By Daniel Melnyk
Within the hospitality world, a new phenomenon is circulating – “revenge travel.” The concept is simple, albeit impactful for the industry; after 2+ years of pandemic-related restrictions, travelers are eager to make up for lost time and canceled trips. Basically, revenge travel is the global phenomenon of people booking big trips to ‘take revenge’ against the pandemic. This trend has acted as a key catalyst in the undeniable rebound of the hospitality industry.
However, it wasn’t just trips that were canceled ad nauseam over the course of the pandemic – it was also groups and events. From weddings to birthday parties, family gatherings, work-related conferences, meetings, showcases, and more, our social and professional calendars were notably stripped of group gatherings for an extended period of time. Now, in the wake of the pandemic, we are not only seeing “revenge travel”, we are witnessing revenge events. Finally, the appetite for in-person events is, once again, omnipresent – if not insatiable.
As we approach the summer season, the events segment is buzzing with momentum, and hospitality brands and event planners can share in a collective sigh of relief. At the same time, however, we must acknowledge (and appropriately assess) this changed landscape.
1. Bullish Forecasts
According to Knowland, groups and meetings business is forecasted to recover to 106.4% of 2019 levels in 2023, and Amadeus reports that 64% of event professionals say their spending increased this year. At the same time, the number of meetings taking place climbed back to nearly 90% of pre-pandemic levels in September, according to Knowland. Based on its Meeting Recovery Forecast, overall meetings volume will surpass 2019 levels in mid-2023. The industry’s resiliency (and the powerful influence of pent-up demand) is evident in these numbers, indicating that people’s desire to gather in person has not only returned but is not going away anytime soon.
As noted in the American Express Meetings & Events 2023 global forecast, a great deal of confidence is being expressed in the strength of business for the coming year. “There’s a tremendous understanding of the value of having in-person meetings,” shared Gerardo Tejado, senior vice president of global value development and general manager of meetings and events for American Express GBT. “There’s a clear emphasis on the importance of internal meetings as companies look to restore culture and improve communication dynamics among disparate teams.”
Now, more than ever, hospitality brands and venue providers are encouraged to consider where their business is coming from. What does it look like? Are there specific segments that could be better maximized? Where is the most opportunity in the remaining quarters? At the same time, brands can fortify their position within these optimistic market forecasts by prioritizing flexibility. Whether it’s offering different dates, spaces, or pricing options, hospitality brands that act as true, creative partners to their customers and demonstrate flexibility in the booking/planning process are most likely to succeed.
2. Economic Headwinds
These bullish forecasts may seem at odds with economic downturns across other markets. With the continued mention of the “R” word and the general tightening of budgets across sectors in anticipation of further volatility, companies that represent buyers are dealing with different resources. Now, more than ever, corporations and event planners are trying to do more with less – which is not unlike what we are doing in the hospitality industry in response to rising costs and inflationary conditions.
Despite the continued surge in demand, it’s important to note that customers may begin to express some frustration in regard to pricing and rate increases. This means that the events industry must be strategic in how it approaches pricing and value proposition, ensuring that clients feel like they are getting the most for their money. At the same time, hotels and venue companies should look to dive deeper into segmentation to identify those markets (or micro-segments) that aren’t as negatively impacted by recessionary conditions. Don’t be afraid to get granular and actively seek out the micro-segments that are performing and may be traditionally underserved by the events industry.
Finally, there also exists a great deal of potential competitive advantage for different destinations. Some destinations, such as Florida to Arizona, may have reached a price ceiling for buyers due to increased demand and popularity. This opens up opportunities for new, emerging destination markets that can capitalize on displaced business while highlighting their location and unique offerings.
3. Shorter Booking Windows
Events and meetings have always been a fast-paced segment. Still, as events industry professionals navigate the new landscape, they are discovering that planners are organizing events in a fraction of the time it took just a few short years ago. Research indicates that 53% of planners are booking or sourcing events less than one year out, especially as planners look to rebook the backlog of events and meetings displaced during the pandemic.
This trend translates to an influx of RFPs – some of which, we know, will be unqualified – and hospitality and venue brands must leverage technology to move at a speed that ensures a competitive advantage. After all, speed and service win more often than price. Now, more than ever, hotels and venues must (at the bare minimum) place emphasis on accelerating the speech at which they acknowledge RFPs and initiate a relationship with prospective buyers. Moreover, I think there is a great deal of value in personal touch-points; in other words, sales teams shouldn’t be afraid to pick up the phone and call their prospects to build rapport and set the tone early on in the relationship.
4. Smaller Meetings
The pandemic has changed how people think about large gatherings, and, in its wake, we are seeing a rise in smaller, more intimate events. In fact, small meetings are recovering faster than large events, with 52% of planners anticipating that the number of small in-person meetings (with 50 or fewer attendees) at their companies will return to pre-pandemic levels this year.
This trend presents an opportunity for the events industry to pivot towards offering more intimate, personalized experiences that cater to small groups. Industry leaders can capitalize on this trend by employing a group booking engine for smaller spaces that streamlines processes, empowers buyer convenience via automation, and helps hotels and venues tap into the growing demand for small, more frequent events.
5. Rising Costs
The events industry faces rising costs, one of the biggest issues planners face as they plan their events today. To this effect, a 2022 CWT report estimated the cost-per-attendee to be 25% higher than in 2019, which is set to rise by another 7% this year. With this in mind, event planners must strategically and creatively manage costs to ensure that events remain affordable for attendees while providing a valuable and memorable experience.
Hotel and venue brands are also encouraged to look at data surrounding lost business – where are you losing business? Who are you losing business too? Oftentimes, there is great opportunity to be found in addressing weak points to better fortify your offering against competitor venues, both traditional and non-traditional.
Sustainability is increasingly becoming a priority for companies, with 70% of companies including sustainability questions in their proposal requests. 41% say their company gives “some preference” or “a lot of preference” to hotels with green certifications in the RFP process
89% of survey respondents identified sustainability as a priority, and the two most requested environmentally-friendly actions are working with sustainable vendors and venues.
The events industry must respond to this trend by incorporating sustainable practices into its operations at every level, from reducing waste to conserving energy and minimizing the overall carbon footprint associated with any event or meeting. In 2023, those hotels and venues that embrace sustainability initiatives within their practices and as a core part of their brand ethos can differentiate themselves from competitors, appeal to environmentally conscious clients, and contribute to a more sustainable future.
7. More data and technology
It’s no secret that the pandemic drove a digital transformation across industries, and the events industry is no exception. Now more than ever, hoteliers are using data and tools to automate operational tasks, drive sales efforts and uncover new business sources or pipelines, mitigate data decay (data naturally decays at 23% a year), and build a more optimized group sales pipeline. The use of technology has become increasingly important for event planners, with virtual and hybrid events becoming more commonplace post-pandemic.
Data analytics, in particular, are playing an increasingly significant role in event planning and management. We have more data at our fingertips than we ever have, but is more always better? How do hotels and venues know they have the right data? How do they appropriately action it? How can they create the data infrastructure required to truly drive demand and assess the nuances across different group segments and types? More often than not, traditional sales and catering systems have remained focused on the bottom of the sales funnel and have relied almost entirely on an inbound RFP pipeline rather than looking to establish a truly data-driven strategy. Fortunately, emerging platforms are leveraging automation technology to clean up data and identify opportunities at a rapid speed.
While the industry continues to evolve, it is clear that there is a growing demand for in-person events, and hotels and venues are finding innovative ways to meet this demand despite the challenges they face. As we move forward, it will be necessary for hospitality brands and event planners to remain agile and adaptable, embracing new processes, perspectives, and intuitive marketing automation platforms to serve their customers better.