Posted February 3rd, 2017
Industry pundits have long predicted the imminent decline of group sales for business events at hotels, resorts and conference centers. They believed that technology innovation would have a transformative effect on regional and global meetings. They reasoned that next-generation video conferencing, in particular, would dramatically reduce the need, and the desire, for companies to host and facilitate in-person industry conferences, corporate gatherings and other events.
As it turns out, these pundits could not have been more wrong. In this era of digital connectedness, business people still want to shake hands. They still want to “meet and greet” face-to-face. They still want to gather in physical locations to learn, share, network and conduct business. Technology falls short of fully replicating the experience — and benefits — of human interaction in a physical environment.
To be sure, companies slashed travel budgets and scaled back the number and size of the events they hosted as well as the number of events to which they sent their employees during the economic recession. But skies have long since turned blue again for hotels, resorts and conference centers offering function space for business events. In recent years, meeting attendance has soared higher than ever.
In fact, the Center for Exhibition Industry Research reported a 3.8 percent increase in the exhibition industry’s performance in 2016. According to the “2016 Meetings and Events Forecast” from Carlson Wagonlit Travel and the “2016 Global Meetings and Events Forecast” from American Express, room rates are growing by 4.3 percent annually. Hotels and resorts added almost 100,000 new rooms in 2016 alone. Today, demand for function space for business events is growing at up to quadruple the rate of supply, with the daily cost per attendee increasing by a whopping 4.5 percent.
Hotels and resorts with function space may well have an opportunity to boost their overall property revenue, given the escalating demand for function space and the fact that many of them have already maximized the value of their guest rooms through sophisticated revenue management capabilities. Success generally starts with a next-generation technology solution that can optimize the sales and catering management function. Success generally also means having in place the right organizational resources, business processes and performance metrics.