A GLOBAL VISION: Strength from adversity

MEETINGS:review caught up with Roger Helms, founder and chief executive of global site selection agency HelmsBriscoe, to get his take on the state of the global meetings market.

It’s been a roller coaster year or so for the meetings and hospitality sector, how has the industry changed across the globe in that time? Also, do you think there have been some positive outcomes from what the industry has been through?

"The last global survey of the meetings industry I saw put total spend at around $175 billion; not many industries around the world can claim to have that level of financial footprint. What’s more, people are only just starting to really pay attention to the opportunities that exist here. It’s amazing to think that in this day and age we’re only just starting to understand the magnitude and impact of this industry.

"When the crisis first hit, there was a demonisation of the meetings industry. However, people soon started to realise that you need to touch your staff and drive your message, especially during tough times. You have to arm your people to go out and seize the moment and own some of this recovery, and the best way to do that is through face-to-face meetings.

"In the past 12 months we’ve seen evidence that the meetings industry stock is rising. We’re also seeing a lot of attention from Wall Street – they want to understand the meetings market, the predictability of it, and what they can count on.

Roger Helms: "The entire meetings community has rallied
around the cause and put the components together that they
will be able to utilise to prove the value of meetings during
any future crises."

"Prior to this past year, we have never had a firm grasp around the return on investment (ROI) that meetings bring. We’ve always faced questions regarding are meetings important or are they just an additional expense?

"Thanks to the work of people like Roger Dow at the US Travel Association (USTA) and Maritz’s Christine Duffy, I believe people have really changed their perspective. The entire meetings community has rallied around the cause and put the components together that they will be able to utilise to prove the value of meetings during any future crises. Even after 9/11 people were saying that holding meetings was reckless and we really didn’t have any place to go to get the facts and figures on the ROI meetings generate. Now thanks to the USTA’s research with Oxford Economics we can clearly show that for every dollar invested in meetings, companies realise $12.50 in incremental revenue.

"This is the first time, as an industry we’ve been able to do this, so from that point of view, there have definitely been some positives that we have taken away from the crisis. I truly feel we’re now moving in the right direction."

What do you see as the key issues facing the meetings industry over the next few years?
"Technology has become an increasingly important element over the past 12 months as people have questioned the need to spend money on global travel. Virtual meetings certainly have an important part to play in our industry in the future. From a macro standpoint virtual meetings will likely take away from some of the meetings spend that we have seen previously. But we don’t see it as taking over; people will always need to meet face to face.

"Looking forward, we see 2010 continuing to be a soft year. However, beyond that we see 2011 stabilising and 2012 as being a healthy year. This is backed up by what we hear from our distribution, hotel and client networks and contacts.

"The hotel community is facing a major rate issue at the moment, but that can be seen as a good thing for the customer’s side as it’s all about value. In dealing with this, the hotel community has to find other ways to add value to their offerings to customers, and I can see this being an ongoing problem for some.

"In terms of hotel development, we’re seeing a refocus on the importance of meetings. Developers are now looking at the meetings industry more than ever, and are reconsidering the amount of function space that needs to be included in hotel design. They are seeing meetings as an important revenue stream and they want to be able to meet the demand by having enough space to weather any future storms. They’re really starting to see that having plenty of meetings and function space is key to this and they haven’t talked of that before.

"Emerging markets will always present a challenge for the existing industry as this means more competition. But beyond that we’re seeing a lot of our big corporate and association clients struggling to sustain their attendee base. This is a big concern for them as many have been hit hard by the recession. They need to find ways to encourage attendees to return and to retain them. What sort of content they add to the equation to stop attrition and to sustain and grow their attendee base is a big concern.

"On top of all this, I believe we will be under continuing pressure to find the value in the meetings product, to demonstrate the ROI and to look at what needs to be done to continually attract people to the various destinations."

It’s very much a buyers' market at present and those buyers are demanding increasing flexibility on price, on added value elements, on cancellation and attrition terms from venues and hotels, specialist suppliers, DMCs and site selection companies. What do you see as the key issues surrounding this problem?
"I don’t necessarily see this as a big problem; it’s more of a current reality. Our industry is cyclical, and in the past 18 years we’ve seen it happen before. Demand goes up, supply stabilises. The market then shifts and demand goes down, usually because of oversupply. All of a sudden the industry needs to get creative on how to drive demand to its product.

"However, when you’re talking about attrition and cancellation rates, and flexibility of terms of the agreement, I think a lot of companies were hit harder than ever before. It’s all about risk management and that’s a big topic for everyone. Once you’ve been stung hard on attrition clauses, you’re going to find ways to protect yourself in the future. So there might be a little bit of a game changer in that, and I think some of the measures that the big corporate clients have introduced will stay with us for some time to come.

"Having said that, much of the hotel community has adapted to that well. They understand that it’s a necessary evil and they have found ways to minimise future attrition. I was very proud of many of the venues we work with as they got in front of this attrition and went to the customers early and said: ‘Listen you’re going to have an issue eight months from now. The rates are likely to be $50 lower than you booked, so what can we do to try and fix this and minimise everyone’s exposure?.' I was proud of that effort.

"I think both the client and the hotel won in that scenario, because it created goodwill. But I think some of the flexibility that clients are demanding will stay with us. Hotels are going to have to face up to the reality that they are not going to get back to the flexibility levels of the past for a long time to come."

There’s been a lot of talk about corporate social responsibility (CSR), but is this really pulling the trigger when it comes to corporates booking meetings?
"There’s certainly more talk, but whether it will catch hold and be as significant as people want it to be is open to speculation. We’re doing our best to drive CSR; every time a client has shown a commitment to want to do that we have tried to push that agenda. The harsh reality is I don’t see this creating as much demand as many hotel owners and developers were anticipating it would do.

"However, I think that once the market stabilises things will change. For now, the continued drive for value isn’t helping the green agenda."
 
Will industry ever return to way it was pre 2008?
"I do believe that it will, but I just don’t know when. At the moment, people are still concerned about the strength of the foundations of any recovery. We need to be sure these foundations are solid before the real confidence returns to the market.

"There are things from this recession that will be with us for a long time. While luxury is certainly coming back, the emphasis on value and ROI will remain. However, thinking like this and changing the way we do business can only be a good thing for everyone concerned."