by Leo Jakobson | January 04, 2016

"There is a sense of optimism going ahead -- that the skies are blue," says Andy Finn, vice president, group sales, for Benchmark Resorts & Hotels. Indeed, the meetings industry can look forward to 2016 being a strong year. For one thing, attendance is predicted to increase by 2.7 percent, according to Meeting Professionals International's November 2015 "Meetings Outlook" survey. And while budget growth is predicted to be conservative -- just 1.9 percent, according to the "2016 Global Meetings and Events Forecast" from American Express Meetings & Events (Amex M&E) -- the improving economy will mean more meetings, says Issa Jouaneh, senior vice president and general manager of the organization. "In 2015, the mantra was how to do more with less," he notes. "For 2016, it's how to do more with a little bit more."

Meeting and event venues large and small say largely the same thing. "From our members' perspectives, this is probably the most positive time we've seen since 2007," says Mark Cooper, CEO of the International Association of Conference Centers. This past December, the Center for Exhibition Industry Research reported a 3.8 percent increase in the CEIR Total Index, which measures the exhibition industry's performance. It was the 21st straight quarter of growth, according to CEIR president and CEO Brian Casey, who adds that the organization "anticipates growth to continue into 2016 and 2017."

Here are six industry trends to watch for.
 

1. HOTELS FLEX THEIR MUSCLE 
It's a fact of life in the post-recession world: North American hotels are likely to retain the upper hand in price negotiations this year. According to the "2016 Meetings and Events Forecast" from Carlson Wagonlit Travel (CWT) Meetings & Events, room rates will grow by 4.3 percent, while Amex puts the number at 4.2 percent. This won't end anytime soon, according to the "GBTA Global Travel Price Outlook 2016," which notes that while almost 100,000 new rooms were added in 2015, "demand continues to grow at up to quadruple the rate of supply." It predicts the daily cost per attendee will grow by 4.5 percent.

Kristin Torres, executive director, meetings and events, for the National Cattlemen's Beef Association, says negotiating with hotels in this seller's market is the greatest challenge to her group's ability to execute meetings this year. "It has been incredibly difficult, and it seems like it will only get worse," she says. "Hotels truly know they have us over the barrel."

To fight this, Torres has recently turned to a third-party site-selection firm for help, and she is careful to provide detailed information about her attendees' spending history to prove their worth. Still, she says, "Hotels are a lot less willing to be accommodating." She adds that even small requests like branded room keys, room drops, and special decorative displays are attracting stiff charges and even flat-out refusals if it's a hassle. "We run a TV show on the in-room channels," Torres says. "In years past they would negotiate the cost down, now they will not even talk about that."

Even worse, the fall "MPI Meetings Outlook" reported that some planners are finding that hotels are not honoring room availability commitments in previously signed contracts.
 

2. LEAD TIME BECOMES SCARCER 
As a result of the strengthening seller's market, planners are going to have to work harder to convince their meeting owners to commit to events farther ahead.

"Lead times for [attendee] registration and venue contracts are continuing to shrink," says Cindy Fisher, vice president of CWT Meetings & Events. "For 2016, plan ahead and be aware that some hotels in high-demand markets no longer hold space when responding to availability requests. By increasing their lead time for larger events, planners can increase their negotiation power. Make your internal decision-makers aware and decide if you can be flexible on dates. Flexibility will be key in planning ahead."

 

It's possible that message is getting through. In the Amex forecast, planners surveyed said the average lead time for 2016 would be 18 weeks in North America, far ahead of Europe (seven weeks), Asia (eight weeks), and Central and South America (six weeks). There is some skepticism, however, as global hoteliers on the whole predicted an average of just four weeks.

"Working quickly and far in advance to secure key properties has become a necessity and is predicted to be even more significant in 2016," says Jouaneh. "While new hotel builds are in progress, supply has not yet caught up to demand in many popular cities. This availability challenge is putting more pressure on tight lead times and is an added incentive for meeting owners to secure approvals in a timely fashion."
 
 
3. F&B GETS HEALTHIER -- AND PRICIER 
Planners are facing a bit of a double whammy when it comes to food and beverage budgets. As the GBTA Foundation's forecast says, "food and beverage continues to be a significant driver for cost," even as attendees increasingly expect planners to follow expensive foodie trends.

"Healthy options are really what we've been seeing for several years," says Benchmark's Finn. "But people are taking it to the next level with organic, vegetarian, and gluten-free, as well as locally sourced -- everything -- from produce to microbrews."

Last year the U.S. Consumer Price Index jumped by 2.9 percent year-over-year, CWT noted in its 2016 report, which suggests "trading down on menu items that don't heavily impact attendees (e.g., swapping in tap water for bottled) or reducing the number of breaks to contain or even save on F&B." Finn adds that family-style meals are in vogue and can help keep prices in check.

Destination Hotels' "Fourth Annual State of the Meetings Industry" survey, released this past December, found that F&B pricing was the third-most critical factor among respondents in choosing a meeting location, with two-thirds rating it either a nine or 10 in importance. Suggestions include portioning buffets closer to what will actually be eaten and trying to share ingredients with other groups at the property, or its restaurants.