A report released at the end of December 2013 reveals that overall 2014 spending on meetings in North America by clients of American Express Meetings & Events will be flat in comparison to 2013 levels. The report, compiled by Amex and based on the company’s 2014 forecasts, also revealed that outside of North America should see a small drop in spending in comparison to last year.
Amex reveled that in the Asia/Pacific region meetings management clients would see a fall of 3.6 percent for year-over-year meeting spending. This was the most notable decline in all the regions forecasted. Europe and Latin America should see declines of 1.8 percent and 1.4 percent, respectively, predicts Amex.
The company used what it describes as “a number of sources,” for its forecasts, including “proprietary American Express data sources,” licensed third-party data, “interviews with industry leaders,” information gleaned from its 2014 global business travel forecast and surveys conducted in September of meeting professionals and “leading hotel suppliers.”
The flat spending projections are despite forecasts predicting higher hotel rates for meetings and group airfares, the report states. Although Amex predicts hotel rates will remain flat in Europe for meetings, they projected increases of over 4 percent in North America and 4.6 percent and 3.3 percent for Asia/Pacific and Latin America, respectively.
The report stated: “Hotels that responded to our survey are not as optimistic about rate increases as meeting planners are,” and added “One of our European experts has seen hoteliers in 2013 attempt to raise rates, only to find them return to the same level as 2012 at the end of negotiations.”
Amex believes that group airfares will show an increase of 1.6 percent from the previous year in 2014. This will be followed by a further 1.1 percent in 2015, claims the report. In the international category, 2014 group airfares should rise even more to 3 percent.
The survey also considered the uptake of virtual solutions as an alternative to traditional meetings and discovered that respondents reported a lower adoption of hybrid or virtual meeting solutions than the previous year’s survey had suggested would be the case. In fact, the number of respondents who felt that more than 10 percent of their meeting activity would be conducted by virtual or hybrid means fell from 56 percent in 2012 to 26 percent last year.
“The two most compelling reasons, cost savings and reduced travel, appear to be driving an increase in use of virtual solutions,” Amex said, “While these are important considerations, virtual meetings can deliver expanded reach, extend a live event, and more. These alternative formats may continue to experience only modest gains in utilization until meeting owners are focused on using them to achieve business outcomes versus savings.”
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