Category: Analysis

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Prospects for meetings industry remain good

Prospects for the UK’s meetings and events venues remain good for 2019 despite trading against a backdrop of ongoing political and economic uncertainty, says the Meetings Industry Association (mia).

According to figures gathered by the mia, daily delegate rates (DDR) and 24-hour residential rates rose 4% and 9% respectively in the first quarter of this year, continuing a steady upward trend of 2018 when rates rose 2% overall.

Average DDR rates have risen as much as 30% over the last four years, with the biggest increase recorded in the South West and East Midlands according to the mia’s online benchmarking tool miaTouchstone.

Figures from the latest miaTouchstone report reveal the average DDR is now £44, with rates in central London above £60 and outer-London and the South East typically around £45-£50.

The average 24-hour residential rate now stands at £150, with the range between the lowest and highest regions narrowing to £130 and £170.

While the economic and political uncertainty brought about by Britain’s plans to leave the EU appear not to have impacted rates, it could be responsible for a ‘disappointing’ drop in the number of meetings per venue in the first quarter of 2019.

The average number of meetings per venue held from January to March this year were ‘well down’ on those held during the same periods in 2018 and 2017, which the mia believes could be due to a loss of confidence among clients as the UK approached the initial Brexit deadline of 29 March.

The drop in the number of meetings held during the first quarter of this year, is nevertheless being regarded as a blip, thanks to enquiry levels increasing by 5% in January to March compared to the same period in 2018.

Jane Longhurst, chief executive of the mia, said: “miaTouchstone’s review of enquiry levels is a key indicator of future prospects for the meetings and events industry and with those levels continuing to rise, we are optimistic that this year will end on a positive note.

“While the average number of meetings is down for the first quarter of this year, the fact that both DDR and 24-hour residential rates have risen suggest the sector is operating efficiently and robustly.

“We are aware that the uncertainty created by ongoing Brexit negotiations has made the trading landscape difficult for all sectors of the economy and will continue to do so into the near future, but giving participating members access to miaTouchstone means they are able to monitor and benchmark their activity against their peers so they can plan more effectively during this volatile period.”

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Bookings spike suggests London as Europe’s most connected business hub

The UK now serves more European and international destinations than any other European city, according to new research commissioned by the London Convention Bureau.

London has direct air connections to 401 destinations around the world and more connections with Europe (243 routes) than any other European city, according to RDC Aviation, which analyses city flight data.

Transportation links with Europe are well served with by high-speed train links, like Eurostar, to cities across France and Belgium. There is a new service between London and Amsterdam, with a third daily direct train from London to Rotterdam and Amsterdam. The extra service, which launches on 11 June, was due to demand for routes to the Netherlands.

Eurostar claims that a London-Amsterdam Eurostar journey emits 80 per cent less carbon than the equivalent flight.

Due to the strong transport links with mainland Europe, London’s Convention Bureau recently announced a new partnership with the Paris Convention and Visitors Bureau that will see the two cities forming a partnership offering a range of two- in-one incentive travel products.

“The number of high-profile associations and corporations that are now choosing London is an endorsement of the city’s position as a world-class location for meetings and events, as well as being a global centre for learning,” James Rees, executive director for Conferences and Events at ExCeL London said.

The meetings and incentives market remains a tour de force in the UK capital with brands like Adobe, Salesforce, Amazon Web Services, Oracle, Google and Microsoft hosting large scale corporate events in London this year.

Massive meetings are also on the horizon, with London Tech Week welcoming over 55,000 visitors in June 2019, at a number of venues including the Barbican and the Tower of London. Sibos, one of the world’s largest financial services, will host more than 11,000 delegates.

“We are very excited to be bringing Sibos to London for the first time, this year. London is one of the world’s great financial centres. It’s a city where business, creativity and innovation converge – and that’s why it’s the perfect place for Sibos 2019,” Chantal Vanes, head of Sibos said.

“While providing a great venue to do business, London’s ever-changing cultural offering, spanning world-class museums, theatre and the arts, will also allow delegates to enjoy their experience at the world’s premier financial services event to the fullest.”

London fact box

  • Latest figures show that business visitors to London spent £3.5 billion annually.
  • From September 2017 to October 2018, London welcomed 3.5 million international overseas business visitors.
  • According to findings from the Hotel Monitor Report, a new report monitoring hotel capacity across European cities, London is set to add 11,600 rooms to its hotel market by 2020.
  • The capital’s hotel market is set to outpace a number of major European cities by 2020, including Paris, Berlin, Lisbon and Milan.
  • Hotel operators are increasing hotel capacity across the city, with an 8 per cent uplift predicted by 2020.
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Scottish cities account for 24% of all major association meetings in the UK

Scotland is bucking the trend with the number of major association events held in 2018 up 5% from 2017, despite the UK dropping two places in the latest ICCA Country and City Statistics report for total number of international association meetings.

The report, released early this week, revealed that the number of major association meetings that took place in the UK dropped by 3% in 2018. However, Scotland celebrated an increase in the number of meetings during the same period.

In 2018, the country hosted 137 events, up from 114 in 2017, and contributed 24% towards the UK’s total for the year. Scottish cities moved up the rankings in 2018 with Edinburgh taking position 27 and Glasgow taking position 47 in the world rankings, with only London coming above them in the entire UK.

Last June, the Edinburgh International Conference Centre hosted the European Orthodontics Society Congress, which welcomed more than 2,500 delegates from across mainland Europe. The congress, the society’s largest annual gathering, also utilised the entire Surgeons Quarter campus for its President’s Reception.

Amanda Ferguson, head of business tourism, Convention Edinburgh said: “I’m delighted to see Edinburgh position in the top 30 of the ICCA World Rankings again. The ability to continuously attract international association meetings in a very competitive marketplace is underpinned by our vibrant knowledge economy and sectoral strengths.”

Climbing 25 positions in the ICCA rankings, Glasgow was the host city for a number of major association congresses in 2018 including the World Haemophilia Congress and the European Society of Sports Traumatology, Knee Surgery and Arthroscopy (ESSKA) Congress.

Both held at the SEC, The World Haemophilia Congress attracted more than 5,000 delegates from 137 countries to its four-day event and the ESSKA Congress welcomed more than 4,000 delegates across its three day programme.

Last year, VisitScotland Business Events won the ICCA Best Marketing Award for its first-ever digital campaign “Scotland. Where ideas become legend”. The campaign, which launched in November 2017, highlights the reasons why event organisers should view Scotland as the perfect partner for international conferences – its globally renowned academic credentials, historic pioneering spirit and world changing innovation.

Rory Archibald, association & sectors, VisitScotland said: “We’re thrilled that Glasgow and Edinburgh have made huge leaps in the 2018 ICCA rankings. Over the past two years we have been showcasing Scotland to the world through our award-winning Legends campaign, INNOVATETHENATION ambassador network and most recently our inaugural Association Reception Series in Brussels. Business Events are a crucial tool for economic and social change in Scotland, so we will continue to work tirelessly with our partners, our knowledge centres and the Scottish Government to attract more ground-breaking events across the country.”

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EDGE Venues reports more than 187,000 venues returned in searches in the site’s first four months

At the inaugural EDGE Venues Marketing Masterclass, held at the May Fair Hotel London on 12th April, EDGE Venues shared its first set of marketing analytics with over 160 licensees and non-licensees to demonstrate its early success. 

EDGE Venues was launched on 1 December 2018, providing agencies, corporates and event planners with a platform dedicated to the meetings and events industry. With more than 19,000 venues in 45 countries in 125 international destinations, EDGE Venues has exceeded expectations, and the results were shared at the Marketing Masterclass earlier this month.

The Masterclass, generously hosted by Edwardian London Hotels, saw guest speakers with experts in digital marketing and SEO (search engine optimisation) with Somebody Digital, and social media experts Capella Synergy, providing their expertise in analysis into the data behind EDGE. The event took guests through a deep dive into EDGE Venues Business Intelligence, providing insight into the user-trends behind the technology.

To date, the platform is used by over 190 agents and corporates and at the Marketing Masterclass, it was revealed that £7.7m of event revenue has been tracked in EDGE in its first four months with a further estimate of £7.5m direct bookings from agents and corporates and more than 1000 qualified and prospected enquiries.  

Jacqui Kavanagh, Managing Director for EDGE Venues had this to say on the success of the event: “We’re absolutely delighted by the turnout for our first EDGE Venues Marketing Masterclass. We opened this event up to both licensees and non-licensees of EDGE as an opportunity to showcase our success to date. The digital platform has been really well received by both bookers and the venues that are using it to maximise their exposure. We’ve seen more than 1,000 enquiries that have been directly trackable through EDGE, this doesn’t include those that have booked directly. We’ve taken all feedback on the site back to our developers and will continue to make enhancements – this includes our recent redesign of the homepage.”

Will Smith, Event Manager at the Flowerpot Hoxton and licensee of EDGE Venues said this about the Masterclass: “The EDGE Marketing Masterclass was an excellent afternoon. Being invited to such a prestigious event with industry experts made me feel incredibly valued as a customer. I came away from having learnt some excellent insights into the future of the events industry and having made some wonderful connections with industry peers. 

“I’ve been on the EDGE site for eight weeks and being able to communicate the agencies which utilise it means I’ve already confirmed my first booking. And it comfortably pays for my full year’s marketing package. As a small independent venue, I will never be able to compete with the large hotel chains for SEO or marketing budgets, but EDGE gives me every opportunity to win business when we are suitable for a clients’ needs. Our best clients are small agencies, so a platform built to give smaller agencies access to more information is a vital tool.”

Want to know how you can get involved with EDGE Venues? Contact the EDGE Team to find out more:

+44 (0) 1780 484051

enquiries@edgevenues.com

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Paris has regained its position at the top of the ICCA city rankings

Paris has reclaimed the top spot in the International Congress and Convention Association (ICCA) city rankings for 2018, as the number of global meetings recorded hit a record high.

However, the UK has fallen from third to fifth in the country rankings, overtaken by both Spain and France, with London falling one place to seventh in the city rankings.

The US continues to top the country rankings, as ICCA captured a total of 12,937 rotating association meetings taking place in 2018. This was an increase of 379 meetings year-on-year and represents the highest annual figure ICCA has ever recorded in its yearly statistics, signalling that industry growth is continuing on a strong trajectory.

Paris climbed to the top of the city rankings by number of international association meetings with a margin of 40 meetings above second place holder Vienna. In 2017, Paris and Vienna held joint second place, with 190 meetings each. Last year’s number one Barcelona fell to fourth place, with Madrid entering the top five for the first time since 2015 in third place. Among the top five cities for another year, Berlin falls to fifth place from fourth in 2017. London fell from sixth to seventh slot, with 150 meetings.

The top 10 is as follows:

  1. Paris – 212
  2. Vienna – 172
  3. Madrid – 165
  4. Barcelona – 163
  5. Berlin – 162
  6. Lisbon – 152
  7. London – 150
  8. Singapore – 145
  9. Prague – 136
  10. Bangkok – 135

The US remains in the top country spot, unchallenged for more than two decades. Germany remains in second place while the UK dropped from third to fifth place, overtaken by Spain, which rises to third. After exiting the top five last year, France re-entered in 2018 in fourth place. Italy replaces France in sixth place, and Japan and China remain in seventh and eighth place for another year. The Netherlands and Canada swap positions, coming in at ninth and 10th respectively.

The top 10 is as follows:

  1. US – 947
  2. Germany – 642
  3. Spain – 595
  4. France – 579
  5. United Kingdom – 574
  6. Italy – 522
  7. Japan – 492
  8. China – 449
  9. Netherlands – 355
  10. Canada – 315

ICCA CEO Senthil Gopinath said: “We have recorded our largest ever annual snapshot of the immediate past year’s meetings data in 2018. These results closely follow the release of our 55-year history of the international association meetings market in October 2018.

“ICCA’s latest figures uphold the mature, robust growth pattern we identified in this report and provide more evidence of our firm belief that the association sector continues to be an unrivalled stimulator of global societal development and force for progress across the globe.”

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London hotels see room rates increase in April

STR’s preliminary April 2019 data for London hotels reported an increase in Average daily rate (ADR) of 1.4% to £143.01.

According to the report, year-over-year, supply is increased by 2.3% during the month, with demand also growing by 0.7%. However, occupancy decreased by 1.6% to 81.1% during the period, and Revenue per available room (RevPAR) also slipped 0.1% to £115.99.

A statement by the group read: “The absolute ADR level is the highest for any April in STR’s London database. STR analysts attribute the decrease in occupancy to supply growth, and to a lesser extent, the Easter calendar shift from early April last year.”

It comes as UK hoteliers saw an “encouraging start” to the year as a result of a “healthy rise” in hotel demand from international travellers.

The findings from Expedia Group, drawn from Q1 2019 data (January, February, March), show that demand for trips made by international travellers increased when compared with the same period last year, with major metropolitan cities and several regions across the country boosted by double digit year-on-year growth.

Outside of London, a number of major cities experienced notable growth, including Manchester (over +10% year on year), Edinburgh (+15% year on year), Glasgow, Leeds and Cardiff (each +10% year on year).

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Brexit not deterring business travellers in the UK

Advantage Travel Partnership, the UK’s largest independent travel agent and travel management company (TMC) consortium, revealed the findings of its 2018 Hotels Market Report which shows that the UK regional capitals are performing strongly with overall room nights booked growing by 8% across the top 250 UK cities.

London continues to be business travellers’ favourite capital for work trips with 663,000 room nights booked in 2018, an increase of 5% when compared to 2017. But Edinburgh experienced the highest level of growth in 2018 with room nights booked increasing by 16%, Belfast was up 13% and Cardiff up 5%.

The 2018 Hotels Market Report analyses data from corporate hotel bookings made between January and December 2018 by Advantage’s TMC members, who represent around 40% of the UK business travel sector, highlighting business travel trends and booking behaviour.

The report also shows significant growth for cities in the Midlands and North East, with Derby seeing the highest growth with 31% more booked room nights compared to 2017, while York, Nottingham and Gateshead also saw double-digit percentage increases.

Top Ten UK Cities – Booked Room Night Percentage Increase (year-on-year), January – December 2018

Derby – 31%
York – 22%
Plymouth – 21%
Inverness – 20%
Nottingham – 18%
Edinburgh – 16%
Reading – 15%
Belfast – 13%
Norwich – 11%
Gateshead – 10%
Global Results

The business world continues to travel widely, with the 2018 Hotels Report recording that hotel demand remains strong in many international cities with New York, Auckland, Wellington, Houston, Paris and Sydney topping the Advantage Top Cities list. In total, worldwide volume grew by over 393,000 room nights, a total increase of 8.74% compared to 2017, indicating that SME (Small and Medium Enterprise) corporate accounts continue to perform strongly.

The total number of bookings made by Advantage business travel members in 2018 saw similar growth – up 8.76% – while the average length of stay remained constant, at 1.87 nights. Increased demand and higher occupancy globally meant hotel rates have increased by US$2 to an average daily rate (ADR) of US$169.41.

The report also looks at trends on bookings and ADR for cities and locations around the world, with New York once again topping the list as the highest volume worldwide city outside the UK, with 90,799 room nights booked at an average rate of US$395.97 per night. Increases were also seen in Bangalore (up 54%), Kuala Lumpur (up 36%) and Boston (up 27%).

Neil Armorgie, Global Product Director at Advantage, commented: “It is clear that the corporate hotel sector continues to grow, with another significant increase in bookings year-on-year, made by independent TMCs. Despite continued uncertainty in both the global and UK economies including Brexit, hotel room night demand is at record levels in many destinations, providing a welcome boost for our members.”

“Although not all destinations in Britain saw an increase in room nights booked, ADR remained strong. It is also positive to see particularly good performance in both major cities and regions such as the East Midlands and North East.”

The report is representative of hotel bookings made across most of the major international and independent hotel groups including: Accor, Apex Hotels, Choice Hotels, Citadines, Clayton Hotels, Design Hotels, The Doyle Collection, Edwardian Hotels, glh Hotels, Hallmark Hotels, Hilton, HotelREZ, Hyatt, House of Daniel Thwaites, IHG, Jurys Inn & Leonardo Hotels, Loews Hotels, Macdonald Hotels, Maldron Hotels, Melia Hotels International, Millennium Hotels & Resorts, The Montcalm Hotels, NH Hotels, O’Callaghan Collection, Omni, Park Plaza, Pegasus, QHotels, Quest, Rotana, Radisson Hotel Group, Sabre Hospitality, Small Luxury Hotels, TravelClick, Travelodge, Village Hotels Club, WorldHotels Collection and Wyndham Hotel Group.

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Guests value ratings over brand value, study finds

Guest ratings and price are more influential than brand reputation when travellers book hotels, according to a new report – ‘The Big Decision: How travellers choose where to stay’ from Expedia Group and Unabashed Research.

The study’s 903 participants were asked to select two destinations; a familiar domestic city and an aspirational international location that was unfamiliar. The result? The report stated that ‘Price was by far the most important factor when picking a hotel, across both well-known and unknown brands.’ And ‘Interestingly, hotel brand carried a marginal advantage over the other attributes.’

“Our results revealed that guest ratings have a strong influence on traveler selection. Travelers are willing to pay more for hotels with higher guest ratings, and considerably more so than for premium branding.” according to the white paper by Expedia Group’s Abhijit Pal, head of research, lodging partner services.

“This shows that guest ratings have essentially leveled the playing field for independent hotels, as more potential guests seek out third-party endorsements for hotel properties they are considering,”

“Today’s brands succeed by filling up their hotels with business and group travellers, and for many second-tier business destinations, it may feel impossible to be an independent hotelier. Online marketplaces can help convince leisure travellers, as well as road warriors and their employers, to choose independent properties.”

So one of the study’s main takeaways is it “shows that a non-branded independent has opportunity to compete against an established brand player for traveler preference by focusing on the guest experience.”

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London hotels achieve record revpar figures for March

Preliminary March data shows demand outpaced supply among hotels in London, leading to a 2.1% occupancy increase.

Based on daily data from the month, London reported the following in year-over-year comparisons:

• Supply: +2.5%
• Demand: +4.6%
• Occupancy: +2.1% to 81.6%
• Average daily rate (ADR): +1.7% to GBP138.13
• Revenue per available room (RevPAR): +3.8% to GBP112.68

The absolute RevPAR level is the highest for any March in STR’s London Database. STR analysts attribute the performance to several events in the market—a pair of Six Nations rugby matches (9 March and 16 March) and the Passenger Terminal EXPO (26-28 March).

Keeping checking back for the full March results that will be released by STR later this month.

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Hotels faced a tough start to 2019

According to the latest data tracked by HotStats, the UK hotel industry has had a rough start to 2019, with rising costs biting into profits.

Total gross operating profit per room came in at £35.44 in February – a 4.4 per cent drop on the same month in 2018.

Despite a 0.5 per cent increase in revenue per available room (revpar), non-room revenues dropped 0.4 per cent to 36.2 per cent of total revenue. This included a 0.7 per cent decrease in food and beverage and a 1.3 per cent decline in conference and banqueting.

Still, hotels managed to hit a 0.2 per cent gain in overall revenue. However, this was wiped out by rising costs, including a 0.5-point increase in payroll as a percentage of total revenue to 32.8 per cent.

The biggest cost increase proved to be utilities, which rose 8.7 per cent year on year to £5.98 per available room – equivalent to 4.8 per cent of total revenue. This was followed by an 8.2 per cent hike in sales and marketing expenses.

As a result, profit contribution at UK hotels was recorded at 28.7 per cent of total revenue, which is far below the average of 38.2 per cent for the 12 months to February.

Michael Grove, director of intelligence and customer solutions, EMEA at HotStats, said: “While top-line numbers have actually been positive – albeit slightly – rising costs are having an adverse impact on flow through.”

In contrast to the UK averages as a whole, properties in Cardiff saw an 8.9 per cent year-on-year increase in profit per room, owing largely to Wales hosting England in the 2019 Six Nations Rugby tournament.

But in Edinburgh, despite the city hosting Six Nations matches, gross operating profit for hotels fell 27.7 per cent – the Scottish capital’s sixth consecutive month of profit decline.