Meetings are back in a big way and host organizations must get creative to navigate rising costs and hotel staffing issues, according to a new report from meetings management company BCD Meetings & Events, released Thursday.
Globally, increased costs are challenging meetings sourcing processes, event budgets and goals, but are being met with “strategic creativity,” among meeting organizers according to BCD M&E’s “What’s Trending 2023” report, which was sponsored by Hilton. BCD M&E is the meetings management arm of travel management company BCD Travel
“While Covid is no longer the driving factor, challenges such as soaring sourcing and travel costs, inflation, supply chain issues, staffing, increased meeting requirements, payment issues and more, are forcing planning teams to keep a close eye on containing costs. They must train and hone their creative muscles to deliver successful meetings and events and high ROI for all stakeholders,” BCD M&E stated in the report.
BCD M&E also encouraged companies to move toward more strategic meetings management processes to support these areas of concern, and they noted certain regions like Asia-Pacific gaining traction in this effort. The report called out the “great disconnect in understanding the impact of their meetings and events” on corporate strategy and success for companies lacking cohesive meetings management.
For those companies, “an overarching, ongoing consideration for SMM in 2023 [is finding new ways] to demonstrate the value of meetings and events to all stakeholders,” according to the report. Understanding and containing costs is part of that value, but the program can’t be expected to deliver savings against 2019 budgets.
Report authors estimated an event that cost $20,000 in the United States in 2019 now could run $27,000, which will pose a challenge for meetings procurement teams looking to prove their value with a pre-pandemic baseline. That said, pent-up demand for seeing clients and colleagues in person will take priority over “easing the strain on planners’ budget.”
As demand accelerates, organizations should book events as far in advance as possible—“the speediest to contract will be who secures spaces first,” according to BCD—but hosts may be forced to cut corners to keep spending in check.
This urgency planners must lock in venues and contracts links to other top global and regional concerns.
North America
In North America, where meetings management practices generally are most mature, departures from meetings policies and workflows in the scramble to secure meetings venues have resulted in data loss.
“[We have seen] organizations … stop following the governance programs put in place with those SMM initiatives to enable the business to hold meetings,” BCD managing director of North America, Charlene Rabideau noted, adding “planning and program reconciliation are not being tracked as closely.” The result could be a less informed meetings strategy for 2023, both for sourcing meetings and delivering content.
As meetings drive the return to travel, Rabideau noted integrated travel and meetings management remained an area of interest, especially in the United States. This could also help with costs if organizations can integrate the data to hold more leverage with suppliers.
Corporates are also looking at managing smaller meetings and require self-serve options enabling ad hoc meeting organizers to move quickly, within policy—that data will also need to be integrated to optimize the program, the report noted.
Other top concerns in the region include staffing issues and inflation as the hospitality industry works to “scale back up to execute a full program of events,” Rabideau said. Getting regular, up-to-date data and content on ongoing supply chain and budget challenges will be important to keep up with this ever-changing reality, according to the report.
Latin America
BCD VP and managing director of Mexico and Latin America Ana Paula Hernandez highlighted how the region is also seeing shorter lead times in what was “already a short-lead market.” This makes forecasting more challenging for this market, but “demand for small meetings and international congress participation is on the rise, but so are costs.”
Budgets in this region are tight: “Spend has increased by 10-15 percent overall [since 2019], but the volume of meetings is three times higher, meaning budgets are stretched. Pricing and payment terms have also changed, with credit no longer a viable option due to the cost of money in this region,” Hernandez reported. Additionally, many businesses closed during the pandemic, further limiting venue options, forcing organizers to shift event-destinations to tier 2 and tier 3 cities.
Asia-Pacific
The pandemic still casts a shadow over the region, with China still following a zero-Covid policy. As such, BCD managing director of Asia-Pacific Sanjay Seth noted the “constant need for agility and flexibility in event format for planners in this region heading into 2023.”
While in-person meetings and face-to-face connections remain an “effective format” in Asia-Pacific, according to the report, organizers must consider which locations grant access to the most attendees without quarantine and restrictions. This challenge also comes with lack of inventory and staffing in high-demand areas and rising costs. As a result, virtual formats remain “largely preferred,” Seth reported and organizers are favoring simpler formats, leaning away from “complex hybrid events” due to high costs and longer lead times to execute.
For in-person events still underway in the region, lead times are “increasingly shorter and hotel availability is scarce, pushing planners toward quick decision making,” according to the report. Meanwhile, many budgets in Asia-Pacific are tight and “not increasing to match the backdrop of global inflation, pushing planners to be more strategic and creative in budget management.” As a result of tight timing and reduced budget, meeting hosts are favoring packaged vendor offerings and built-in capabilities, Seth noted.
Meeting buyers tend to focus on opportunities in region and are not looking at the global picture. “While it’s fine to have a global strategy, getting regional and local buy-in is more critical than ever due to stringent consideration for supplier partners based on their flexibility and costs,” Seth noted.
Europe, the Middle East and Africa
BCD managing director of Europe, the Middle East and Africa Mikael Ek noted the general outlook for 2023 is “not looking favorable” due to the war in Ukraine as well as “inflation at historically high levels and an energy crisis.”
In the face of those challenges, however, “the demand for face-to-face meetings is huge, predominantly for small to midsize groups,” with more caution in bringing larger events back due to risk of cancellation, Ek noted.
As in-person events ramp up, sustainability is at the forefront of concerns, driving more organizations toward strategic meetings management, “as most companies in this region have set targets to reduce carbon emissions by 2030 or risk severe fines,” according to the BCD report. Organizations are looking to source sustainable partners but may not be willing to pay more for them. To meet budgets—both cost and carbon—they may need to adapt to hybrid formats, leveraging advanced technologies that still will engage virtual-weary attendees with unique experiences that provide a sense of belonging, Ek noted.
“Technology and digitization are two critical elements to consider as part of any SMM program in this region, along with sustainability,” he wrote, adding that over the long term, “digital components will play an important role, even at on-site events” as “in-person gatherings will be seen as special features to accent an event within the organization, rather than the norm.”
United Kingdom
“Savings targets are getting harder to achieve,” in the United Kingdom, according to BCD U.K. managing director Helen McCabe, as prices spike to historic highs, demand for in-person meetings rises and staffing shortages continue to plague the local hospitality industry.
As a result, organizers are “restricting face-to-face meetings for employee or internal events [and] prioritizing external events” while reducing event duration and budgets. Adding to the pressure, some suppliers are requiring advance payment in full, according to McCabe.
To mitigate, U.K. meeting hosts are keeping virtual event options in play and engaging strategic preferred partners strategies aligned with meetings management.
“Many in this region are struggling to balance rising costs with the huge uptick in demand for venues and services along with longer lead times and shrinking availability,” McCabe reported. Organizers can maneuver by shortening programs and cultivating partnerships to “rely on those trustworthy relationships to deliver added value or cost savings.”
Priorities are shifting for U.K.-based organizations with “an increased need to optimize tech stacks to ensure organizations are collecting the right data and analytics, while duty of care and sustainability—both strategic priorities during the pandemic—are beginning to dip again as lower priority than cost and service,” McCabe noted.
The Bottom Line
Human connection is in demand, but costly, and sourcing sustainable venues and partners may make it more costly, according to BCD M&E, adding that organizations in this environment, should consider the value of partnerships and pursue in with meeting formats, including hybrid and virtual events.
BCD recommended organizations “examine the types of meetings and events in your program to identify opportunities for using varying formats to your advantage.”
[email protected] (Angelique Platas)
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