What to Expect for M&E in 2019

It's that time of year. The big meetings agencies are starting to roll out their forecasts for 2019, and the future looks bright for group business. CWT Meetings & Events VP of the Americas and South Pacific Tony Wagner, strategic meetings consultant Betsy Bondurant and Cvent SVP of enterprise sales and partnerships Anil Punyapu spoke with BTN editor-in-chief Elizabeth West about what to expect in the coming year.

BTN: Tony, tell us some of the general trends that CWT M&E forecasted for next year.

Tony Wagner: Demand is up everywhere, even in economies that are still a bit challenged. Latin American markets like Brazil and Argentina, where the peso has dropped by 40-plus percent, are still seeing rising [group] demand. That's tied to broad, global economic activity. Here in North America, we're seeing demand up fairly consistently. It's not a huge spike, but it continues to grow year over year. [What we're seeing] more than we've seen in the past, though, is an increase in average group size, and it's consistent across our segments.

BTN: And that's tied to business confidence?

Wagner: There's a general confidence in the economy, but I also think that corporates are viewing events as a growing share of their budget to drive topline revenue. That type of sentiment equates to more meetings demand.

Anil Punyapu: There has been a lot of RFP activity to place business ahead of the expiration date on 10 percent commissions. We agree that demand is rising overall, but at least part of it has been an artificial uptick that will begin to correct itself in the fourth quarter of 2018. 

BTN: The commission situation is key, but let's table that for a moment and follow Tony's lead for now: topline revenue associated with meetings. Are we going to see companies proving that out with metrics in 2019?

Betsy Bondurant: Not all corporates are mature enough in their programs to have exact metrics, but more companies are looking at that and using technology to help gauge it. I see companies getting smarter about how they are using their money. They are using engagement measures in thoughtful ways to inform how they spend and how they interact with attendees. 

Punyapu: We see companies maturing in this regard, particularly technology companies. [They] are designing data lakes and looking at information across all the events they care about and then using that data to relate to the rest of the marketing process. Pharmaceutical, financial and manufacturing companies will get into these practices in 2019, and they'll bring in that marketing operations person to start to relate this data to the rest of the cycle.

Wagner: We also see that. It's not necessarily the individual event they are looking for in the data. It is the life cycle of the customer. That event itself may not have a return; that may not be the best calculation. Clients are focusing [analytics] on their customer acquisition or retention cycle or their revenue growth setter. 

BTN: One challenge here is that the industry hasn't established standard metrics that can get at the impact of different kinds of events or different kinds of attendee interactions. Is that something Cvent is working on for 2019?

Punyapu: We've invested a lot in analytics and have done some of that work, but it also has to be a fluid process. We continuously learn from our clients and what they need to learn from the data.

BTN: Let's go back to Anil's assertion that impending commission cuts have precipitated at least part of the increase in meetings demand lately.

Wagner: There was a phenomenon of trying to get ahead of the commission cuts. It increased acute demand but also influenced average lead times, [according to] our research. We [hadn't] seen movement in that regard in a long time. The commissions cut contributed to that trend. 

Bondurant: With commissions cuts, there's a lot more scrutiny now around strategic meetings programs and being able to articulate the value of the meetings, especially those that are driving revenue. As an example, internal training is being done in alternate ways, online and a lot of pre- and post-work [to optimize] the face-to-face element and maybe reduce time onsite. [This reserves] face-to-face resources for revenue-generating events that can more directly justify costs.

BTN: Do you think more brands will join them in lowering commissions in 2019?

Bondurant: My personal thought is that eventually commissions may go to more of a dynamic pricing. I don't know why any hotel in New York City is giving commission when they get so many RFPs and they have such high occupancy. I would be shocked if more chains are not [moving to] lower commissions.

Wagner: I definitely agree with that. And I think that other brands are looking to be opportunistic, and they may experience a lift for the short term.

BTN: What other trends are you seeing going into 2019?

Wagner: There's actually a piece missing in this discussion about commissions. Hotels have treated all meetings the same way when it comes to commissions—from huge association deals to small meetings with 25 people. It's hard to get value out of those 25-person meetings. It's hard for an agency to add value; it's hard for the hotel. At this point, there is a need for much greater inventory access and automation versus the kind of system [workarounds] we do right now to try to make this work. I know there are small meetings tools emerging, but they are basically simplified RFP systems. We need to see more attention given to small meetings automation with the major brands. 

BTN: Anil, this sounds similar to what your CEO, Reggie Aggarwal, was talking about at the Cvent Connect conference in July.

Punyapu: Simple events like field marketing events or seminars are an area where our competitors are challenging us to expand our solution and we welcome that. It's definitely an area Cvent is exploring.

BTN: Betsy, what keeps you up thinking about next year?

Bondurant: I was going to say the war for talent. I think we're looking at 3 percent unemployment, and hotels continue to struggle. You go to a hotel and they ask you if you want to take a pass on housekeeping for your stay. I've got a love-hate relationship with that. I love the idea, but I also don't want to put a housekeeper out of business. On the sales side, there are a lot of hotel sales folks onboard who have never been in a buyer's market. If this changes, will these representatives know how to keep a preferred partner and will they understand how important the corporate group business is?

Punyapu: I also think about the employment issue but from a different perspective that centers around employee engagement and loyalty. Unemployment is at its lowest rate. Productivity is high. Every company is trying to engage employees and drive productivity and retention. They have to start practicing some of the same marketing and engagement tactics for their internal meetings. They need to digitize the employee journey in the meetings environment, see what engages them and for how long. I think some companies in 2019 will start to correlate internal meeting experience and engagement to employee retention rates.