Who could have predicted a year ago that Zoom would be a major disruptive influence in the Meetings Industry? Years of speculation about the threat to hotels from videoconferencing was much ado about nothing until the Pandemic. Now, conventional wisdom suggests that Hybrid Groups, which combine teleconferencing with person-to-person meetings, will be prevalent for the foreseeable future and a permanent part of the new normal.
NEW PARADIGM, NEW CHALLENGES
The same forces (perceived cost savings, enhanced convenience, health concerns,) that have exalted the benefits of working from home also wreak havoc on in-person event attendance. Consider these additional challenges for the meetings industry:
- The new criteria for business and event related travel now includes health related risks, complicating the decision to approve conference attendance.
- The uncertainty of blocking function space without being able to confidently predict virtual attendance vs. live attendance will require a new approach from both hotels and meetings professionals.
- The extra space now necessary to accommodate social distancing in both meeting and dining venues will dilute food and beverage revenues for hotels as a result of less guests in the restaurants, reduced banquet covers and the elimination of receptions, creating mounting pressure for hotels to recover lost profitability through innovation and price increases.
On the other hand, thousands of new attendees are being introduced to the world of conference participation online that will both enthuse and prepare them to attend those same events in person in the future. And it is possible that hybrid meetings may serve as a temporary transitional solution and will not create a negative financial impact after the crisis subsides. In the short term, however, potential group revenue derived from rooms, F&B and ancillary spending will be suppressed until the Pandemic is behind us.
HYBRID BUSINESS MODEL CONSIDERATIONS
Ironically, the ability to provide the tech services required for a hybrid event presents a new opportunity for hotels to differentiate themselves from the competition. The scope and complexity of hybrid meetings production is vast and pricing strategies will be determined on a case-by-case basis, but the following factors come into play:
- Regardless of the size of a group, the technology must be reliable, simple to use and well-designed, which should be reflected in the price.
- Support from technology professional(s) with a sense of urgency and a friendly service mentality is also crucial for problem solving and logistical delivery of the meeting content.
- Cost based pricing components are derived from technical complexity, labor, equipment and set-up. The price range is also determined by the length of the event, depth of event integration and audience size and location.
- Value based pricing addresses the intangible elements. For example, the top goals of event participants in a recent poll taken by Marketing Charts were education, networking, and new sales leads. How will these goals be accomplished in an online experience? Examples may include enhanced messaging with a panel after a presentation or virtual sessions designed specifically for networking purposes. Providing effective solutions to achieve business goals is key to a strong price-value relationship.
- Tapping into the creativity and innovation of virtual meetings is also an important value-based pricing opportunity. Analytics, online polls and sophisticated chat functionality are good examples.
- It would be a mistake for a venue to position hybrid production as a loss-leader. Addressing the fundamental business challenges of a pandemic is not the equivalent of the cost of doing business and must eventually serve as a revenue source.
- Providing the bare minimum level of technical support is also a bad idea. Engagement from an online participant is already tenuous due to the temptation to multi-task as well as the notorious short attention spans inherent in a remote setting. If an online experience is buggy or complicated, it is doomed to swift, unforgiving failure.
- The financial implications brought on by Hybrid Meetings will include trade-offs; meeting organizers may save money from reduced in-person attendance but will spend more on tech support for online services and inevitably for meeting room rental as a result all of the new health and safety elements and social distance spacing.
QUESTIONS TO START
- What is the best solution for hotels to provide hybrid tech services to their clients? Is it worth it to invest in in-house capability? Or is the smarter decision to partner with a professional production company or a digital marketing agency? The decision will impact profitability and service quality.
- How steady will demand be for online event attendance from association members, business owners or tech users? What is the optimal ratio of in-person/on line attendance for an event? What will the ceiling be for event registration fees since the online experience is limited? The complimentary webinar has become a prolific new marketing tactic that may inadvertently be conditioning its audience to expect online content for free.
The notion that the online experience of conferences, tradeshows and incentive programs will prime the pump for future in-person patronage is hopeful and promising. While it ultimately may be more expensive to both attend and host an event, the quality of the experience will eventually improve as a result of the new standards (cleaner, less crowded, improved efficiency.) The pure joy of exploring new destinations, meeting people face to face and experiencing firsthand the collaborative, creative adrenalin rush of a well-run conference or tradeshow cannot be duplicated on line. There is no substitute for being there in person.
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