As he planned his company's 2007 incentive trip to St. Thomas, U.S. Virgin Islands, Mark Mosley, a senior manager with Allstate Insurance Co., Irving, Texas, thought long and hard about his group's flight arrangements. His final conclusion: Between the sky-high fares and the many hassles now associated with air travel, it made more sense to charter three planes than to book with the commercial airlines.

“We haven't done that since 1996,” he says.

Whether you share Mosley's concerns about air travel, or your meeting worries center around the terrorism threat, an epic hotel seller's market, the effect of fuel costs on hotel (even F&B) rates, the threat of an avian flu pandemic, or the need to navigate new and unknown destinations as your company expands globally, most meeting pros are approaching 2007 with a certain amount of trepidation.

Following are your potential challenges — and some solutions.

Adventures in Budgeting

The bad news for meeting planners, according to many forecasters, is that the hotel seller's market will be sustained well into 2008 — if not beyond.

According to the BCD Travel 2007 Industry Forecast, average daily room rates will increase 6 percent in 2007, with average group rates increasing 3 percent to 5 percent. And those group rates could go up as much as 8 percent or 9 percent in popular meeting destinations, according to the Atlanta-based consulting company. (Since the release of the forecast, BCD Travel Consulting has rebranded as Advito, but remains part of BCD Travel.) The American Express Global Business Travel Forecast, released in October, is no sunnier: It projects average rate increases of 3 percent to 8 percent for upper-end properties in North America.

Maria Chevalier, vice president of global business and intelligence for BCD/Advito, says the laws of supply and demand continue to account for the prolonged seller's market. “Demand has increased, while supply has stayed relatively flat,” she says. “We've got a lot of things going on. You've got hotels being removed from the inventory because of condo conversions or because you're seeing renovations of older properties. And new construction is just not keeping up with demand.”

In response to rising costs, Seth Kerker, director, Global Events, Access Intelligence/Chemical Week, New York, is booking meetings eight months out, rather than four to six months out as he did in the past. “The further out you book, the better [hotel] prices you're going to get,” he says.

BCD/Advito is also forecasting a jump in food and beverage rates of up to 8 percent in 2007. Kerker has some strategies to deal with those increases as well. “Our meetings are very food-and-beverage intensive,” he says. “We've been pretty successful in negotiating clauses in hotel contracts that either lock in, or minimize, those prices.”

The budgetary challenges extend beyond the United States and are particularly difficult when planning European programs, says Julie Carroll, vice president of industry relations for BCD/Advito. “The dollar is still not that strong, and coupled with [supply-related] factors, we think American companies might be inclined to keep their people closer to home,” she says. According to the BCD/Advito forecast, supply is tight in Asia-Pacific and Middle East markets, and these regions are going to need 35,000 new rooms to meet anticipated demand. Chevalier predicts rates will increase through 2008 before flattening out in 2009.

If you're looking for a bargain, Carroll says deals are possible in segments of the Canadian and Mexican markets. “But it's hit and miss.”