Last year threw the meetings industry a few curve-balls with new venues launched, companies going into liquidation and the fall of corporate meetings. Sarah O’Donnell looks to those who commented in last year’s looking forward feature to see if their predictions came true and asks others what they see in 2011’s crystal ball.
Andrew Deakin, MD of Conference Care:
“The general election and the ensuing spending cuts have had a two-fold effect on the market. All government departments had to slice their overheads and many quangos were diluted. This in turn affected corporate confidence, with many unwilling to commit to running their commercial event programmes.
Uncertainty has also brought with it opportunities, as clients are more willing to see what else is out there. During the last 12 months we have been able to secure more new clients than at any time in our trading history and we expect to report double digit growth for 2010.
During 2010 a number of agencies went out of business, but we have also seen further market consolidation in the agency community. I certainly think this will continue during 2011, but we also see that a number of high profile venue groups are walking a financial tightrope at this time.”
Chris Parnham, MD of Operations at Zibrant:
“Clients have begun to test the water and new bookings did hold strong as I predicted. The line-of-sight on lead times has shortened also as predicted, but business is picking up.
Our strategy for 2009 was one of survival, and this was accomplished. The 2010 strategy was one of recovery. I am delighted to say that we over-achieved and we expect to deliver a record year. We opened our Paris branch this year, and I expect to invest further there next year. We have plans for new product development, and are focusing on some new markets as well.
Each sector is different, but I see moderate growth across the corporate landscape, with some uncertainly over government-related business.”
Dale Parmenter, Group MD of DPR Group:
“Thankfully, all our predictions about 2010 came to fruition. This meant the strategy we had put in place was effective enough to deal with the financial climate while growing the business. We have employed 17 new team members and increased our client base by seven. This year our turnover and GP will be up.
The market will still be nervous and short lead times will definitely continue.
I believe there will be some normality returning and realistic lead times will eventually return. Talk of recession will fade away as other issues take more prominence, especially sustainability and return on investment. I feel the Olympics will have an increasing effect on our industry as we get closer to 2012.”
Dan Rivlin, MD of Kenes International:
“Our industry is quickly changing, which will turn us into one of the more competitive industries. Competition will spread from price to value and will force companies to develop or obtain capabilities in areas such as media and new media, consultancy, strategic planning, fund raising and legal issues.
Professional conference organisers, a very outdated term by itself, will take vertical and horizontal integrations in order to become more diversified.
The world is moving into a more competitive environment than ever before. If we translate it into price only, we are likely to miss the point. It is also about cost, as our clients are likely to look into increasing their own profits (or at least maintain similar profit levels), but it is mostly about value and this is the real story. We will need to develop new expertise for clients in order to help them and us to survive.”
Geoff Fenlon, General Manager of The ICC Birmingham:
“For The ICC, 2010 saw a significant improvement compared to the previous year. Most particularly, we began to see the returning prominence of the corporate market, with big businesses once again holding big events.
The industry may further contract in 2011 as over-capacity and public spending cuts squeeze smaller and larger venues alike. Venues will be under pressure to provide ROI for customers. They must deliver, or they will lose the business.
In terms of our clients, we expect the corporate market to continue to improve, but only in certain sectors, such as financial services and automotive. The association market will remain strong. Delegates will look to get more out of their time at conferences, making the most of the networking opportunity.”
Des McLaughlin, MD of Venue Procurement at Grass Roots:
“In my predictions, I said we would diversify our business mix and we won two major accounts in new business sectors. We saw growth of 20 per cent year-on-year, exceeding our target and our forward business for 2011 continues the trend. We also launched our New York office in April, which has performed well.
I was also more optimistic than most about an upturn in meetings and events for 2010 and again this has proved true. We expect clients’ meetings business to show steady controlled growth and we will add to this through acquiring new accounts. We will continue to grow globally, taking a ‘hub and spoke’ approach. Our next office is opening in Singapore in January 2011.
I think the last two years have made us take stock of what points differentiate Grass Roots from our competitors and we’ll focus on developing these areas. If you don’t know what your unique selling points are then it will simply come down to who is the cheapest.”
Ian Linley, Head of Corporate Sales for Center Parcs:
“Entering 2010 we were unsure of what to expect. However, we have been pleasantly surprised. The larger events returned, as did more lucrative spends in terms of add-on sales, such as teambuilding. I think a lot of organisations had spent 2008/09 holding off and in 2010 thought the time was right.
I believe companies will need to keep staff morale high as their employees’ ’personal pockets’ get hit with high inflation, austerity measures, VAT increases and probably limited or no pay rises. Events are a means of pulling together and nurturing or maximising working relationships.
While we have had to compete for business in 2010 we have not done this purely on price reductions. In 2008 when the economy started to change we decided that we could not compromise our product and what it stood for by taking low rate business or churning out a lesser value experience. This approach worked and I don’t see it changing in 2011.”
Jacquie Rogers, GM of BT Convention Centre, ACC Liverpool:
“Overall my prediction was correct as we are versed in managing our long-term business expectations. It was a year of continued growth us. Despite competitor openings, we have continued to increase market share and are seeing more international business as well as new local business.
Together with The Mersey Partnership, who drive the destination brand for Liverpool City Region, we will continue to penetrate international markets from Europe and USA to India and China.
We have continued to add value and not drive rates down. Our value add proposition is immediately apparent when clients compare our offering against other venues who charge for basics.”
Jonny Sullens, Portfolio Director for International Confex, UBM Live:
“Duncan Reid, the former Portfolio Director, was pretty near the mark last time out and the challenge for us is predicting a year when our product sits solidly in Q1. A good industry tradeshow should be a benchmark for how the industry is doing and International Confex is no different.
The cuts to regional development agencies will impact, as will the business from local authorities and government. That said the private sector is in a better place and, while it is right to countenance measures of austerity, there isn’t quite the blanket ban on foreign travel, event spend and corporate hospitality as in 2009.
By following our industry trends, we are hopefully well-placed to deliver great results for all those who support Confex. The launch of and investment in these initiatives have made us competitive in 2010/11 and by building on them we want to grow Confex throughout the year.”
Juliet Price, Head of Marketing and Business Intelligence at Hotelzon:
“Hotelzon was predicting a tough year and the first half was certainly as anticipated, though we did see an increase in the number of meetings held from 2009. We have experienced higher forward demand, especially with small overseas bookings, which had disappeared last year. There has also been growing confidence from the private sector, however always with a view to keeping costs reigned in.
Next year we anticipate a modest overall increase in average delegate rate and fairly static volumes, especially in the first half of the year. Further consolidation around meeting spend and greater support of travel policies, especially with preferred hotel programmes will be high on the agenda for our account reviews.
With markets as they are, and with many potential customers on a merry-go-round of considering switching from one-stop-shopping with travel management companies to best of breed and back again, we hope to see a growth in our business base.”
Louise Amphlett, Head of Lime Venue Portfolio:
“Lime Venue Portfolio is seeing a growth in demand from corporate clients and agencies, who recognise the ease of access we afford to over 100 unique venues across the UK. Without doubt, we have seen a reduction in government events. However, these are being replaced by demand from SMEs and ancillary spend from weddings and private events.
Going forward, we have geared our business to be able to respond quickly and efficiently to the renewed vigour in the market place.”
Nick Jones, MD of Nexus Collections:
“It seems the concerns of a double dip recession have faded. Although the austerity measures and bailouts will weigh on economic growth for years to come, it appears that a sharp decline in economic output will be avoided as central governments pursue quantitative easing.
Growth will be difficult to achieve. If your business is maintaining its sales, or achieving moderate growth of a few per cent, then you are doing well. The best planning advice I could offer businesses over the next year is to maintain real earnings by planning for future inflation.
Inflation will erode your real earnings unless you prepare for it. You only have to look at gold and silver prices which have increased nearly 400 per cent in recent years as investors rush to precious metals to preserve purchasing power and hedge against inflation.
I am not suggesting you go out and buy gold, but start preparing immediately by increasing your own prices where possible. Be prepared to expect increased prices from your suppliers.”
Peter Ducker, Executive Director of the Hotel Booking Agents Association:
“There’s no doubt business picked up this year, obviously as a direct result of my prediction, which gave the market a much needed confidence boost.
It has certainly been a competitive year, with pressure maintained on rates, but more particularly the variation in performance of different destinations becoming almost bizarre, and lacking a logical explanation.
London, always a law unto itself, has had a bonanza, while other cities have been less fortunate. Compound that with side swipes from ash clouds et al, and it has been a year to test everyone’s mettle.
I feel positive for 2011; all the businesses I see in our membership are now extremely lean, fit and focussed. In every conversation I have, whether with agent or venue, I see an energy coiled and ready to react to opportunity as it arises.
The principal negative influence I see is that the public sector spending cuts will continue to impact, and I think they will be more of a factor in Scotland than they have to date.”
Ruth Carter, Chief Executive of UBM Conferences:
“The world of conferences has certainly picked up quicker than I had expected. I thought we would still be in trouble until the end of the year but the green shoots have continued to show.
One thing I hadn’t anticipated was the problems with recruitment. Finding the right people, with the right background and the right passion, has been incredibly challenging.
There hasn’t been an ‘across the board’ improvement but rather some segments have performed better than expected. There are still market sectors floundering.
I think the challenge will come from two areas: firstly staffing and, secondly, a more international focus from our customers and clients. The UK is a resilient economy essentially but so many of our customers are looking into Asia or South America, that we will all need to be geared to deal with that change. We’ve seen steady growth in Europe and the US, but stronger growth in India, China and South America.”
Ted Walker, Head of Marketing at Keith Prowse:
“I think there are reasons to be cheerful when looking at the corporate hospitality industry in 2010. From our point of view, a number of key indicators suggest that entertaining is on the agenda for businesses in the UK.
In terms of value, there has never been a better time to be a corporate hospitality buyer. The average price of luxury sports and recreation products in London actually fell three per cent from 2009 to 2010, according to this year’s Stonehage Affluent Luxury Living Index. This means hospitality providers charging unreasonably high rates will find it hard to continue an unfair pricing policy.
There are a number of exciting landmarks on the horizon. We can benefit from the growing demand for inspiring sporting backdrops which has emerged in UK business.”
Jane Longhurst, Chief Executive of the Meetings Industry Association:
“Although, as our own research shows, the industry entered 2010 stronger than it was in 2008/9, it is clearly going to be another tough year for Venues and suppliers have needed to constantly evaluate their offering and adapt to meet the demands for flexibility and value. Our approach has been exactly the same.
We are constantly reviewing our product to ensure MIA membership has continued to be an asset during these difficult times. We’ve become more competitive and more relevant, with a broader spectrum of benefits available to our members, such as a dedicated sales training academy, industry specific economic research and increased opportunities to network.
The strategy we recommend to our members is to continue finding new ways to differentiate and add value to clients and fulfil the value proposition.”
Peter Ash, Sales Manager at The Point:
“Our event business has increased during 2010 with the opening of The Point in June at the cricketground. The mix of facilities we have both in terms of size and style mean that we can appeal to a wide sector of the market.
It is hard to predict what 2011 will bring with so many uncertainties about the wider economy, but there will very likely be a decline in public sector business. Being an independent operator means that we can be more flexible to the customers needs and budget.”
Trevor Elswood, Group MD of BSI:
“Demand has increased in the meetings sector and there has certainly been an increased focus on new technology and strategic procurement approaches from those responsible for this spend category. We’ve witnessed the increase in online adoption levels with internal meetings space bookings also rising to in excess of 100,000 bookings annually.
Technology has certainly taken the strain and allowed us to absorb the growth, keeping the pressures that it brings under control. It has also provided us with the opportunity to increase the speed of service delivery and penetrate new markets.
Looking forward, there comes a point where you can’t feasibly reduce costs of service any further. This is where strategic value becomes the essential differentiator, effectively examining and addressing customer expenditure to remove and reduce their direct costs.”
Jackie Boughton, Head of Sales, Conference and Banqueting at Wembley Stadium:
“With the threat of a double dip recession diminishing daily, unless the external influences on the UK’s recovery (such as the USA’s own challenging financial position) rears its head to impact Europe, I am optimistic that 2011 will see the growth the industry so desperately needs.
The private sector is leading the way, with its need for new product launches, motivational conferences and large gatherings to announce to the world that Britain is back in business. With the 2012 Olympic and Paralympic Games around the corner, as 2011 progresses, confidence will surely return. While it may not returning to pre-recession levels, I am confident that trading conditions can only go one way, and that is up!”
Paula Lorimer, Sales Director for the Manchester Central Convention Complex:
“We knew that there were going to be challenges in 2010, but we were also optimistic as we had won some great business. This year would also see the completion of Manchester Central’s redevelopment programme.
For the conference industry as a whole I believe there will be an increasing focus on value and reducing additional costs. I also think that some associations will consider reducing the number of their rotations in order to further reduce costs.”
Martin Sirk, CEO of the International Congress and Convention Association:
“In the last article I professed my faith in the resilience of the international association meetings sector, and 2010 has proved that to be correct. Associations may be under financial pressure in their sponsorship and exhibitions. But their attendances are robust and new events are constantly being created, especially among regional associations. World congresses are definitely under more pressure.
In many established European destinations one of the biggest worries relates to government cutbacks and the respective meetings. Most countries in Asia Pacific are booming, with fewer cut-backs, and with capital investment still running at high historic levels.
Corporate meetings are on the comeback trail, albeit with the usual traits that we see at the tail-end of every downturn like reluctance to commit early, insistence on looser contractual conditions, price pressure, and cutting out the frills.”