For the second consecutive year, the multi-billion dollar global meetings industry will experience solid increases in key economic impact indicators including spending, international travel, employment and training budgets underscoring overall fiscal and corporate health, according to FutureWatch 2005, an annual report by Meeting Professionals International (MPI) and American Express.
 
Globally, meeting planners in segments such as corporate, independent and association/non-profit, forecast a 5 percent budget increase in 2005, building on a 3 percent increase in 2004. Beyond year-over-year percent estimation, planners also divulged actual budget figures for 2005.

When compared to 2004, there is more room for optimism in 2005 as corporate planners report average budgets of $7.1 million vs. last year's $5.3 million; independent budgets climbed to $11.8 million over $6.1 million; and association budgets up to $4.8 million from $1.4 million. The continued growth of independent planner budgets indicates outsourcing will likely remain a viable industry model even upon full market recovery.
 
"The health of the meetings industry mirrors that of business and the economy in general," said Colin Rorrie Jr., PhD, CAE, president and CEO of MPI. "Increased meeting spend is fuel for a worldwide economic engine. Anecdotal predictions of the demise of face-to-face meetings due to technology or economic challenges haven't come to pass. Rather, organizations are recognizing the value of events as a strategic business tool."
 
For suppliers, overall revenues are projected to increase 13 percent in 2005 over 10 percent in 2004, increasing a gap between planner spend and supplier revenue projections to 8 percent vs. 7 percent last year. While not surprising, the disparity indicates that 2004 predictions of a meetings industry swing back to a sellers' market is less likely.
 
"Meetings industry suppliers are hoping to capitalize on positive economic trends and continue to set aggressive revenue goals," Rorrie said. "The differential against planner budget expectations indicates 2005 will continue to be a buyers' market, creating supplier opportunities to demonstrate value as they face market share battles to ensure individual revenue goals are met."
 
There also are expectations for sustained increases in international meetings and business travel, employment and training budgets. From Europe, outbound meetings will increase to 28 percent of all planned meetings in 2005 over 17 percent in 2004, and from Canada, 29 percent of meetings will be international in 2005 vs. 23 percent in 2004. In both cases, the United States is the top destination choice.

U.S. planner expectations for outbound meetings are up one percent to 23 percent, primarily to Europe and Canada. Overall, planner and supplier respondents equally expect industry employment to grow by 4 percent and training budgets to increase by 7 percent and 9 percent respectively.
 
New Standards for Operating Efficiency
 
"Business is picking up and budgets are expanding, but the meetings industry will not return to business as usual," Rorrie said. "The 'do more with less' mantra and shortened lead times adopted during a tight economic market are now standard operating procedure. Planners feel pressure to justify the value of their jobs, while suppliers must justify the value of products and services in an increasingly competitive environment."
 
To create efficiencies, technology, standardized meeting management practices and strategic sourcing strategies are becoming more prevalent in meetings management, making consolidation -- and commoditization concerns that come with it -- a nearer-term reality. In fact, 18 percent of planners and suppliers (up 13 and 5 percent respectively over 2004) report commoditization will have the greatest impact on meetings in 2005.
 
In the industry's first year-over-year look at the pace of meetings management, the elements which when combined define a full strategic sourcing solution, all grew significantly. Fifty seven percent of planner respondents have fully or will implement meeting purchasing policies and procedures; 54 percent have or will standardize purchasing channels; 50 percent have or will have preferred supplier programs; and 48 percent have or will implement technology solutions for meeting planning.
 
Julie Hylton, director of industry development for American Express, added, "Executives are embracing procurement's strategic role in bolstering bottom-line results across organizations. This means that meeting professionals, who have typically operated outside procurement's view, are no longer exempt from the process. They must understand how procurement officers are impacting meetings management, become fluent in the language of business, and articulate the strategic value meetings bring to the bottom-line. It is no longer acceptable to focus solely on tactics."
 
Better Business Relationship to Prove Value
 
In FutureWatch 2005, 67 percent of planner respondents indicate they always or frequently measure ROI, with post-event attendee surveys the measurement tool of choice followed by meeting budget and revenue reports, and client feedback. But 68 percent of suppliers indicated planners seldom or never ask for help in measuring ROI, signaling a need for partnering to measure and articulate tangible meeting results.
 
While 71 percent of planners and suppliers equally express the desire to work as partners, there is room for improvement in the business relationship. Suppliers indicate a need for more honest disclosure of budgets (67 percent), more lead time/flexibility (56 percent), more comprehensive communication (49 percent) and more detailed RFPs (45 percent) from planners. Planners indicate they want more flexibility (85 percent), faster response to requests/inquiries (58 percent) and more detailed, transparent quotes (42 percent) from suppliers.

Additional Key Findings

• Cited as a major issue in 2003 and 2004, attrition concerns dropped a significant 14 percent among planners and 7 percent for suppliers, proof of results when both sides of the business tackle an issue.
• Eighty-five percent of suppliers plan to invest in Web site enhancements; 67 percent in wireless technologies.  As opposed to previous years, suppliers will not increase investments in other technology categories, such as guest room and audio/visual.
• Planners expect to use the Internet 21 percent more to research and 4 percent more to book venues in 2005.  This is a slight increase in Web research and a slight decline in booking over 2004.

"Beyond providing a state of the industry, FutureWatch 2005 is a reference point for MPI as the organization executes Pathways to Excellence, a strategic plan developed to propel members, and the meetings they implement, to a more strategic level, ensuring the business of meetings remains a dominant force in the global economy," Rorrie added.

Now in its third year, FutureWatch is a comparative study of meeting planner and supplier perspectives worldwide, reporting three-year trending and 2005 projections. More than 16,500 MPI members were invited to participate with 1,851 responding -- 52 percent corporate, independent and association planners, and 48 percent suppliers from hotels, conference centers, airlines, CVBs and more. Dallas-based Syndics Research, an independent firm, conducted FutureWatch 2005. The full report is available at http://www.mpiweb.org .