In today’s troubled economy, which notably includes a sinking dollar, one would expect the meetings and events market in Europe to be quite affected. They are, but to a certain extent. Until recently, things didn’t look so bad.
“In some of our hotels we see a slight drop of US customers due to the economical situation, however it is minimal and we are confident that this will be increased again,” says Gitta Brueckmann, Regional Vice-President Sales & Marketing (Continental Europe) at Marriott International. But, according to the Hilton Hotels, the number of American meetings in Europe has dropped significantly in the last 12 months. It used to be that US customers were N°1 in terms of turnover, followed by the UK, and local companies came third. Nowadays, European (non-UK) customers are N°2 on the list, and are not far from taking the lead. This, of course, is due to a firm decline in US companies’ meeting budgets. “There are less events in Europe, less time spent, but also less people for each event”. An average event at a Hilton hotel now uses around 65 rooms, down from 95 rooms two years ago. This figure shows just how much meeting budgets have been tightened up. For François Tixier, Senior Area Director of Sales for the Hilton Hotels (France, Benelux, Spain and Italy), this is mainly due to the US dollar’s exchange rate, which has kept falling since 2006.The bottom-line of today’s market is that it’s on the buyer’s side. This means there is less demand, less often, and for less people. It also means it will generally be more difficult than before to please a customer. So anything that gives meeting planners the impression that they are saving money or getting more for their money is a good option. Of course, as we said previously, customers still want creativity and imagination, as before. In fact, in this market, “before” is a very important word. Because customers’ needs and expectations are always changing, yet providing them with something better or something else does not mean they will let go of an advantage or service they are used to. So when you put this into today’s economic context, it appears there is good news and bad news. The good news is the dollar/euro crisis will probably not last for ever, at least not to this extent. The bad news ? You guessed it. Customers are getting used to the special things they are getting today, due to the economic situation, and they will most certainly ask for it in the future.But for Hilton, the bad news isn’t that bad. The company says it was able to maintain its sales thanks to a very efficient yield management. Furthermore, meeting planners are now able to book an event at the last minute (less than one week before) because these days, the lower demand makes it is easy to find some space somewhere. In general, hotel chains dealing with American companies cover themselves for the exchange rate when reservations are made well in advance. This enables them to secure their profit margins, or at least to not loose money. For instance, if an American customer makes a reservation six months ahead du-ring a sinking-dollar period, a fixed exchange rate will be agreed on at that time. The hotel chain will know almost exactly how many dollars it will be getting when everything is paid for. So all things considered, the economic picture doesn’t look so bad for the meetings and events business.But make no mistake: in these rough times, meeting planners, whether they’re European or American, are getting more picky, asking to get either more for their money, or cost-saving options. For example, American customers now want free wi-fi access throughout the hotel, which is the case virtually everywhere in the Unites States. But not in Europe. Says François Tixier: “As of today, no hotel chain is providing Internet totally free of charge in Europe. Some had started to do so, but they quickly changed their mind, because it made them loose a lot of money”. But one thing is for sure: hotel chains are all checking on each other, in case one of them changes its mind again.Now, how do European hotels fill the gap between their policy and US habits? “We make compromises”, says François Tixier. For instance, partial, unlimited wi-fi access (in the meeting room only) can be included in the room price, whereas guest room access will be charged extra. Or sometimes hotels will offer a fixed rate that will apply to each room, but this will significantly increase the bill. “Because Americans usually use the web for hours and hours” says Tixier. The reason hotels are maintaining this pay-as-you-go policy is because they have lost a lot of money due to cellphones. In-room phones are now seldom used, so they want to compensate that with the Internet. “We will continue to bargain, but wi-fi access will not become free in a near future” says Tixier.But besides bargaining on wi-fi, there are other ways to please the customer. More than before, meeting planners are asking for a good return on investment. Because their budgets are not as loose as they used to be. There are many ways to please them without lowering prices. One of the things customers like most is to find amenities that are different than elsewhere. New technologies, creative interior decoration, outstanding food platters make a hotel or an event look different from others. But being different is still not enough. Customers also want more. “Added value for their money is what companies are really asking for” says an experienced meeting planner. Added value options include giving more hotel points and/or airline miles than would be required. Hotel points enable customers to get free nights for a future meeting, whereas airline miles can buy many things, including hotel nights and flights. The really good news about this type of reward is that it meets the planners’ request for added value, but doesn’t cost the hotel industry a lot of money.Says François Tixier; “The market is on the buyers’ side. This means hotels need to do more than usual in order to close a deal with a customer. So when we come up with something that pleases him a lot and does not cost us much, we’re very happy about it”. According to Hilton, this is true for both European and American customers. Indeed, American customers, who are generally loyal, tend to be very demanding. Europeans, as far as they are concerned, are somewhat less demanding, but much more frivolous: they will go and see competitors if they think they are not getting what they should get.This trend is not escaping Accor Hospitality. Vincent Roux, Director of Sales Meetings and & Incentives, Accor Hospitality Global Sales says “As the European Leader in Hotels our reliance on the American based Meeting Planners has never been so strong. However the context of “clients cheery peeking” is global meaning that our strategy is to adapt to the shorter-led enquiries, smaller format and personalised quotes notably with our meetingATaccorhotels.com portal which will see many developments towards the end of the year and be extremely creative with our offering as Pullman proves to be”.Pullman, a new brand of Accor, has taken into account customers' demands for quick answers, personnalized following, no technical bugs and some creativity. Its Co-Meeting offer makes it possible to prepare a meeting by visualizing and arranging the room in 3D, thanks to a system called "Meeting Matrix". A quote is given within 24 hours, via one single program, the Event Manager Pullman, assisted by an IT Solutions Manager which will remain active during the entire meeting or event. Besides e-tools, Pullman has developped innovative pauses, where participants can get a massage or taste local specialties.Nowadays, major hotel chains are giving meeting planners the possibility to arrange every single detail of the meeting on-line, via a meeting planner’s guide This includes assigning a room to each participant, choosing meals, selecting special services such as simultaneous translation, and usually much more. At Hilton, this service is called POG (for personalized online group) and the use of it increased by 100% each year since it was introduced 30 months ago. A second online tool which customers are very fond of is the guest list manager, which enables the meeting planner to change the number of participants, or their names, in the time during the reservation and the event. Both of these tools are interactive, so if the hotel changes anything, the meeting planner will know it immediately.One year after the creation of Meet In Style, its department in charge of organizing meetings and events, Concorde Hotels & Resorts now has a website totally dedicated to meeting planners, www.concorde-hotels.com/meetings. They can now select their destination, hotel, meeting rooms and can even personalize the space they use at the hotel, thanks to a large photographic collection provided by Concorde. Additional online tools like Request for Proposal or RFP, enable customers to submit up to 3 simultaneaous demands for quotes and study each of them. Once this is done, two e-tools called Pick UP and Rooming List Manager are there to simplify the handling of the event, thanks to a new search engine allowing to consult each project live, and an online managment of the participants list, which the meeting planner uses to quickly visualize all the rooms booked. All these tools bring flexibility and immediate answers, two things meeting organizers are more and more fond of.Hotel managers have noticed that customers are more often asking for very specific services or activities. And they expect hotels to be able to meet most of their demands. According to Antoine Renardias, who a owns a Best Western Hotel in Reims, requests for secured internet access, via a specific network, are getting more common. Some companies are very afraid that their confidential data might be hacked or stolen. Of course they are willing to pay the price for this. Hotels must also be able to provide outstanding activities, when they are asked for it. In Reims, tourist activities are numerous, notably benefiting from the presence of the champagne brands. But sometimes meeting organizers ask for something very specific such as massages, hot-air balloons or wine-tasting activities. And the hotelier must arrange for all of this. “Of course, we never says yes to something we’re not able to provide,” says Antoine Renardias.Added values are not the only solution available to hotel chains to support the growth of meetings. In fact, the new niches are still unused. This market targeted certain industries such as laboratories which have been reducing their meeting budgets and shortening decision-making lag time since the beginning of the year. Being dependent on this sector alone has thus become dangerous for suppliers who did not expect this slump. “At Accor, we are working to adapt offers to the needs of different markets. Price is not the only decisive element in the choice of a location and a service. Banks don’t have the same needs as laboratories when they hold meetings and nor do auditors or automobile manufacturers. To meet these needs we have designed services that are in synch with their expectations and even defined a catalogue of hotels that provides all the information necessary for preparing their events. Our goal is to facilitate the decision maker’s job be it as meeting planner or events organizer and to grow our market share across all sectors,” declares Thierry Thauvin Sales Manager Mice at Accor France.The bottom-line of today’s market is that it’s on the buyer’s side. This means there is less demand, less often, and for less people. It also means it will generally be more difficult than before to please a customer. So anything that gives meeting planners the impression that they are saving money or getting more for their money is a good option. Of course, as we said previously, customers still want creativity and imagination, as before. In fact, in this market, “before” is a very important word. Because customers’ needs and expectations are always changing, yet providing them with something better or something else does not mean they will let go of an advantage or service they are used to. So when you put this into today’s economic context, it appears there is good news and bad news. The good news is the dollar/euro crisis will probably not last for ever, at least not to this extent. The bad news ? You guessed it. Customers are getting used to the special things they are getting today, due to the economic situation, and they will most certainly ask for it in the future.
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