By most accounts, it has been a banner decade for the global meetings and events sector.
At IMEX Frankfurt this week, the usual parade of promotion and celebration was on display around the show floor. Concern about the industry’s future, though, was common in discussion with leaders, particularly in the areas of sustainability and the health of group bookings overall.
Sustainability has become a stronger focus for the meetings and events sector, but some raised the concern that greenwashing and the perception of events as wasteful could decrease demand for events in the future, particularly if these issues become a political focal point around the world.
For Don Welsh, CEO of Destinations International, part of the problem is the lack of best standards for destinations. He pointed out that Houston is one of the only cities with a strong sustainability program for travel in the U.S., while Scandinavian countries lead the green wave in Europe. Every destination should be buying into sustainability, but most aren’t.
It’s not that everyone else is avoiding the issue, he said, but that the lack of clarity on goals and buy-in from local politicians makes a focus on sustainability challenging for destination marketers and managers. Smaller cities, though, are starting to embrace the challenge as they become more competitive when compared to established destinations.
Mark Cooper, CEO of IACC, echoed the same sentiment. Smaller venues and destinations are more likely to focus on issues like sustainability rather than sell old meeting spaces that don’t meet certain standards. Dominant hotel chains, too, need to do more to revamp spaces with the future in mind.
Perhaps this is tied to the rise of secondary destinations as attractive spots for meetings, as well as many groups looking beyond the traditional hotel meeting room for their event.
“If you gravitate away from big names, it can be more affordable and sustainable,” said Cooper. “If we’re not more sustainability savvy, meetings will become a target of politicians. No one wants to be like the tobacco companies of the ’80s… for venues, the line between upgrading and [being wasteful] is tough because there is a desire to be seen as not staid.”
He gave the example of more venues purchasing reclaimed furniture, for instance, as an example of smartly weaving sustainability into the design of event spaces. A new focus on data security, too, will lead many spaces to upgrade their information technology infrastructure, but upgrading other technology elements like televisions may prove wasteful by comparison.
Where’s the Demand
A common refrain across IMEX Frankfurt has been not only the value of events to destinations, but also the narrative that the sector will continue to grow quickly in a time of relative economic uncertainty. Not everyone buys into this narrative, though.
One source, who asked not to be named for political industry reasons, said a slowdown in group bookings is already here but won’t be reflected by industry data for some time. Destinations known to be most popular for groups are underperforming almost inexplicably, and big spenders in the pharmaceutical and finance sectors are constraining spending due to bad optics with the media and investors.
She suggested that destinations themselves will be able to hide a decline in group booking due to the surge in individual and family leisure travel that has propelled the global travel boom. Thus, the same old narrative will be able to continue despite a slowdown potentially taking place.
Others said that a potential weak year is to be expected in the context of the sector’s explosive growth over the past few years.
Planners, too, are continuing the feel the pressure from increased workloads and the mess wrought by electronic request for proposal systems.
Another source suggested a major factor causing friction in the sector is that hotels are deluged with requests from planners to book their spaces, which leads to planners sending out dozens or hundreds of requests to book one meeting. The process is exhausting for both parties, and this is a refrain this reporter has heard time and time again after promising anonymity during interviews.
Since digital meeting space distribution has one dominant player in Cvent, there’s no equivalent alternative for planners to turn to if they’re booking a large event. From the hotel side, this can lead to such a minute conversion rate for sales people that they burn out from their role instead of negotiating rewarding partnerships with planners or associations.
One gets the sense that no one wants to publicly speak ill of the dynamics that Cvent has helped create due to its colossal power in the industry. While alternatives exist like HotelPlanner and numerous small meeting booking sites, Cvent’s systems are not as efficient as they could be but continue to have widespread adoption around the world. Hotel chains, too, bear blame after a period of consolidation that has given planners reduced commission and less negotiating power.
No one sees a breaking point on the horizon, but something will have to give eventually as tension ratchets up between various industry players stymied by increased demand and rising prices. Perhaps it will be the hotel chains finally building real distribution systems for selling meeting space (which they have secretly been attempting without publicly announcing it), or when a lack of demand for meetings from big corporations helps pull pricing and availability back into a healthier state.
With the possibility of Brexit still lingering in the British political world, the U.K. as a destination continues to build new convention centers, expecting that business travel will continue to increase.
Convention centers in secondary cities like Leeds, Aberdeen, and Newcastle are poised as a more affordable alternative for events considering London, and offer a stronger commitment to sustainability, said Helena Adkins, a content manager at Visit England.
“Continued investment means business as usual,” said Adkins.
As well, the U.K. has begun to allow US and Canadian travelers to enter the country via ePassport gates in an attempt to simplify the arrival process for North American visitors.
A weak British pound means more affordable events for planners who are operating on tight budgets with constrained resources. In a time of tacit tension in the sector, low prices and varied venues could be an attractive proposition for global planners.