The crystal ball says, among the trends that will affects in 2019, the economy’s continue rise will be the driving force. Companies have more money for meetings, but planners have less funds to host the events. Meanwhile, hotels are charging higher rates while supply struggles to keep up with demand. But don’t be alarmed. Not all is black and white—millennial pink, anyone?
As you buckle up for 2019, we take a look at what will affect you the most over the next 12 months.
On the Up-and-Up
The new normal in events is incremental growth, says American Express Meetings & Events in its 2019 Global Meetings & Events Forecast. Given where the industry was a decade ago, that’s great news. “2019 will be a growth year for the meetings industry, with activity expected to increase across all meeting types and regions,” says Issa Jouaneh, senior vice president and general manager at American Express Meetings & Events.
Here Comes the But.
Meeting budgets are expected to increase by .8 percent in 2019, American Express Meetings and Events says. That’s better than nothing, but the increase is only a fraction of the 2.4 percent increase expected in hotel room rates. And with more meetings needing hotel rooms, costs will go up. “The challenge before planners is mastering this volume, while working with the reality of expenses increasing at a higher rate than meetings budgets,” says Jouaneh.
A Word from Sponsors
Sponsorships pay for nice things at conferences, but what do the big spenders get out of it? That’s the question planners are being forced to answer. EventMB says 43 percent of planners are unable to prove sponsors’ return on investment. The same study says 53 percent of planners are struggling to sell sponsorships. There is “a growing tendency in our industry requiring more accountability for the money spent on events,” EventMB’s top 10 events trends report states.
Down to Business
The International Congress and Convention Association, which has been tracking meetings for 55 years, says fewer attendees are coming to association meetings. Events including 50 to 249 participants comprise more than 60 percent of association meetings. But there are more meetings than ever, meaning the overall count for attendees is higher: about 25 million in the past five years.
The most common meetings are internal, specifically training sessions, according to the 2019 Global Meetings & Events Forecast. Such meetings are responsible for 30 percent of business gatherings in North America, the study finds.
Not surprisingly, tech meetings and events are the fastest growing sector. They make up to 14.4 percent of events now, only slightly below medical sciences, which hosts 16.6 percent of events, ICCA says. American Express Meetings & Events adds planners in North America expect product launches to increase by more than 1 percent this year.
Marriott International shook the event’s industry by slashing third-party commissions from 10 percent to 7 percent. Hilton, InterContinental and Hyatt have since followed suit. A year later, at least 50 percent of planners are concerned with this new reality. “Commissions are a way for us to keep costs down for the program,” says Rachel Lunderborg, global director, solutions & analytics, CWT Meetings & Events. “The commission cuts will force the buyer to become more strategic to make up for these increased costs by looking at control management strategies. It’s really about negotiating hard over the business terms to make up the difference.”
That’s Not Fair!
Planners looking to go to Europe for a meeting or incentive trip may start sounding like a grumpy toddler, CWT says. Hotel prices are projected to rise 5.6 percent, as capitals like London and Amsterdam are reporting 82 percent occupancy rates. Adding salt to the wound, the rise in rates matches what’s ahead for airfares.
More than 5,300 new hotels are currently planned across the country, adding more than 630,000 room nights, Lodging Econometrics says. It’s not big-box properties of more than 500 rooms leading the boom; it’s boutiques. Leading the trend is New York, which has 32 hotels in the pipelines, well higher than second-place Nashville (20). CWT says 18,000 room nights will be introduced by 2020 as a $1.5 billion expansion continues on the Javits Center in Manhattan. The surge in room space has helped stabilize prices, making New York & Company’s job selling the Big Apple as easy as pie.