Corporates tighten their belts


Global political and economic uncertainty, coupled with growing concerns about the safety of business travellers, is resulting in hesitancy in the meetings sector, which analysts predict will probably see some slowdown in growth in the coming year. By Liesl Venter

If 2016 taught meeting professionals anything, it was to prepare for the worst and hope for the best. By the look of things, 2017 won’t be any different.

Major political upheavals, such as Brexit and the election of Donald Trump as US President as well as the growing threat of terrorism and viral outbreaks around the world, have brought uncertainty and everywhere industries are treading lightly.

Global uncertainty has spread through the meetings industry, says Issa Jouaneh, senior vice president and general manager, American Express Meetings and Events, commenting on the company’s annual global meetings and events forecast for 2017. “This year we are seeing a shift in sentiment,” he says. “While this sentiment has yet to have a meaningful impact, we do expect this shift may result in some slowdown in the growth we have witnessed over the last couple of years.”

American Express’s report also forecasts that budgets are likely to be similar to 2016, resulting in overall activity, including number of meetings or number of attendees per meeting, even seeing a decline. Predictions of flat meeting spend are also being coupled with an increased focus on return on investment (ROI).

Adriaan Liebetrau, former ceo of Saaci, says South Africa is not immune to the global pressures. “We are living in very uncertain times and South Africa is facing its own share of political and economic woes. We don’t expect to see budgets increase significantly in 2017 and there is a definite move toward shorter events with fewer attendees. There is a major focus on ROI for the company,” he says. This means companies will be looking at the importance of an event, be it a meeting or a conference, and how the event will impact on the company and improve operations.

As unpredictability remains the order of the day, increased growth for the MICE sector is near impossible, says Liebetrau. “I don’t foresee a fantastic year ahead but that does not necessarily mean it will be a bad year. Procurement is still very tight. That is not going to change quickly, even if the economy does turn and become very good. Increased budgets are not something we will see this year.”

Adjusting to these uncertain times will be essential for meeting professionals, he says. “Innovation is going to continue to be a trend. We are going to have to be more innovative in our approach and our delivery. We cannot continue doing the same thing and expect better results or even the same results.”

It is a sentiment echoed in the American Express report. “As budgets decrease and tighten, meeting planners and suppliers will need to consider creative and innovative ways to encourage meeting growth,” it reads.

According to the report, 2017 will be a year of making adjustments. “With property and other related meeting costs rising, many organisations appear to be adjusting the number and size of their meetings to stay within their budget constraints. Holding fewer meetings with more attendees or a more targeted attendee list is one option, as is using multiple local meetings to replace a larger meeting that requires significant travel,” reads the report.

Monique Swart, founder of the African Business Travel Association, says political and economic factors locally and internationally will also impact the business travel environment.

“A much stronger ROI is required for many corporates in relation to business trips and we have seen a reduction in travel in many corporations across South Africa and the rest of Africa.  We are also seeing companies reducing their travel classes – economy for all as opposed to business class – and at times reducing their hotel accommodation options to the cheapest possible rates.

“We also see companies sending fewer staff on conferences and requiring the one or two they do send – as opposed to four or five – to return and report back to their teams regarding what was learned during conference, such as sales leads garnered and so forth.

“I am still very positive about business travel in 2017,” says Swart. “For the most part, companies can’t avoid travelling and although additional measures are being looked at to reduce travel costs, for the most part they continue to travel.”

Tech, tech and more tech

Several international experts, including the American Express report, forecast increased use of technology across all aspects of meetings. This includes meetings management technology in an effort to use data collected to inform programme decisions, get a handle on spend and even deliver better events. Increased adoption of mobile apps will be a definite as they are not only seen as an engagement tool but also for measurement, providing necessary feedback and deep post-event insight.

Liebetrau says in South Africa, while the technology uptake is slower than elsewhere in the world, there is a definite increase in the use of technology and in the realisation of the benefits it brings.

“We expect to see more and more technology being applied in our sector in the coming months and years.”

Technology, he says, also allows for the creation of the much-expected experience that is now just about synonymous with MICE.



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