The groups and meetings market has been deeply affected by the economic downturn. The sector has been hit even harder than the rest of the travel industry by an overall decline in business travel spending. Conference and meetings venues and high profile destinations have further suffered from the fallout of politicians’ comments about irresponsible corporate spending and profligacy. The additional accommodation capacity coming on stream has further exacerbated an already dire situation. The resulting battle for dwindling groups and meetings demand has led to extreme price discounting and loss of revenue. Analysts predict that corporate travel will take longer to recover from the recession than leisure travel. It seems that the meetings industry will have to wait some time before it will see a significant uptick in demand.
Despite these negative drivers, companies are continuing to innovate and take advantage of changing market dynamics. Will positive trends outweigh the current challenges over the mid- and long-term?
Nothing Replaces Face-to-Face
The most important factor promoting growth is the need for face-to-face meetings to discuss business opportunities and get a personal feel of the business partner’s situation will always exist. Even the growing adoption of virtual meetings and online communications technologies does not serve to replace meetings. There comes a point where these tools, which are very effective at generating initial interest and leads, are not sufficient to close the deal. This has a positive impact on both business travel and conferences and events. In fact, virtual technologies—like The PhoCusWright Conference Online Ticket—are examples of how the physical and virtual components can be combined to offer a complete event experience.
Globalization Drives Business
The globalization of business increases rather than decreases the need for interaction and information exchange on a personal level. Conducting business in areas like Asia, where cultural aspects often play a key role in business success, creates the necessity to make new face-to-face connections. This in turn stimulates demand for international conferences and events in those high growth parts of the world.
While recessionary conditions are prohibiting growth in the near term, some of the factors outlined here give reason for mid- to long-term optimism. Growth will also require new investments in technologies enabling improved planning, marketing and organization of conferences—in some cases the same technologies that may now be seen as competitive. Perceived threats to the industry brought about by new forms of instant communications can be turned into opportunities that improve the overall groups and meetings experience.
PhoCusWright is conducting a 2010 Special Report to analyze the turbulent groups and meetings market. This critical study will determine how recessionary trends and positive growth indicators shape the outlook for this vital sector. Sponsor this research to help shape the direction and breadth of this research. Travel companies, groups and meetings venues, operators and suppliers are encouraged to contact us.
As an investor in Groups & Meetings: Driving Success in Business Travel’s Most Complex Segment, you will help define the goals and shape of this study and have special access to its results. PhoCusWright seeks participants at an investment point of US$15,000. Participants receive: