What does the future hold for the events industry?By James Bland
2016 has undoubtedly been a rocky ride for Britain, first with Brexit and then Trump’s triumph in the USA. We have been observing how the different markets in which our clients operate have been responding to new challenges and increasing uncertainty. The spotlight in this article falls on the events industry, named as one of the sectors with the most to lose from Brexit.
The most widely discussed issues facing the sector include lack of talent resources and pressure on inbound event volumes, as well as domestic volumes, in the event of an economic slowdown. A short survey of event planners conducted by BVA BDRC in April 2016 revealed that 1 in 10 had already paused event decisions pending the referendum result. The results of the 2016 MeetingsMetrix research have just been published and show that at least some of those fears are already materialising.
MeetingsMetrix surveys over 650 event planners, with a mix of agents and corporates, and results suggest that demand growth is slowing and unlikely to pick up again in the next 12 months. This is especially true among corporates, as agents tend to have a slightly more optimistic view. If the mere idea of Brexit can do that, what might happen when the real thing eventually arrives? The picture is the same when looking at delegate rates. Although quoted rates post a modest increase of 0.6% this year (as measured in our VenueVerdict Sales module), the outlook for the next year is flat or even negative in certain industries or regions.
Reasons to be cheerful
But enough gloom for now! Let’s talk about some of the positive outcomes for venue brands. It certainly hasn’t been bad news for everyone…and our congratulations go to AccorHotels’ Mercure which wins ‘Most Improved Brand’ this year and makes it well into the top ten on the MeetingsMetrix Brand Ranking Index. Following some significant portfolio transfers, Mercure is now one of the largest UK brands, which unsurprisingly has had a positive impact on awareness. More interestingly, its improved position is also driven by an increased share of preference. This is particularly impressive given that it has about as many properties as the top two brands, but approximately 30% fewer meeting rooms than Hilton and about 10% fewer than Marriott.
This year’s Brand Ranking Index results show that it has generally been a good year for midscale venues. The top five brands feature a cluster of upscale players, but the midscale tier dominates the rest of the top fifteen. Many of those brands record an improvement in ranking, not unexpected considering that the midscale events offering has become more clearly defined and widely-communicated in recent years. They seem to be doing a much better job at convincing agents in particular, amongst whom their share of preference has increased versus 2015.
The events industry looks to remain a pretty competitive space in the coming years, as it now counts more credible players than ever. The sharing economy could potentially be a threat too. Whilst homestay sites may still lack credibility as a corporate accommodation option, last year already 8% of Agents and 7% of Corporates reported having used Airbnb to book events-related accommodation. And new sites like Vrumi and Zipcube (renting your home and office as meeting space) already have thousands of spaces available to hire with a few clicks.
The MeetingsMetrix 2016 report focuses on identifying opportunities that venue brands can tap into to better meet event planners’ need and gain a larger share of business. To find out more about how you can benefit from the report and the expertise of BVA BDRC’s Hotel Insights team, please do get in touch with me. The report is available to purchase now and includes the following sections:
- Market Dynamics
- Meeting Event Planners’ Needs
- The Event Booking Journey
- Brand Performance
- Brand Perception
- Brand Profiles
‘Understanding Markets’ is one of the eight business challenges that we specialise in solving at BVA BDRC. The markets you work in are constantly evolving – new entrants, new demands from customers, changes in legislation or a product innovation can all result in exciting opportunities but also present challenges. Look out for new market-related content in the coming weeks as we will be sharing trends from some of the other market studies we run, including the Hotel Guest Survey, Holiday Trends, SME Finance Monitor and Mortgage Achilles. To find out more about how we can help you, visit our Markets page.
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