Change is afoot in the fields of travel and meetings management. To kick off the new year, Ron Shah, founder and CEO of meetings and events platform Bizly, points out key facets of the industry’s evolution. He discusses why the status quo won’t do and how constituents should adapt. That includes ways in which corporate events departments can secure the budgets they need.
The last 12 months in the events industry began an unprecedented domino effect; profound change has started and will only accelerate in the years ahead. The cozy days of 10 percent commissions are no longer a reality for the industry. What is now 7 percent soon will be zero percent. Also gone are the days when an events department paid for itself. The same is true for “no-charge” agencies. It is an unavoidable reality. The disease is an outdated funding model. Price opacity is the cause of the disease and fragmentation is the main symptom.
This situation leaves the events industry with an urgent and unavoidable crisis: find a funding model as soon as you can. There are four critical components to the future.
1. Corporate events departments must begin their journey to securing real budgets.
2. Agencies must transition to fee-paying models.
3. Hotel brands will be forced to replace price parity with volume-based discounting.
4. Underlying these changes, the industry will require technology that provides metrics to justify the value of live events.
Before we get to solutions for each of these four components, let’s take a step back. What is happening in the business world and where does the events industry fit? The timing couldn’t be better for upheaval and change.
Remote workforces impact all businesses. With them come unprecedented levels of isolation and loneliness. Surrounding this trend is the rise of AI, data, analytics, robotics and the intelligent systems of the modern enterprise. According to the reigning philosophy of businesses today, “all that matters is what you can measure”.
It seems that the most successful businesses know they must get people together in person to build relationships and create long-term growth. But in-person experiences have always been “squishy.” There is no solid set of metrics to justify their value.
Half the industry relies on savings and spend management; the other half is selling tickets and trying to generate event revenue. Meanwhile, organizations are not capturing the essential role of getting together in person. These gatherings have been a central pillar of business through the ages. The trouble is that while the modernization of the enterprise over the last few decades has poured data and analytics into every cranny of business, it hasn’t yet come to events in a simple and scalable way. The best we have are shoddy savings calculations from our RFP providers and incomplete CRM integrations. The result is metrics that don’t stand their ground with their digital counterparts.
Bringing real measurement to in-person events could usher in a new generation for the industry and produce an outcome that permeates every aspect of the enterprise. “In-person” should be a critical tactic that we measure in all enterprise systems —CRM, marketing, HR, facilities, operations and finance. The impact of face-to-face experiences is a critical measure missing from our business dashboards. Unlocking it with data means unlocking billions of dollars in value for organizations around the world. These are the stakes for getting it right.
Here is a roadmap for the four changes outlined above.
How corporate events departments will secure real budgets. There is a positioning problem facing corporate events departments related to the history of their funding. As soon as it became vogue to claim your events department had zero cost (thanks to commissions), it all went downhill. Now we must turn the cart around. But how?
Let’s start with nomenclature. You have a few minutes to make your case with your CEO or CFO. Dispense with “meetings,” “events” and “MICE.” You’re not the events department; you are the experiences department for the company. You provide the experiences that drive team culture, sales conversion, brand building, operational excellence, training, recruiting and much more. Nomenclature is a big part of making a strong case strong and securing the budget you need. The experiences you create are driving revenue and value for the company.
Get the data set right. The obsession with savings only hurts your positioning. Events aren’t commodities with transparent public pricing that one should attempt to arbitrage. Events are opportunities to make real connections. They are a critical source of ROI for your company’s shareholders. Build your next-generation data set around measuring this ROI and value. The debate on savings will then quickly subside and your executives will rightly wonder why they aren’t doing more events.
Agencies must transition to fee-paying models. HelmsBriscoe, Conference Direct and many other meetings management firms aligned themselves with corporate travel departments on a cash-neutral model funded by hotel commissions. This isn’t desirable or sustainable for anyone in today’s environment. It also requires organizations to host events in hotels. Why should they? In the age of Airbnb, it’s unique venues available via workspace companies like Convene and WeWork that are proving to be the places where modern workers want to meet.
In light of all this behavioral change, agencies must adapt to hold their ground. They will have to support corporate travel and events departments in making the case for budgets. Most importantly, agencies will have to prove their value in new ways.
The dominant value proposition of travel management companies is the power of aggregation; thanks to their volumes, they get the best rates. This may be true for hotel stays and airline tickets, but is a harder case to prove with events. Meetings agencies will need to partner with innovative technology firms to optimize for ROI in an environment of price opacity. Agencies will have to learn how to provide services in a more streamlined and modern way using technology as the backbone.
Hotel brands will have to redefine their commitment to price parity. The hotels created the commission scenario in the industry. They claimed they had to keep prices at a certain level to remain consistent (i.e., price parity), but in exchange for buying in volume, they would pay the standard commission to the corporate travel department. Now that hotels have eroded their commitment to pay commissions, there no longer is a requirement for price parity. The model of the future will be a variable price or defined discount level for groups based on the corporation’s overall spend volume.
The industry will require technology that provides metrics to justify the value of live events. The underlying catalyst to change will be technology. To be clear, technology isn’t the same as features. In my few years in this industry, I’ve found an overwhelming obsession with features. TMCs, agencies and consultants build technology RFPs with the sole objective of creating a feature checklist to compare providers but rarely do they ask about user adoption.
Are the technologies used across the organization? What value do they return? Do they make for better events and provide the metrics needed to get us to the future and help secure bigger budgets so we can grow? Overly complex software that requires armies of integration specialists is not the path to the future. The most impactful technology in the modern era, Google, started with one main feature — a search bar. This unlocked the most value, data, metrics and user joy in the history of technology. The events technology of the future will be that simple.
There is a whole population of businesspeople who have incredible data feeds from every aspect of their organizations. They demand robust metrics to understand the value of their in-person experiences. This technology needs to have modern, open-ended APIs that work with existing systems. It also needs to be simple, minimalist and easy to use for any age or demographic, and collaborative with the various stakeholders and agencies. This is the technology that will define the future of events, and will rapidly increase the budgets that the industry needs and deserves.