Meeting Mentor Magazine
Cover Story
Can Hotels and Meetings Maintain
Their Strong Pace Into Next Year?
It’s looking like a banner year for hotels and meetings, begging the questions, “Can 2013 match these numbers?” and “What will it mean for rate negotiations?”
• Hotels. With record room demand and very little new supply, the short answer for Jan Freitag, senior vice president, STR, is “more of the same.” Hotel occupancy was above 61 percent, and room rate growth in STR’s August numbers hit 4.2 percent. Hotels recorded their single best month ever in July: 106 million rooms sold. In 2013, “we expect room demand will continue to increase, but not quite at the rate we’ve seen, [with] a slight uptick of new supply at the end of 2013,” he said.
• Meetings. U.S. meetings are on target for a very healthy 2012, with attendance up 4 percent after second quarter numbers were released by the Center for Exhibition Industry Research. Economists did not change their forecast of 2.9 percent increase in 2012 for meetings overall (attendance, exhibits, net square footage and revenue); the half-year growth rate of 2.3 percent is even with GDP. The 2011 forecast of 2.4 percent growth ended up at 2.7 percent — a full point better than GDP. “We need a more robust economy to sustain event performance,” said Douglas Ducate, president and CEO, CEIR. Still, CEIR has tracked eight quarters of consecutive growth for the exhibition industry.
Meeting Professionals International’s Business Barometer-Annual optimistically projects a 2.8 percent increase in the number of meetings next year in the U.S., slightly higher in Europe (3.2 percent) and Canada (3.3 percent). However, the swinging pendulum is already hitting meeting planners in the back. With room demand back where it was in pre-recession 2007, Freitag noted, “you cannot rely on availability in your favorite destination on your favorite day,” he said. “Transient demand is so strong that the hotel revenue manager will wait out whether to take a group on a lower rate three years out.”
As for rates negotiated in 2008 and 2009 for future meetings, he has “a hard time believing hotels will make those null and void.” Instead, “negotiations going forward will again involve resort and auxiliary fees, perhaps leveraged against food and beverage.” And even presented with a good deal in a secondary market, meeting professionals will have to consider higher airfares and more limited capacity.
• International travelers. Compared to the same period last year, international visitors have increased their spend on U.S. travel and tourism-related services 11 percent to $82.2 billion, cited the U.S. Department of Commerce’s Office of Travel & Tourism Industries.
• Looking well beyond 2013. MPI last week released research findings from the second phase of its Future of Meetings project. Some trends for meeting professionals to ponder:
— Content will be free.
— Designs of meeting spaces will be specific and flexible.
— Data will become more personal and less private.
— Online events will feed offline experiences.
— You will need to consider cash, carbon, climate and crisis costs. — Maxine Golding
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