Crisis. With the Eurozone crisis showing little sign of resolution, and the recent downgrade of Italy and France, the Hotel Booking Agents Association (HBAA) surveyed its members to gauge the impact of the European economy on the meetings and events sector.
After the 2009-2010 economic crises, agent members experienced a dip in overseas venue finding enquiries, but have seen an upsurge of 60% in the number of international briefs in the last two years. The increase is characterised by shortened lead-in times, smaller events and an overall reduction in spend, which reflects the prevailing local market conditions and wise caution on the part of meeting planners.
Chris Parnham, managing director of Zibrant and vice chair of the HBAA, commented: “We are seeing fewer large meetings, and an increased number of smaller meetings, which are being booked with shorter lead times. About 75% of small meetings are now being booked within two weeks of the delivery date.”
Germany, Ireland and the Netherlands continue as key destinations; however, Greece and Portugal have seen notable declines.
Jacqui Kavanagh, managing director, Trinity Conferences, said: “We have seen fewer bookings in countries that are economically unsettled: for example, a client who held their event in Athens in 2011 has moved it to Malta this year. However, the destination itself, venue, access and other factors are still extremely important and these are always elements that cannot be compromised. Our clients are looking for good value for money and service, and fulfillment of their event objectives. Security and connectivity are paramount, and even the hint of civil unrest or disruption can mean that a destination will be entirely dismissed by bookers.”
Jacqui Loftus, managing director, Paragon Europe, said, “Having worked extensively on international events, we have noticed that Madrid and Barcelona have dropped off the radar somewhat over the past few years. However, Cannes, Nice and Monaco are currently at the forefront. Trending events for 2012 are B2B seminars, international exhibitions and brand lead experiential events and, although budget and lead-times have been cut, the client’s expectation of quality remains high.”
“Clients are nervous of Greece and their defaulting – and of the on-going strikes which disrupt events. But clients looking for low delegate rates are booking Budapest and Prague rather than Portugal, but that’s because they are fashionable meetings destinations, more than being fearful of Portugal”, commented Des McLaughlin, managing director of Grass Roots HBI.
In terms of the financial implications of booking meetings and events a year ahead, the biggest factors for consideration were cancellation terms and currency fluctuations.
Andrew Deakin, director of Conference Care and HBAA executive committee member, said: “It’s difficult in any destination to obtain long term commitment; clients seem to be minimising liabilities by holding off until the very last minute. They are concerned about the security of their deposits, the stability of the country, strikes, and the perception of holding a European event, as well as anything and everything else that could present an obstacle.”
Jacqui Kavanagh added: “Our clients are now looking at different destinations and have thought about new ways of managing their risks. These have varied according to the client, their events and the economic conditions of the destination. For example, one of our clients spreads the risk of currency fluctuations by having bank accounts in £ sterling, US $ and Euros and decides which one is best to use when a payment is required. For another client, we negotiated with the venue to use an Escrow Account in order to minimise the risk.”
She continued: “Event insurance, VAT and contracting have also become more important factors and we suggest that clients compare the options from different insurance companies before purchasing cover.”
Peter Ducker, executive director of the HBAA, commented: “The demand by corporates to host events in Europe is being mirrored with the international hoteliers signing up to the HBAA’s International Charter of best practice. We are seeing hotel groups including Dolce Hotels and Mövenpick, who have a predominantly European base, signing up so that they can benefit from the UK’s buying power.”