Will a rising tide lift all boats? That seems to be the biggest question when examining meetings and hospitality industry predictions and the results from this year’s Meetings Focus Trends Survey. While many facilities are gearing up for a great year, will demand and meeting planner budgets keep pace?
"If you look at it from the 10,000-foot view, the view in the U.S. is more positive than we've seen in a long time, from an occupancy and demand perspective," says Bobby Bowers, senior vice president of Smith Travel Research (STR), which tracks U.S. hotel trends. "Rate growth is good, and supply growth will not be that huge in 2015."
Of course, STR specializes in tracking hotel metrics for a clientele made up of hotel owners, so what could be good on the supplier side of the equation could be problematic on the planner side, especially if budgets remain flat.
Overall, STR is predicting RevPAR (revenue per available room, a key indicator of hotel financial health) to increase between 5 percent and 7 percent in 2015.
"The way things are right now, it's really good, from a hotel operations perspective," Bowers says. "All the signs that you want to see are just real, real good, and demand has actually been accelerating."
The positive hotel industry forecast comes on the heels of a 2014 that saw a strong increase in demand, so although 2015 may not show a large year-to-year increase due to a robust 2014, indicators point to continuing growth.
"That would include meetings and conventions," Bowers says, in regard to the meetings segment picking up steam. "That's really been weighted down for a long time and wasn't coming back, but now toward the latter part of '13 and through '14 meetings have come back strong."
Planners may take solace in a couple factors, however. STR believes most of the rate growth will occur in the transient segment, and because meeting planners book much further out, favorable rates may already be locked in.
"From the planner's side, because the demand is good and performance is good, it could be tougher negotiation-wise, but many times those things are negotiated a year or two, or more than that, out. I think that hotel revenue management people like to have the security of having a good percentage of their house sold, so they tend to take a fairer approach as to what rates will be."
As far as the hottest U.S. hotel markets, Bowers singles out a few that have performed exceptionally well in the last year.
"The markets that have been really strong are the ones you can imagine: San Francisco, Miami, New York. New York has been good, but that's one of the markets where we've seen a whole lot of new room supply, but they're still running occupancies in the 80s.
"Nashville has been really, really good," Bowers continues, "but I think that as you move into 2015 it would be hard to imagine Nashville's performance being sustained all the way through 2015."
Star RevPAR performers have indeed included Nashville, with an almost 19 percent increase; Atlanta (nearly 14%) and Denver (over 16% growth). Washington, D.C., had a tough 2014 in terms of RevPAR, respectively, registering growth of only about 4 percent.
Although the destination RevPAR leaders will certainly have a hard time matching their success in 2015, the outlook is still weighted to the supplier side, so Bowers stresses that meeting planners should move with haste begin negotiations in order to lock in rates. And on the flip side, of course, secondary and tertiary markets that haven't seen this recent spate of success will cede some negotiation leverage to planners during the next year.
THE SURVEY RESULTS
Tech and Green/CSR
This year’s Meetings Focus Trends Survey attracted complete responses from nearly 550 meeting planners.
New questions in this edition centered around meetings technology, most notably Internet bandwidth, and social media strategy.
When asked how important Internet bandwidth was to their choice of a facility, 15.3 percent of respondents stressed that it was critically important and 34.4 percent indicated it was very important. Less than 10 percent said it was not important at all.
The importance of technology and Internet bandwidth was further evidenced when survey takers were asked how planning had changed for them in the 12 months prior, with the most popular response—expressed by nearly 35 percent—being they were more concerned with tech capabilities and bandwidth.
Free Wi-Fi (44.5%) and good meeting room technology (34.6%) both made strong showings in the question asking planners to select the most important criteria for choosing a hotel, but of even more importance were location (81.9%) and rates (81.1%). Attrition policy was pegged as the most important factor for 37.8 percent of respondents.
When asked what their biggest challenge will be in the next year, however, learning and utilizing new technology only registered with 8.4 percent of the respondents, with 43.1 percent indicating that increasing costs would be their biggest stressor in the next 12 months; 26.4 percent of association planners named declining attendance as their biggest potential hurdle in 2015.
In another tech-related question, a solid majority of planners still haven't hopped on the hybrid—or virtual—bandwagon, with more than three quarters saying they've planned neither. For those that have, however, almost 30 percent say it hasn't affected attendance at their face-to-face meetings. The outlier here was government planners, of which nearly 18 percent said hybrid meetings have resulted in a decrease in face-to-face attendees.
Perhaps a bit on the disconcerting side, at least for those high-minded folk who place a premium on sustainability and corporate social responsibility (CSR), 67 percent of respondents said they did not expect to plan a green/sustainable meeting in 2015, and nearly three quarters indicated that they wouldn't offer a CSR element in their meetings.
The integration of social media into meetings, however, made a respectable showing, with a little more than 60 percent of respondents (and nearly 77 percent of association planners) indicating they used social media outlets to promote their events. More than half of all of the planners said they encourage attendees to post accounts of their meetings via social media, with the lion's share, 69.2 percent, being association planners.
Corporate planners were a little cooler to the idea of soliciting attendee social media participation, with only 38.7 percent responding that they encouraged tweeting, Facebooking and the like.
Career Issues
Meeting planners remain a generally happy bunch, with more than 80 percent either somewhat (34.2%) or extremely (48%) satisfied in their choice of career. As with last year's survey, government planners were slightly less content, with 36.8 percent being extremely satisfied, which was down 15 percent from last year's survey. It seems most of those who aren't absolutely jumping for joy put themselves in the "somewhat satisfied" column (42.1%), which increased 19.9 percent from the previous survey, conducted in the fall of 2013.
