Travel buyers are increasingly realizing that they if they want to meet their targets on savings, they need to target their meetings. With prices tipped to climb steeply in 2007, we outline a strategy to bring group event costs under control.
European companies have woken up this year to the value of managing their meeting costs strategically – and it is not coming a moment too soon. According to BCD Travel Consulting’s 2007 Industry Forecast, group hotel rates are likely to rise an average of 3 to 5 percent next year, with the figure rising as high as 8 to 9 percent in more popular locations. Food and beverage prices at meetings are tipped to jump 8 percent.
For larger European businesses, these increases will add millions of Euros to their meeting costs. What is more, says BCD Meetings & Incentives president Scott Graf, the trend is for companies to stage increasing numbers of meetings for groups of ten or more – especially internal get-togethers. ‘In a world where people are increasingly working apart, either because they are based at home or always on the road, it is becoming more important for companies to bring teams together to meet face to face,’ he says.
“Businesses therefore need help with taking cost out of their meetings programs. Normally, they only look at doing this on an event-by-event basis. We want to help them look at 50 or 100 at a time,” says Graf.
In the United States, companies have been doing exactly that for the last three or four years and BCD Meetings & Incentives has seen the same trend emerge in Europe during 2006. Companies are being spurred on by the tough negotiating climate, in which hotel meeting room rates are climbing as demand grows but supply remains constant.
Graf warns buyers to expect particularly steep price rises in amenities beyond the basic bed and meeting room rates, such as use of the hotel business centre. “Hotels are being more aggressive about pricing these services so that they appear as bigger negotiating chips,” he says.
However, before buyers can negotiate with confidence, they need first to build their meeting strategy. For those who have not started down this road, Graf suggests the following program:
Gather the management information. Understand where your organization is buying meetings, how many it stages and how much it is paying for them.
Identify who plays a role in organizing meetings. This could include the procurement department, travel managers, other functions such as sales and marketing, and senior executives. Make sure you capture all of the spending data that they have.
Identify where the savings are to be made. This is where expert help can really make a difference. Possible options include:
-- Using rail instead of air
-- Slightly downgrading the class of hotel chosen for meetings
-- Changing the amount and type of food you buy for events
-- Consolidating with a single audio-visual supplier across Europe
Build a clear meetings policy for your organization that is separate from your regular travel policy, then go out and explain it to key stakeholders.
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