President of the AIPC, Edgar Hirt, believes the end of the GFC will leave a changed meetings sector in its wake.
One area that will likely feel a great deal of impact will be the financial equation.
The results, while not entirely predictable at this point, will be of considerable interest to both convention centres and their clients as primary players whose decisions and circumstances will ultimately impact a lot of other industry suppliers and participants as well.
As with most things in the future, nobody really knows how all this will play out. But there are already some key factors that can at least narrow the range of possibilities based on effects already being felt and trends that aren’t likely to change direction anytime soon.
Some of these include:
- Governments in most parts of the world are now financially strapped and likely to be living with the hangover resulting from lower revenues, stimulus funding and increasing service expectations for some time. This means a couple of things: first, that they are going to be less inclined to make investments in anything they don’t see as the most urgent priorities (which, depending on their perspectives, may or may not include convention facilities), and at the same time will be less likely to support attendance by government officials at professional and / or business events like meetings and conventions.
- Overall event attendance (and the revenues that accompany this) is likely going to be increasingly challenged for a variety of reasons. First, because as suggested above, fewer employers – government or otherwise – are likely to be very interested in supporting meetings participation unless they can see immediate and direct benefits to their most pressing issues – mainly around managing financial challenges. Secondly, because there is a residual concern around the perceived sustainability of meetings-related travel – which alone might not be enough to tip the balance but, when combined with factor number one, could become a formidable impact. And, finally, there are plausible alternatives available today including better virtual technologies that offer a more feasible option than anything available in the past.
- Next, while association events have been the ongoing strength of the industry during recent troubled times, even their finances will eventually start to show the strain. Along with attendance, another reason for this is that the trade shows that often accompany them (and that often supply a large proportion of their event revenues), are facing problems of their own, including new and potentially more targeted on-line promotional opportunities, new restrictions such as those now facing the pharmaceutical industry and, in some cases, a reduction in the number and size of exhibitors due to structural issues like industry consolidations that aren’t likely to reverse any time soon.
- And, finally, there are some fundamental changes taking place in client / supplier relationships and the overall financial equation as a result of downsizing, outsourcing and the retaining of intermediaries. These changes can introduce new costs while at the same time create an expectation of reductions in overall event expenses – a situation that obviously creates stresses which can only be sustained for so long before the equation starts to fall apart.
Any one of these issues could present a real challenge to the very survival of the industry as we know it – but taken together, they suggest that a major transition may be on the cards. What is clear is that while the existing formula can be stretched for a while, it’s not realistic to think it’s possible to build a long-term solution on a formula where a few members of the industry prosper at the expense of others. And that means some fundamental changes are required, potentially including the whole distribution of risk and reward amongst all players.
But one very positive area for re-examination – which is also something common to all the factors noted above – is the need for a better job of recognising, measuring and promoting our value to the overall economy and adjusting the financial picture accordingly.
Governments are more likely to keep investing if they see meetings as contributors to their most urgent priorities – things like economic recovery and the support of policy priorities like innovation, employment and economic transition. Similarly, delegates and their sponsors are more likely to make participation a priority if they can more clearly see just what they will get out of their attendance, particularly in professional or business terms. And exhibitors will be more inclined to maintain their participation if they can see strong and informed attendance and understand why events and the audiences they deliver are more effective alternatives to the less personal options available for marketing their products.
So where the financial challenges we face have the potential to turn various sectors against each other in their striving to achieve a bigger slice at other’s expense, the more effective choice is to cooperate more than ever on building the value proposition. That way, everyone really can win – and we will be better equipped to face whatever kind of future the ongoing global uncertainties may deliver.