Meeting Planners Are Positive For 2013
By Robert Mandelbaum, Director of Research Information Services at CBRE Hotels
Strong gains in transient demand have led the U.S. lodging industry out of the depths of the 2008/2009 industry recession. However, it wasn't until 2011 that hotels began to see signs of recovery in the group demand segment. Looking forward, the people responsible for planning meetings and exhibitions are optimistic, and it appears that hotels will continue to see more delegates and attendees roaming their hallways in 2013.
The vast majority of planners surveyed stated that the number of meetings and exhibitions they will organize in 2013 will equal the number they planned in 2012. However, while the volume of events is expected to remain flat, planners are expecting greater levels of attendance and expenditures.
In 2013, 43 percent of the planners will be able to operate with a larger budget than they had in 2012. In turn, 46 percent will spend more to conduct their meetings next year than they did this year. Part of the reason for the greater level of expenditures is the expected increase in attendance. Nearly 90 percent of the survey sample said that 2013 average attendance levels will be equal to, or greater than, what they were in 2012.
The planners surveyed recognize that the hotel industry is recovering and they will have to start paying more for hotel rooms. During negotiations, planners are finding hotel managers less willing to concede room rates. Only 33 percent of the time in 2012 have hotels been willing to offer meeting planners lower room rates as an incentive to book their group. This is down from 58 percent in 2011.
With hotels offering fewer discounts, 72 percent of the survey participants have planned for an increase in room rates in 2013. An additional ten percent say rates will remain the same as 2012, but labeled existing hotel prices as "high".
Resigning the need to pay higher prices for hotel rooms, planners are no longer looking at room rates as an area where they can save money. The price of guest rooms was ranked as the sixth out of eleven areas in the meetings budget for potential cost savings. This is down from a fourth place ranking in 2011.
While room rates are rising, only 16.4 percent of the survey participants have had trouble booking rooms for 2013. In fact, 24.6 percent said room availability is easier to find in 2013 than it has been in 2012. This helps to explain why most planners are still not willing to move the dates of their events to save money at their preferred hotel.
Given the perception that hotel rooms are still available in 2013, the lead time for booking events has not changed for most planners. Seventy-two percent of the planners surveyed said the length of the booking window in 2013 is the same as it was in 2012. Twelve percent said it will increase, but 16 percent say it will shorten.
Consistent with surveys of transient travelers, meeting attendees yearn for complimentary internet access. According to the perceptions of the planners surveyed, free access to the internet is the most important meeting site criteria for attendees. Conversely, for meeting planners, complimentary Wi-Fi ranked just ninth out of 16 factors that they deemed as most important when selecting a meeting site.
The selection criteria for a meeting facility rated as most important by the planners are:
- Available meeting space
- Willingness to negotiate contracts
- Price of meeting space
- Price of hotel rooms
- Service standards
Looking ahead, meeting planners are as optimistic as ever in recent history regarding the health of the meetings industry. Forty-six percent of the planners surveyed believe the industry will be healthier in 2013 than it was in 2012. This is the highest percentage recorded since 2007 for this same survey.
For hotel owners and operators, growth in group business will further boost the record levels of lodging demand that has been accommodated in 2012. While the direct benefit will be felt by the meetings oriented properties, capacity at
these hotels frequently leads to greater compression in the overall market, which benefits all hotels.
Robert Mandelbaum is the Director of Research Information Services for PKF Hospitality Research, LLC (www.pkfc.com). Special thanks to Marlane Bundock, Managing Editor of ConventionSouth, for sponsoring the survey. This article appeared in the January 2013 edition of Lodging.
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CBRE Hotels is a specialized advisory group within CBRE providing brokerage, valuation, consulting, research and capital markets services to companies in the hotel sector. CBRE Hotels is comprised of over 375 dedicated hospitality professionals located in 60 offices across the globe.
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