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The Dallas meetings industry is expected to grow for a third
consecutive year, signaling economic and corporate
prosperity as well as a financial boost for hotels, airlines
and convention centers, according to FutureWatch 2006, an
annual research report from Meeting Professionals
International (MPI) and American Express that was released
last week.
According to FutureWatch 2006, several key indicators
including the total number of meetings planned and
expenditures per meeting/event are expected to increase in
2006. Client-side planners--defined as corporate,
association, government and nonprofit planners--and
intermediaries--defined as independent meeting planners,
third-party planners, multi-management companies, DMCs and
association management companies--expect the number of
meetings planned by their organizations to grow by 7 percent
and 21 percent over 2005, respectively. Suppliers--defined
as convention/conference centers, convention and visitors
bureaus, hotels, resorts, meeting facilities, production
companies and on-site meeting support--project a 10 percent
increase in the number of meetings they will support.
Planners, intermediaries and suppliers predict a 7 percent,
14 percent and 9 percent jump, respectively, in expenditures
per meeting in 2006 compared with 2005.
Additionally, client-side planners expect to receive a
larger share of their organizations' budgets in 2006 than in
2005, with 42 percent predicting their budgets will grow as
a percentage of their organizations' total budgets. Only 8
percent expect to have a smaller proportion.
"All FutureWatch 2006 respondents expect to have more
frequent, longer and larger meetings this year, suggesting
that organizations are increasingly recognizing the value of
meetings as strategic business tools that can achieve
business goals," said Colin Rorrie Jr., PhD, CAE, president
and CEO of MPI. "However, from what we've seen, cautious
optimism seems to be the theme in 2006. While key indicators
point to growth and increased meetings spend, concerns about
the economy and rising oil and travel costs loom."
Venue Demand Outpaces Supply/Increasing Lead Times
Expected changes in lead times, hotel rates, and attrition
and price concessions suggest that demand for meeting space
and accommodations may outpace supply in 2006. Meeting space
lead time is projected to increase by 38 percent in 2006,
from 29 weeks to 40 weeks on average. Meanwhile, lead time
for hotel/support services is forecasted to jump 37 percent
from 23 weeks to 31 weeks. Additionally, 76 percent of
client-side planners and 81 percent of suppliers expect
hotel rates to increase in 2006. Finally, 31 percent of
client-side planners, 28 percent of intermediaries and 24
percent of suppliers predict that concessions and
flexibility will decrease in 2006.
"In the past few years, meeting professionals for the
most part have experienced dramatically shorter lead times,"
Rorrie said. "In some cases, a meeting that took six months
to plan now must be executed in three weeks. The fact that
FutureWatch 2006 respondents are expecting longer lead times
and higher hotel rates in 2006 suggests that the unusually
active hurricane season of 2005 combined with the increase
in the number of meetings being planned may be taking its
toll on available inventory, especially in key tourist and
convention destinations. Organizations may not have a choice
but to plan meetings further in advance."
International Travel Slows
While meetings are on the rise, international meetings
travel is slowing, as U.S. and European planners project
little change in the use of international meeting
destinations, and Canadian planners expect a significant
decline. Canadian planners anticipate only 14 percent of all
2006 meetings will be held internationally, compared with 23
percent in 2005. While the United States remains the top
international destination for Canadian planners, only 7
percent expect to hold their meetings there, down from 16
percent in 2005. European planners expect international
meetings to increase slightly from 26 percent in 2005 to 29
percent in 2006, with the U.S. and Asia listed as top
destinations at 12 percent and 8 percent respectively. U.S.
planners predicted little change in international meeting
locations, with Canada and Europe tied as lead locales at 5
percent each.
Planners Lead Procurement Process
Despite continued implementation of standardized meetings
management processes and concerns about commoditization,
meeting planners are still by far the most active
participants in the buying process for meetings. Eighty
percent of respondents said meeting planners were always or
often involved in the identification and contacting of
vendors, 84 percent said they were "always" or "often"
involved in the evaluation and recommendation of vendors,
and 78 percent said they were "always" or "often" involved
in the final purchasing decision. Meanwhile, only 13 percent
of respondents cited that procurement was involved in any of
the three phases.
"With the move towards standardized management systems,
there was a perceived risk that meeting planning would
become solely a cost-based purchasing decision driven solely
by procurement," said Julie Hylton, director of industry
development for American Express Establishment Services. "In
fact, today's data suggests that meeting planners lead the
charge in identifying, evaluating and making the final
decision regarding vendors. And, because the majority of
respondents also indicated that procurement departments are
involved at least occasionally in the process, it's
important that planners establish a dialogue and a
productive relationship with their procurement colleagues."
Meetings as a Strategic Function
Meetings are increasingly becoming a tool for furthering
organizational objectives, with 71 percent of client-side
planners indicating that meetings are recognized to a great
or very great extent as a strategic function important to
the growth and success of their organization. Forty-nine
percent of planners said the perceived value of meetings has
increased over the past year, while 62 percent predict it
will grow even further in the next two to three years.
Additionally, 66 percent of meeting managers and 80
percent of directors are either being consulted when their
organization is considering a meeting or are involved in
driving strategy and establishing how meetings will be used
to support organizational goals.
"Meeting professionals are increasingly operating beyond
the logistical or tactical level and have the opportunity to
strategically impact the organizations for which they work,"
Rorrie said. "As this strategic role emerges, it's critical
that meeting professionals speak in the language of
business, increase their influence and articulate the
bottom-line value of meetings to all stakeholders and
executive decision-makers."
Additional Key Findings
While many organizations fully outsource their meetings
function to intermediaries, survey indicators show a greater
percentage of intermediaries are actually working in concert
with an existing meetings function. According to
intermediary respondents, 42 percent of the time their main
contact is within the meeting planning department, as
opposed to the internal department that "owns" the meeting.
The top five internal organizational trends affecting the
meetings industry are workload, organizational budget
changes, shifting organizational goals, organizational
growth and shorter lead times.
The top five external or environmental trends affecting
the meetings industry include the state of the economy,
travel costs, the rising cost of oil, changes in technology
and increasing globalization.
When asked about return on investment (ROI) for meetings,
respondents indicated that discussions within their
organizations focused more on cost savings and efficiencies
than achieving the strategic goals of a meeting. Just over
one-third of respondents focus on the achievement of
strategic goals when discussing ROI.
Return on Objectives (ROO) has been discussed within 61
percent of planners, 71 percent of intermediaries and 55
percent of supplier respondents. ROI and ROO discussions
signal that organizations are seeking a measurement model
that provides a complete picture of how meetings drive
business and reflect total benefit and total expense.
For the full report, visit
www.mpiweb.org.
Corporate
Events information from Special Events
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