2015 Market Outlook
In this article we look at the overall market outlook for hotels, meetings and events in 2015. We also identify the major challenges facing travel buyers today.
Hotel prices are set to rise
Most travel procurement managers are already bracing and prepared for the forecasted single-digit increases in hotel prices. The hotel industry is currently enjoying a robust period of stronger demand, moderate expansion of new room supply, favourable capital costs and an increase in investor interest. This improved outlook will mean greater pressure on negotiated rates for travel managers.
The rosier outlook for 2015 also stems from very encouraging economic signs that typically accompany fatter travel budgets and fewer travel restrictions. Among the positive economic signs include improving consumer spending, jobs growth and slowing rates of unemployment and layoffs.
The 2015 Rugby World Cup which is being hosted by England from 18 September to 31 October 2015 will also increase demand for hotel rooms especially in London which will result in inflated prices.
What can travel managers do to cope with this increased pressure on their budgets? We recommend negotiating better deals with suppliers, consolidate the volume and number of suppliers and evaluate commitments, policies and guidelines. Travel policy compliance is likely to be the single most pressing issue facing corporate travel buyers today and it probably represents the greatest opportunity for savings. Once you're able to convince travellers to use preferred suppliers and follow the guidelines you've established and communicated, compliance is much less of an issue.
Meetings and events forecast
The positive news is that, as a result of a lot of hard work and education by those in the corporate meetings and events industries, organisations understand that nothing replaces 'face to face' time for accomplishing business objectives. However, throughout 2015, we expect meeting costs per attendee to rise globally by about 3%.
Suppliers are expected to become tougher on terms of attrition and cancellation clauses in 2015. Many will increasingly deny the possibility of non-penalty following a late change in event scope or cancellation.
Meeting and events planners are continuing to negotiate costs to get the most from their budget, typically focussing on reducing the cost of food and beverage packages, rather than scaling back on entertainment or theming. Our top tip is to look beyond bedrooms and meeting space and negotiate on total spend. Include food and beverage, audio/visual support including internet, business centre charges and miscellaneous charges like car parking.
In the majority of cases, meetings and events in 2015 will be held domestically and in midscale hotels to contain costs. We recommend using the shorter travel time to create a more efficient agenda that starts earlier in the day, reduces total meeting time and, in turn, reduces overall cost.
If you would like help with negotiating better deals with preferred suppliers, establishing a travel policy and ultimately reducing the cost of your hotel, meeting and events spend then contact us on +44 (0)330 022 8643 or via e-mail at firstname.lastname@example.org.