A changing landscape for hotels and venues?

A quick dip into recently published news and opinion from the meetings sector seems to indicate that things are changing.  The very good Grass Roots Meetings Industry Report 2013 by Alan Newton hints at a swing in the balance of power away from the meetings buyers and towards suppliers although Alan emphasises that at the moment this is a US led trend.

So what might be behind this trend and can we see any evidence that it might be seen in the UK? 

Looking first at the demand side of the trend, Alan reports that “our clients in the UK, USA and Asia are all showing a modest increase in meetings activity and slightly higher budgets than a year ago.  The mood is quietly positive,’

But what is happening on the supply side?

It will not have escaped followers of the hotel transactions news that a couple of deals have recently been done by UK banks that had found themselves holding hotel assets as a result of their lending binge and the subsequent repossessions following the recession and crash in hotel values.  Big losses have been sucked up and canny private equity and venture capital investors have bought at what might prove to be the bottom of the market. Principal Hayley and Malmaison have both been ‘moved on’ and rumours surround other brands such as DeVere Venues.  As the market commentator Hotel Analyst puts it on page 117 of Sleeper Magazine; “Are we finally at the point where deals start in earnest? The short answer is no. But it seems highly likely that there will be more movement than we have seen for some time.”

This then begs the question what will this smart money do with hotel and venue assets picked up cheap from the banks? Some are now under-invested following their stint under bank ownership but it seems likely their new owners will be far more careful about pouring more new money in without some very careful analysis.  It’s possible that one or two of the worst performing hotels and venues may be moved on or re-developed for other uses.

So what about new supply?  Melvin Gold's UK Hotel Construction Data report says that although there has been a gradual uptick in new hotel openings since the low point of 2010 this has been dominated by the budget sector so it seems fair to assume that the overall supply of meetings hotels and venues is adapting to a lower level of demand.

Availability and rate are very strongly influenced by supply/demand in the meetings sector so maybe there are signs that the landscape is changing.

It will be up to hotel and venue operators to ensure that any hardening of the market doesn’t lead to greed and profiteering and bring our industry into disrepute.  As Alan Newton puts it ‘interesting patterns have started to develop.......(these) may be considered more alarming if they are not managed professionally.’

Although at Sundial Group we have only experienced slight season changes in demand so far I am proud that our high number of long standing and loyal clients can trust us to take the long view and protect our reputation for fair pricing and value for money should these trends indeed tip the balance of power away from the buyer.

Face to Face or Facebook?

Technology has increasingly been forging a role to make business communications easier.  More and more businesses are using email, video conferencing, live chat and social media networks to communicate and build working relationships, all from the comfort of their own desks and, even, homes.

As liberating as this is, there remains, perhaps more than ever, a need for face-to-face meetings to help cement these virtual links and also to provide something more. 

Mary Beth McEuen, @marybethmcuen vice president and executive director of the Maritz Institute, published as part of recent Cornell University research, her observations on how successful leading companies are choosing to use both virtual meetings and face to face ones (as well as a hybrid of the two) in combination to create effective business outcomes. 

Whilst it must be acknowledged that face-to-face meetings require more financial and time investment (and naturally with that, hold the most expectations), they can work better strategically to achieve three key things:

1. Capture attention – particularly when a business wants to initiate something new or different.

2. Inspire a positive climate – helping to catalyse collaboration, innovation and performance

3. Build human networks and relationships – information can easily be shared virtually, but it is people relationships that are the most valuable

They also offer people the opportunity to share and respond to body language and facial expressions, providing more social interaction and bonding, which virtual channels can only go so far to do.  In my view, it is these social, psychological and emotional benefits to real personal proximity that no amount of remote communication can replace.  A shared meal or drink, walk in the grounds or after dinner, ‘hair down’ discussions add texture and trust to relationships that can really transform a team or working relationship.

Also, in an age when multi-tasking is a common part of all working practice and held in such high regard, face-to-face meetings actually serve to challenge the productivity of doing many things at once.  Face-to-face meetings encourage individuals to down-tools and focus their attention on one task or point.  McEuen argues that real meetings enable people to switch off autopilot and open their minds up to new experiences and situations. This helps generate fresh creativity and blue-sky thinking.

With the benefits of face-to-face meetings clearly outlined, there still remains the difficult question of cost. Face-to-face meetings no doubt cost money to arrange, to travel to and also impact the environment. Furthermore, MPI research predicts that large face-to-face meetings will become more complex in their nature, and involve strategic alliances of organisations or consist of multiple formats happening within one location.  Therefore meeting planners will have a harder task on their hands as they work to achieve return on investment.  A focus on strategy, with clear business outcomes has never been more important to ensure their efficiency and effectiveness.

Organisations often give great weight to venue charges when choosing the location for their meetings, sometimes overlooking the overall benefit.  I have no doubt that the comparatively small premium attached to using the right venue to deliver the more subtle benefits of face-to-face meetings is well worth the investment.

At Sundial SOS, we help meeting planners find the right meeting venues for their business needs and budget. A free service; our venue finding team has first-hand knowledge of hundreds of venues across the UK and can support with any element or level of event management.  For more information and guidance on getting the best out of your face-to-face meetings, please visit: http://www.sundialsos.com

Meetings Technology to replace Face to Face?

Several publications including Events, Our Industry, Meetings & Incentive Travel and Conference News have covered a recent piece by Zibrant's Fay Sharpe on the 'rocketing use of meetings technology'.

It might be easy to read her claims that ‘up to 20% of ‘ritual’ face to face meetings will be replaced by virtual meetings’ and feel deeply concerned for the events and meetings sector.

However, I believe that trying to attribute specific outcomes to the rapid march of technology is a risky pastime. The combination of mind-blowing advances in technology and financial austerity will indeed cause fundamental changes in the way people work, communicate, share and create knowledge, but not necessarily with the most obvious outcomes.

The broader technology driven picture is that organisational structures are being re-invented. Teams are replacing hierarchies; projects are replacing routine administration and access to data is ubiquitous.

Sundial Group has hosted ‘management training’ for almost 50 years but I have been amazed at how rapidly this is changing. Corporate learning and development was dominated by ‘chalk and talk’. The information age with its immediate access to the world’s data has made most of this classroom learning redundant. This could have spelt the end of management centres but it hasn’t, there have never been so many dedicated venues!

Nowadays corporate development is all about the creation rather than learning of knowledge. Communication is the lifeblood of this way of working. Traditional teaching has been replaced by skills development, team working, creativity and experiential learning.

Strangely one of civilizations oldest events, due to take place this summer in London is helping to accelerate another organisational change. The anticipated disruption to commuters is driving the already established trend of remote working. Some of the most traditional industries and professions have realised that the day has arrived when they don’t need everyone in the office every day. Leading consultancies such as Corpra are developing and testing strategies for this summer that will drive irreversible change.

So what might be the bigger picture for venues and the future for face to face meetings? I believe that organisations will move away from the day to day office based environment but instead will look to bring people together as and when there is a need. They won’t want to maintain expensive HQ buildings capable of housing all office staff at once but they will want to use the most conducive environment, tailor-made for a project to be launched, reviewed or shared and for team face time to accelerate innovation and create knowledge.

Technology is indeed changing how we work but I firmly believe that the human need for physical proximity as an adjunct to the communication experience will be with us for a long time. There may indeed be growth in remote meetings but at Sundial we are focused on how the future will drive a need for the best face to face meeting environment because we believe the need has never been greater.”

The evolution of dedicated venues

The ongoing economic crisis of the past 4 years has driven the most rapid business evolution ever seen. Never before has it been so critical for organisations to embrace change. The challenge is to understand what to change and why.

Speaking as a past Global President of The International Association of Conference Centres (IACC) I have been especially interested to see how our particular niche of the conference centre concept would evolve. IACC members operate in the small to medium sized meetings market (outside the UK larger conference centres are called convention centres). Their bread and butter events are about strategy and communication, management training and in-house conferences, product launches, and motivational get togethers.

It is a long-held belief of the niche providers to this sector (and many of their clients) that a dedicated and focused environment is a better fit for these activities than a hotel or other location that regard meetings business as ancillary.

So how do you test this difference? Hotels focus on selling bedrooms, they regard meetings as a great way to sell a block of bedrooms and have developed meetings facilities and services to enhance their ability to sell bedrooms. The core business of Conference Centres, however, is selling meetings. Their management approach is driven by the needs of the meeting planner. Facilities, operations, staffing and training respond to their understanding of how to add value to meetings.

An interesting industry debate developed exactly along these lines as the availability of broadband connectivity and WiFi became key requirements for meeting attendees. The traditional hotel approach was to identify this need as a revenue opportunity whilst conference centres had no hesitation to install the necessary infrastructure and provide the resource at no charge. In the current highly competitive, over supplied marketplace Hoteliers have had to back down, but I don’t believe this has changed their underlying attitude.

On the other hand, a consequence of more choice for customers has also resulted in conference centre management having to sit up and take notice of the generally superior individual guest facilities encountered at good hotels.

At a superficial level it may seem that the once clear blue water that existed between conference centres and hotels has narrowed or even disappeared. Yes conference centres have upped their game with investment in accommodation and amenities and hotels have listened to their meetings clients’ bug-bears about charging extra for key ingredients.

It has indeed become much more difficult to tell at first glance if a venue is a hotel or a conference centre, even the name over the door might be misleading. Hotels have sectioned off some of their space and labelled it Conference Centre, whilst some traditional conference centres have earned themselves the chance to rebrand as conference hotels, where they are offering dedicated meeting space with high quality accommodation.

To add to this confusion some operators who traditionally ran dedicated meeting venues have lost sight of their priorities and re-organised with a drive to sell bedrooms (even offering loss-leading single overnight specials to the detriment to their focussed environment) whilst hotel brands have taken their meeting planners more seriously and changed their priorities for operations, facilities, staffing and training in response.

However I would argue that ultimately, under the surface of any venue my definition of the dedicated meeting environment differentiator still remains. Does your chosen venue sell meetings or bedrooms?

Fortunately other recent developments make it easier to ask that question and get a truthful answer. Our increasingly connected and transparent world is giving rise of the ‘Thank You Economy’ and is re-establishing the power of recommendation, washing away the principle of blind brand loyalty.

I believe that it is only a matter of time before hotel booking agents and corporate procurement controllers tap into the knowledge that is out there and join the experienced meeting planners who have always been more influenced by the environment and outcomes than the venue / hotel marketing spiel.

At a time when buyers have the upper hand in the supply / demand relationship the dedicated venues have a distinct advantage. They work at understanding how they add value and seek to control the overall environment they provide so that the focus is on the needs of the organisation hosting the meeting.

If you have read the recent Steve Jobs biography you may, like me, see an analogy here with Apple Corporations’ desire to take responsibility for the overall, end to end customer experience. You might even find dedicated venues with Apples’ drive to make that experience the best it can be – if you ask the right questions.