Is it a Sellers’ or Buyers’ Market for Meeting Space?

As travel restrictions ease and in-person meetings are on the increase, industry experts have begun using the term “compression” to describe the demand on available space by multiple groups. “The return of in-person meetings and events — and business travel in general — is a welcome sign after more than two years of pandemic-related uncertainty,” said U.S. Travel Association  (USTA) President and CEO Roger Dow. “There is simply no substitute for a face-to-face meeting, which is proven to lead to more fruitful business opportunities, and can help power an economic and jobs recovery in communities across America.”

This Confidence to Travel to In-Person Events Survey  shows a desire to return to in-person meetings, finding that nearly one-quarter (24 percent) of business travelers now plan to take more trips to attend conferences/conventions/trade shows than pre-pandemic. Also reported is that 43 percent plan to travel the same amount, while 17 percent expect to travel less, and 16 percent were not sure. Nearly one in four respondents indicated these events are critical to closing sales. Responses to this survey were gathered at Harry Reid International Airport in Las Vegas and Miami International Airport, with both cities particularly busy of late as trade shows and conventions continue to rebound.

One of the key drivers of compression is that events already scheduled in advance for 2022 remain on the books, while events that were cancelled in 2020 and 2021 have been rebooked and moved forward to the same time frame. All of which makes it more difficult and costly for planners to find available space and resources for future meetings and events that have not yet been scheduled.  It hasn’t taken long after the rollout of Covid-19 vaccines for industry experts to start using the word “compression” when referring to negotiations for future in-person meetings. With travel restrictions eased, travel demand picking up and planners signing contracts for future events, finding available space soon could become a difficult and costly endeavour.

Event planners have also noticed a burst of corporate meetings demand. Booking a year ago, it was a buyer’s market. Everyone was so anxious to have the business coming back, with compression, the sharp increase in demand, rates are becoming less and less competitive and returning more toward 2019 levels at a pretty rapid pace.

According to a recent report from The American Hotel & Lodging Association, in collaboration with Accenture, business travel is expected to stay down by more than 20% of its pre-pandemic volume. In 2019, business travelers constituted 52.5% of the industry’s overall room revenue, but it’s anticipated to represent just 43.6% in 2022. 84% (Eighty-four percent) of business travelers plan to take at least one trip to attend conferences, conventions or trade shows in the next six months, according to a new survey by the U.S. Travel Association (USTA).

As the meeting and event industry slowly recovers from the impact of the pandemic, we asked some hospitality and travel experts what they’re seeing right now in 2022.

Remote Team Meetings

A dispersed team may make group travel bookings more difficult to arrange, but working remotely means that in-person gatherings are more important than ever. “Most people want to get their team back together,” said Samantha Hodge, general manager of The Hideaway at Hull Bay.

Smaller Group Sizes

As has been a trend across all events, companies are opting for smaller, more intimate group sizes when planning business trips. “Our smaller, more remote destinations have been increasingly popular,” said Shelly Archer, managing partner of 360 Destination Group, a destination management company with over 17 locations in the U.S. “Typically, this indicates that clients are planning programs with fewer attendees overall and their budgets reflect that as well.”

Of course, small doesn’t always apply to the budget, especially after a two-year meeting drought. “Many clients are making up for those cancelled events of the past, whether corporate or personal, and are willing to splurge a little,” said ​​Karen Whitt, VP of sales and marketing at The Hartling Group, which oversees The Palms, The Shore Club and The Sands in Turks and Caicos. “We are seeing smaller groups with larger spend, and the 2022 numbers are rivaling pre-COVID budgets.”

Rodrigo Esponda, managing director of the Los Cabos Tourism Board, shared a similar sentiment, saying that “during the COVID-19 pandemic, we have seen that our clients have mostly maintained their budgets at pre-pandemic levels. While they may be planning smaller-sized meetings and events in terms of the number of people, they utilize their budget on other components—whether it be the venue selection, meeting add-ons or destination activities that provide a high level of safety while visiting the destination.”

Location matters. Tempting Travellers To Los Cabos in August 2021 was the first real indication that the industry was going to be in recovery sooner than we all anticipated. In September 2021, Los Cabos recorded nearly 118,000 international arrivals, marking its most successful September month ever, with a 40% increase in international arrivals compared to 2019. From November 2021 to April 2022, there is a 45% increase in scheduled seats from the U.S. to the Los Cabos International Airport as compared to the same timeframe in 2019 to 2020.  

Safety Protocols in Place

Interestingly, according to the Development Counsellors International’s (DCI) newest edition of “Winning Strategies In Destination Marketing: A View From Meeting Planners,” only 29% of respondents noted that the security at a business event should be a joint effort between themselves and host destinations, compared to 70% of respondents in the 2018 edition. Thirty-six percent of respondents noted that security is the planner’s responsibility. “With the pandemic, there seems to have been a shift of responsibility, with planners owning more of the responsibility because I would imagine they feel a strong responsibility for keeping attendees safe,” said Daniella Middleton, DCI’s senior vice president of tourism.

Cancellation Policies

While pandemic-related concerns affected most of the results throughout the DCI study, cancellation policies topped the list with 73% of respondents reporting that they’re most concerned about that issue. “Meeting planners are dealing with tasks that are very much in the moment, from dealing with cancellation policies to understanding restrictions and guidelines in every destination. They are still in crisis mode,” Middleton explained. “It is important for destination markets and suppliers to understand how they can be valuable partners to planners during this moment in time.”

That’s why many destinations and properties continue to offer flexible booking arrangements as the industry handles the ups and downs of the pandemic. “A primary concern for planners is the potential scenario of needing to cancel hotel reservations or extend their stay due to potential positive cases with trip attendees,” Esponda said, adding that Los Cabos has “implemented a more flexible reservation policy across all hotels in the destination to support planners and travelers during this time.”

Popular Destinations

So, where’s everyone going? According to the DCI study, San Diego remains a top spot, with Montreal and Vancouver entering the charts for the first time. “Among the top six destinations, half are Canadian, suggesting a shift in focus among meeting planners to more northern cities,” Middleton said. “This is possibly a reflection of their COVID-19 responses and general control over the pandemic, as compared to the more affected areas in the U.S.”

Archer added that, currently, 360DG is experiencing the most activity in Santa Barbara, Napa, Austin, Orlando and Los Angeles.

Our industry is moving toward a future that is increasingly more sustainable, diverse and innovative. Join us in celebrating the #FutureOfTravel.

 

Fiona Knight Consulting Services in business for over twenty-nine years. specializes in project management which includes special events, media launches, conferences, workshops, focus groups, festivals, tours, outside broadcasts, anything that needs an expert hand to guide technical implementation, keeping on track; on time and on budget Look for my #TemptingTravellersTo…blog or follow on twitter or Instagram.

Fiona

Fiona Knight Consulting Services in business for over twenty-five years. specializes in project management which includes special events, media launches, conferences, workshops, focus groups, festivals, tours, outside broadcasts, anything that needs an expert hand to guide technical implementation, keeping on track; on time and on budget Look for my Tempting Travellers To... blog at http://i-meet.com/pages/Profiles/MyBlogs.aspx or https://www.facebook.com/TemptingTravellersto or follow on twitter or Instagram @fknightevents

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