Meeting News - November 19, 2007 - (Page 32)

MN Outlook 2008 By William Ng B udget pressures precipitated by rising supplier prices are dominating meeting planners’ minds for 2008. Anecdotally, they are using workarounds to combat costs. While budgets are rising for 40 percent of planners surveyed for MeetingNews’ Outlook 2008, half are getting no greater amount of money for 2008 than in 2007. In line with figures from American Deal Breaker: Rising Costs 76% of planners surveyed identified budget pressures and rising costs as their most urgent concern for 2008 Express Business Travel’s 2008 forecast released in October (see Nov. 5 MN cover story), Candy Adams, a San Diego-based independent planner and trade show consultant, said she is experiencing 7- to 10percent cost hikes—with notable increases for pipe and drape. Many exhibitors, she said, have opted for smaller, more spartan booths. “Trade show organizers are being strangled in the wallet,”said Adams.“They can’t keep doing big shows at these rates.” Many of Adam’s show organizer clients, whose budgets are remaining flat for the most part, have moved to lesscostly alternatives like tabletop shows. Still, she said, “I’m being asked to add value. One client is trying to squeeze more out of the same $30,000.” The story is similar for Sean Schuette, director of meetings and events for Minneapolis-based IntrinXec Management Inc., which provides association management services, who said his clients’ meeting budgets are predominantly static. He added that IntrinXec is working hard with customers on where to trim and where to hold the line, such as F&B. “Clients are looking to us to keep within budget, but it’s still very important to have a plated dinner.” Some associations have outgrown their venues, but rising facility costs are impacting Schuette’s site decisions. “The costs at bigger facilities are far greater than their budgets; we have to work on Budget Profile: About 40% of planners have higher budgets for 2008, but half surveyed are getting the same amount of money they got for 2007 finding tradeoffs,” he said. Shrinking lead times are compounding the challenge. Schuette thus has been upfront in negotiations: “Sometimes, I come right out and say,‘Here’s what I need; here’s what I can afford. Tell me what can you do.’” With rising costs, it is becoming critical to leverage pre-existing supplier relationships and go into negotiations armed with the meeting’s value history, he said. “It comes down to your relationships: ‘Here’s the value of our event. We bring you “x” amount on rooms and F&B; can you cut a discount on AV?’” Echoing that is Laura Shelton, president of Fusion Meetings & Events, in Alexandria,VA.“Your initial RFP may not be that attractive, but once you show how much your attendees will spend on site and in the area, it adds up,” she said.“Go back to your meeting’s previous years and show what it brings to the hotel and city.” While Shelton’s client budgets are trending up, partly because of greater sponsorship support and increased registration levels, she said more associations are tweaking their rotations, opting out of major, highcost cities for smaller destinations. “In some cities, attendees ate like kings, but in others the money for F&B did not get them as much,” Shelton said. Where budgets are tight, Shelton also feels the squeeze. She said that as more associations seek to add value for members by ramping up educational content, which entails more AV, she faces tradeoffs in areas such as speaker travel. Generational issues are also at play: “Younger attendees want more education, but they also want to be entertained.” Industry veteran Joan Eisenstodt, of Eisenstodt Associates, in Washington, DC, stressed F&B and AV are the wrong places to cut.“Those are creature comforts for attendees, and they will notice.” She also urged planners to think geopolitically: “We should be paying attention to Iran and oil prices. More and more hotels are adding energy charges. The Southeast drought and southern California fires will impact agriculture, and more food will have to be imported, resulting in higher F&B prices.” Pressures abound for the coming year, as planners’ financial balancing acts will be done on thinner tightropes. The key, Eisenstodt said, will be looking at all market implications for meeting attendees. Contact William Ng at william.ng@nielsen.com Operating in Status Quo Will your budgets in each of the following categories change in 2008? 80% 70% 60% 50% Increase Stay the same Decrease 54.8% 49.3% 44.1% 39.9% 51.5% 41.2% 29.9% 62.1% 40% 30% 20% 10% 0% 5.3% Air Travel 6.7% 7.3% 8.0% Accommodations Food & Beverage AV or Event Production Source: MeetingNews survey of 322 meeting planners 32 MeetingNews November 19, 2007 www.meetingnews.com http://www.meetingnews.com

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Meeting News - November 19, 2007

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