By Brad Foster
Hold onto your hats event people, the sector is expected to grow in 2020.
Do you ever feel overwhelmed when you wade through your various social media channels with all that information? You’re not the only one. The good news is that so too are many corporations who, according to the writers of the CWT Meetings & Events 2020 Future Trends Report, are recognising that one of the best ways to cut through all the noise is to hold face-to-face events.
“We’re seeing approximately 25-30 per cent of overall marketing budgets being spent on live events,” explains CWT Meetings and Events vice president, Ian Cummings.
A fact reiterated by CWT Meetings & Events vice president and managing director, Derek Sharp, who was visiting the company’s Australian operations recently.
Along with the CWT M&E Australia and New Zealand director, Michelle Sargent, and Asia Pacific senior director, Sam Lay, the trio were understandably upbeat about the future of the sector over the next 12 months.
The report concluded that the industry is experiencing steady growth amid an outlook of rising average air and hotel prices, with future expansion expected in the emerging markets of India and China.
Rapid innovations in technology are supporting greater engagement and data capture in events, while strategic meetings management programs have evolved from a focus on costs savings to creating value for attendees.
A strong desire in attendees to experience authenticity is trending across events from training to incentive travel, while research and case studies highlight what trends will shape M&E programs in the coming year.
Globally, the meetings and events industry is estimated at $840 billion, and growing.
The report, the third CWT Meetings & Events has now done, says there are some signs of economic uncertainty around some major European markets, causing a contracting of lead times. This is particularly the case with the instability caused by the UK’s exit from the EU. However, overall there is steady growth.
The bigger markets such as the US, Europe and Asia are driving most of that demand, and it is expected emerging markets, such as India and China, will see more dramatic growth in the years to come as they continue to be brought into centrally-managed programs, especially with populations motivated by travel, events and training.
“There’s a big push for new and different venues. There’s the push for always making sure that meetings are driving different and better engagement, and technology is playing a big part in that,” Mr Sharp said.
He said tech tools like apps are now so all-encompassing, providing everything from live polls to shaping meeting agendas through feedback received (via an app) – a raft of applications that provide greater engagement at meetings.
Part of the reason behind the study is, as Ms Sargent explains, to keep their clients advised.
“They want somebody who can counsel their needs,” she says.
“I think we’ve long moved away from a position where we are order takers. We’re now recommending destinations; we’re being asked to come up with the latest trends and make recommendations on their events.
“We need to keep our product knowledge updated. I find more and more of our clients are asking, where are we going next year? What should we be doing?”
Mr Sharp agrees, adding that the issue of sustainability was another big theme that came through this year’s study.
People are, for example, wanting to work with venues that incorporate sustainability into their operations.
“We were talking about one hotel that said you won’t see plastic bottles in our meeting rooms. That’s great but then you go up to their [accommodation] rooms and there are plastic bottles in all of their guest rooms,” Mr Sharp says.
“Us being able to interpret trends with property specific details to our customers of where they would fit with their strategy is probably the starting point for any of these engagements.”
One of the more interesting findings was the so-called “festivalisation” of events.
“The premise of it is that we’re organising conferences and events, normally around three days, and the last thing people want to do is sit in a hotel room or a hotel conference room for three days,” says Ms Sargent.
“Whether you’re in a hotel conference room in Sydney or in Singapore it’s pretty much same-same.
The whole concept behind festivalisation is pulling people out of that conference space and taking them outside that space and showing them something a little bit more cultural or doing something a little bit different.
“Hotels have done a very good job in cottoning onto this. They’re getting involved in festivalisation. For example, we might have a beautiful new grassed area with lovely palm trees, let’s set something up there and we’ll do the catering for it. Even if we have events off-site from the hotel they might still offer to do the catering for it.
“The whole idea is that there’s pop-up food and beverage outlets, that it’s more interactive, it encourages networking, and it gets them in the great outdoors, although in saying that, they can still create great spaces indoors as well that follow similar parameters.”
Other findings of the study revealed the following:
CWT’s data shows a rapid expansion in the numbers of event websites being created, up 52 per cent year-over-year, while the number of mobile apps created has more than doubled since 2017. “The meetings and events business will look very different in three years with huge changes, particularly around digitalization,” adds Saskia Gentil, vice president, Global Sales, CWT Meetings & Events. The opportunities around machine learning and artificial intelligence abound, with businesses in the wider marketing space already taking advantage of the burgeoning technology to create content. Combining creativity with machine learning could allow for more effective events content, while the rollout of 5G means faster connections for attendees.
A key trend for 2020 is environmental, economic and social sustainability. While images of the Amazon rainforest fires have brought sustainability issues to the fore, in 2020 the focus is on extending the concept to cover diversity and inclusion, modern day slavery, and even data privacy. “There is a trend towards the idea that events should do more than just educate or have a business development opportunity, but also to create good for communities globally,” says Jessie States, Director of the MPI Academy at Meeting Professionals International. “It is more than just being an add-on, it is about the entire experience. Big brands are making a statement about what they stand for, and ultimately it is the consumer demanding it.”
Average air and hotel prices are projected to rise slightly in the coming year. Air prices are expected to increase by 1.2 per cent (in USD) on average worldwide, though regional variations show that prices will vary between -1.6 per cent and 2.3 per cent across Asia Pacific, the Middle East & Africa, North America, and Latin America. Meanwhile, Europe will see prices remain steady, with a small 0.5 per cent gain in Western Europe, while Eastern Europe is expected to experience a 0.2 per cent dip. In Latin America and the Caribbean, however, air prices are forecast to fall by 1.6 per cent, mainly driven by contraction in business, continental and domestic rates. Hotel accommodation is experiencing a similarly small, but notable, expansion in pricing of 1.3 per cent (in USD) on average across the globe. Reflecting conditions in air travel, the greatest price increases will be felt in the Middle East, Africa, and North America. Overall, only Latin America and the Caribbean are forecast to see a regional price reduction, with prices across Europe increasing by an average 0.7 per cent. Mr
“The dismantling of the commission model that took place in the airline world is happening in the hotel space, and we have to be ready for a world where commission goes to zero,” Mr Sharp says.
SAFETY AND SECURITY
Meetings arrangers are taking security and safety more seriously as an issue but this isn’t stopping them from being more adventurous with their choice of destinations. This is having an impact on how they manage safety and security. International SOS security consulting director in Asia, Aditya Luthra, says: “More events are going to more remote tier two and three cities where access to medical care may be subpar and sub-standard, and the security environment could be more volatile.”
To prepare for these risks, medical and security risk services firms, such as International SOS, provide clients with pre-travel risk assessments to decide if the destination is suitable to host the event. This covers not just the event venue and offsite activities venues, but also “vicinity” risks, such as any crime “hotspots” near the hotel that attendees should be advised about, or any risks associated with traveling between different event venues.
“Every location is assigned a risk rating – from low risk to extreme risk,” explains Luthra. “This covers both medical and security issues. It’s important to have access to accurate and timely information and advice, and also having an accurate understanding of the potential exposure to the event.”
There is an increased focus on safety, security and risk. Event organisers want to ensure attendees are protected at meetings. If they are bringing a large group of people to a destination they want to know what their exposure to safety and security risks are.
Overall demand for meetings and events in North America is continuing to increase, but the pace of growth has fallen. Despite these headwinds, the US economy continues to be strong with event sizes rising, including many companies in the tech sector that have moved to consolidate their smaller meetings into larger events.
Destinations such as Nashville and Austin are rising in popularity thanks to new hotels, venues and a strong cultural appeal. Rates continue to rise in Seattle due to strong demand and tight capacity, with the city fast becoming “the new San Francisco.” Meanwhile, Austin has also seen a material increase in properties that cater to the upscale and the luxury market place.
As one of the fastest growing economies in Latin America—with 6 per cent growth in real GDP in 2019, according to the International Monetary Fund—Panama is capitalising on its highly developed services sector. The investment buzz in the central American country is cementing Panama’s place as a business and events hub for the region, with the opening of Tocumen International Airport’s Terminal 2 set to double passenger capacity this year, along with the launch of the new 24,000-capacity Amador Convention Center expected after its scheduled completion at the end of September 2019.
The majority of events in the region are mini meetings of up to 30 people for healthcare and pharma companies, covering training or salesforce meetings, with around 75 per cent of meetings lasting one to two days. But this trend is changing, with growth in larger conventions. As companies globalize, they want to consolidate their events regionally, looking at efficiency of cost and logistics. This can allow for more investment in the content, hiring external speakers, and having additional days to make the meeting more effective
Lead times for events in the region are currently around 30-45 days with pressure from political and economic uncertainties affecting business decisions. While these short lead times are challenging in terms of venue availability and accommodation occupancy, increasing numbers of businesses are taking steps to better manage their events program.
EUROPE, MIDDLE EAST AND AFRICA
There is no doubt the Brexit vote in 2016 was the beginning of economic uncertainty around the euro zone. Nevertheless, economies and business bounded on with a positive outlook and finding opportunities to capitalize on currency fluctuations. The uncertainty has given meeting planners some financial benefit. London and the UK continue to be strong for meetings and events and the resulting devaluing of the pound has made the UK even more attractive. No surprise then that London continues to top the region’s destinations, while Manchester is a key location to watch, with major development that includes a second arena on the horizon, with a 20,000 capacity.
Economic concerns in many of the other large European economies, election uncertainties and social unrest have begun to take their toll on some of the larger corporations’ future spending and budgets. There are many forecasters talking of economic recession ahead and it’s likely the euro zone would be one of the first to feel it. The Middle East continues to be back in vogue as a destination with great uplift and some of the top carriers in the world offering great value for money, plenty of new hotel openings and a whole host of forthcoming major events such as the EXPO 2020 Dubai and the usual sporting events. Africa also remains a hot destination for incentives and the safari opportunities are expanding to new destinations such as Rwanda.
Emerging destinations in Europe, the Middle East and Africa are increasingly popular. Possibilities abound in cities that offer value, excitement and inspiration. Copenhagen has become renowned for its sustainability credentials, and is aiming to become the world’s first carbon neutral city by 2025. It is already well on the way, with more than 70 per cent of its hotel rooms holding official eco-certification. It is also home to six hotels in the Brøchner and Arthur Hotel Group, the world’s first carbon neutral hotel group. Other up-and-coming destinations include Athens, Greece; Budapest, Hungary; Dublin, Ireland; and Istanbul, Turkey.
While the protests in Hong Kong caused immediate disruption to the M&E market, the longer-term outlook for the city and the wider Asia Pacific region remains strong. Events and meetings due to be held in Hong Kong had to be rescheduled or relocated. Demand is still there despite short-term challenges, [and] planners are starting to plan forward for the following year.
Fears about the potential detrimental impact of a prolonged US-China trade war on economies across the region have also caused some nervousness among companies.
Despite this cloud, there are dynamic opportunities in Southeast Asia with major corporates and multinationals relocating their production and manufacturing units to countries such as Thailand, Vietnam and Indonesia.
There is growing demand from event organisers for the region’s second and third tier cities and destinations beyond the key regional hubs.
Many groups are going to tier-two and tier-three cities in China. Japan is strong for incentives as groups prefer to go to a stable destination with cultural appeal and good infrastructure.
Bali remains an attractive incentive destination while Suwon in South Korea is benefiting from the opening of a new convention centre. Malaysian cities such as Penang and Kuching are also competing for more M&E business.
Australia continues to be a very strong and resilient market – both for inbound meetings and events, as well as domestic clients.
ELECTRIC MOVEMENT – THE EVOLUTION OF AUTOMOTIVE
The investment in electric vehicles by all major manufacturers is expected to be very significant for the region as an automotive hub. While challenges remain, including an increasingly regulated automotive industry, innovation is moving ahead—and with it is a need for training, product launches, sales conferences and immersive events. Porsche is set to launch its electric Taycan by the end of the year, and Audi is hot on its heels with the e-Tron GT in 2020, with rumours of an electric Jaguar F-type in 2023, following closely behind. Every manufacturer is investing in that area, and although the auto industry might be facing some challenges, investments across the board and a need to showcase new products at roadshows will continue, ensuring that sector remains buoyant.
SMARTER MEETINGS – A NEW GLOBAL APPROACH
Creating a global meetings and events program has been seen as a winning strategy by major US-based multinational organisations for many years, and there are signs that this kind of centralised approach is becoming more common with clients based in other parts of the world. As part of this evolution and growth, some clients have branded their SMM (Strategic Meetings Management) programs under their own titles, such as GE SmartMeetings, for example. Whatever you choose to call them, the benefits of creating a global program are set to keep winning new converts as they seek to control costs, and optimize meetings and event activities across all markets.
As with most aspects of meetings and events, automation and new technology is changing the way programs can be managed. There has also been a shift away from purely focusing on costs—with other factors becoming more important than savings, particularly in mature markets such as North America.
Over the past few years, there has been a lot of focus on the impact of the millennial generation (also known as Generation Y) within both the meetings and events sector and the wider corporate travel market. The influence of this generation (those born between 1980 and 1995) will continue to strengthen the industry as they are expected to form the largest group of business travellers across the world from 2024 onwards.
THE ARRIVAL OF GEN Z
We are also starting to see the emergence of the next generation of workers at the beginning of their careers—these are known as Generation Z or centennials born from 1996 onwards. According to Mediakix Research, while their influence, due to their age, is so far limited, this will rapidly change over the next decade as their population reach 2.56 billion globally by 2020. So what do these new generations of attendees want from the meetings and events sector? While research can be somewhat patchy (particularly for Generation Z), it’s clear that technology will play a leading part in satisfying their expectations and needs. Centennials are also already known as digital natives because they have never lived without digital technology. This has endowed them with a preternatural comfort in using technology as a group compared with older generations. They certainly expect to be able to complete their travel bookings all on their smartphones with at least 75 per cent of those in Generation Z making their booking on a mobile device.
The development of better apps and other technology platforms should help turn more attendees into participants. No matter their age, they are given more ways to communicate with others and express their opinions both during the event and post-event. This even includes the capture and assessment of emotional data to measure attendees’ engagement during sessions. This has been used at events in Paris where cameras have filmed the audience to examine both their attention and emotional engagement by monitoring their facial expressions.
RETURN ON EXPERIENCE
The report says it can be misleading to make too many assumptions about attendees based solely on their age and generational stereotypes. Other factors such as gender, marital status, and income may also be crucial elements in the way they choose to engage or behave. Cultural and regional differences can also play a major factor in how attendees interact during an event, as does the kind of mobile device and social platforms they use. This represents an obvious challenge for organisers of global events, as attendees from different regions often will use a wider range of social media and technology.
THE EXPLOSION OF EXPERIENTIAL
The “experience economy” has surged in recent years – we want to connect, share, and most of all, feel. As the lines between our work and home lives become increasingly blurred, it is more important than ever for business events to be as interactive and meaningful as the daily experiences we have grown accustomed to with friends, family and through our consumer choices. Demand has grown significantly for events that are experiential in nature. Partly driven by the growing number of millennials in the workplace, and partly by the deep human craving we all have for more immersive experiences that touch our souls and minds, this is one trend that is not going anywhere.
Multisensory experiences that captivate attendees mean greater engagement with the content, deeper understanding of the messaging and, ultimately, a meaningful connection with the brand. The emergence of exciting technology means opportunities abound to create experiences that are more immersive and responsive to attendees. Think augmented reality used to share details of the recipe or provenance of each item of food at the event, or virtual reality to take medical attendees deep inside an organ of the human body. The rollout of 5G will make these connections quicker and smarter – your attendees could crowdsource the room temperature or choose the music they want to hear. This feeling of being an active part of the event, rather than a passive listener in a static environment is thrilling. Even in large groups of 500 or more there is an expectation there will be personalisation. It will become more focused as data is harnessed to help make sure every interaction at an event is relevant and meaningful.
FESTIVILIZATION MEETS BUSINESS
The festivalization trend is also blurring the lines of business and live consumer events. Inspired by events like Coachella, the annual music and arts festival in California, and the South by Southwest festival in Texas, the trend can be taken into the meetings and events space for a full, immersive experience. Even room set-up and stage configuration comes from this driving trend of concerts and the live marketing space, meaning a more participatory experience for attendees. The automotive, retail, communications and tech industries have already capitalized on the power of experiential events, but the format can be relevant across all sectors, where the purpose is clearly defined and measurable. Services such as banking, finance and personal services can also benefit from promoting customer relations with realistic scenarios.
Want to know more? Visit www.cwt-meetings-events.com/futuretrends/. CWT M&E director, Australia and New Zealand, Michelle Sargent, can be contacted on (02) 8666 1500.