Meeting the Demand

The years following the global financial crisis of 2008 brought hard times to the meetings industry. Drastic budget cuts meant that companies had less money to allocate to live events, and even if they had the funds, some customers or clients couldn't afford to travel. Now, thanks in part to a stabilizing economy and improving corporate performance, it appears that a recovery in meetings demand and spending is underway, according to new BTN research as well as testimony from several major hotel chain executives and third-party management companies.

According to a Business Travel News survey of 172 corporate travel and meeting managers fielded from December 2013 to February 2014, 39 percent of respondents indicated their organizations' 2013 meetings expenditure increased from 2012, and 40 percent predicted another year-over-year increase in 2014. About 11 percent of respondents reported a decrease in meetings expenditure.

Executives at several event technology and management companies, including BCD M&I, QuickMobile and Cvent, told BTN of increased business during the past two to three years. "We've seen that people are starting to put on more meetings, the number of attendees per meeting has gone up, and the requests for proposals for spend and hotels has been trending back up," said Cvent vice president of marketing Eric Eden.

Event management firm Meetings & Incentives also reported an increase in the number of conferences held by its clients annually, swelling to 637 in 2013 from 450 in 2011. "We've seen meetings spend rise pretty dramatically with our clients; about 18 percent a year over the last two years," said Meetings & Incentives director of strategic meetings management and analytics David Sachs. The average number of attendees per event for M&I clients also increased nearly 50 percent within the same timeframe, he said.

Meetings management firm BCD M&I, a sister company to BCD Travel, had clients who put in place travel freezes at the end of 2012 and expected meetings to decrease.

"In some of those cases, meetings did not decrease as they had anticipated, even with internal budget cuts," said Charlene Rabideau, BCD M&I's vice president of account management and operations. Since 2012, BCD M&I has seen a year-over-year increase in its annual number of meetings managed and corporate business overall, which Rabideau attributed to strong customer growth the past few years.

Meanwhile, several hotel chains during earnings conference calls in February cited improving group performance. Hyatt Hotels reported a 3.9 percent year-over-year increase in group room nights in 2013, with the average daily group room rate up 2.4 percent, and Marriott International claimed a 7 percent year-over-year increase in group bookings in 2013. Starwood Hotels & Resorts Worldwide reported that group booking pace is up for 2014, and Marriott's booking pace for 2014 is running 4 percent higher than last year, with its corporate group booking pace up nearly 10 percent. Research firm TravelClick also reported that booked group room nights for 2014 across the top 25 North American markets is up 3.8 percent since last year, with the group booking pace up about 10 percent.

Studies conducted by other organizations also showed a thriving meetings industry, including the industry umbrella association Convention Industry Council. While CIC's "Economic Significance of Meetings to the U.S. Economy" report focused mainly on the association space, its data showed that during 2012, 1.83 million meetings were held in the United States. They were attended by 225 million participants, an attendee increase of 10 percent since 2009. Overall, meetings in 2012 contributed more than $115 billion to the U.S. gross domestic product, nearly a 9 percent increase from 2009.

"This increase seems to be technically driven by economic performance," said Tony Wagner, vice president of CWT Meetings & Events, Carlson Wagonlit Travel's meetings-management arm. "As the economy grows and there's more confidence in a company's earnings, you tend to see the number or size of their meetings increase."

However, some executives struck a more cautious tone, reporting that while overall corporate meetings spend is up, per-meeting spend has remained stagnant. "Meetings budgets are still scrutinized like there's no tomorrow," Meetings & Incentives' Sachs said. Other event management companies reported stable increases in business and more client investment in meetings, but have

Centralizing Success

A 2012 survey conducted by BTN and sister publication Meetings & Conventions indicated that 36 percent of 295 meetings-professional respondents had in place a strategic meetings management program at their organization, taking a comprehensive approach to managing meetings and monitoring meetings spend across their entire organization or business unit, with a much higher percentage having at least some aspects of an SMM program in place.

This year's BTN survey of 172 corporate travel and meeting professionals revealed that companies are looking to centrally consolidate those SMM programs in order to better track companywide spend and return on investment.

From scandals involving profligate spending at some meetings like the U.S. General Services Administration's incident in 2012, to the introduction of the U.S. Physician Payments Sunshine Act, which requires pharmaceutical companies to report per-attendee spend, there are many reasons why some organizations are trying to better track and report spend by centrally consolidating their strategic meetings programs.

However, while the benefits of consolidating SMM programs can be significant, the process is anything but easy and can involve a vast range of departments, including human resources, marketing, procurement, training and internal communications and information technology. This year's survey demonstrated a clear divide between those companies that are in the advanced stages of SMM, collecting better quality data and putting it to use, and those in the early phases attempting to consolidate their program to gain a handle on spend.

Roughly 34 percent of respondents said their company has consolidated the meetings purchasing process, 29 percent reported consolidating meetings data and 31 percent have centralized the planning process. Large companies are more likely to have developed advanced SMM programs, due to higher meetings budgets, as are pharmaceutical companies because of strict industry regulations. Still, most organizations have yet to centralize any part of the meetings process, with more than half of respondents reporting no consolidation at all.

"More and more customers are looking to take a more enterprisewide approach to managing their meetings, but many are still in the infancy stages," said CWT M&E's Wagner. "What we have seen is what we'd call a parallel path based on maturity of a customer." Mature customers include those larger companies that have had an established SMM program in place for a while, he said. These organizations have already begun to see the benefits of centralized SMM in the form of cost savings and better data collection.

"As procurement becomes more involved, companies want to take a more consistent approach and implement a more consistent process," Wagner said. "They want to reduce the number of vendors from a management standpoint and see an increase in data quality and leverage." CWT's clients also have begun to align hotel sourcing strategies across transient and meetings properties. "There's a big difference between business and transient, and we're seeing that negotiation come together."

BCD M&I's Rabideau also witnessed more cooperation in managing transient and meetings travel, noting a 2012 GBTA study that found 43 percent of travel managers were planning live events for their organizations and 38 percent were responsible for developing their companies' strategic meetings management programs. "We see more integration of travel and meetings happening," Rabideau said, "and the oversight of the two commodities has become more important in order to find opportunities to leverage the programs."

Companies whose meetings programs still are in the early stages are just beginning to track basic data, for instance how many meetings are happening across a company and how much they cost, and making the information available in order to reduce expenditures. "It's OK to start simple," Eden said. "You don't have to jump into the deep end. It's OK to have a phase plan."

The particulars of centrally consolidated SMM programs vary by company, but they generally include central sourcing and budgeting functions, leaving the actual planning and execution to individual departments. "One of the things we noticed right away, by centralizing our meetings and trying to get more of them to come through the travel department, is that we can leverage contracts and we know what's being committed," said Cheryl Benjamin, travel manager at manufacturer Dart Container Corp. "We don't want to take over the meeting planning, we just want to be involved in that contract and that financial obligation." Not only does this format help Dart cut costs, it also helps the company "source smarter," she said.

Benjamin explained that by the time a meeting is presented to her team, it's already been discussed with a vice president or department director, so upper-management approval is implied. However, other companies have more formal approval processes in place. Nearly 56 percent of BTN survey respondents reported their company's meetings policy placed limitations on contract-signing authority, and about 30 percent required senior-level approval.

Some companies have put in place per-meeting spending thresholds and delineate which meetings require authorization. "The average [threshold for approval] is $25,000," explained Meetings and Incentives' Sachs, adding that the amount varies by organization. "From what we've seen, corporations still give choices. The one piece that tends to be taken away [from an individual department] is the sourcing and hotel procurement."

In addition to approval processes, some companies control spend by limiting the venues or locations where a meeting can be held. Approximately 52 percent of respondents indicated they are required to use onsite meeting space when feasible, while 25 percent must use preferred meeting suppliers, and about 30 percent reported utilizing videoconferencing when applicable. "We hold a blend of in-person and virtual meetings," Benjamin said. "We don't always bring people in if we don't have to, and we're installing videoconferencing equipment in our facilities."

How a company consolidates its SMM program and what restrictions it enforces is mostly dependent on company culture, explained Rabideau. "We've seen everything from very loose [restrictions] to ‘strongly encouraged,' " she said. "Meetings are not typically mandated, so strongly encouraged is probably the most aggressive. We've had a few clients say they'd use disciplinary action if guidelines are not followed."

For many companies just starting the SMM process, defining the concept of a meeting helps them structure better meetings management guidelines. "In general, if it's 10 or more guest rooms on a given night, with or without meeting space, it becomes a group event," Sachs said. He attributed this rule to a hotel model that considers any event with less than 10 attendees a catering event, while those with 10 or more are considered a meeting. For some companies, like Dart, there's a less-than-formal definition in place. "I'd say if there's 20 to 25 people and if there's offsite meeting space involved, it'd be considered a meeting," Benjamin said. "With us, it's more, ‘Give me your meetings details and let's talk this through.' "

The Next Steps

While many companies still are in the early stages of structuring an effective strategic meetings management program, Rabideau said more organizations would begin to invest in globalized meetings programs. "For 2014, we continue to see the trend of centralizing programs on a global basis," she said, "or we see organizations beginning to at least dip their toe in the water on what a global program and policy looks like. People who are managing meetings programs globally are at least putting a general policy in place, doing some data capturing, general meeting registration, hotel sourcing, and then allowing the region to do some of the management locally."

Sachs agreed that going global is the next big step for strategic meetings management. "We have had a lot of companies that have done their North American side," he said. "Now they're all starting to move forward on the global side. The globalization of SMM in the next year, year and a half, is going to happen and is going to gain a lot more traction." Sachs said this would lead to more data and "better information for companies to work with."

Wagner predicted more organizations would invest in SMM programs that combine marketing and meetings strategy. "Executives and marketers are expecting more of a return from meetings," he said. "Because of the technology marketplace changing, people are reassigning their technology strategies and are trying to build in more links between their marketing organization and meetings strategy because these tools are starting to expand their capabilities."

Cvent's Eden also predicted more synergies between meetings and marketing management. "A pretty high percentage of events that companies do is around marketing," he said, citing a 2014 Forrester Research report that concluded that, on average, 20 percent of marketers' budgets is committed to live events. "Companies always need to win more customers and sell their existing customers more products and services, and in-person events are one way marketers do this." 

Sidebar: Technology's Evolution

Technology continues to become increasingly crucial to strategic meetings management, making it possible to source and evaluate data once unavailable to companies. "You're seeing more and more customers integrate technology into the meetings experience now, and there's more and more data being gathered," said Tony Wagner, vice president of CWT Meetings & Events. "I expect us to start seeing companies leveraging data not around spend, not around who is attending and how many events they're attending, but how they're interacting."

Wagner expects companies with mature strategic meetings management programs soon will be able to easily and regularly monitor attendee reaction to speakers, educational sessions and other meeting components. "That type of data is now being gathered, but isn't necessarily being acted upon as a meeting owner."

Key to that technological growth has been the rapid development of meetings apps, which in some cases have fully replaced printed meeting agendas.

Event apps have gone from being an added bonus to something that is expected, explained Robin Jones, chief marketing officer of meetings app and technology provider QuickMobile. "If you isolate the mobile event app category, it's in a mass adoption stage," she said. She reported that QuickMobile has seen demand double year over year "in terms of inbound interest through to apps delivered and companies added to our client list."

Many of QuickMobile's customers have stopped utilizing one-off event apps and now invest in platforms that allow them to create apps year-round, Jones said.

"Large organizations two years ago would go out and buy an app for a flagship event," she said, "but what we're seeing now is, keeping with SMMP, a need to consolidate that spend, get economy to scale and get a better pricing structure for a company's overall mobile landscape."

Instead of singular event applications, QuickMobile customers more often are employing the company's multi-event application platform, through which they can create custom mobile apps for any event as needed. "It's gotten much more traction than we anticipated," said QuickMobile CEO Patrick Payne. When the company first introduced the platform at the end of 2012, officials predicted less than 20 clients would utilize it by the end of 2013; instead, Payne said more than 100 customers currently leverage the platform.

This report originally appeared in the April 1, 2014 edition of Business Travel News.