While we have yet to see the final impact that COVID-19 will have on meetings and events, it’s clear that the coronavirus is one of the largest hurdles that meeting planners have ever faced. From information gleaned through industry surveys, we know that nearly every meeting planner has been affected by the coronavirus in their daily work.
What we can do now is look at the current climate and take a step back in history to see the story of meetings and events recovery from past economic downturns. Below, we’ll take a look at how the meetings and events sector of hospitality is currently being affected, how events have recovered in the past, and how planners have historically reacted to mitigate long-term risk.
How Has Covid-19 Affected Meetings and Events?
When MPI surveyed 830 meeting and event planners around the globe, the effects were already staggering, with 93% of the surveyed planners having experienced cancellations. Further, more than a quarter of participants stated they have had to cancel over 25 events. This was less than 6 months after the first known case in China was discovered and only two months after the first reported US case.
While event cancellations came suddenly and aggressively, that is in line with the novel coronavirus’ effect on jobs in the US. In the 2008 recession, which was spread out over roughly 2 years, more people lost their jobs overall, but job loss was spread out over months. With the coronavirus, less people have filed for unemployment benefits, but a large amount happened suddenly, breaking records for most files claimed in the briefest period.
This makes the coronavirus a new and puzzling phenomenon in the business world, where businesses, and for a time the economy, had taken an abrupt but massive hit, instead of the lengthy but manageable loss we’ve seen in past economic downturns. But we can still look at the 2008 recession for a small peek into the road to recovery and how meeting planners coped with the economic downturn.
Meeting planners are aware that the effects will be long felt. With 83% of MPI survey participants believing that they will see a great deal or a lot of impact to business over the next twelve months due to Covid-19.
When Will Meetings and Events Find Growth Again?
Travel will almost certainly be affected by the Coronavirus until the new vaccines have been properly administered to the majority of the population, and the current plan for Pfizer distribution is still in its infancy. Even once vaccines have been taken globally, we still shouldn’t expect meetings and events to come back full force immediately. Businesses have experienced significant revenue loss due to the sudden halt of non-essential business activity, and this will have a reverberating effect for events.
Meetings and events do not rebound as quickly within businesses as some other activities. Not only is business leadership watching budget spend more closely and cutting costs more drastically, as Dave Larson mentioned in an interview with BizTime, there is a perception that extravagant business events are inappropriate during times of economic downturn.
According to STR data, it’s clear that transient demand rebounds faster than group demand, with transient demand in a growth stage just 7 months after the economic downturn began. The study associates the increased transient demand to people taking advantage of hotel deals with low ADRs.
This same phenomenon may have also contributed to loss of commission revenue for meeting planners who set ADR for events at a higher price 1-2 years before the recession began. In order to cut costs, attendees may have canceled their initial booking through the event and booked outside of the room block in order to get a better deal closer to the event date. Meeting planners can expect to see something similar take place for postponed or rescheduled events with previously contracted ADR, but risk can be mitigated with new technology that gives deeper visibility into owed commissions from events.
How Do Meeting Planners Move Forward?
Data shows that meeting planners remained optimistic and anticipatory in their recovery approach to the 2008 recession. In 2010, at the beginning of the recovery period, most surveyed meeting planners were planning a mix of new ideas to position themselves for future business growth.
While much has changed in the decade since this research was conducted, many of the growth tactics still hold true today as important measures to create new business and maintain revenue.
The top three strategies are still valuable today:
Increase Marketing
Increasing marketing efforts was chosen as the top strategy to focus on within the next two years because marketing creates demand for meetings and events. While there are costs associated with marketing efforts—paid campaigns, marketing teams, content, and promotion—if meeting planners are measuring their return on investment, spend for marketing can show major returns. Plus, organic social media efforts have made huge leaps in the last decade.
Reduce Expenses
In addition to personnel expenses, meeting planners, especially those with a global reach, must contend with costs associated with payments as well. Consolidating hotel commission payments, either through Onyx CenterSource or another service, is one of the easiest ways to trim expenses associated with cross-border payments, currency conversion, and check and wire transfer fees.
Increase Technology
There is no doubt that meeting planners will be focusing on the creation and monetization of virtual events in the future. This is one way that technology has drastically improved over the last decade. Once companies and travelers become more comfortable and are prepared for in-person meetings and events, planners thinking ahead will also seek cost-effective ways to stay on top of commission payments from hotels.
While we’re still waiting to see the full impact of COVID-19 on meetings and events, and hospitality as a whole, the most important thing to remember is that this situation is temporary. The events industry will recover, and those who can adapt to new processes and think ahead will grow faster and be more resilient.
Are you Prepared to Recover?
Onyx CenterSource has recently introduced new technology with meeting planners in mind. In addition to supporting overall cost reduction, we can help you recover previously unpaid commission and support your future commission collection goals. Contact us today for a demo of GroupPay.