The CWT report confirms that the meetings and events industry saw growth in 2010 and is likely to recover fully in all regions over the next few years. Average spend per attendee is expected to increase by 7% to 11% in 2011. But that increase means suppliers are less likely to offer deep discounts to meetings and events organisers.

According to CWT research, meetings and events spend typically accounts for 0.1% to 1.5% of corporate revenues, and can reach as much as 4% in some industries, such as pharmaceuticals and IT. However, companies that don’t have centralised management and effective spend tracking lack a clear grasp of their expenditure on meetings and events.

CWT estimates that such companies could achieve savings of 10% to 25% on average and increase meetings and events impact if they implement best practices in sourcing, processes and policy and compliance. CWT also found that more EMEA-based clients are organising their events abroad – 30% in 2010 compared to 25% in 2009.

Travel trends
The CWT research is based on the replies of 187 travel managers around the world, each with responsibility for more than US$5 million of corporate travel spending. Its states that, while total air, hotel, rail and car bookings experienced a double-digit increase in 2010, prospects for 2011 are more uncertain.
 
Flight ticket prices in 2011 are predicted to rise between 2% and 7%, depending on the route and booking class. CWT says costs last year increased on all routes, with the exception of economy class continental flights, where prices actually decreased by 9% as a result of new low-cost airline routes. CWT’s report also warns that more airlines will increase fuel surcharges in 2011.
 
Airlines are also keeping capacity in check to maintain profitability, according to the study, rather than win share at the expense of margins. Airline capacity is expected to increase by just 6.1% globally, compared to 6% in 2010.
 
Less luxury
These cost pressures mean businesses that were quick to cut back on business and first-class travel during the economic crisis have been slower to reintroduce it. CWT data shows that business and first-class accounted for 36% of intercontinental tickets from January to September 2010, compared to 40% in 2008. However, there has been a rise in premium economy flight bookings and CWT expects more airlines to offer such services.

There has also been an increase in the use of low-cost carriers for business travel. In Europe Middle East and Africa, the CWT report says low-cost airlines accounted for 13% of tickets sold in 2010 – 3% higher than 2009. It’s a similar story for growth for low-cost carriers in other parts of the world. In Asia Pacific, they account for 17% of CWT’s bookings (a 2% rise on 2009), with the figure for Latin America being 24% (a 7% increase on 2009).
 
Hotel rates
CWT also expects hotel prices to increase in 2011. Rates, prior to negotiations, have risen by 5% on average compared to 2010. This varies considerably by region and city, but higher category accommodation is seeing the highest increases.

‘Deluxe’ property prices have increased by 6%, for example, compared to 3% for ‘economic’ priced property, according to the CWT survey. CWT advises companies to continue to ask for last-room availability agreements in high-occupancy markets. It has found that this clause was being granted in more than 80% of its clients’ contracts for 2011.
 
Take the train
Rail was less affected by the economic crisis and continued to increase during 2009-10 with the ash cloud pushing many travellers to rediscover the benefits of train travel – convenience, speed, often cheaper prices and a lower carbon footprint than air. The CWT report predicts that rail usage is likely to increase further in 2011, particularly on journeys under three hours, with increasing market share on national and international routes. Prices are also expected to increase in 2011, with the introduction of new high-speed lines and higher tolls, although increases on some key routes will be limited by competition from airlines. Meanwhile, trans-border ticketing will remain complex.
 
To tackle the range of cost pressures as demand increases in 2011, the CWT survey found that companies top travel management priorities for 2011 are:
–    improving traveller compliance (68%)
–    optimising online adoption (61%)
–    driving air and ground transportation savings (64%)
–    optimising hotel spend (62%)
 
source: http://meetingsreview.com/news/2011/02/03