Business Tourism

Trends
A summary of recent news and research on
business tourism, focusing on meetings,
conferences and incentives.
March 2011
 Introduction

Business Tourism Trends draws together some of the latest news and research on business
tourism, including market trends and predictions, buyer planning / booking behaviour and
competitor destinations.

The reports and news items which have been used in this update have been referenced under
each item and are all freely available from the publishers’ websites. A list of useful websites is
given at the end.

If you have any feedback or suggestions about this resource, or if you would like to be alerted to the
next issue, please email claire.banbury@visitscotland.com.

KEY INSIGHTS THIS ISSUE

Continuing recovery at a slow and uneven pace throughout the MICE industry. ‘Moderate’ growth is expected, as face-to
-face interaction between companies and a need for an international presence returns. Recent studies have shown that
not all respondents see business travel as providing a competitive advantage, but those who travel consider it to be a
contributing factor to driving revenue.

There is a sense of cautious optimism amongst meeting professionals about the year ahead and companies will
continue to monitor the value of attending events/tradeshows/meetings, and incentives.

As business travel demand improves, earlier booking will be required. Post-recession, companies are now ‘savvy’ at
seeking out the best deals and negotiating, but do expect to pay more. To remain competitive, suppliers will need to
understand their business customer and be able to provide added value to their accommodation, travel and facility
offerings.

Key trends going forward include; the identified need for better collaboration between planners and suppliers, good
quality venues and facilities, and greater content for MICE. Being able to meet corporate social responsibility requests
will give providers a competitive edge, sustainability will remain a key objective for companies, and growing usage of
technology will occur within the industry.

Incentives are on the increase again but will on the most part continue to be shorter, with domestic or short-haul travel
still dominating. Increasingly suppliers are seeking to attract in particular the US market to their luxury destinations by
offering a guaranteed dollar rate. This allows incentive buyers to book with confidence in an environment where the
stigma attached to incentives is fading a little. Companies are now looking to reward and motivate staff so last minute
booking will become difficult for planners as demand grows. Golf and spa remain popular, although some suppliers are
starting to diversifying their offering beyond these popular activities, in a bid to attract old and new business. Suppliers
are also branching out to provide ‘luxury all-inclusive’ options.

Full year provisional figures for UKTS and IPS will be available in May 2011. Look out for an update
on our corporate website : www.visitscotland.org

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 Meetings market

Meeting trends for 2011

The Meeting Professionals International (MPI) research study ‘FutureWatch’ examines the views of global meeting and event
professionals from across 20 countries. The report highlights top trends that are expected to affect the sector, as well as
relationships, technology and greater collaboration between planners and suppliers. The volume of meetings, number of
attendees and overall spend is expected to increase ‘moderately’ throughout the global meetings and events sector. There is a
projected increase of 8% for meetings planned for 2011, and a 5% increase in the average spend per meeting.

A number of reports have highlighted the potential increase in the industry ‘dabbling’ with virtual channels, and social media this
year. Technology and alternative virtual channels are predicted to become more mainstream as interaction, innovation and
‘connectivity’ become more important, perhaps changing the way the industry works and communicates. The online
environment is no longer seen as a threat to the live event circuit, but as a tool to deliver a greater impact and involve even
more professionals.

Meeting and event suppliers will increasingly be looking at ways to attract potential business, understanding what meeting
professionals want from the experience expected to meet corporate social responsibility requirements, as company
commitment to sustainability and CSR continues. Planners stated that there will be an increase in meetings planned in the
coming year, and mirroring this, suppliers expect more meetings, as more proposals are being prepared.

Whilst key markets build in strength and more outbound international travel is expected; Americans, Canadians and Europeans
are still likely to travel within their own region as increased budgets are met with a rise in the cost of delivering meetings and
events.
Source:MPI

Association Meetings continue to grow

The Association Management Companies Institute reported that the demand for events for industry
associations rose in 2010. 75% stated that they have seen an increase in requests for proposals and
there is also growing demand for Associations Meetings management in 2011. ICCA/IMEX have also
reported that attendance at International Association Meetings is increasing, however revenue is
down from exhibitors and sponsors. Associations have been the key to keeping the industry afloat
throughout the recession, however there is increasingly difficulty due to reduced corporate sponsor
budgets.
Association Meetings Forecasts and Trends Report 2011 found that the economic downturn had no
significant impact on three-quarters of respondents last year. In terms of changes to their meetings behaviour, around half of
respondents still intend to select lower cost destinations and venues. Few respondents plan to significantly cut down the cost or
the number of future meetings. Association meeting planners are continuing drive to deliver quality and value for delegates to
ensure there are good attendance levels.

For planners, there is a constant need to deliver conference programs that ’appeal to the broadest audiences’, some trying to
appeal to younger delegates. According to a PCMA Exhibitions report, approximately 18,000 different association meetings are
organising on a regular basis and nearly 60% of headquarters of associations that organised international meetings in 2009 are
based in Europe.
Source: ICCA World/Meetings Review

Cautious Optimism for meetings in 2011

US hospitality management company, Benchmark Hospitality International, has announced its top 10 meeting trends for the
year ahead. 2011 is expected to finish strongly and already both group and individual business travel has picked up. The
company is seeing a continued focus on ‘value for money’ from its customers. Planners are looking for flexibility and
customisation from providers, as well as ‘added value options’ from accommodation offerings. The number of meetings are
expected to increase but not size. Contradictory to some reports, BHI predict that social media will play a role within the
meeting planning industry ,but it still won’t take hold in the same way as in other sectors. LinkedIn and YouTube will be the
popular B2B channels as companies post videos of meetings and utilise these channels to share and review meeting content at
a later date, reaching out to a wider audience without people needing to be in the room.
Source: Conworld.net

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 Incentive Travel

‘Incentive Industry Trends 2011’

The Incentive Research Foundation report suggests that providers, buyers and suppliers are feeling more optimistic about
the future, and also predict an increase in incentive business over the next 2 years.

The current economic situation means that planners hope to be able to plan and implement incentive programs in less
challenging conditions going forward. Planners are likely to have slightly more flexibility in terms of choosing an incentive
destination as travel budgets start to ease ‘a little’. It is likely that there will be a reduction in the number of days/nights spent
on incentive travel and perhaps a shift from group travel to individual travel packages in 2011, however, this is not expected
to be a permanent shift.

Incentive planners are increasingly under pressure to keep programme quality up, despite budget cuts, due to expectations.
Respondents feel that this is possible, as budgets improved in 2010 are expected to be maintained in 2011. According to the
joint study between the Incentive Research Foundation and Corporate Meetings & Incentives, to meet expectations,
cutbacks have had to take place—particularly in terms of room gifts, cutting the number of qualifiers so that the spend-per-
head is maintained, shortening the length of trips, and also reducing the number of managers in attendance. Despite
predictions of increased incentive travel, some respondents still expect travel and merchandise incentives to be cut.

Source:IRF

Larger Incentive Budgets for 2011

The Reader Forecast survey conducted by IRF for the Incentive Magazine has found that nearly half of respondents will
have a larger incentive budget in 2011 than in the previous year, or it will remain unchanged. In terms of the incentive
programs that will be run in 2011, 17% expect more employee sales recognition programs to be run, more consumer loyalty
programs and more merchandise and gift card incentive programs. Respondents were stated that they are cancelling an
incentive travel program in 2011, plan to let participants know that the program will be back when the economy improves,
replace the incentive with increased or more systematic recognition, or turn the travel program into a business meeting. A
quarter would replace it with a virtual event instead.
Source: Incentive

’Top 11 Incentive Trends for 2011’

The Incentive Research Foundation predictions for 2011 show that improving economic conditions have enabled planners to
plan and implement non-cash incentive (travel/merchandise) programs but there is still an air of fragility around planning
programmes. Fluctuating conditions over the past decade have made incentive providers and planners more able to adapt to
fluctuating conditions and post-recessionary behaviour, resulting in less elimination and reduction of incentive travel.

Trends such as seeking out business from across the globe rather than just domestically will be important to
grow the sector. This will require a greater understanding of what individuals and markets look for in terms of an
incentive product or experience.

There are predicted opportunities for suppliers and providers to leverage from technology. The IRF predicts that the
online environment for both communication and virtual solutions will help programmes move forward.

Understanding extravagance versus necessity - consumers/businesses have gone through a few years of ‘re-
prioritising’ what they ‘need’ in life and this is the same in the business world. Priorities have changed and incentives can
still have the same impact, just without the ‘extravagance’.

The use of ‘games’ as a way of rewarding for performance, enhancing training and motivation. ‘Gaming’ and ‘token
economies’ are increasing throughout the business world, rewarding people with ‘points’ and ‘tokens’ instead of cash
incentives.
Source: IRF

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 Non-MICE business travel news

Deloitte’s Business Traveller Survey reflects the general business travel trends and the expected increase in trips during
2011. Over half of the 1,001 respondents stated that they expect to take the same number of business trips as 2010, and
almost a quarter expect to take more trips in 2011 compared with the previous year. Younger business travellers are
downloading hotel applications via their smart phones. Source: Deloitte

Companies and their business travellers will continue to have restricted budgets along with stricter policies around travel
expenses going into next year, and this is likely to remain over the foreseeable future as this behaviour becomes the ‘new
normal’. A survey by Egencia found that ‘advanced booking of airline tickets’ and ‘encouraging the use of web
conferencing’ will be strong strategies for maintaining and controlling travel costs in both Europe and North America.
Source: XeniosWorld

Airlines such as Easyjet and British Airways have new fees and policies in place which will affect travel planners. BA will
be introducing a new booking fee at the beginning of March this year, which will charge £4.50 on all nonpremium bookings
made with credit cards through intermediaries. It will not affect premium cabins or bookings made with a Visa or
Mastercard debit card. Source: ABTN

Premier Inn has recently launched a new ‘Premier Business’ programme for its corporate customer base.
Hotel services, business accounts and management information are already provided to corporate but this new
programme aims to ‘create more of an identity’ for business travel buyers and managers who want to book
directly.

Orbitz Quarterly Trend report highlights the need for flexibility and efficiency during the rise of corporate
travel. Business travellers will be looking for customised travel experiences, perhaps utilising airline ancillary
services such as priority boarding and technology solutions as mobile internet adoption for example, is on the
increase. Travellers are still cost-conscious. Source: Orbitz

Key business travel market news

The UK has seen some recovery in business travel through passenger numbers at BAA’s airports during 2010. There is
concern that another rise in APD may weaken the prospects for inbound tourism and UK competitiveness.
Source: Business Traveller

A study of Canadian corporate travel managers has found that the market is optimistic about 2011 as expected
reductions in business travel volumes in 2010 did not happen. In 2010 there was an increase in business travel spending,
particularly at a domestic level on airfares and hotels. Source: ACTE Connect

The German business travel market continues to be strong, although a new ‘eco’ tax may impact on the movement of
these business travellers. The 2010 study of the German Incentive and Motivational Travel Market found that incentive
planners organised 15 incentives per year on average last year - both domestically and outbound. The objective of these
incentive trips is to reward employees and improve performance, as well as educate the participants.
Source: CIT Magazine

A recent National Business Travel Association study has estimated that U.S. business travel spending will rise 5% in
2011 to $239.3 billion. Improvements to the economy and stronger profits encourage personal meetings and group trips.
This would mean a second consecutive rise in spending. U.S. business travel is estimated to have increased by 2.3%
in 2010. According to a new report by the Convention Industry Council, face-to-face meetings held during 2009
directly contributed more than US$263bn to the United States economy. The total economic output of those
meetings, including direct spending and multiplier effects, was more than US$907bn in US economic activity.
Source: NBTA/HotelNewsNow

According to Deloitte, the volume of business travel across Europe will decline in 2011. 4,000 people in the UK,
Germany, Italy and Spain were polled about their leisure and business travel expectations for 2011 and there is
apprehension as a result of the continuing uncertainty in some of these markets from VAT rises and business budget
cuts. Source: Deloitte

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 Other news and developments

Coca-Cola is now an official sponsor of the Scottish Exhibition & Conference Centre (SECC) in Glasgow,
as part of a 3-year deal which includes rights across all event, conference and exhibition space at the
venue.
Source: Meetpie

A Yorkshire-based hotel company, Cedar Court Hotels, is looking to entice budget-conscious event
organisers with £5 meetings package. The day package at its five properties in Leeds/Bradford, Harrogate,
Huddersfield/Halifax, Wakefield and York includes room hire, unlimited tea and coffee, snacks and fruit, free
WiFi for the organiser and meeting equipment. Lunch costs are on top of this.

York & Scarborough Conferences has launched a new business tourism ambassador programme to
recruit 20 ambassadors for the area. The aim is to increase the region’s
corporate and association event bookings and promote facilities to
organisations.
Source: C&IT

A new two-storey multi-functional arena will be opening in Berlin at the end of

2013 with an aim to double capacity. The convention and meeting market
generates annual sales revenues of about €1.53bn and secures 29,600 jobs in
the capital alone.
Source: Meetpie

Northern Ireland continues to invest in its tourism infrastructure and a recent

visitor attitude survey of international business tourists and destination
management companies found that the golf facilities, quality of food and wide
range of unique activities are part of the appeal. The country aims to attract corporate visitors and is already
considered an attractive destination for international incentive visitors.
Source: 4NI.co.uk

Scandinavia’s largest four-star hotel, the Bella Sky Comwell, will open in May 2011, adjacent to
Scandinavia’s largest convention centre, Bella Center. With 814 rooms on 23 floors, 32 flexible meeting and
conference rooms, there are places for dining, viewing, exercising, relaxation or simply enjoying. The strong
collaboration between the Bella Center and Comwell hotels means catering for very large conferences and
congresses can now be combined with more leisurely activities such as golf, spa and wellness stays.

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 Other news and developments

Following recent budget cuts and restructuring, here is a summary of Visit Britain’s role in business
tourism.

Business Visits and Events Legacy Plan

VISITBRITAIN WILL CONTINUE TO PROVIDE…

Data, forecasts and trends, overseas visitor values and volumes and buyer behaviour will be collected in
broad terms. However, specific questions in the surveys relating to business visits will not be included unless
the industry sector contributes towards their cost.

Bid support will continue, under the auspices of the VisitBritain Government Affairs team.

Business extender messages in leisure marketing programmes will happen where appropriate. Wider
business tourism messages within leisure marketing activity will be considered as appropriate.

A MICE module within the BritAgent on-line training programme, which has just launched in many
markets.

Enquiry referrals will normally go directly to the National Tourist Boards or DMO/Convention Bureaux, but for
any requests that come into the 21 VB offices, they will be passed to the specific National Tourist Boards for
response

In terms of Government Relations, the team will not take up specific issues relating to business tourism and
events. However, if the issues relate to wider aspects of Britain’s competitiveness or global standing, like VAT
or visas, then it will be part of on-going communication with Government.

Business tourism and other events are said to be largest beneficiary from the 2012 Games. Current 2012 work
includes securing pre-Games training camps, encouraging NOCs and their sponsors to hold their conferences
here. In the future, VB will assist in the delivery of benefits to make Britain the world destination for
conferences and events, through our B2B work and media angles. This will be developed in relation to the
sector as part of our overall media focus.

VISITBRITAIN WILL NO LONGER PROVIDE…

The bi-annual Discovery Workshop
However, if the national boards and BV&E wish to continue with Discovery (or a similar event) we would offer a
knowledge transfer.

Shows & Exhibitions

All VB organising of and participation in trade promotions and exhibitions will end. It will be up to the National
Tourist Boards to individually or collectively determine their participation. In some instances, such as the
EIBTM and IMEX shows, VisitScotland already exhibit and VisitEngland will take on some of this responsibility
for England suppliers.
VB will no longer participate in overseas exhibitions for international conferences, exhibitions and incentives.
The exception may be AIBTM in the US, but this is to be confirmed.

Committees/Associations
VisitBritain will continue to attend the BVEP meetings in an observer capacity. There will be a continued
representation of business visits and events on the revamped British Tourism Development Committee on the
understanding that business visits and events will not form part of the Committee’s remit.

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 Useful resources

Almost all of the information featured in this newsletter is available freely from the website
sources provided. Below are links to some of the key reports and websites.

NBTA Foundation—Business Travel Quarterly Outlook

http://www2.nbta.org/foundation/pressreleases/Pages/rls011211.aspx

MPI FutureWatch 2011 - Executive Summary

http://www.mpiweb.org/Libraries/Research_and_Reports/FutureWatch2011_ExecSummary.pdf

IMEX Global Insights Report - November 2010

http://www.imex-frankfurt.com/documents/IMEXGlobalInsightsReportNov2010.pdf

2011 Industry Forecast

http://www.bcdtravel.com/global/show_document.asp?id=aaaaaaaaaaczzpf

ITB World Travel Trends Report 2010/2011

http://www1.messe-berlin.de/vip8_1/website/Internet/Internet/www.itb-berlin/pdf/Publikationen/
worldttr_2010_2011.pdf

AMEX Business Travel 2011 Forecast

http://about.americanexpress.com/news/pr/2010/2011forecast.aspx

2011 Travel Forecast

http://www.carlsonwagonlit.com/export/sites/cwt/en/countries/us/vision/pdf/2010/Q3_CWT_Vision.pdf

2011 Convene Meetings Industry Travel Forecast—November 2010

http://www.pcma.org/Documents/2011%20Convene%20Meetings%20Industry%20Travel%
20Forecast.pdf

MPI Business Barometer - October 2010

http://www.mpiweb.org/Libraries/NTA-Reports/BusinessBarometer_Oct2010.pdf

Deloitte Business Traveler Survey - November 2010

http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Consumer%20Business/
us_thl_businesstravelers_110210.pdf

Association Meetings Forecasts and Trends Report 2011

http://www.imex-frankfurt.com/templates/content/documents/AssociationMeetingsSurveyReportOct10.pdf

The Incentive Industry Trends 2011

http://theirf.org/direct/user/file/pdf/Pulse-Survey-Fall-2010.pdf

The Top 11 Incentive Trends for 2011

http://theirf.org/research/content/6031533/driving-our-future-the-top-11-incentive-trends-for-2011/

EventView - October 2010

http://www.mpiweb.org/Libraries/NTA-Reports/EventView_2010.pdf

IMEX America Index of Optimism

http://www.imex-frankfurt.com/documents/IndexofOptimismSurveyReportOct10.pdf