Economic power of events

When it comes to business events, a fragmented industry has often meant a fragmented presence in the minds of policymakers, government and industry leaders.

Often lumped together with leisure tourism simply because it shares some of the same supply chain when using hotels and transport, it has been hard to get a clear view of the size and shape of this important part of the UK economy. But a new UK Economic Impact Study (UKEIS) plans to change that.

The study has been carried out by academics at the International Centre for Research in Events, Tourism and Hospitality (ICRETH) at Leeds Metropolitan University; it was led by MPI Foundation, the not-for-profit research arm of Meetings Professional International, an industry trade body for the past 30 years.

“This is the first time this level of information has been gathered in the UK,” says Jackie Mulligan, director of enterprise and principal lecturer at ICRETH. “It is just the start of establishing the full economic picture.”

And what a picture it shows. In 2011, with more than 1.3 million meetings and 116 million attendees in 2011, the sector spent just under £40 billion – in one year, more than double the contribution of the 2012 Olympic Games to the UK’s gross domestic product (GDP) over the 12 years between 2005 and 2017, estimated to be £16.5 billion by Oxford Economics.

This is the first time this level of information has been gathered in the UK. It is just the start of establishing the full economic picture

“Our study proves the critical role of bringing everything together, from registration fees to accompanying persons,” says Ms Mulligan. “If you are looking at only one aspect, such as meetings, you won’t see the spend on, for example gala dinners, and therefore won’t see the effect on all the supplier businesses.”

Previous studies focusing on aspects of the events industry have demonstrated the economic pulling power of events; a study by Oxford Economics, published in February 2012, found that, in 2010, exhibitions alone generated £11 billion in spending and supported 148,500 jobs, equivalent to 0.5 per cent of total employment in the UK. But ICRETH also looked at, for example, the spending power of spouses or friends accompanying delegates to a conference, which accounted for almost 20 per cent (£7.7 billion) of total spending.

“There is a need for destinations to consider these people and, the further afield delegates come, the more likely they are to bring an accompanying person,” says Ms Mulligan. “It is important that we understand the benefits of an event as a whole; we should be trying to measure the benefits to a whole community, not just the venue at which the event takes place.”

Measuring and identifying the ripple effect of business events is part of a growing awareness and therefore professionalism, according to Paul Kennedy, director of events consultancy Kennedy Integrated Solutions, who cites the growing number of city-supported or owned convention centres as an example of how policymakers are waking up to the economic power of the events industry.

“If you look at centres in places, such as Liverpool or Gateshead, you can see shining examples of the way a city can improve its economic performance by becoming an event destination,” he says. “But it’s still not easy to get people to listen to the evidence.”

Finding the right venue for an event is, of course, critical for success and budgets – the largest expense, at 17.4 per cent, was venue hire. Of the 10,127 meeting venues in the UK, almost 20 per cent were classed as unusual, unique or special – venues that might spark the imagination as well as boost the bottom line.

“A decade ago people were far less likely to use unusual venues such as museums,” says Ms Mulligan. “But in the current climate there is a need for something that makes people think a bit differently. One of the UK’s strengths as an event destination is the huge variety of venues, from HMS Belfast to the West Yorkshire Playhouse.”

One of the UK’s strengths as an event destination is the huge variety of venues, from HMS Belfast to the West Yorkshire Playhouse

It is a trend also identified by American Express Meetings & Events which, in its 2013 Global Meetings Forecast, notes “a trend of holding meetings in unique destinations, such as restaurants or aquariums, for potential additional savings”.

UKEIS also noted the breakdown of events between venues: unusual venues, many of which do not have bedrooms, tended to be used more for conferences, while smaller hotels hosted more incentive events.

Such venues will typically be combining a range of events, not just focused on the business community, which accounts on average for about 30 per cent of the venue’s occupancy (125 days in the year).

Perhaps surprisingly, 64 per cent of meetings were classified as small, with fewer than 100 attendees, and only 6 per cent were the headline events that attracted more than 500 delegates.

“Those larger events are important economically, but you need a mixed economy of events,” says Ms Mulligan. “It’s not the quantity of people, but the quality and variety of the programme that’s important.”

The study also shows considerable seasonality in meetings, with March and April taking the lion’s share in terms of numbers – around 20 per cent of all meetings in the UK being held in the spring. Few organisations felt December was a good time to schedule a meeting, with only 3 per cent of the total number being held in that month.

“That kind of data can help organisers plan better,” says Ms Mulligan. “Knowing the peak times can help in boosting attendance or negotiating with venues.”

Data can also help identify cost savings; with 20.6 per cent of attendees’ spend on accommodation, and 9.5 per cent on food and drink from restaurants, cafes and bars, it’s clear where organisers need to focus their attention to trim the budget.

Such fine detail provides the clearest picture yet of the business events industry. With more information still to come – the final report will be published at The Meetings Show in July – the industry is building solid foundations to prove its importance to the UK economy.