The R he Road to R oad to Reco ecover ery Member Trends & - - PowerPoint PPT Presentation

The R he Road to R

• ad to Reco

ecover ery

Member Trends & Outlook Study

Amsterdam July 2012

Michael Hughes Managing Director, Research & Consulting

Ab About th t the S Stu tudy & y & Ob Objec jectiv tives Objectives

• Key Themes
• Growth & Revenue
• New Buildings & Expansions
• Marketing & Clients
• Conclusion

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• The third edition of the AIPC

Member Survey.

• 52% member response rate;

Response Breakout:

Europe: 53% Asia: 17% North America: 14% Australia: 8% Africa: 5% Latin America: 2% Middle East: 1%

• There will be a new full study report

for members with all of the data presented by major regions.

Key Themes

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4

2011 Centre Gross Revenue Growth Worldwide Average

5.7% 4.8% +2.6%

Expected 2012 Gross Revenue Growth Worldwide Exact Percentage Increase of Actual Growth vs. Expected Gross Revenue Growth Forecast in both 2010 & 2011

Bad Headlines & Low Expectations – Still Decent Growth

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Centres seeing moderate to strong recovery *

56% 44%

See weak to no recovery, or recession **

Two Camps, Two Worlds

* Only 7% are seeing a “strong recovery”. ** 17% are seeing “very weak” or “no recovery”.

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Say their exhibition space pricing power has increased over past five years

65% 67%

Are engaging in more incentive and subvention activities than five years ago

Raising Prices While Offering More Discounts

88%

Percentage of AIPC members that say event clients are negotiating more today

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Percentage of members in 2010 with expansion projects underway or planned

32% 36%

Percentage of members in 2012 with renovation projects underway or planned

Expansions to Renovations

0% 5% 10% 15% 20% 25% 30% 35% 40%

Members Expanding Members Renovating

32% 17% 25% 23% 20% 36%

2010 2011 2012

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Members expecting total exhibition and meeting space revenue to increase in 2012

58% 16%

% of additional member venues expecting their AV and equipment revenues to increase in 2012 vs. last year (58% expecting growth)

Signs of Recovery

16%

% of additional venues seeing telecom, internet and tech revenues increasing today (51% expecting growth)

Key Event Services are Seeing Good Growth…

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Improve the Attendee Experience

#1 Issue for Event Producers

Event Producers Have Power, but they Have to Invest & Add Value to Stay Relevant

AIPC members that say event producers require higher quality food and beverage

51%

Major event producers that have changed the way they promote value to attendees

82%

As event producers – and exhibitors – need to improve their

• fferings and value there is opportunity for venues.

Source: Red 7 Media Research & Consulting; AIPC

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• Connected
• Content

Today’s Event Industry Buzz Words

• Hybrid

Impact of Hybrid Events Online Participation Average online event attendance 1,269 Average online event attendance when held during live, physical events 4,294 Percentage Increase (Hybrid Events) 238%

Source: Red 7 Media Research & Consulting

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2012 Corporate Event & Experiential Marketing Budget Growth Forecast

7.8% growth

Corporations are Spending on Events & Experiential Marketing Again

Key issue: A significant portion of this is not spent at convention centre events.

Source: Red 7 Media Research & Consulting

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It’s Still Very Early in the Digital Revolution

Percentage of consumer media companies with their “digital media strategy fully developed” *

7% 11%

Percentage of business-to-business media companies with their “digital media strategy fully developed” *

2 years, 3 months

Age of the Apple iPad

* These figures also include many associations with publishing and content divisions.

Source: Red 7 Media Research & Consulting

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Event Producer Quotes on Opportunities, Challenges & Technology

• “The biggest opportunity for our event programs is to foster better, more meaningful and

relevant connections with customers both online and at their events.”

• “Our goal is to make attendees feel part of a large effective community where they can

share and learn.”

• “Our key opportunity is implementing the latest technologies to make for a better attendee

experience.”

• “The biggest technology challenge is keeping up with the continual changes in social

media and web site technology.”

• “Our biggest challenge is the adoption of new technology with the understanding it takes

two to three years for widespread acceptance and adoption.”

• "(Our key technology challenge is) finding a technology solution that does not overwhelm
• ur audience in either introducing technology that is too new or complicated, or offering too

many options that they get frustrated.”

Source: Red 7 Media Research & Consulting

Growth & Revenue

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Worldwide – Strength of the Economic Recovery

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession

7% 49% 28% 12% 5%

Top Risks to Recovery Worldwide: 1.) Economy: 59% 2.) Competition: 55% 3.) Hotel Pricing & Availability: 32%

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There are two membership segments – those seeing moderate growth and a second half that is not.

Worldwide – Revenue & Attendance Growth 2011 & 2012

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast

5,7% 4,8% 5,4% 3,8%

Gross Revenue Attendance

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Europe – Strength of the Economic Recovery

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession

3% 44% 29% 16% 8%

Europe has the weakest outlook – the most selecting “weak”, “very weak” or “no recovery”.

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Europe – Revenue & Attendance Growth 2011 & 2012

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast

5,2% 4,8% 5,2% 3,9%

Gross Revenue Attendance

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North America – Strength of the Economic Recovery

0% 10% 20% 30% 40% 50% 60% 70% 80% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession

6% 75% 13% 6% 0%

North America is a comparatively healthy, slowly expanding economy. Disconnect? 81% of North American members say the recovery is moderate

• r strong, yet they are also forecasting a

2% drop in attendance in 2012.

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North America – Revenue & Attendance Growth 2011 & 2012

• 3,0%
• 2,0%
• 1,0%

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast

5,3% 2,2% 6,8%

• 2,3%

Gross Revenue Attendance

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Asia – Strength of the Economic Recovery

0% 5% 10% 15% 20% 25% 30% 35% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession

15% 35% 35% 15% 0%

Asia is a mixture of rapid growth as well as some weakness. Also, China’s growth rate is slowing; what’s the impact?

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Asian – Revenue & Attendance Growth 2011 & 2012

0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast

2,4% 7,6% 2,8% 8,8%

Gross Revenue Attendance

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Australia – Strength of the Economic Recovery

0% 10% 20% 30% 40% 50% 60% 70% Strong recovery Moderate recovery Weak recovery Very weak recovery, flat to no growth No recovery, we are still in recession

10% 60% 30% 0% 0%

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Australia – Revenue & Attendance Growth 2011 & 2012

• 2,0%

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 2011 Gross Revenue 2012 Gross Revenue Forecast 2011 Total Attendance 2012 Total Attendance Forecast

9,1%

• 2,0%

4,3% 2,5%

Gross Revenue Attendance

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Revenue “Movement” 2011-2012: % of Venues Seeing Increasing Revenue Streams – All Respondents

2011 Venues w/Increase 2012 Expecting Increase % # Change Exhibit hall and meeting room rent

53% 58% +5%

Food/beverage sales or concessions

49% 56% +7%

Other vendor commissions/revenue share

22% 28% +6%

Audio-Visual and equipment rental

42% 58% +16%

Exhibitor services

32% 39% +7%

Telecom, internet, technology services

35% 51% +16%

Parking revenues

24% 27% +3%

Signage and/or advertising

19% 32% +13%

Events owned/produced by the venue

19% 30% +11%

Portion of hotel occupancy tax

7% 15% +8%

Hotel reservation services

4% 11% +7%

Direct government funding

7% 10% +3%

Naming rights

5% 6% +1%

Public/private partnership(s)

7% 13% +6%

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Were New Revenue Streams Added in the Last Year?

Yes; 45% No; 55%

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Examples:

• Expanded, enhanced meeting / conference spaces and services
• Enhanced, improved AV services
• Enhanced, improved telecom and IT services
• Advertising and signage income
• Upgraded Food & Beverage, catering
• Hosting cultural exhibitions; entertainment and sporting events
• Changing pricing, package plans, value added
• Other: parking, security, cleaning services

Percentage of Centres that Have Partnered on Events & Activities with Shared Risk

Yes; 41% No; 59%

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Examples:

• Cultural exhibitions and events
• Art shows and events
• Entertainment and concerts
• Consumer shows
• Share of ticket sales with or instead of space rental

New Buildings & Expansions

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New Building & Expansion Activity 2010, 2011 & 2012 – All Respondents

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0% 5% 10% 15% 20% 25% 30% 35% 40%

New build Expansion Renovation No development plans currently

17% 32% 17% 35% 12% 25% 23% 40% 16% 20% 36% 36%

2010 2011 2012

Expansion activity slowing, renovations and refurbishment increasing.

If You Could Redesign Your Centre Today, What Changes Would You Make?

0% 10% 20% 30% 40% 50% 60% 57% 57% 39% 29% 6% 1% 23%

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Spaces and Areas that Need Most Improvement:

• Meeting rooms: 53%
• Exhibit halls: 46%
• Signage: 35%

“Other”: More networking spaces, lounges, bar, restaurants; Non-conventional areas for meetings; Multi-functional and flexible areas; Larger pre-built auditorium; More adequate loading dock facilities; More truck marshalling space; Storage

Government Inclination to Invest in Centres

More inclined to invest; 18% Less inclined; 41% Same level; 41%

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Marketing & Clients

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How Sales & Marketing Strategy & Approach has Changed

% More marketing investment 47% Started pursuing other markets 44% Switched tactics 41% Pursued local business alliances 35% Changed messaging 26% Developed an "Ambassador" program 21% Changed CVB relations 19% Joined a marketing alliance 18% Other 12% Not applicable 9%

While “More Marketing Investment” is the #1 approach, less than half of venues are doing this.

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Types of Events with Best Current Growth or Outlook

% Association conventions with exhibits 71% Association conferences and meetings 61% National or International corporate meetings 54% Local corporate meetings 41% For-profit trade shows, trade fairs, exhibitions 36% Entertainment events 36% Governmental events and meetings 34% Consumer and public shows 29% Sporting events 10%

Associations are the core market. Corporate meetings are rebounding around the world.

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How Event Management & Attendees are Changing

Event Management

%

1.) Increased negotiations

88%

2.) Shorter booking windows, booking closer to the event dates

82%

3.) Requiring higher-quality food and beverage

51%

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Attendees

%

1.) Shorter stays and visits at events

77%

2.) Shorter or less tourism-related activity/stays before/after events

58%

3.) Less spending on attendee-related services such as food concessions or business centre

46%

% of Centres Working More Closely with Local Community Groups than Previous Years – Which Groups & Why?

Yes; 61% No; 39%

All Communities:

• More funding

Academic Community:

• Attract more scientific events
• Opportunity for interns
• Increasing medical conventions
• New ideas

Business Community:

• Garner more corporate business and support
• Actively support business groups to attract more business tourism

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Local government:

• Driving the message of our impact related to tax generation, job creation and sales from our

guests

• Financial support from city government is critical factor for choosing the host city

General public:

• Raise awareness of the centre and its contributions; and increase visitors to our public events

Types of Groups & Goals

Hybrid Events: Face-to-Face with Virtual/Online Elements

Yes; 53% No; 33% Don't Know; 14%

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Are centres seeing more clients incorporating hybrid events that combine face-to-face and virtual/online elements? Is this trend positive or negative for centres?

Positive; 56% Negative; 6% Unsure; 38%

Top E Event t Pr Producer r Issu Issues & s & Co Concerns

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Improve attendee experience Improve event ROI Expand customer engagement Increase

• verall

attendance Higher quality attendance

94% 90% 85% 83% 77%

Source: Red 7 Media Research & Consulting

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Key T y Theme mes & s & Tagli lines s Use Used by T y Top E Events ts

• Gartner ITxpo – Focus. Connect. Lead
• HIMSS – Next Spring HIMSS Changes Healthcare
• InfoComm – Communications Intensified
• National Association of Broadcasters – Where Content Comes to Live
• VMWare – Education. Collaboration. Networking.
• World Market Center – All Your Best Connections are Here
• CES – The Industry’s Brightest Minds Come Here
• CES – Take Your Place on the World Stage
• E3 – Innovation Unveiled

Top E Exhibito ibitor r & Ev Event Mar t Markete ter Issu r Issues

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Improve event ROI Higher quality attendance Expand customer engagement Improve attendee experience Improve measurement

• f performance

metrics

92% 83% 80% 78% 71%

Source: Red 7 Media Research & Consulting

Co Convention tion & & Exh Exhibition ibition Att Attendee T Trends

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Will Attendees Participate in More, Fewer or Same Number of Events Over the Next Few Years? Reasons for Attending

1.) See new products: 85% 2.) Networking: 75% 3.) Stay up to date on industry trends and issues: 74% 4.) See many companies at one time: 64% 5.) Create and/or strengthen industry relationships: 61%

Source: Red 7 Media Research & Consulting

Conclusion

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AIPC Members’ Most Important New Management Approach, Service, Project, Development or Industry Trend

Quantified Verbatim Responses % Sales and marketing related 17% Operational or process improvement 13% IT investment 11% Customer service 11% Expanded spaces 9% Partnering 8% Special local factors, or major unique events 6% Pricing and package plan changes 6% Customer and client issues, trends 6% New revenue strategies, launching own events 4% Cost control 4% Staffing, hiring 2% Food and beverage enhancement 2% Other enhanced services and/or new equipment 2%

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Verbatim Comments on How Clients are Changing

• “Clients are seeking better value for services, especially IT.”
• “Customers ask for same kind of spaces, but expect more comfortable facilities

with various on-site services as lounges, technical possibilities, state-of-the-art restaurants and cafes, etc.”

• “Increase in the demand for break-away spaces, parallel meeting rooms and

network spaces. Conferences are becoming more interactive and the spaces need to respond to this.”

• “Clients require more direct service, including more active participation in the

design of event logistics. Clients are much more reactive to hot-button issues, and much less proactive in terms of anticipating changes and re-positioning their events. They want solutions now to problems they didn't know they had.”

• “Centres are increasingly having to provide more for less. Clients are

negotiating much harder on the areas that directly affect them and this is usually around the services provided by the centre. Organizer fees, hotel rates, etc. seem to be less affected.”

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Conclusion

• Slow, uneven recovery – two worlds.
• Main challenges: weak economy, competition and empowered clients.
• Risk aversion by clients and venues. More political focus than on new

revenue streams.

• Digital is transforming media and information sectors; but still only

significantly impacting events (mainly positive).

• Investment shift to renovations and upgrades from expansions. Still,

most venue managers feel they need more and enhanced spaces.

• Event management strategies focused on “Content” and “Community”.
• Opportunity: Event producers need to raise the bar and enhance the

attendee, and exhibitor/sponsor, experience.

Q&A

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