators in 2012 as data was required to be collected (but not reported for this year). It did not affect recruitment. Continue medical education (CME) continues to see a restriction in grant approvals, which is down as much as 15 percent from 2011. Medical education conferences are looking to other avenues, such as registration price increases, and cost containment to overcome the deficit. (Note from Sue: More on the state of accredited CME funding is here.)
Overall, 2013 looks to keep pace and may even grow faster than the prior year. Meeting buyer confidence is understandably guarded, but we are definitely seeing a sign of encouragement as the global recovery continues to take hold.