Successful Meetings - December 2007 - (Page 14)

News & Analysis > Industry Trends Prices Rising in 2008: Planners Beware Planners expecting a break on meeting costs in 2008, after contending with the seller’s market of recent years, are in for a disappointment. American Express Business Travel (AEBT), along with two travel industry analysts, last month released forecasts for next year, and by all accounts, the airline and hotel industries are still going gangbusters—which means higher rates and continued challenges in finding dates and space. However, armed with this information, meeting planners can make decisions now that will save them money next year, industry watchers say. “We’ll see little reprieve [from increases],” says Mike Streit, vice president and global leader of advisory services at AEBT. “As such, corporations will be challenged to keep budgets in check.” Amex predicted that hotel rates, on average, will spike by eight to 10 percent next year and even more in super high-demand markets, such as New York (10-14 percent), other major cities (up to 12 percent), and the entire Asia-Pacific region (18-22 percent). The company predicted a rise in airfares of six to seven percent. Meanwhile, Runzheimer International announced it too envisions 2008 increases, albeit a smaller five-percent jump in airfares and hotel rates. The Y Partnership, a marketing firm that tracks travel trends, predicted a five- to six-percent jump in travel costs next year. However, these increases do not have to spell disaster for meeting budgets, says Chris Wilkes, practice leader of meetings management in the advisory services group of AEBT. “It’s about planners being careful in where they’re spending their budget dollars,” she says. “They need both to look outward to suppliers, in terms of negotiating, but also inward to plan creatively. Little steps, such as choosing a buffet over a plated dinner, can make a difference.” Planner Tanya Zuckerman, project and planning specialist at Pharmion Corp. in Overland Park, KS, agrees. “We cers, turning travel policy guidelines into mandates, and using online meeting management tools), and then they can take steps to control costs. “Finding out the who, what, where, and why of a meeting helps a company understand what’s happening, so it can understand patterns and address them,” says Wilkes. “It’s building a foundation.” AEBT officials say the universe of planners deploying these practices, particularly for small meetings, is growing. (However, its vision may be a bit skewed: Amex recently released its own online meeting management tool.) In fact, understanding one’s meeting spend is easier said than done, says one corporate planner who asked to remain anonymous. “We have looked into what they suggest, tying meetings to transient travel, but our volume of room nights is not high enough,” the planner says. “Amex is saying [manage meeting costs] only because of their new association with StarCite,” she says. “Having just attended a sales blitz by StarCite, with Amex reps in the room, this sounds a lot like what they talked about.” As for her company’s travel policy: “We have one in place but nothing is mandated. We are looking at it more closely, and our two transient travel people and I are planning to recommend that the policy require mandatory compliance or the traveler is not reimbursed.” However, she noted, “We are not optimistic that our recommendations will be accepted.” —Rayna Katz DECEMBER 2007 SUCCESSFUL MEETINGS will change dates to get a better rate; we just try and be realistic.” For now, Pharmion management still expects Zuckerman to choose destinations that will be a selling point to attendees, but she knows that executives will eventually suffer sticker shock and ask her to find alternate sites. “There will come a day—and it’s not if, it’s when—when management won’t sign off on the higher rates,” she says. “When that happens, we’ll have to assess meetings on a case-by-case basis.” AEBT officials suggested that companies get a better handle on their travel and meeting expenditures (taking measures such as employing procurement offimimegasite.com 14 http://mimegasite.com

Table of Contents Feed for the Digital Edition of Successful Meetings - December 2007

Successful Meetings - December 2007 Contents Editor's Note Special Report Research Industry Trends 2008 Meeting Events Planner Spotlight Websites of the Month Mouth for Sale Technology Talk Food & Beverage Pre-Event On Site Pre-Event Tools of the Trade Goodbye, Booth Babes Five Tips to Improve Your Golf Events When Crime Pays Office for Hire More Miles for Your Money Places & Spaces South Florida Biloxi / Mississippi Gulf Coast Fort Worth Monterey Beijing Gurus Special Supplement: Hawaii Island-by-Island Guide

Successful Meetings - December 2007

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