The appetite for face-to-face meetings will wane next year with growing financial pressures being cited as the main reason.
Our latest look at the meetings and events market was taken through the eyes of our Business Opinion Omnibus and found that nearly half of all business leaders (47%) said their company would be using external facilities by the end of 2023.
Many of these recognise that getting people together is good for business with external venues having potential to make a better impression or offer additional facilities, such as catering.
However, looking ahead to next year, 27% anticipate fewer offsite events, with a further 15% undecided and the balance expecting roughly the same amount – a net negative outcome that potentially means fewer events overall as businesses brace themselves for a challenging 2024.
How does this effect spend?
28% of businesses are expecting to spend more on external meeting facilities next year, but this is partially fuelled by an expectation of increased prices rather than a sign of greater demand. Meanwhile, nearly a quarter (24%) of the businesses who said they were likely to reduce spend next year claim it is due to a perception of bad return on investment. But surely bringing people together, will be valuable, productive and a good use of time and money, with benefits that go beyond the immediate facilities on offer?
It’s not as easy as that, though, is it? There is nuance to every role, output, and its execution.
In a recent conversation with Amy Edmondson, Professor of Leadership and Management at Harvard Business School, we were able to gain some insight into the concept of ‘flexibility’ in the workplace – a hangover from the pandemic that saw us all in our home offices, with pyjama bottoms on, kids running in and cats strolling across keyboards.
“There is flexibility and there are relationships. You can’t have ultimate flexibility and deep relationships – you’re trading one against the other.
Flexibility can be defined as working wherever and whenever you want on tasks that are individually accomplished and modular, meaning the interfaces with other people’s work are uncomplicated. As soon as the interfaces are more interdependent, and tasks more complicated, then flexibility is at odds not just with relationships but with quality of execution.
Step back, look at the work first, what is the nature of the value that we are providing for our customers and how does that value get produced and if part of the answer is through teamwork, through the integration of people with diverse skill sets and areas of expertise, then we have to give deep and long thought to what kind of flexibility works best as a team.”
This view neatly underpins the concept that leads much of Microsoft’s ‘Future of Work’ strategy with AI playing a significant role in making asynchronous participation possible and synchronous participation better.
The balance between output, connection and becoming more cost and ROI-conscious in the face of growing financial pressures is a tough one to strike.
If business leaders’ predicted use and spend on external facilities hold true, we will see a shift towards fewer meetings and event,s and a need to better reinforce the value of those that do take place. One of the best ways to do that is for venues to deliver EPIC experiences and events that leave people invigorated, feeling productive and connected – wanting more, not less.
The 2022 Hotel Guest Survey found that 80% of leisure guests had already booked a domestic stay, or were highly likely to, with city breaks the most popular choice. The cost pressures being felt by the consumer were also a factor, with value for money driving booking decisions.
Consumers are becoming more comfortable with the idea of booking an international holiday, but while we are seeing those green shoots for outbound travel, nearly twice as many adults booked a UK holiday during January – the highest incidence since the start of tracking.
Comfort with the idea of staying in hotels and other types of paid-for accommodation jumped significantly as Omicron-driven fears receded and the accommodation sector is closing in on the pre-pandemic norm in terms of consumer comfort levels.
What remains to be seen is whether this recovery will endure, or whether this is one final hurrah before the cost-of-living crisis starts to bite. As we saw from our survey, value is a driver for consumers and there are further factors heading towards us, including the energy price cap increase and possible economic repercussions of Putin’s war on Ukraine.
The domestic leisure market has dominated the sector during the pandemic, with an average of 3.8 leisure trips taken over the past two years, against 1.3 domestic business trips. Beach and resort breaks were popular, as more exotic climes were unavailable.
Jane Pendlebury, CEO, HOSPA, said: “The pandemic drove a rise in domestic holidays caused by necessity – we needed a break but we couldn’t leave the country. In the event we rediscovered what we knew before the growth of budget airlines, which was that the UK is full of wonderful destinations with hotels, restaurants and pubs which offer unique and welcoming experiences.
“Many guests have realised that the UK is not a second-choice destination, but somewhere to explore and be inspired by.”
Ben Harper, group managing director, Watergate Bay Hotel, Another Place and Beach Retreats, added: “The domestic market isn’t a new one, we had been booming before the pandemic. I’m confident of the short term, but I feel even more confident about the medium to long term. There is such an inconsistent landscape in the UK – and no leading brand – which presents a great opportunity.
“Domestic leisure markets across Europe have seen growth in interest from investors, who are looking to build platforms and brands which will bring them healthy returns, but also keep pace with the demands of the mass-affluent travellers who want exceptional design and memorable experiences. These businesses successfully reduce seasonality and create lifestyle through brand.”
Our study found that confidence was growing, with 47% of UK consumers happy to book a domestic trip to be taken in a few months and 32% to go now. As guests have become more comfortable with staying in hotels, they have also started to return to the cities. Looking at future intent for the next 12 months, 47% were planning a city break, while 34% wanted to visit a local area or attraction and 32% were aiming to visit friends or relatives.
David Orr, CEO, Resident Hotels, said: “Whenever restrictions were loosened during the pandemic, we saw people eager to return to the cities, to meet with friends and family, to reconnect with culture and nights out; looking to rediscover the normality the pandemic and strict lockdowns had denied us all, regardless of age.
“We are delighted to see still seeing life return to the cities, recognising that people seeking those lost experiences more than ever cherish and value those moments, so even more focus on “reputation” when it comes to booking a hotel. Reputation is a fundamental qualitative test that reaches across feeling safe and secure, knowing that the teams are looked after well and that guests are looked after well. Reputation uniquely informs the decision of a guest as well as a team member to put their trust in you. Cities we all hope are returning quickly to being the most desired and dynamic of destinations, yet reputation and trust underpins all judgement guests will make when considering investing in their experiences. It is the team at The Resident which the reputation of the hotel is built upon and which will see it become a much-loved destination for a lifetime as we move forwards.”
The survey found that having had a good experience in the past was behind many bookings.
Kevin Edwards, Alliants, said: “Experience is one of the drivers behind booking, in this case experiences which people have had in the past. This is clear proof that, if you want to create those lifelong connections with guests, which will see them return as well as recommend your hotel to friends and family, then you need to focus on experience.
“The hotel sector had become convinced that memorable experiences can only be delivered by a vast team, but the pandemic has persuaded a growing number of hotels that technology can be used intelligently to both free team members to give better service and, with messaging, help create those important bonds. This becomes even more relevant when you see that guests are conscious of value: no-one wants to pay for swarms of staff hovering ‘round reception.”
Many in the sector felt that, once international travel had become more certain, consumers would revert to old patterns and return to their search for summer sun. Instead we can see that the domestic market has outlasted the pandemic and, with the added influence of concerns over price and the impact of travel on climate change, may remain buoyant.
To continue to attract guests, hotels must appreciate that they no longer have a captive market, but must compete, if not on the weather, then value and experience, as consumers look to make the most of their time and money.
Learn more about Hotel Guest Survey.