28th Annual Meetings Market Survey Suggests Slower Growth Ahead

Author: Michelle Russell

Around the time Convene editors were trying to assess what the results of this year’s Annual Meetings Market Survey indicated about the health of business events in 2019, the World Economic Forum’s Annual Meeting in Davos, Switzerland — where investors, bankers, and former policy makers debate the future health of the global economy — was just wrapping up.

There were no strong signals from event professionals who responded to this year’s survey that they anticipated an economic downturn, and only a few mentioned concerns about the economy going south. In fact, most saw continued stability and growth for their events — and many also blamed the strong economy — which in turn creates a seller’s market — for making their job more challenging. One respondent actually was hoping for a slowdown, mentioning this wish-list item for 2019:
“A downturn in the market so hotels become more flexible in their revenue-management practices.”

The economic verdict in Davos, according to Bloomberg? “The global economy is stumbling but not falling over.” Pundits attending the World Economic Forum predicted slower growth ahead, but voiced concerns about the trade war between the U.S. and China, and “other political flash points,” such as Brexit and the U.S. government shutdown — which wasn’t even on respondents’ radars when they participated in the survey in November.

One trend clearly in their sights — and validated by a report by Tourism Economics published on Jan. 30 — is that the U.S. has become a less desirable place for international visitors. According to Tourism Economics’ “U.S. International Inbound Travel” report, as global travel expanded 6 percent in 2018, the U.S. continued to lose market share, with overseas travel to the U.S. growing only 2 percent. “This reinforces our continued concern,” Tourism Economics President Adam Sacks told Convene, “that global antipathy toward ‘America First’ rhetoric and policy is affecting international travel to the U.S.”

Sacks emphasized that the report did not make a direct correlation between the decline in international tourists and international conference attendees traveling to the U.S., but the data raises questions about the appeal of the U.S. as a destination overall. On average, respondents to this year’s survey said, only 6 percent of registered attendees at their largest 2018 event were from non-U.S. destinations vs. nearly 8 percent in 2017.

One of the reasons why the United States lacks appeal as a convention destination for potential delegates is that some groups encounter a big hurdle to travel here. Eighty-eight percent of respondents said that it was more difficult for potential registrants to obtain visas in 2018 than in 2017. That’s a 6-percentage-point jump among those who cited more visa challenges in 2017 over 2016 — and a 30-percent increase in what planners said was their experience among potential registrants in 2016 compared to 2015.

Despite all of these and other market challenges weighing on event professionals’ minds, this group of survey participants reported positive results for events in 2018 and look forward to even better outcomes this year. While many said they wish their leaders understood the important work they do for their organizations and their constituents — “We need to elevate the recognition of meeting professionals and their value to organizations,” was a comment echoed by others — on the whole, there were far more “yes” answers to the question of whether they thought the events industry had improved last year.

“I expect the industry to improve again this year,” one respondent wrote, “as meetings become more innovative.”

Here are some highlights of the results:

Size of 2018 convention/meeting budget vs. 2017 convention/meeting budget — +2 percent compared to -1 percent in the 2017 survey
2018 attendance vs. 2017 attendance — +5 percent compared to +3.6 percent in the 2017 survey
2019 attendance vs. 2018 attendance (projected) — +4.4 percent compared to +3.2 percent in the 2017 survey
Number of 2018 exhibitors vs. 2017 exhibitors — +2.6 percent compared to +2.7 percent in the 2017 survey
Number of 2019 exhibitors vs. 2018 exhibitors (projected) — +1.9 percent vs. +1.4 percent in the 2017 survey
33 percent expect to plan more meetings in 2019; only 4 percent expect to plan fewer meetings.
Belt-tightening — Most event organizers still are being asked to cut back on meeting expenses, with the majority (63 percent) asked to focus on reducing F&B expenses, followed by AV costs (47 percent).
Slightly more space — Total exhibition space was relatively the same footprint as in last year’s survey. Respondents reported that, on average, their largest exposition had approximately 100,700 net square feet vs. 100,000 net square feet in the 2017 survey.
Planning a bit further out — The average booking window for large meetings is 2.3 years, approximately the same as in the 2017 survey; for small meetings, it’s 10 months, the same as in the 2017 survey.
Outsourcing — Respondents to this year’s survey were most likely to outsource event-supply rentals (64 percent), followed by app development and deployment (58 percent), and housing (43 percent).

More of Note

Moving on to a broader analysis, throughout the survey results you will see, there are more than a dozen places where we’ve included Annual Meetings Market Survey results from 2007 (published in the 2008 March issue of Convene) up to present-day results from the survey conducted in late 2018. Some benchmark metrics have changed little in 12 years. For example, the average annual convention/ meeting budget has held steady at between $1.1 and $1.3 million (with the exception of 2008, when it hit $1.7 million), and the average overall organization budget reported in 2018, $5.9 million, is closer to the 2007 budget figure of $5.4 million than last year’s organization-wide budget of $6.5 million.

When respondents were asked to write in their No. 1 on-the-job challenge, budget frustrations were the most-frequently cited woe. One respondent commented: “BUDGET!!!!!! Increasing prices from hotels is killing me!!!” Others identified increasing F&B and AV costs as factors wreaking havoc on their budgets.

Of course, technology continues to reshape events. While event-supply rentals was the top outsourced item in 2007 and in 2018, in the last few years, event-app development and deployment and technology services also have topped the list of outsourced aspects of event production. And while we didn’t ask respondents if they were considering webcasting their events — what’s now more commonly referred to as virtual and hybrid events — in 2007, our survey results this year again show this remains a largely untapped opportunity. One in five respondents reported that their largest event included a virtual or hybrid component, and their use of virtual meetings and events went up only 0.2 percent in 2018 compared to 2 percent in 2017.

In terms of technologies, only one quarter (26 percent) said they had introduced a new event technology at their most recent event. Among the social-media tools they use for marketing to and engaging with their audiences, Facebook is their top choice, followed by Twitter, LinkedIn, and Instagram.

This time around, most respondents said they prefer to do things the old-fashioned way when it comes to site selection: Site visits top the list (45 percent said it is their first preference). Online searches (24 percent) and one-on-one sales interactions (22 percent) are neck-and-neck as the primary methods planners use to evaluate meeting sites. This represents a big departure from last year, when 41 percent chose online searches as their top site-selection tool, and only 28 percent said they preferred site visits.

As for the promise of mining data for insights about attendee behavior and other aspects of business events? This also seems to be an opportunity with unrealized potential. Only one in 10 respondents outsource data analysis, and more than three-quarters said their organization has not changed how it collects and uses participant data in the last year. Yet it’s not outside of all event strategists’ purview: Three-fifths of respondents said that they play a hands-on role in collecting and analyzing participant data.

This year, for the first time, we asked whether respondents include a community-service project in their events: A little more than half (53 percent) said no. Of those that do, only 4 percent include a CSR activity at every event; 12 percent only at their largest event; and 31 percent said that they feature one occasionally.

Another new question in the 2018 survey sought to determine how much of a priority event organizers place on environmental sustainability at their events. Only 11 percent said that they make this top of mind and include environmental elements in their RFPs. Around half (53 percent) said it’s somewhat important to them, and more than one-third (36 percent) said sustainability is not part of their planning efforts at this time.

As a disruptor, the sharing economy seems not to be having much of an effect — certainly not in terms of making a dent in room-block management. Only 22 percent said that they expect that a percentage — on average, 5 percent — of their registrants will use Airbnb (or another shared-housing platform) rather than their headquarters hotels or hotels in their room block (down from 26 percent in last year’s survey).

Click on the following survey questions to read a sampling of respondent’s comments about those questions.

More Meetings Market Survey

Click the topical links below to see more Meetings Market Survey results and an explanation of how we did it.

Michelle Russell is Convene’s editor in chief.

Meetings Market Survey: Planners Optimistic About Growth Ahead

More of Note

More Meetings Market Survey

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