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February 11, 2015

MPI Report: Business Improving, but Planners Struggle With Seller's Market

Meeting Professionals International has published its Meetings Outlook, 2015 Winter Edition. The newest installment of the quarterly special report indicates business is up and getting healthier. However, the rising global seller’s market will continue to task meeting professionals suffering from shorter lead times and budgets that aren’t keeping pace with costs.

Key findings include:
—70 percent of meeting professionals expect overall business conditions to improve in the near future.
—49 percent of respondents anticipate a business decrease in the government meetings segment.
—41 percent of respondents see a positive future for the domestic corporate segment.
—Projections for live attendance numbers have been on the rise approximately 5 percent each quarter since Q2 2014.

To view the full report, visit www.mpiweb.org/meetingsoutlook.

Some excerpts and stats from the report follow:

An emerging seller’s market for hotels is making the lives of many planners more complicated these days, even though the meeting industry showed signs of stabilization throughout 2014. Organizations’ meetings budgets have been rising steadily and are predicted to continue—11 percent of respondents who participated in this survey anticipate budgets to increase by 6 percent or more in the near future and 42 percent eye an increase between 1 percent and 5 percent. 

At a time when many attendees show up expecting to use multiple devices during an event, rising Wi-Fi costs are also top of mind. Six percent of respondents cited the rising cost of Wi-Fi bandwidth as a trend to watch—notable as that figure is 300 percent larger than reported last quarter.

“The clients have the same budgets as they did last year, with more people attending, and their bottom line costs are increasing,” says Patricia F. Zollman, senior director of global accounts at site selection firm HelmsBriscoe in Buckeye, Ariz. “Trying to be creative and making it look good is the challenge. I am doing more negotiations on everything to get to the bottom line.” Zollman’s efforts involve trying to secure more sponsorships to cover the cost of Wi-Fi and the audiovisual needs of speakers, for instance.

In the emerging seller’s market, more respondents are also reporting tougher contract negotiations with hotels. “We have been negotiating aggressive cancellation clauses to be able to sign and not lose space, because demand is so high,” said one planner who requested anonymity.

In some cases, negotiations with suppliers are tougher, too. “The usual and persistent trend ‘do more with less’ is more and more difficult to apply because the suppliers don’t want to bargain their products,” said one planner from Canada who did not want to be identified. “The suppliers’ costs have risen, but not our budget!”

Attendees Expect Innovation

In the new environment, planners and organizers are also facing another pressure: to innovate—and often on budgets that haven’t come back completely to pre-recession levels.

One important trend tied into innovation is the gravitation toward virtual and hybrid meetings. Virtual attendance is expected to grow 3.1 percent in the coming year, compared to 2.4 percent for live attendance. Certainly, there’s still a way to go on this front, but 59 percent and 61 percent of respondents expect to leverage virtual and hybrid options, respectively.

Read the full study at www.mpiweb.org/meetingsoutlook.

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