MPI and American Express Study Reveals Planners Expectations

Meetings Industry to See Sustained Growth in 2007

. October 14, 2008

FEBRUARY 15, 2007. According to FutureWatch 2007, the definitive market trends study for the global meetings and events industry, the industry is expected to grow for a fourth consecutive year, signaling an economy that is strong, thriving and moving quickly to meet a variety of internal and external challenges. A diverse group of more than 1,400 meeting professionals answered questions regarding the 2007 meeting plans of their companies, vendors and partners. The study was sponsored by Meeting Professionals International (MPI) and American Express.

FutureWatch 2007 reported findings in three main categories:

---|Inside Meetings

An inside look at meeting departments and the trends expected by client-side planners.

---|Looking Outward

Global trends impacting the industry and the worldwide expansion of planner and supplier organizations.

---|The Middle Ground

A look at how technology, outsourcing, preferred vendor programs and other factors impact and shape the relationship among planners, meeting management companies and suppliers.

Focus Increasing on Centralization and Spend Consolidation

Health in the Marketplace

Respondents' expectations for the coming year paint a picture of sustained industry growth. Planners expect to manage more meetings in 2007 and expect to see larger budgets in dollars and as a percentage of the total organizational or company budgets. Budgets are expected to increase by 21% for association planners and 18% for corporations, while spend per meeting is expected to increase by only 8% and 4%, respectively.

Centralization of the Meetings Function

This year's report also established a baseline against which future shifts and developments in key areas, such as movement toward a more centralized function, may be measured. 54% of corporate planners surveyed indicated that their meetings function was either mostly or completely centralized across the organization, and 49% of planners reported having a meetings function that was centralized across different organizational locations or regions.

A Report Card for Procurement and Preferred Vendor Programs

It is widely acknowledged that procurement or purchasing departments are playing a more active role in purchasing decisions for meetings within many organizations. 30% of corporate and government planners say procurement plays a major part in their purchasing decisions and another 34% report some participation. 27% of respondents expect purchasing departments to become more involved with meetings in 2007, while 15% predict they will be less involved. 26% of corporate planners do not have a preferred vendor program, while 30% are not sure if they do. 60% of corporate planners believe that their organization's preferred vendor program has been successful or beneficial (rating it either a 4 or 5 on a 5-point scale).

Calculating Total Meeting Expenditures

With more organizations focusing on return on investment (ROI) measurements, FutureWatch 2007 asked how corporations track what they are spending on meetings. 55% of corporate planners indicate that total meeting spend is calculated for their organization, while 30% say that it is not and 15% do not know if it is calculated. Of those not currently calculating total spend, 51% of organizations expect more emphasis to be placed on this in the future. Yana Gutierrez, Vice President, Growth & Emerging Industries for American Express Establishment Services, added, "Spend consolidation is something we focus on with our clients. The first step for a client is simply to gain visibility into total meetings and events spend across the company. After all, you can only manage the spend that you can see."

Globalization, Terrorism and a Rise in Hotel Rates Will Shape 2007

External Trends: Terrorism, Gas Prices and Economic Trends

The impact of war and terrorism on business travel has surged ahead of all other concerns, with 38% citing them as major concerns. Behind terrorism and war (the top concern), increasing costs are expected to have the greatest impact on the industry. This is led by the cost of oil and gas, followed by general inflation. Economic outlook was next rated, with some predicting that an economic downturn would impact them in 2007, while others expect economic improvement.

Hotel Rates on the Rise

75% of respondents expect hotel rates to increase in 2007, while only 1% expect a decrease and 26% expect no change. The average amount of the increase expected is 8%.

Entering the Global Market

Globalization is on the rise in all areas of the meetings industry. Client-side planners, meetings management and services companies, and especially hotel and resort companies expect to increase their global presence in 2007. Those with a foot in the global market are more likely than their single-country counterparts to expand that presence over the next year. "Today, meeting professionals are operating in globally networked organizations that are just beginning to understand the challenges and opportunities this new seemingly boundless marketplace offers," said Bruce MacMillan, CA, president and CEO of MPI. "MPI is specifically addressing the needs and concerns of the globally-focused meeting professional by offering the strategic tools needed to positively impact the bottom line for their organization."

Additional Key Findings

Meetings Technology: A Wealth of Possibilities

Technology is one of the many tools that planners rely on to help them execute at the highest level. The most sought technologies for 2007 are expected to be: Technology and tools to help with meeting logistics; tools to get increased attendee feedback about meetings and events; and tools for identifying and tracking meeting attendees (registration tools, badge solutions, RFID technologies, etc.).

Outsourcing Holds Steady

As found in 2006, client-side planners predict little change in the number of meetings they will outsource in 2007. While planners expect to outsource 15% of their meetings in 2007, this year's survey drilled deeper to determine how client-side planners are using outside meetings management organizations and services. One-third of outsourced meetings will be completely outsourced, whereas two-thirds are predicted to be partially outsourced.

The Mapping of Meetings

The coming year tracks significant shifts in the geographic locations that meeting planners are considering for their events. For 2007, U.S. planners anticipate holding 90% of their meetings domestically, 3% in Europe and 1% in Canada. In 2007, Europeans predict that they will hold 81% of their meetings in Europe, 8% in North America and 3% in Asia. Canadian planners expect to hold 72% of their meetings in Canada, compared to 86% last year. Their activity in the U.S. will more than double, from 7% to 15% of meetings.

The full report is available at http://www.mpiweb.org and www.americanexpress.com/meetingsolutions.

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