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Recently the world’s financial markets have been in turmoil over the much covered ‘credit crunch’ which originated in the USA. In the past it has always been the case that when America sneezes, Europe gets the Flu – worrying news considering that our industry is presently going through a boom period. The question must be asked, are we about to see an end to current business levels in the UK conference and events sector?
Predictions that economic growth may be reduced by up to 1% in 2008 and 2009 (Ernst and Young Item Club) as a direct result of the credit crunch have cast a shadow over our industry and its anticipated growth.
In the past, corporate organisations’ conference and events budgets have been among the first to be slashed when companies tighten their belts. However, with new emphasis on the importance of face-to-face meetings and procurement teams working on getting ever better value when procuring meetings and events, is there really an appetite to reduce C&E budgets?
*Analysis of Conference Care’s statistics for October highlight:*
* October maintains its traditional momentum as one of the key months for conferencing. However, the USA economy is now having knock on effects in the provinces when figures are compared year on year.
* In the capital, demand remains robust with day delegate rates increasing 11.86% from £55.24 in 2006 to £61.79 in 2007 and accommodation rates increasing by 7.18% to £164.07 for the same period.
* Demand in the capital means conference organisers are in a ‘race for space’ namely venues are not holding provisional bookings but demanding signed contracts from the outset.
* Rates in the provinces is in line with inflation and highlight a slow down year on year compared with 2005, 2006.
* Half term clearly affected business in October with Fridays clearly seeing a decrease due to people taking long weekends to be with the family.
* The tumbling dollar, high oil and food prices, and a tight US labour market are keeping inflation fears at the top of the agenda.
* The association market is showing signs of a slow down in rates as members put pressure on their association to deliver value for money.
* The financial sector has seen a decrease in rates three years consecutively – a true reflection of the UK’s economics.
* Pharmaceutical market has seen rates even out, a reflection of ABPI legislation on the meetings and events.
The emergence of procurement in the buying process of meetings and events has had a knock on effect in all market segments as purchasing departments seek to consolidate and benchmark expenditure.
_Andrew Deakin is a Director of Conference Care_