By Amanda Kelly, Senior Meeting Planner at Impact AMC
While no one can ever predict the future with absolute certainty, Michael Dominguez, President and CEO of Associated Luxury Hotels International is known for predicting event trends based on economic data. Dominguez emphasized a few key points at the recent Connect Marketplace event in Milwaukee. In addition to the overarching trend of the events industry operating at or above 2019 levels, three key considerations remain at the forefront.
Prices will remain high.
Some factors that contribute to high prices include the labor market, food supply, shipping routes, and insurance rates. While promising economic shifts persist on the inflation front, prices are unlikely to return to previous levels. Hotels, despite experiencing increasing revenue, have consistently been operating at losses. Labor is the highest expense across property types and will continue to increase year by year.
Compression will continue.
While event rebookings from 2020 may be stabilizing, the meetings and events industry in the US is anticipated to experience ongoing compression.
Three main contributing factors are:
Popularity of second tier cities
New hotel builds being primarily limited-service properties
Convention center expansions taking large amounts of meeting space offline.
Groups have increasingly been focusing on second-tier cities, contributing to less availability, especially during peak conference seasons. Many of the new hotel developments are limited-service, adding room nights to cities without expanding the much-needed meeting space. Although convention center expansions will create additional opportunities, significant portions of meeting space will be offline during construction, forcing groups to seek alternative venues at times.
Seasons may become a thing of the past.
As groups consider options to decrease their event spending, off-peak seasons and alternative patterns may become more appealing, potentially diminishing the savings typically associated with traditional off-seasons. While some geographic locations still offer cost benefits for hosting events during these times, those savings may be less significant than in the past.
Across industries, conferences and events continue to be a critical component, especially associations as they often provide a hub for member engagement and recruitment, information sharing, networking, and serve as a revenue stream. While the positive outlook of growth in the events industry is a good a thing, extra creativity and attention may be required during all phases of event management to ensure events remain a positive return on investment for associations.