The meetings market in Asia is maturing. Raini Hamdi finds out in this Roundtable why companies want more accountability and transparency from their meetings & events, and what it means for industry players
From left: Danielle Puceta, director, AMEX Meetings & Events, Asia-Pacific;Kelly Kuhn, president, Asia-Pacific, Carlson Wagonlit Travel; Amanda Hanlin, director of global sales, HRG Meetings, Groups and Events
Flat or just modest growth is expected this year of the corporate meetings and events market in Asia-Pacific, and senior management is more eagle-eyed than ever in watching compliance, cost and reduced time from the office. But this is good news for firms that provide solutions to help companies manage their meetings spend, which in the region, is still a fairly new idea. TTG Asia’s Roundtable asks: Is the industry maturing in Asia?
What are you seeing in the meetings & events (M&E) industry in Asia this year?
DANIELLE PUCETA Overall, we are seeing a greater focus from senior management with regards to policies, and management of finances and suppliers. They are also seeking greater transparency into company-wide meeting activity.
KELLY KUHN Overall the APAC economy is still growing at an impressive rate, and we expect overall growth in meeting volumes of two to five per cent, mostly driven by increased spending in China, India and Indonesia, but with other markets showing strong buying patterns, including Singapore. The nature of events is evolving, as are the objectives and measurement of corporate meeting programmes, but there is a lot of pent-up demand for meetings in the region.
AMANDA HANLIN Meeting bookings in Asia has increased by about four per cent from this time last year with China gaining real momentum. Having seen hotel rates drop by 30 per cent in 2011, Tokyo rose by 11 per cent in 2012 with a continual rise in 2013 as meeting activity increases following new reconstruction after the natural disasters. Singapore is also seeing rising venue rates due to the mega conferences and exhibitions taking place in the city.
The need to have visibility of meetings around the what, why, who and how was heightened recently, and has been a contributing factor to companies turning their attention to meeting consolidation.
So there’s still some growth but senior management wants more accountability and transparency from meetings. Why?
PUCETA This is partly due to overall business sentiment in this region which has been a little more cautious in the past six months than it had been in the previous few years, leading to a greater focus on spending control. It is also partly due to the current environment of increasing regulatory scrutiny and heightened awareness around security and safety issues. Senior managers recognise that complacency in the meetings and events planning process can have serious financial, legal and reputational consequences.
Any examples of how control and transparency were lacking before and what senior management is insisting now?
HANLIN Yes, for starters we are moving from operating without contracts, which has been typical in the area of meetings, groups and events, to working within a contractual agreement just as we would on the transient (corporate travel) side.
We now have clients signed up to work with us for three to five years on a contractual basis. This has resulted in stricter and clearer SLAs (Service Level Agreements), KPIs (Key Performance Indicators) and a more focused approach on process for areas such as risk management, escalation and 24-hour support. A consistent pricing model across multi markets, where feasible, is also a growing requirement.
The scope is increasing and we are seeing bids include requests for venue sourcing, meeting registration, small events and payment solutions. In some cases we’re seeing RFPs for both transient and M&E, as companies look to get full leverage from their supplier programmes.
PUCETA In this region we are seeing a greater focus on formalised M&E policies and adherence to policy in order to achieve greater visibility into where spending and activity is actually occuring.
A comprehensive and explicit meetings policy is at the core of the most successful and strategically focused M&E programmes. What is particularly important is to have a policy that includes explicit language regarding meetings-related payment methods and processes. Similarly, language pertaining to the procurement of meetings-related goods and services is absent in most of the existing policies.
KUHN With the increasing role of corporate procurement departments in the decision-making process, the onus is being placed more firmly than before on agencies that can offer a higher standard of accountability, responsibility and transparency over meeting programmes.
With the rapid emergence of strategic meetings management (SMM) programmes in the region, we can see a real desire on the part of our clients for a new degree of rigour around meetings. If you ask a travel manager about their company’s annual travel spend, they will know it to the nearest dollar, but ask them the same question about their meetings spend and they may not have the full picture.
When we implement SMM solutions for our clients, we start off by giving them clarity and visibility over their overall spend, and then build a programme from there. Without that level of visibility and understanding, it is impossible for companies to make smart decisions about the future of their meetings programmes.
Would you say this is part and parcel of the maturing of the meetings and events industry in Asia?
KUHN The bottomline is that companies are now paying serious attention to their meeting programmes. As M&E remains the biggest area of unmanaged spend for most companies, that can only be a good thing. Customers are demanding better value for their meetings – which means better outcomes as well as a lower price – and this is a good sign for the industry. It will force all providers to improve their offering and it will force the inefficient companies out of the market entirely.
This is a normal and positive feature of any maturing industry, and we welcome it. As has happened elsewhere in the world, we would expect the consolidation of agencies to continue in the coming years and for large agencies such as CWT to come to the fore. These bigger agencies will need to retain their creativity and nimbleness to compete with niche players, but the greater buying power and wider networks will be a boon for clients.
What’s the role of meeting planners then if companies such as yours are managing the spend?
KUHN Meeting planners remain, and will always be, the key people in the meeting industry. The role of a good agency should be to support and enhance the work of the meeting planner and to enable him to deliver outstanding events. The end client still wants that personal touch and to see a familiar face throughout the meeting process, and the meeting planner is the person in that space.
HANLIN The meeting planner will still have a role. The majority of the time they own the relationship between the venue and their company. Where we can help is by taking away the admin function of the venue sourcing – the T&Cs (Terms and Conditions), the negotiation of the venue. This means that the client/company is better protected as the risk of an employee agreeing to T&Cs that maybe they don’t understand is minimised and the planner still keeps the relationship with the venue.
PUCETA Meeting planners need to be focused on collecting information for reporting purposes at an enterprise level. They need to get a holistic view of where meetings and events activity is occuring for internal and external reporting purposes, and in order to ensure the safety of their meeting attendees in times of disruption or crisis, for example.
In order to get a sufficient view of where meetings and activity is occurring, there will also be a greater focus on more sophisticated data collection.
Do you think in this climate of greater control on spending, companies will resort to other ways to meet, such as video-conferencing?
KUHN With the increasing sophistication and ease of video-conference and telepresence solutions, our global clients are already substituting video conference for face-to-face meetings. It tends to apply to small meetings or those occasions where it just doesn’t make sense to jump on a plane due to time, cost and discussion content. It remains a small portion of a client’s overall meeting portfolio but we are suspecting to see small and consistent growth in this area.
In the more mature Asian locations, we are also seeing clients use laptop technology more, such as the document-sharing facility through Microsoft Outlook. For example, contract discussions or presentations which would typically have been held face-to-face are now performed through document-sharing technology, Webinars and conference calls.
PUCETA In Asia, according to our 2014 Meetings and Events Forecast, meeting planners cite ‘cost savings’ and ‘reducing time out of the office’ as the most compelling reasons when it comes to using virtual meetings. However, what we have seen over the past year is that the actual adoption rates of virtual meetings remain quite low. In fact, the results in our 2014 Forecast point to only a modest increase in adoption of these solutions, perhaps due to the fact that the virtual/digital toolkit has gotten more sophisticated and associated costs are moderating. In our 2013 Forecast, 56 per cent of the audience projected that virtual or hybrid meetings would represent more than 10 per cent of their meetings activity, however, this year only 26 per cent of the planners surveyed reported more than 10 per cent of their meetings were virtual or hybrid meetings.
