The second report on the impact of the current economic climate on the UK conference and events market, commissioned by the Meetings Industry Association (MIA) and sponsored by the Confex Group, was conducted in February 2009. The report findings show confidence in trading conditions over the next six months has fallen significantly, causing many in the industry to call for restraint from the instinct to slash prices.

Trevor Miller, Sales & Marketing Manager, Leicester Conferences University of Leicester commented, “One of the most important factors for all of us right now is to keep rates as stable as possible without any panic reductions or price wars. Consider instead well targeted discounts and promotional offers as well as increasing value for money as more strategic and effective solutions to the economic downturn”.

Jane Evans, MIA, Chief Executive commented, “Price slashing may win an individual contract, but it sets a dangerous precedent and is unsustainable longer term. The industry can be proud of the strong value-based proposition it has built, price slashing will severely damage this, prolonging the downturn and generally making recovery more difficult.”

Buyers want flexibility
While the report suggests that some agents are using the recession to force prices down, on the whole, buyers understand that slashed prices will lead to reduced service quality and generally wish for venues to respond to the downturn with greater flexibility. Trisha Mentzel, Riverbed Technology Ltd comments, “Venues need to provide value for money as well as flexibility; due to attendance numbers decreasing it is sometimes difficult to estimate numbers when first booking a venue”.

The reports, the first of which dates to September 2008, have been conducted by Thames Valley University and by HRG, on behalf of the MIA. Their objective is to provide an insight into current market conditions so those in the industry have a solid base of reliable information on which to make decisions.

The findings are based on a sample size of 340 organisations representing venues, industry buyers and agents, and also reveal:

A marked decrease in day conference business during the last 6 months with 46.1% of respondents noting a decrease at this point against only 8.9% reporting a decrease in day conference business when assessed in September 2008. Of these respondents 69.5% report that they have seen day conference business decrease by more than 10% with 19.2% experiencing losses of more than 21%.

• A decrease of over 10% in 24 hour conferences
• A greater than 10% decrease in events
• 46% reported a decrease in the achieved rates for day conferences and 44.9% reported a decrease in the rates achieved for 24-hour conferences.
• Lead times for both day and 24-hour conferences have reduced considerably across the industry.

The positive side
There are some reasons to be positive:

• 62.3% of respondents claim increased delegate numbers at day conferences and over 25% are reporting increased numbers for 24-hour conferences.
• 51.5% of respondents believe the number of events will remain the same or increase during 2009.
• 69% of respondents forecast their staffing levels will remain the same or increase in 2009.

But it is generally believed that there will not be a market recovery during 2009, with 63.3% reporting that they expect to see a decrease in the end of year results for day conferences. In the first report just 20.8% were predicting a decrease on the full year.

“Clearly these are sobering results for the entire industry. However, we will come through this downturn, and have an opportunity to do so stronger than before. Those of us that do the most to reassure buyers with a quality product, great service and excellent value for money are the ones that will be best placed to benefit from the upturn when it comes” Jane Evans added.