The Road Ahead: Forecasting for Meeting and Event Planners

January 2016

Our Family of Companies

A Letter from our Chairman:

We hope you are off to a great start in 2016, and wish you all the best for a fantastic year ahead!

Following a brief pause, we are excited to be back at work and eager to accomplish our goals for this year. In this HRG e-newsletter, we review meeting and event trends from industry experts and shine a light on market developments you need to be aware of - and prepare for - to deliver a positive ROI.

We have hit the ground running looking to build upon our success last year, as HRG experienced growth across all of our lines of business - managing high profile events, leading workforce training programs, and implementing innovative marketing solutions. Moving forward in this, our 19th year in business, we will continue to work hard to earn your trust and help you achieve your goals.

We hope you enjoy our monthly newsletters, and look forward to hearing from you about topics you are interested in learning more about in future editions. You can also review past newsletters at HRG In the News and Follow us on our HRG LinkedIn Group page.

Wishing you all the best for a fantastic year!

Regards,

Robert O. Sanders, Jr., CMP

Founder and Chairman

Hospitality Resource Group, Inc.

Peering Ahead-Meeting and Event Forecast for 2016

For many of us, we begin the year with renewed optimism. Despite an up and down market, the economy is expected to continue its steady growth through the fall election season. For event planners, this means another busy year filled with challenges from rapidly changing market conditions. And unless you have access to an unlimited budget (or a winning ticket for the next Powerball), it's important to know what's trending in order to manage increased expectations with limited resources.

Meeting and Events - 2015 Recap and Review

The meetings and event industry has grown and evolved, as organizations continue to come together to engage and inform. Mark Cooper, CEO of the International Association of Conference Centers said that "from our members' perspectives, this is probably the most positive time we've seen since 2007." Also, as reported in the Meeting Professional International (MPI) annual "Meeting Outlook" survey, M&E attendance is projected to increase 2.7%, and hotel occupancy in New York was 84.8% in December, the highest of the top 25 U.S. lodging markets.

These developments are expected to place additional strain on planners to keep costs in line and generate results that exceed management expectations. If this seller's market for venues continues, planners will need to keep their heads on a swivel to be as efficient and effective as possible.

Top 10 Meeting and Event Trends

HRG has scoured the web and touched-in with our clients, strategic business partners and hospitality leaders to gauge where our market is heading in 2016. Here's a rundown of key developments sure to impact M&E planners this year:

1. MARKET DEMAND TO IMPACT PLANNING, NEGOTIATIONS

The improving economy will mean more meetings and events, says Issa Jouaneh, MPI SVP and General Manager, and hotels are likely to retain the upper hand in price negotiations- at least until later this year. Also, according to the 2016 GBTA Global Travel Price Outlook, "demand continues to grow at up to quadruple the rate of supply".With daily costs per attendee projected to increase 4.5%, room rates rising more than 4%, and average lead times for reserving space moving out up to 18 weeks, planners will need to convince management to commit earlier. By increasing lead times and becoming more flexible, planners will improve their bargaining power.

2. M&E BUDGET GROWTH TO RISE MODESTLY

Though we will see more meeting and event activity, event management resources will only grow modestly, with budgets projected to increase less than 2%. MPI's Jouaneh stated that "In 2015, the mantra was how to do more with less, and for 2016, it's how to do more with a little bit more."

3. TRAVEL COSTS STABLE, TO HEAD LOWER

With oil prices plummeting, air and ground travel costs are expected to remain steady. U.S. business air travel volume is predicted to reach 502.8 million person-trips in 2016, according to Travel Industry Wire, and will continue to grow (GBTA BTI Outlook). Since '09, jet fuel has fallen 60% and competition has narrowed, as prices rose. Car rental prices should also decrease, as a "sharing economy" driven by Uber is growing, despite management concerns about safety and security.

4. VENUE OPTIONS EXPAND TO MEET MARKET DEMAND

A ccording to USA Today Travel, "business travelers looking for a home on the road will have lots of new choices this year, as a building boom gives rise to hundreds of new hotels." 865 hotels with 103,230 rooms are under construction and scheduled to open in 2016, according to hotel research firm STR, as developers boost investments to match surging demand.

Photo credit: USA Today/ Marriott International

Jan Freitag, SVP of Lodging Insights at STR, says "the industry continues to break records on the demand side, with a 1.5% uptick in rooms opening this year. New York was number one with 13,583 rooms slated to open in 2016 and beyond." Also, smaller cities will become more popular, as Cvent CEO Reggie Aggarwal notes that, "people are looking for different experiences, and we're seeing a rise of regional alternatives, with Pittsburgh and Charleston making their debuts on the list." Also, limited service hotels are the most popular type of property being constructed - offering guests a breakfast bar rather than a full service restaurant or elaborate meeting room.

5. ORGANIZATIONAL DEVELOPMENT TOPS LIST OF M&E PLANS

As the economy has continued to grow slowly since the 2009 recession, senior management has shifted their focus and budget towards training, as featured in Successful Meetings . Investments in staff training, educational events, and sales meetings will increase in 2016, continuing an upward trend.

6. DISCRIMINATING TASTES DRIVE F&B COSTS UP

Destination Hotels' Annual State of the Meetings Industry survey found that F&B pricing was the third-most critical factor in choosing a meeting location, as two-thirds rate it a 9 or 10 in importance. Others predict a 4% increase in cost per attendee, as "food and beverage continues to be a significant driver" according to the GBTA Foundation. Attendees will expect planners to "follow expensive foodie trends", including healthy options, locally-sourced produce and microbrews.

7. FOCUS ON IMMERSIVE EXPERIENCES

Nearly two-thirds of meeting planners polled in the Successful Meetings "2016 Trends Survey" said the "need to create a compelling meeting experience" was one of the most important strategies to pursue this year. "We're seeing a definite increase in demand for experiential learning," says IACC's Cooper, including teambuilding or experiential learning.

Photo Credit: Radisson Hotel New Rochelle

The 2016 Experiential Marketing Summit Survey results concluded that planners will try to convert events from tactical to strategic experiential portfolios. Popular options include creative culinary competitions, team-building games, scavenger hunts, and company trivia games. Innovative hoteliers have started to offer more interactive events to complement leading edge technologies.

8. TECHNOLOGY: INCREASINGLY MOBILE-AND MORE TO COME

From enhanced virtual reality to mobile hot spots and beacons, technology has started to play a more prominent role in developing effective meeting strategies.An expanding range of applications have hit the market, as innovative industry leaders including Freeman Digital Ventures have responded to the demands of event attendees for more engagement and interaction.

Photo credit: PSP Media

Smart Hotelier's 2016 Top Ten Digital Marketing Resolutions recommends that planners consider including BLE (Bluetooth low energy) and iBeacon options to support creative event themes, from interactive games to scavenger hunts. Additional benefits include navigation assistance, social media networking, automated demonstrations (videos, etc.), targeted exhibitor or event management messages, local promos on discounted ecoupons, loss prevention, and action metrics. Other developments to watch include:

Mobile apps
Data management
Smartphone Event App Integration
Tech Disruption Interruption
Free Wi-Fi

9. VIRTUAL, HYBRID MEETINGS TO EXPAND

2016 will see an increase in virtual meeting technology, as 1/3 of respondents to a Successful Meetings Trends survey say they plan to hold more virtual meetings this year. This was the biggest increase in any type of meeting reported. Hybrid meetings were second, as nearly 17% plan to offer more of them in the future.

Photo: 2015 HealthTech Conference

10. MILLENIALS ON THE MOVE

The growing influence of millennials is everywhere, and the M&E industry is no different. Price Waterhouse Coopers projects this demographic will make up 80% of its global work force by 2016. "They are becoming the earners, the spenders, the travelers, and the workers," says Tina Edmundson, Marriott's global officer for luxury and lifestyle brands. According to a recent study by the Global Business Travel Association, "what makes them even more attractive to the hotel industry is that they are nearly twice as likely to travel for business as Baby Boomers- 46% of Millennials vs. 26% of their older counterparts." Meetings Magazine also points out that "over the next few years, associations have to consider how to reach and engage all generations around their meetings and educational programs, develop customized communication and content that effectively reaches each audience segment, and customize the show experience to ensure they are attractive to multigenerational audiences.

United Rentals 2016 Annual Strategic Suppliers Show,

Indianapolis Convention Center

SHIFTING M&E MARKET- IMPACT ON PLANNERS

Based on the expanding role of technology, the shift in market makeup towards millennials, and the evolving demands from attendees for more interaction, organizers and planners need to take a closer look at how, when and where they offer their meetings and events this year. Key questions for event planners include:

How do I improve my ability to engage my audience- before, during and after a meeting or event?
What tools and technologies should I invest in to measure the effectiveness of my events?
Have I prepared management and sponsors far enough in advance on my event date and location options?
What can I do to offer new creative themes, trending topics, and F&B options to improve my audience/attendee satisfaction?
How do I balance my event communication and support for a widening range of attendee demands, from millennials to baby boomers?

United Rentals 2016 Annual Strategic Suppliers Show

More than ever, event planners need to be as informed and prepared as possible to optimize their ROI. Do you need help in planning your next meeting or event? For a no cost initial consultation, contact HRG Event Solutions at (914)761-7111 or email walter@hrginc.net.

Hudson Valley EDC Beer, Wine, Spirits & Cider Summit

Culinary Institute, Hyde Park, NY

About Hospitality Resource Group

Hospitality Resource Group, Inc. (HRG) is a group of 3 vertically integrated companies, with over 19 years of experience offering innovative training solutions, event management solutions and brand marketing programs for businesses, education institutions, municipalities and not for profit organizations. HRG clients benefit from our proven ability to develop effective management solutions to expand their markets and engage their companies to build brand equity, increase sales and improve productivity.

The HRG family of companies includes:

HRG has earned widespread recognition from leading industry organizations, including:

Corporate Office: 237 Mamaroneck Avenue, White Plains, NY - Phone: 914.761.7111 - Fax: 914.761.7854 - info@HRGinc.net