Meetings are back in full swing and host organizations need to get creative to deal with rising costs and hotel staffing issues, according to a new report from meeting management firm BCD Meetings & Events, released Thursday.
Globally, Rising Costs Complicate Meeting Procurement Processes, Budgets and Event Goals, But Hit the “Strategic Creativity” of Meeting Planners, Says What’s Trending 2023 Report by BCD M&E, 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 skyrocketing procurement and travel costs, inflation, supply chain issues, staffing, increased meeting requirements , payment issues, etc., require planning teams to keep a close eye on cost containment. They need to train and hone their creative muscles to deliver successful meetings and events and a high return on investment for all stakeholders,” BCD M&E said in the report.
BCD M&E also encouraged companies to adopt more strategic meeting management processes to support these areas of concern, and they noted that some regions like Asia-Pacific are gaining traction in this effort. The report highlighted the “great disconnect in understanding the impact of their meetings and events” on business strategy and the success of companies that lack consistent meeting management.
For these companies, “global and continued 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 cannot be expected to generate savings over 2019 budgets.
The report’s authors estimated that an event that cost the United States $20,000 in 2019 could now cost $27,000, which will pose a challenge for meeting procurement teams looking to prove their worth with a base. pre-pandemic reference. That said, pent-up demand to see clients and colleagues in person will take priority over “relieving the pressure on planners’ budget.”
As demand picks up, organizations should book events as far in advance as possible — “the fastest contract will be the one that secures spaces first,” according to BCD — but hosts may be forced to reduce their expenses to control their expenses.
These contingency planners must lock down venues and contract ties to other major global and regional concerns.
In North America, where meeting management practices are generally the most mature, deviations from meeting policies and workflows in the rush to secure meeting venues have resulted in data loss.
“[We have seen] organizations… stop following the governance programs put in place with these SMM initiatives to allow the company to hold meetings,” noted Charlene Rabideau, BCD’s Managing Director for North America, adding that “planning and the reconciliation of programs are not followed as closely”. The result could be a less informed meetings strategy for 2023, both for meeting sourcing and content delivery.
As meetings drive the return to travel, Rabideau noted that integrated travel and meeting management remains an area of focus, particularly in the United States. It could also reduce costs if organizations can integrate the data to have more leverage with suppliers.
Businesses are also considering running smaller meetings and need self-service options that allow ad hoc meeting organizers to move quickly, within the policy – this data will also need to be integrated to optimize the program, notes the report.
Other major concerns in the region include staffing issues and inflation as the hospitality industry struggles to “scale up to run a full schedule of events,” Rabideau said. Obtaining regular, up-to-date data and content on supply chain and ongoing budget challenges will be important to keep up with this ever-changing reality, according to the report.
BCD’s vice president and general manager for Mexico and Latin America, Ana Paula Hernandez, pointed out that the region is also seeing faster delivery times in what was “already a short-term market.” This makes forecasting more difficult for this market, but “the demand for small meetings and attendance at international conventions is on the rise, but so are the costs”.
Budgets in this region are tight: “Spending has increased by 10-15% overall [since 2019], but the volume of meetings is three times higher, which means 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 have closed during the pandemic, further limiting venue options, forcing organizers to shift event destinations to Tier 2 and Tier 3 cities.
The pandemic is still casting a shadow over the region, with China still following a zero-Covid policy. As such, BCD’s Managing Director for Asia-Pacific, Sanjay Seth, noted the “continued need for event format agility and flexibility for planners in this region as we approach 2023.”
While in-person meetings and face-to-face connections remain an “effective format” in Asia Pacific, according to the report, organizers need to determine which locations grant access to the greatest number of attendees without quarantines or restrictions. This challenge also comes with a lack of inventory and staff in high demand areas and rising costs. As a result, virtual formats remain “widely preferred,” Seth reported, and organizers are favoring simpler formats, moving away from “complex hybrid events” due to high costs and longer turnaround times.
For in-person events still ongoing in the region, lead times are “increasingly tight 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 growing to match the backdrop of global inflation, pushing planners to be more strategic and creative in budget management.” Due to a tight schedule and tight budget, meeting hosts are favoring packaged vendor offerings and built-in capabilities, Seth noted.
Meeting buyers tend to focus on opportunities in the region and don’t look at the big picture. “While it is good to have a global strategy, gaining regional and local buy-in is more critical than ever due to rigorous consideration for supplier partners based on their flexibility and cost,” noted Seth.
Europe, Middle East and Africa
BCD’s managing director for Europe, the Middle East and Africa, Mikael Ek, noted that the general outlook for 2023 does not look “favourable” due to the war in Ukraine as well as “high inflation. at historically high levels and an energy crisis”.
Faced with these challenges, however, “the demand for face-to-face meetings is enormous, mainly for small to medium-sized groups”, with more caution to bring back larger events due to the risk of cancellation, noted Ek.
As in-person events grow, sustainability is at the forefront, pushing more organizations toward strategic meeting management, “as most companies in this region have set carbon reduction targets in ‘by 2030 or risk heavy fines,’ according to the BCD. report. Organizations seek to find long-lasting partners but may not be willing to pay more for them. To stay within budgets, both in terms of cost and carbon, they may need to adapt to hybrid formats, leveraging advanced technologies that will still engage virtually weary attendees with unique experiences that provide a feeling of belonging, noted Ek.
“Technology and digitalization are two critical elements to consider in any SMM program in this region, along with sustainability,” he wrote, adding that in the long term, “digital components will play an important role, even at on-site events” because “in-person gatherings will be seen as special features to accentuate an event within the organization, rather than the norm”.
“Savings targets are getting harder and harder to achieve,” in the UK, according to BCD UK managing director Helen McCabe, as prices hit historic highs, demand for in-person meetings increases and Staff shortages continue to plague the local hospitality industry.
As a result, organizers “restrict face-to-face meetings for employees or internal events [and] prioritize outdoor events” while reducing event duration and budgets. Adding to the pressure, some suppliers are demanding full prepayment, according to McCabe.
To mitigate, UK meeting hosts are keeping virtual event options in play and engaging strategic preferred partner strategies aligned with meeting management.
“Many in this region are struggling to balance rising costs with the huge increase in demand for venues and services, along with longer lead times and declining availability,” McCabe reported. Organizers can maneuver by shortening programs and cultivating partnerships to “build on those trusting relationships to deliver added value or cost savings.”
Priorities are changing for UK-based organizations with “an increased need to optimize technology stacks to ensure organizations collect the right data and analytics, while due diligence and sustainability – two strategic priorities during the pandemic – are starting to become less of a priority again than cost and service,” McCabe noted.
Human connection is in demand, but costly, and finding lasting locations and partners can make it more costly, according to BCD M&E, adding that organizations in this environment should consider the value of partnerships and pursue meeting formats. , including hybrid and virtual. events.
BCD recommended that organizations “review the types of meetings and events in your program to identify opportunities to use different formats to your advantage.”