Much more for less as industry comes of age

With business budgets continuing to tighten, companies want more for less and expect added value from conference venues, writes Clare Gascoigne

What’s the key driver of events in 2013? Cost. The UK may have avoided a triple-dip recession, but business is counting the pennies like never before.

“Back in 2008, you simply told customers the price and the availability,” says Robin Parker, general manager at Church House conference centre in the heart of London’s Westminster. “Now, they question everything.”

Five years of global recession have bought about huge changes in the business events industry and keeping business meetings close to home is one clear trend identified by the 2013 forecast from American Express Meetings & Events.

“In a recession, companies don’t want to be seen to be flying off to an exotic destination, so will hold meetings closer to home,” says American Express Meetings & Events vice president, Europe, Michael Schuller. “It’s cost-driven, but it’s also to do with perception.”

No one wants the same kind of reputational damage suffered by insurer American International Group when it spent a six-figure sum on a conference in Phoenix, Arizona at the same time as receiving government bailouts, (though it transpired that much of the cost was met by delegates themselves).

But those working within the industry are clearly frustrated by the continued perception that the word “meetings” is equivalent to “junkets”.

“This is a serious business and that’s still not really understood,” says Paul Kennedy, director of consultancy Kennedy Integrated Solutions. “Events is worth more as an industry to the US than cars. If companies don’t hold meetings face-to-face, profitability suffers.”

In 2010, an Oxford Economics report found that every dollar invested in business travel results in $12.50 in added revenues and $3.80 in new profits, and a company that eliminated its business travel would see corporate profits drop 17 per cent in the first year.

According to Mr Schuller: “No one wants to reduce the number of meetings because companies understand that meetings are valuable, but organisations have smaller budgets to spend so are trying to do the same or more with less.”

 Now clients ask us to measure how well staff understand sales objectives before and after the meeting

That can give a boost to second-tier venues, whether Lincoln or Lithuania, which might offer cost savings, but also puts pressure on venues to perform.

“Everyone is looking for value,” says Mr Parker. “There’s been a lot of discounting and price cutting in the industry, but I don’t believe that’s the way forward; it’s more about enhancing the venue, offering extras. There’s a lot more negotiation.”

It means lead times are much shorter; if a meeting is held in November, the board may wait till third-quarter figures are out before giving the green light. It also means venues that don’t offer top-end technology as standard are likely to suffer; likewise venues that don’t appreciate the increased skills required by staff.

According to Martin-Christian Kent, product development director at People 1st, a sector skills council for the hospitality industry, customers have expectations that are rising all the time.

“Employers are going to have to develop their staff and provide a service that is personalised, not just friendly,” he says. “We’ve all been to conferences where the wi-fi hasn’t worked – that’s not acceptable any more.” Staff need to be able not only to use the technology at the venue, but to help customers use their own technology.

Increased use of technology, such as webstreaming keynote speakers, is one way of increasing value for money by making a conference “live on the web” after the last delegates have checked out, though many companies struggle to make best use of new media because it falls through the cracks between the IT department, procurement and the conference organiser. But you have to get approval for the event in the first place.

“Gaining approval is much more difficult [because of the cost pressures],” says Mr Schuller. “Measurement is increasingly important; we used to provide surveys asking what delegates thought of the hotel or the food, but now clients ask us to measure how well staff understand sales objectives before and after the meeting.”

Mr Kennedy believes the private sector could make more use of the academic side of the business. Proving value has become a different – and more critical – exercise that can make or break an organiser.

As senior management demand increasingly complex measures of value – not just a return on investment calculation – so the events industry itself becomes a more highly professionalised and specialised industry.

“Meetings used to be about logistics – getting there, starting on time, providing delegates with materials,” says Mr Kennedy. “Now it’s about the generation of effective content and the best way to communicate.”

Not that the logistics don’t matter – American Express is seeing a greater interest from clients in issues of safety and security, anything from not wanting to invite clients to Athens if there is a risk of anti-government demonstrations, to the exact location of a hotel and which embassies are nearby – but more that issues, such as good transport, have come to be expected as basic standards.

And that, in itself, can be seen as a sign of an industry that has grown up.