Latest Research - Business Events

The Impact of Business Events

What could they mean for coastal resorts?

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“The business events sector is now recognised globally as a major driver of national, regional and local economies, creating beneficial impacts on the host destination.�

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The Impact of Business Events to a Coastal Destination

Introduction

The business events sector is now recognised globally as a major driver of national, regional and local economies, creating beneficial impacts on the host destination.

Quite apart from the money spent by the buyers who actually pay for the events, delegates generally spend more per head than holidaymakers and other leisure travellers.

In 2011, for example, according to the government-backed International Passenger Survey, business and conference visitors to the UK from overseas spent on average 72 per cent more per day than leisure visitors.

And it’s not just international delegates who bolster local economies.

Business event attendees, wherever they’re from, dispense largesse in many ways. Aside from staying in hotels, they book taxis, patronise local bars, cafés and restaurants, sample the local nightlife, buy newspapers, shop for gifts, and much else besides.

Individually, their economic contribution may seem relatively small.

Collectively, and particularly since they place such a small burden on local facilities, their economic impact can be considerable.

72% Higher day spend for business and conference visitors, than leisure.

In truth, many coastal resort destinations have been missing out on the business events market. Big cities like London, Manchester, Liverpool, Birmingham and Cardiff provide stiff competition.

However, although the last few years have been tough, the market is growing, and event organisers are always looking for new destinations and venues. For the UK’s seaside towns, this represents a major opportunity, just waiting to be grasped…

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SO WHAT IS A ‘BUSINESS EVENT’?

The term ‘business events’ is shorthand for what travel professionals generally refer to as ‘the MICE market’- meetings, incentives, conferences and events.

‘the MICE market’

Meetings are generally small-style functions with a single, specific purpose, such as staff training sessions, focus group gatherings, educational seminars and the like.

Meetings, Incentives, Conferences and Events.

While incentives represent more informal events, often with a strong leisure and entertainment element, designed to reward an employee’s past performance and encourage future productivity and loyalty.

Attracting large-scale conferences, staged over several days, with a diverse agenda, generates fierce competition partly due to the high repeat business they generate.

Favoured by trade associations, such as the Police Federation or the Royal College of Nursing, and special interest groups like political parties or the CBI, these conferences can transform the local visitorfacing economy, from the smallest newsagents to the flashiest, upscale restaurants. Entice a political conference, and the PR spinoff is limitless.

The catch-all term ‘events’ covers a huge range of activities, from trade shows and exhibitions, to society weddings and charity gala dinners.

The widely-accepted definition of a business event is “an out-ofoffice meeting of at least four hours’ duration and involving a minimum of ten people” – although, as can be seen from the above, they are often much bigger and much longer.

The sector is sometimes known as ‘business tourism’ to differentiate it from ‘transient business travel’, which covers short out-and-back trips, usually by lone travellers, for example to meet a specific client or supplier.

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The Impact of Business Events to a Coastal Destination

WHAT IS THE STATE OF THE MARKET? The short answer is “buoyant, but highly competitive”.

Currently, it is estimated that more than 200 countries – and many thousands of towns and cities within those countries – are active in the sector.

WHAT ARE EVENT ORGANISERS LOOKING FOR?

To add to the mix, new or rejuvenated destinations are constantly challenging for a slice of the business events cake. In the UK, classic examples are east London and Liverpool’s docks – once virtual no-go areas, they have been transformed (within a relatively short space of time) to become major business event destinations.

For event planners, buyers and organisers, the crucial measures of success are the event’s potential return on investment (ROI) and return on objectives (ROO).

It’s not hard to see why. A July 2013 study published by the Meeting Professionals International (MPI) trade body, in conjunction with Leeds Metropolitan University, found that the sector:

The first is, by and large, a financial consideration (will delegates be more productive as a result of their attendance?), while ROO, generally speaking, concerns mindset change – persuading staff to adopt new sales techniques, for example.

• generated more than 1.3 million meetings in 2011

To achieve those returns, delegates need to enjoy a positive visitor experience both inside and outside the event venue. The all-important presentation interrupted by a fire alarm test can be just as irritating as inadequate car park signage or an inattentive restaurant waitress.

Destination management organisations cannot control the content of a business event, but they can and should influence its environment.

• was responsible for expenditure by delegates and partners of just under £40 billion • directly generated 423,500 full-time equivalent jobs across a wide range of industries (a figure which rises to more than one million when indirect and induced employment is considered • in total generated £58.4 billion in gross domestic product (GDP) in 2011.

Equally, the event organisers themselves will welcome a positive visitor experience, from a professional point of view. A single point of contact, a dedicated event team, a responsive help-desk (capable of sourcing anything from badge lanyards for delegates to a bouquet for the chairman’s wife) all enhance the likelihood of repeat bookings.

More recent data from another trade body, EVCOM, reveals that: • there were an estimated 1.25 million business events in the UK in 2013, involving an estimated 91 million delegates (up from 85.5 million in 2012)

For coastal resorts in particular, there is an added bonus – business event participants who enjoy a positive visitor experience may well return at a later stage as leisure visitors, making an additional contribution to the local economy.

• Nearly two-thirds (64 per cent) of those surveyed expect business to be up in 2014 – only six per cent foresee a decline in business.

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THE BUSINESS EVENT BENEFITS Business events cater for the high-quality, high-cost and, therefore, high-yield end of the visitor economy. Put simply, event attendees spend more – particularly if they can claim expenses – than holidaymakers, and event organisers spend more than tour operators.

Furthermore, although business events can and do take place throughout the year, relatively few are staged during the peak holiday periods, simply because it is harder to fill delegate places at those times. This makes them an ideal “fit” for coastal resort destinations looking to increase shoulder-season revenues.

That year-round nature of the events market also leads to the creation and sustenance of permanent jobs, as opposed to the seasonal, temporary jobs which are a frequent characteristic of the leisure tourism sector. Higher local incomes mean higher local spending power, and that means even greater local economic impact.

Many business events – particularly larger conferences – attract expert participants, not just as delegates, but also as speakers and panellists. Local companies and organisations, even if they are not remotely connected with the business tourism sector, can benefit from a pool of knowledge, experience and ideas which might not normally (or easily) be available to them.

Ultimately, destinations which successfully and regularly attract business events become known as business centres in their own right. Local entrepreneurs embark on new ventures, and outside investors are drawn in.

WHERE ARE WE GOING TO PUT THEM ALL? Against this background, coastal resorts keen to capitalise on the business events sector should first determine their true position in the marketplace.

Relatively few coastal destinations boast purpose-built conference centres, but almost all will have facilities which could attract at least some elements of the business events market.

Larger hotels will nearly all have function spaces but, given the market’s appetite for quirkier venues, it is important to consider alternative options. Cinemas and theatres, council chambers, museums and galleries, stately homes, sports venues and leisure centres – almost anywhere has the potential to become part of the business events offer.

Nightclubs, usually deserted during the day, represent a vastly under-exploited opportunity.

Smaller hotels will have fewer options. Most event organisers prefer to accommodate all their delegates in one place, so limited room-stock and limited function space will inevitably lessen their appeal to many event organisers.

However, it is worth noting that even very large companies – banks and building societies are a prime example – regularly hold “regional” meetings with relatively few delegates. Most will be day visitors, but it all adds up.

Trade body EVCOM, mentioned above, estimates that the average cost per delegate of a non-residential event works out at more than £40, excluding VAT. Organisers whose attendees need to stay overnight reckon on spending, on average, more than £130 per delegate per day.

There is also some demand for multi-venue functions, whereby the sales team holds its training seminar in one place, the IT crew convenes in another, and the finance department foregathers somewhere else, before coming together for a final collective briefing.

In short, lack of space does not mean lack of opportunity.

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The Impact of Business Events to a Coastal Destination

ADDING VALUE

MIXING BUSINESS WITH LEISURE

As indicated previously, the business events market is hugely competitive. Few destinations can hope to match the draw of major cities, whether at home or abroad.

While there is an obvious overlap between business tourism and leisure tourism, there are also very clear differences, both from the clients’ perspective and from that of the suppliers.

And in pitching for ‘second-tier’ business, coastal resorts find themselves going head to head not only with inland towns and cities like Cambridge, Bath or Stratfordupon-Avon, but with each other.

Principally, of course, the main motivation for leisure travel – whether it is for a day trip, a weekend break, or a full-blown vacation – is to ‘escape’ from the humdrum world of work. The main motivation for business travel, and for business events in particular, is to expand and enhance the working life.

‘Differentiation’ is the name of the game. With return on investment and objectives uppermost in their minds, event buyers and organisers understandably lean towards those destinations which can add to and enhance the delegate experience, ideally at little or no cost to themselves.

Event delegates are not on holiday. While event organisers will often seek to incorporate at least some leisure activities into an itinerary – even if it is only a buffet lunch at the conference hotel – the primary emphasis is on information and education.

Again, the opportunities are almost endless. Examples include event-specific windscreen stickers entitling delegates to cut-price (or free!) parking, booklets of vouchers offering price reductions at participating restaurants and attractions, exclusive late-night shopping opportunities, ‘goody-bags’ and even hampers of local or regional produce, and many more.

The leisure traveller will spend an hour or more over that buffet lunch; the business event delegate may well wish spend no more than 45 minutes; he or she has an agenda to adhere to.

The holiday operator is unlikely to enquire about the size of the hotel ballroom; the event organiser will need to know the precise measurements (including, in some cases, ceiling heights) and seating configurations and capacities.

Other added-value initiatives are almost subliminal.

More often than not, delegates will be unfamiliar with the destination they are visiting, so would welcome a greeting letter outlining local facilities and attractions, along with a pocket-sized street map.

The leisure traveller might ask for a restaurant recommendation, or for directions to a local attraction.

He or she is unlikely to ask, late in the evening, for 24 photocopies of a 40-page legal document.

Similarly, although perhaps only practicable for larger events, temporary road signs directing motorists to their ultimate destination, along with information displayed at rail station taxi ranks (including fare details), will add to the visitor experience.

From the perspective of the destination marketing organisation – the intermediary – it is crucially important to recognise, understand, and cater to, two very different market sectors. Business tourism might come under the aegis of the local tourism board, but it requires (and demands) a level of professionalism not normally found in the average Tourist Information Centre.

Most event organisers work to a very closely-timetabled schedule – they tend to frown upon ‘free time’, which is all too often turns into an ‘escape’ from the event objectives. However, offers/suggestions of organised add-ons (wine tastings, boat trips, guided tours and the like) which can be built into delegate itineraries at an early stage will generally be well-received.

One size does not fit all.

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THE STARTING POINT Most coastal resorts – indeed, most towns and cities, regardless of their geographical location – will already reap the rewards inherent in the business events sector, even if they do not recognise the fact.

Companies and organisations hold out-of-office meetings, host business lunches, and stage retirement parties, without troubling the destination marketing organisation. Consequently, for those keen to exploit the business events market, the starting point is usually to be found on the doorstep.

The National Coastal Tourism Academy’s “home town”, Bournemouth, has a well-established financial services sector employing 11,500 people. Its ‘digital economy’ is already important and growing rapidly.

That may not hold true for other destinations, but the principle remains the same. These people, and their employers, hold meetings, attend conferences and seminars, and visit trade shows. They entertain clients, and are entertained by suppliers Having identified the key local business interest sectors, it makes sense for them to form a focus in identifying and bidding to attract conferences and other business events.

The focus should not, however, be restricted to ‘corporate’ events. Local special interest societies, charitable and other not-for-profit organisations, sports clubs, and many other groups can provide invaluable business event ‘leads’.

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The Impact of Business Events to a Coastal Destination

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THESE FINANCIAL TIMES In his Autumn Statement of December 2014, Chancellor of the Exchequer George Osborne acknowledged – in broad terms – that HM Treasury’s outgoings (£732 billion) exceeded its income (£648 billion) by £84 billion.

The age of austerity is far from over, continuing cost-cutting is almost inevitable, and local authorities will undoubtedly feel the pinch. Quite apart from reducing their overheads, councils will need to demonstrate (to central government and to the local electorate) that what they do spend, they spend wisely.

Tourism in general, and business tourism in particular, is on an extraordinary upward curve.

Business travel spending in the five key European markets – the UK, Germany, France, Spain and Italy – is expected to reach €147.1 billion (£117.7 billion) by the end of this year, according to the latest forecast from the Global Business Travel Association (GBTA) The 4.9 per cent growth over 2013 will be followed next year by a further 6.6 per cent increase in 2015, taking total expenditure to €156.8 billion (£125.4 billion), the Association predicts.

The positive outlook comes despite the fact that economic conditions throughout Europe continue to be “sluggish”, with only 0.8 per cent growth in euro-zone GDP in the first quarter of 2014 and no growth at all during the second quarter.

Latest figures (Q3/14) from the influential Guild of Travel Management Companies (GTMC), whose business travel agency members account for more than 80 per cent of all managed travel bookings by UK companies, emphasise the potential.

The Guild’s quarterly transaction survey reveals that while air bookings for the July-September period were up only one per cent year-on-year, rail and car hire bookings were up eight per cent and 21 per cent respectively.

The figures are not event-specific, but the rise in business trips by road and rail suggests that UK domestic business tourism is on the increase – and in what is traditionally the weakest three-month period for the sector.

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The Impact of Business Events to a Coastal Destination

CONCLUSIONS Since the economic crisis of 2008/9, the global business tourism market has shown itself to be remarkably resilient. Although business travel nose-dived after the collapse of Lehman Brothers and Bear Stearns, it was very quick to bounce back.

The UK’s business tourism sector, both domestic and inbound, is no exception – in many ways, the British recovery process has been both faster and greater than that of many other developed-world economies.

That general trend is reflected in the business events sector. Latest reliable data suggests that while the number of events may still be below pre-crisis levels, the number of participants at those events is increasing.

And, crucially, those participants spend – on average – 72 per cent more than the leisure travellers on whom so many of the UK’s coastal destinations pin their hopes.

Breaking into, and building, the events market is not easy. It requires a sector-specific mindset and a high degree of professionalism.

However, the rewards, in terms of rejuvenated economic activity, can be enormous.

For more advice, support and direction on staging business events, please contact the NCTA 01202 962 566 9

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