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HelmsBriscoeHelmsBriscoeMeeting Industry TrendsMeeting Industry Trends
20112011
September 10, 2010
AgendaAgenda
HelmsBriscoe Overview Market Conditions Key Meeting Industry Trends Q&A
HB By the NumbersHB By the Numbers
The largest meetings procurement firm in the world Contracted >$1.1 billion in group room revenue over the past 2
years Placed over 6.5 million room nights over the past 2 years Contract over 21,000 meetings annually Annually delivers more than $1 billion in gross meeting spend
to the hospitality community Global presence with 1,150+ associates in over 35 countries Business Mix:
– 72% Corporate/Incentive– 18% Association– 10% Government/Other
Cancun ProductionCancun Production
% Revenue Per City% Revenue Per City
0.47%
57.00%
3.60%0.40%
0.48%0.64%2.70%
0.93%
14.00%
11.00%
2.60%
6.40%
Percentage Revenue Per City 2010
Cabo San Lucas
Cancun
Los Cabos
Mexico City
Nuevo Vallarta
Playa del Carmen
Puerto Jurez
Puerto Morelos
Puerto Vallarta
Rivera Nayarit
San Jose del Cabo
Solidaridad
Destination PartnerDestination Partner
Cancun is a Preferred Partner with HelmsBriscoeAs of July, 2010 – December, 2011Unique access to associatesExposure via marketing, events & educationHost of “MOMs” conference November, 2010HBs ABC in January, 2011
– January 5-7, 2011 - Gaylord National
Market ConditionsMarket Conditions
Contrary to popular belief, the global economy is in recovery
Source: Oxford Economics
Global GDP Change
GDP has rebounded around the worldGDP has rebounded around the world
4.0%3.3%
2.4%
1.4%
(0.5%)
(3.4%)(3.0%)
(2.0%)
0.5%
3.1%3.5%
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Source: Oxford Economics
Global Private Consumption Change
And consumers are buying moreAnd consumers are buying more
3.1%
2.4%
1.7%
1.1%
0.4%
(0.9%)(0.5%)
0.2%
1.1%
2.2%2.4%
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Source: Oxford Economics
Retail SpendingMonthly--Last Six Months—Indexed to 2007
Total retail spending now at Total retail spending now at prepre--recession levels, except in Japan and the US.recession levels, except in Japan and the US.
60
70
80
90
100
110
120
130
140Brazil Canada France Germany Japan Mexico UK US
2007 Level
Source: Oxford Economics
Business ConfidenceLast Six Months—Year-Over-Year Change
Business confidence continues to rise Business confidence continues to rise while its rate of growth has slowed considerablywhile its rate of growth has slowed considerably
0
5
10
15
20
25
30
35
40
45
50Brazil Canada France Germany Japan Mexico UK US
Global Industry RevPAR ChangeConstant USD—Year-Over-Year Change
Hotel performance is on the rise & Hotel performance is on the rise & increasing occupancy is driving recoveryincreasing occupancy is driving recovery
Source: STR Global; Smith Travel Research
(10%)
(5%)
0%
5%
10%
15%
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
OCC Chg ADR Chg RevPAR Chg
40%
45%
50%
55%
60%
65%
70%
75%Australasia
GreaterChina Europe
Middle East& Africa
SouthAmerica
NorthAmerica Global
Source: STR Global, Smith Travel Research
Occupancy By RegionJuly YTD—Last Four Years (2007 – 2010)
But…overall occupancy is still But…overall occupancy is still well below prewell below pre--recession levels recession levels
40%
45%
50%
55%
60%
65%
70%
75%
80%
85%Brazil Canada China France Germany Japan Mexico UAE UK US
Source: STR Global, Smith Travel Research
Occupancy By Selected CountriesJuly YTD—Last Four Years (2007 – 2010)
Most key countries have increasing Most key countries have increasing occupancy, but most well below 2007 occupancy, but most well below 2007
US OccupancyJuly YTD
Last year’s US occupancy was Last year’s US occupancy was the lowest since the early 1970sthe lowest since the early 1970s
Source: PWC; Smith Travel Research
50%
55%
60%
65%
70%
75%
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
US Industry Rooms SoldLast Three Months Ending July YTD
The US has sold about the same The US has sold about the same number of rooms as it did prior to the recessionnumber of rooms as it did prior to the recession
Source: STR Global
258
270
263 262266
274
280 281285
281
261
285
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mill
ions
Global Industry Average Rate ChangeConstant USD
After declining for a record 17After declining for a record 17--monthsmonthsaverage rates are beginning to riseaverage rates are beginning to rise
Source: STR Global
(5.8%)
(2.3%) (2.0%)
(0.5%)
0.5%
2.7%3.5%
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
$0
$50
$100
$150
$200
$250
$300
$350Brazil Canada China France Germany Japan Mexico UAE UK US
Source: STR Global, Smith Travel Research
Average Rate By Selected CountriesJuly YTD—Last Four Years (2007 – 2010)
Average rates Average rates are still depressed in most countriesare still depressed in most countries
Source: Smith Travel Research
Global Industry Performance By Industry SegmentsLast Three Months Ending July 2010
(5%) 0% 5% 10% 15% 20%
Economy
Midscale Without
Midscale With
Upscale
Upper Upscale
Luxury
OCC ADR
Over the last three months, nearly all Over the last three months, nearly all segments posted gains in average rate segments posted gains in average rate
15.5%
9.8%
10.6%
7.4%
6.5%
4.6%
Source: Smith Travel Research
Global Industry Occupancy By Industry SegmentsLast Three Months Ending July 2010
60.3%
65.6%
62.9%
69.2%
71.0%
65.4%
Economy
Midscale Without
Midscale With
Upscale
Upper Upscale
Luxury
Occupancy has been strong across most Occupancy has been strong across most segments, especially over the past three monthssegments, especially over the past three months
(40%)
(30%)
(20%)
(10%)
0%
10%
20%
30%
J-09
F-09
M-09
A-09
M-09
J-09
J-09
A-09
S-09
O-09
N-09
D-09
D-09
J-10
F-10
M-10
A-10
M-10
J-10
J-10
A-10
Group Transient
US Upper Tier Demand Change By Consumer Segment28-Day Moving Average
The growth in demand is the result of The growth in demand is the result of increasing transient and group businessincreasing transient and group business
Source: Smith Travel Research
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
J-09
F-09
M-09
A-09
M-09
J-09
J-09
A-09
S-09
O-09
N-09
D-09
D-09
J-10
F-10
M-10
A-10
M-10
J-10
J-10
A-10
Group Transient
US Upper Tier Average Rate Change By Consumer Segment28-Day Moving Average
Average rate is now rising Average rate is now rising for both group and transientfor both group and transient
Source: Smith Travel Research
Source: Smith Travel Research
Occupancy By Selected MarketsLast Three Months Ending July 2010
30% 40% 50% 60% 70% 80% 90% 100%
LondonNew York
SingaporeSan Fran
SydneyHong Kong
BostonWashington
RomeShanghai
TorontoBerlinTokyo
ChicagoLos Angeles
MontrealSao Paulo
DubaiMiami
BeijingOrlandoAtlanta
Mexico CityHouston
The last three months have seen The last three months have seen many key cities at near sellmany key cities at near sell--out levelsout levels
Source: Smith Travel Research
Average Rate Change By Selected MarketsLast Three Months Ending July 2010
(10%) (5%) 0% 5% 10% 15% 20% 25% 30% 35%
ShanghaiHong Kong
SingaporeNew York
LondonBerlin
MontrealSao Paulo
TorontoMexico City
TokyoBeijing
SydneySan Fran
Los AngelesWashington
MiamiBoston
RomeChicagoOrlando
HoustonAtlantaDubai
In the last three months, nearly In the last three months, nearly all key cities had an increase in ADRall key cities had an increase in ADR
Outlook Outlook
The road ahead is still likely to be rough
Global and US leading indicators Global and US leading indicators have flattened or declined have flattened or declined -- soft patch aheadsoft patch ahead
80
90
100
110
120
130
140
Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10
Global US
Economic Leading Indicators
Source: Global data from Organization for Economic Cooperation and Development (OECD); US data from Economic Cycle Research Institute (ECRI)
Not surprisingly, travel intentions Not surprisingly, travel intentions also appear to be slowingalso appear to be slowing
42%
44%
46%
48%
50%
52%
54%
56%
58%
Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 Jun-10
Business Leisure
US Travel IntentionsDiffusion Index, 4-Week Moving Average
Source: US Travel Association
Source: Oxford Economics
GDP ChangeAnnual Percentage Change
Economic growth is expected Economic growth is expected to strengthen in 2011 and 2012to strengthen in 2011 and 2012
0%
2%
4%
6%
8%
10%
12%Australia Canada China France Germany Japan Mexico UK US
2010 2011 2012
SummarySummary
Occupancy levels remain weak around the world but improving
ADR is beginning to recover Continued volatility of airline industry A more difficult second half of the year may be in store
• A 1 in 4 chance of a US double-dip recession• Odds are greater for another European recession
Solid overall long-term economic and industry recovery Stronger 2011 Much stronger 2012
Key Meeting Industry Key Meeting Industry TrendsTrends
General General Industry TrendsIndustry Trends Shorter meeting length of stay Shorter booking windows Increase of multi-year contracts Larger cities stealing share from smaller cities Aggressive destinations “buying” conventions
International “Subventions”
Growth of 3rd Parties – The Big Three = $2 billion+ meeting spend Greening of meetings – impacting buying decisions Corporate social responsibility – impacting buying decisions Technology resources and access
Prevalence of social technology use at meetings Streaming video Internet access
Corporate &Corporate &Incentive Segment TrendsIncentive Segment Trends
Shift to Strategic Meeting Management/Procurement Maxvantage = Amex + Maritz Experient HelmsBriscoe Industry focus on SMM – NBTA, PCMA, MPI
Shorter booking windows Smaller incentive meetings with less “flash” More individual incentives vs. group “AIG” affect still alive but waning Focus on ROI/ROO/ROM Security is a BIG issue
Association Segment Trends Declining Membership
- Lack of Growth- Decreased Retention- Impact of “generationals”
Reduced Attendance at Meetings Focus on bottom line Reduced sponsorship Declining exhibitor attendance
Redesign of exhibition formats- Shorter/smaller shows- Appointment driven- Hosted buyer model
Increased outsourcing of core services Security is an issue
Tradeshow TrendsTradeshow Trends2010 Exhibitor Trends Survey – Champion Exh. Scvs. 81 percent of exhibitors sending fewer staff to trade shows,
reducing the number of events as well as downsizing booth space
Exhibitors are adopting and seeking new engagement points from show organizers including year round promotion, virtual events, and online tools for attendees
While impact of the recession has been far reaching, exhibitors remain committed to trade shows, and are planning to increase trade show investments when the economy recovers
www.championexpo.com
Tradeshow TrendsTradeshow Trends Niche shows and hosted buyer/appointment driven shows
on the rise i.e.: Connect (Association) Rejuvenate (Religious) TEAMS (Sports)
New shows AIBTM – June, 2011 Baltimore IMEX AM – October, 2011 Las Vegas
IT&ME – future in doubt NBTA – more group & procurement focus (SMM) MPI – tradeshows in flux Increase in co-locations i.e.
PCMA & AIBTM MPI & IMEX AM
Meeting Planners Meeting Planners Intention Survey Intention Survey –– June June
There is a net increase in the number of off-site meetings planners' expect to book in 2010 and 2011 versus 2009
There is a net increase in expected attendance at off-site meetings in 2010 and 2011 versus 2009
Professional meeting planners are less concerned about the negative publicity associated with hosting meetings in upscale properties/destinations, although there is still a palpable level of concern about booking resorts and cruise ships.
Potential Potential Intl. DestinationsIntl. Destinations
Meeting Planners Meeting Planners Intention Survey Intention Survey
www.pcma.org/Resources/Research/MeetingPlannersIntentionsSurvey.htm
Q & A