It’s been a tough couple of years in the meeting business: the finally fading AIG effect that placed a stigma on luxury meetings in particular; the reluctance of corporations to spend money on business travel; and the emergence of technologies that promise low-cost substitutes for face-to-face events. A turnaround does seem to be in place, but the meetings landscape has been permanently transformed by all of the above.
Some meetings industry leaders see a silver lining in the recent crisis in the way the industry came together to make its case for the importance of meetings. That included extensive research and promotion of the critical place meetings play in the economy. For instance, a PricewaterhouseCoopers (PWC) study found that the industry contributed more than $350 billion of direct economic contribution to the economy while accounting for 250 million room nights to the hotel industry in 2009—not a good year overall. According to the PWC study, 85 percent of meetings are held at a lodging facility, meaning more than 1.5 million events at U.S. hotels in 2010. According to PWC, only three or four industries eclipse meetings in terms of jobs.
“The last two years have shaken out any drift within our industry. The understanding of the value of face-to-face meetings has now been indelibly researched and confirmed the feeling that CEOs and association executives have intuitively felt in the past,” says David Gabri, CEO of Associated Luxury Hotels International, a representation company. “With the confirmation of the tremendous impact of meetings, we can motor through the rest of this decade using meetings as an outstanding platform to increase their market share, move their businesses and effectively advance their interests.”
The fact of the matter, according to Paul Cahill, senior vice president of brand management for Marriott International, is that people still need to meet. “We have 15 telepresence sites (videoconferencing) around the globe and they’re doing fine, but they will not be a substitute for in-person meetings,” he says.
ROI and Relevance
“I think normal will look very different,” says Michael Dominguez, vice president of global marketing at Loews Hotels. “We are seeing some demand normalcy but the environment has changed for good. The good news is we usually come out of these crises smarter and stronger.”
Dominguez adds that hoteliers have learned a few things from the downturn. One is that organizations are looking at which meetings need to be face to face. “The purpose and objectives of meetings is a more prevalent concept,” he says. “The long term effect is that ROI will have less to do with the mechanics as far as budget requirements and everything to do with content and content dissemination and how all that fits the objectives of the organization.
“The objective today,” he continues, “is to get the meeting to live beyond the meeting room.”
“We’re seeing that content is king,” Gabri says. “The purpose and objective is critically important, more so than ever.”
Cahill adds that Marriott is looking at meetings in a “holistic” way instead of being focused only around the meeting planner. “We’re looking at three stakeholders: planners, attendees, and the economic buyer, who might be a CEO or CFO,” he explains. “All three of those are critical but the ROI is being driven by the economic buyer. The planner is about the execution. The economic buyer is about the productive use of the $2 million or however much they’re investing in the event. Their question is, ‘How do I know our message will be retained once the delegates leave?’ That’s the new frontier.”
Cahill says that because of technology, all three stakeholders are now able to participate in meetings even if they’re not physically present. “Attendees might communicate via iPad with their home office where the CEO is or vice versa,” he says. “Meetings have been progressively moving toward this, but it is accelerating with technology.”
Budgets Under Scrutiny
Budgets have always been important to meeting planners, according to Kelly Wood, vice president of global sales organization, North America, for Ritz-Carlton. “Overall we have seen a lot of fat trimmed from meeting budgets,” Wood says. “Ever since we came out of 9/11 we have wanted to make sure that money is being spent wisely.”
Wood says there are “all sorts of different things you can do to control meeting costs, especially food and beverage. And the move toward being environmentally sensitive actually helps because we have stopped printing booklets and other paper collateral. We don’t even print out welcome packets anymore; it’s all being done electronically.
“You now have the ability,” Wood continues, “to take advantage of a beautiful environment or landscape without spending a lot of money on fancy bells and whistles. For example, we have done events at the Ritz-Carlton Laguna Niguel where we just place hundreds of little tea lights up the stairs leading to the event —instead of using expensive lighting and rigging. With the moonlight reflecting on the ocean and all the candles, it’s a very meaningful environment.”
“We have to prove to the planner that their goals are feasible, that they should be doing it now,” adds Vanessa Wehner, director of event planning and operations at the Miami Marriott Biscayne Bay. “We want to stay one step ahead of our customers.”
The Shrinking Booking Window
While some believe that booking windows will return to more traditional levels, most see shorter windows as standard. Jason Parsons, general manager of the Naples Beach Hotel & Golf Club, says, “It was nice in the old days when you were booking two and three years out; that allowed you to develop yield rates for transient business. Some of that is coming back, but not a lot.”
Mark Pardue, general manger of the Grand Hyatt New York, adds, “The landscape for booking windows has changed permanently. We will continue to see shorter windows but we have adjusted. We can book, detail, and service an event booked a week out.”
It is not unusual, says Wehner, for a corporation to book a meeting of several hundred attendees six weeks out of the date.
Gen Y: Meeting In A Whole New Way
A central reason to the transformation of meetings is basic: the attendees are changing—getting younger but more importantly with vastly different workplace habits.
“The audience for meetings has changed dramatically while we are still planning meetings for Ozzie and Harriet. Today we have an attendee who wants information now—on demand,” Dominguez says. “Age is only a small part of it. We have to group customers in different ways. You used to know how Boomers acted, but now it’s not about age. We connect with people with like interests. Facebook is not a kid’s site anymore.
“If you look at associations in particular,” he continues, “they are no longer the sole source of information for their members. The members can find information online so the leaders have to make meetings relevant. The biggest change, in summary, is that a meeting is more of a collaborative dialogue than a hierarchical event.”
The emerging workplace style of attendees is having an impact on how meeting spaces look. The Grand Hyatt in New York recently unveiled Gallery On Lex—a high-design space that has one area furnished with couches and easy chairs. Pardue says that this would be a new benchmark for North America—though Hyatt has moved to this approach in Asia.
“This is a response to a growing demand for non-traditional meeting spaces,” says Pardue. “A lot of functions now take place in settings that are more residential in style. We have a communal area where people can meet and gather, check e-mail. It allows us to do cuisine displays and other customized events.”
Hyatt has a similar space at its Andaz property on Fifth Avenue—a meeting space called, in true residential style, Apartment 2E. “We will evaluate this property by property. But the artwork, the colors, the custom designed furniture are all designed to bring a comfortable, residential atmosphere to a meeting,” Pardue says.
“If you think about Gen Y, and the multitasking way they learn, you have to figure out how to give them the ability to do that,” Cahill says. “If you continue with a static environment, you will lose. We need to give those people permission to do what they do.”
Cahill adds that many hotels in Asia, including some Marriotts, provide living room-style meeting space, with full kitchens and executive lounges built into the middle of the space. “We will be learning from that model,” he says.
Another element of this is that meetings will not be confined to meeting rooms. They will begin in the lobby and other public areas—and go back to those public areas after regular sessions. As Wehner says, “More and more often the signing of contracts and other important events will happen in the lobby—after a meeting. That’s part of the thinking behind the Marriott Great Room, which is conducive to small meetings and connecting.”
Of course, the entry of Gen Y is having an impact on every aspect of meetings, including sales. Social media is now playing a huge role in operating—and selling meetings. Bertha Galindo-Crucet, senior catering sales executive at the Miami Marriott, says she recently received a call from a third party meeting planner who told her that “he saw a lot of Tweets about our grand re-opening. He said he would be in town the following week and wanted to check out our hotel.”
Can We Still have Fun?
Many observers see less emphasis on recreational activities like golf and spa, though others simply see a rethinking of meetings-based leisure activity. “Before when you looked at spa, you talked about being massaged,” Wood says. “Now it’s about healthy outcomes from good spa therapies, which can be helpful to someone in doing their jobs.
“It’s all about creating an experience so special that it will stay with attendees,” Wood continues. “They will collect experiences and talk about them. It’s not so much about dropping the name of the resort as being able to learn about lasting impact.”
“Golf and spa have disappeared a bit, partly because they were mostly incentive-oriented, which has fallen off,” Dominguez adds. “But they are still part of the mix.”
“The golf business is getting better,” Parsons says. “Groups are always looking for some kind of team building and release. The difference now is that it might not be the entire group, but a smaller number within the group.”
Corporate Social Responsibility
It’s become common practice for meetings to take a few hours up to a day to accomplish a socially conscious activity. According to Wood, “You can incorporate doing good with your team building. It becomes an effective and efficient way to spend time and money—and attendees feel good about it.”
“CSR is on everybody’s radar right now; it can be a deal breaker if you don’t provide it,” Dominguez says. “The big push now revolves more around the human element than the environmental elements. There’s an expectation that a hotel should be green, but now it’s about giving back to the community.”
While all this change on the meetings front might seem overwhelming, Dominguez offers these comforting words: “It’s unrealistic that hotels will understand all these changes overnight. It’s mostly responsibility to be good partners and help planners ask the right questions.”
And one thing that has not changed, Dominguez says, is that, “People do want to do business with those they know and trust. Our advisory board has been vocal about industry partners who have moved away from relationships because it’s so easy to do everything electronically. Some large organizations think they can centralize these efforts. Meeting sites are wonderful, but you can’t take the personal side out of the business.”