While the industry is anticipating moderate growth this year, it’s important to understand the coming trends to keep your investment at the top of its game.
The pulse of the group customers’ mindset is top of mind for hotel operators and owners. These changing expectations invite business-building questions that can define new opportunities for 2024 and beyond and help create innovative answers tailored to market demand.
For operators, that may start with what challenges do they face to justify meetings delivering impactful outcomes for their business? How can hospitality partners continue to deliver service excellence with increasing attendee expectations for wow factors and luxury experiences?
For hotel owners, understanding the trends driving the end-user customer experience can help your management team optimize performance. The priority is how to use this knowledge to get ahead of the curve to maximize revenue opportunities.
The group customer pulse
The preliminary results from the 4Q 2023 Encore Planner Pulse survey show that almost half of meeting professionals are increasing budgets next year and 35% expect them to remain flat, while less than 15% report a decrease.
This outlook is similar to what we heard in early 2023 and illustrates a baseline understanding that the cost of doing business has increased and, therefore, budgets must increase.
When asked if forced to cut budgets, planners' top areas included décor, entertainment and off-site excursions. That should give us all a sense of relief that our group customers feel the value that the hotel, food & beverage and event technology experiences deliver to the success of their event.
But here’s where we still have our work cut out for us: When asked in which areas they are most challenged by their stakeholders to defend their spend, both event technology and food & beverage rank in the top five areas of concern.
Our takeaway is that the path to continued growth, especially in areas outside of the anticipated moderate rate growth such as event technology and food & beverage, will require us to innovate and effectively communicate the value of the total event experience. We have to give our customers a reason to spend in these areas, and that comes down to delivering an exceptional experience and extending the ROI and reach of the event.
Insights for the future
In 2023, Encore embarked on a journey with a leading research firm to conduct qualitative research across business leaders and influencers around the globe, as well as in-depth quantitative research among event professionals. What we’ve learned: The shifting cultural values of our time that we’ve all felt, seen and read about in the news over the last two years are quickly actualizing. That shifting culture should impact how we serve our teams and our customers in 2024 and beyond.
Insight 1: There’s increased interest in the individual, societal, organizational and cultural impact of events.
Reasons to believe:
• 74% of global adults believe businesses have a responsibility to make society fairer.
• 39% report that ‘being memorable’ is the second most important thing in events.
Business implication: There’s opportunity to cater to the value system of the attendees by innovating aspects of sustainability and DEIB throughout the experience to incrementally deliver a “return on emotion” that makes events more memorable. Delivering ROI and ROE arms our customers with more data to support their business case for meetings.
Key questions to ask your management team:
• How are we rethinking how we use space and maximize time in the conference program to drive incremental revenue?
• Are we looking beyond traditional ballroom space to enhance the guest experience and increase revenue per square foot?
• How are we partnering with the event technology and the food & beverage teams to create immersive experiences as an upsell opportunity?
Emerging tools for AR, AI and virtual experiences will require not just an elevated
experience, but one that is measurable...however, the human
connection remains a top value
Mike Stengel
Insight 2: Emerging tools for AR, AI and virtual experiences will require not just an elevated experience, but one that is measurable as we begin to see more adoption; however, the human connection remains a top value.
Reasons to believe:
• 32% of global adults believe “connecting with others” is a top priority for events, behind “being memorable.”
• 69% believe “humanness”—seeking to connect with real people—is an extremely or very important personal value.
Business implication: While the value system that in-person, real-life connection is paramount, it will inevitably need supplementation from technology to deliver the wow factor, personalization an immersive qualities that have taken hold in the zeitgeist. Innovations in event technology and production are a vital part of total revenue growth and the customer experience.
Key question to ask your management team:
• How is your event technology partner using core tech and innovation to create more immersive, exciting experiences, and therefore incrementally increasing AV revenue?
Insight 3: A sense of belonging is non-negotiable at events.
Reason to believe:
• 52% of global adults believe belonging is an extremely or very important personal value.
Business implication: We should evaluate how operators are training their teams to continue to elevate personalized, empathetic service and exceed customer expectations in every facet of the event experience. Encore has taken a page from our esteemed hospitality partners and spent the last year entrenched in training for customer experience with unmistakable improvements, most notably marked by being named as the Official Event Solutions Partner to “Forbes Travel Guide”. In 2024, we see the opportunity for all organizations, including ours, to elevate CX through the marriage of smart internal technology and strong cultures of belonging that will make our teams’ workdays more effective, fulfilling and connected to our greater purpose to serve our customers and our communities.
Key question to ask your management team:
• How invested is the hotel in training for the next year?
• How invested are your key partners to deliver the service that matches your brand promise?
When looking to maximize event trends to drive incremental revenue, the path can seem daunting to owners, management companies, and the venues themselves. Knowing your end-user customers, keeping your hand on the pulse of the industry and ensuring you have the right partners, will ensure a smooth journey toward enhancing revenue streams, providing value and improving overall client satisfaction.
Mike Stengel is senior vice president, strategic partnerships & venue relations, Encore.
The views and opinions expressed in this column do not necessarily reflect the opinions of Hotel Investment Today or Northstar Travel Group and its affiliated companies.