Making a case for corporate entertaining

Corporate hospitality, like the rest of the meetings and events sector, took a hit during the recession, but the entertaining of clients by companies in order to promote business, especially at sporting or other public events, has demonstrated its resilience and emerged stronger than ever with a much tighter ROI focus.

Andrew Hodgkins, managing director of Smart Experiences tells CN that the market is buoyant with businesses recognising the value of having strong relationships with their clients.

“Major sporting events are key to the market and with the Rugby World Cup starting in September there is plenty of money being spent,” he says.

 Hodgkins does, however, note that the flip side to this is that other events will be hit with clients diverting budgets to the rugby. “The Ashes would normally be dominating the market, however, with England’s poor form and the normal four-year cycle being reduced to two, this isn’t the must-have event it was in 2005 and 2009.”

Although rugby is likely to dominate the market this year, Lord’s Cricket Ground has reported increased sales across its hospitality sales in 2015. “Our onsite hospitality venues have already sold out on the first two days of the England v Australia Investec Test match and we have launched new hospitality packages to cater for the high demand. Sales for the England v New Zealand Investec Test match are up 14% and hospitality packages for Middlesex’s NatWest T20 Blast fixtures are selling better than ever,” says head of sales Nick Kenton.

“Hospitality is of continuing importance to us. It provides the ideal opportunity to showcase not just the venue, but our food, service and knowledge of our sport.”

With the recession leading to overheads being cut at businesses across the board, the recovery of the corporate hospitality sector was swifter than many anticipated.

“2009 was a tough year unless you were an Ashes cricket venue and in 2010 Pakistan toured and cricket had its own recession,” says Hodgkins. “Recovery was swifter than I expected, in the recession clients rethought their whole approach to hospitality as it had tended to be lavished widely and aimlessly. Clients valued their clients and understood the ROI they could get from hospitality and so still wanted to entertain.”

ROI, ROI, ROI
The most notable watchword in the corporate hospitality sector at present is that of return on investment.

“We are seeing an increased emphasis on our customers’ needs to show a return on investment for entertaining,” says Sam Coates, head of marketing at Keith Prowse. “The evaluation is increasingly prevalent, especially as we are seeing a growing number of SMEs using corporate hospitality as part of their business development and marketing strategy.”

She adds that the advent of social and digital media means more marketing activity is carried out alone, meaning meeting face-to-face with the customer can be a beneficial way of securing a deal or developing a long term relationship.

“Essentially, corporates are looking for an overall return on experience: a day at the cricket with Keith Prowse gives hosts approximately 11 hours of face-to-face time to build relationships and develop a customer base,” she says.

Corporate hospitality has evolved since the recession in 2008. Keith Prowse says that while the overall demand for headline events has remained the same, the commercials have changed considerably with the emergence of a new customer base. “There has been an increase in SMEs booking from within technology, media and gaming organisations. To address this shift we have developed new products and services, taking into consideration a wider portfolio of budgets and offering the option of smaller group sizes,” Coates says.

As corporate clients have tightened their governance, the need for bona fide suppliers is increasingly important. The government recently announced it is making ticket touting more difficult; people re-selling tickets will be required to give extra details to discourage computer software buying up tickets. “At Keith Prowse we understand the importance of reassuring our clients and we boast more official appointments with sports rights holders and are subsequently reaping the rewards.”

Trending in the market

Formats for a day of corporate hospitality have changed, according to Coates, due to the public’s evolving awareness in food and a desire for more laid-back set-ups.

“Across the board, formal arrangements such as sit-down silver service have been replaced with a more relaxed, less-static experience, modelled more on upmarket restaurants with sharing platters and fine wines,” says Coates. “We developed such an arrangement for Love Fifteen at the Aegon Championships in 2014. This option comprises enticing platters of food to be enjoyed at the guest’s own pace and, of course some of the best seats in the house, that get you closer to the action.”

Gary Hutchinson (pictured p.21), commercial director at Sunderland AFC and 1879 Events Management, which offers a variety of corporate hospitality packages at Sunderland’s Stadium of Light tells CN that while the venue’s executive boxes continue to provide businesses with the privacy they desire to entertain their clients, it is the more informal settings of the Business Lounge and Quinn’s Sports Bar that have proven increasingly popular this year.

“This shift towards a more casual approach has prompted us to introduce more unusual options, such as themed packages for St Patrick’s Day and American finger foods for corporate hospitality at the Foo Fighters concert.”

Alan Findlay (pictured above), managing director of Pin Point Recruitment, has been using corporate hospitality at the Stadium of Light, Sunderland for the past 10 years.

“I have taken a table of four at every SAFC home game since 2005, with greater numbers at least six times per year when we act as match sponsors. For the past few years I have also booked corporate hospitality at the large music concerts, which have been held at the Stadium of Light, sometimes booking up to 100 tickets to give away to my existing customers. 

“This has proven to be a highly effective way of establishing and maintaining client relationships, with the informal atmosphere aiding communication and helping to develop a closer, loyalty-fuelled bond.

“The service we receive at the Stadium of Light has also ensured my clients feel extra special, with added value opportunities, such as the chance to have their child act as a mascot, helping to make it even more memorable.

“It’s great value for money from the company’s perspective – not that you can really put a price on having clients associate you and your brand with such a positive experience,” he says.

A big difference in the market noted by Moya Maxwell, chair of venue marketing consortium Unique Venues of London, is a greater mix of corporate sectors entering a market which had previously been dominated by the financial and pharmaceutical industries. “There has also been an increase in private client/high net worth individuals booking hospitality which would normally have been the sole domain of a corporate,” she says, before adding that demand for less formal dining is increasing.

In the next few years Maxwell expects to see a greater demand for more bespoke events. “Providers will need to offer a full range of packages and solutions to suit all budgets and client expectation. The ‘one size fits all’ solution is firmly a thing of the past. If the current market conditions continue then I certainly see more entrants into the market looking for something tailored to their requirements.”

Survival of the fittest
While the recession was an undeniably difficult time for the UK economy, Smart’s Hodgkins believes the corporate hospitality sector would be more bloated and poorer in quality had it not hit. “The recession was survival of the fittest. It stress-tested the industry and the industry bounced back new, refreshed and more resilient.”

Possible issues to contend with in the future for the corporate hospitality sector include the need to ensure packages are accessible to a younger generation, while continuing to keep up with influences such as lifestyle choices, food trends and a growing preference for informality.

Concerns for the future, voiced by Hodgkins include the Internet, which, while bringing greater access to information, also brings greater commoditisation. “With low barriers to entry into the market, I would fear that prices will get driven down at the expense of quality and service. This then has a detrimental effect on the industry as a whole as event companies like Smart Group need to be able to invest in the events to keep improving the quality.”

This was first published in the April issue of CN. Any comments? Email Zoe Vernor

Paul Colston

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Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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