2017 Annual Member Survey. Innovation & Renewal

Transcription

1 2017 Annual Member Survey Innovation & Renewal

2 Innovation & Renewal 2017 Annual Member Survey Table of Contents Introduction...3 Executive Summary...4 I.) & Revenue...8 II.) New Revenue Streams & Innovation...17 III.) Investment: New Buildings, Expansions & Renovations...21 IV.) Event & Group Trends...25 V.) Economic Development...29 Conclusion...35 aipc.org 2

3 Introduction This is the eighth edition of the annual AIPC Member Survey. This report continues to identify and track multi-year trends impacting the convention and congress centre industry around the world. This study tracks revenue and attendance growth experienced by the membership, and further examines the impact of industry and economic issues on venue management and performance. New in this year s study is an emphasis on innovation and economic development. AIPC conducted the survey of all members around the world between May and June The survey received responses from 119 member venues, which represents a 65% response rate. The report covers the following areas: and Revenue New Revenue Streams and Innovation New Buildings, Expansions and Renovations Client Trends Economic Development The study has been developed by AIPC in collaboration with Michael Hughes, Managing Director of Research & Consulting with Access Intelligence Research & Consulting. It is important to note that even though the total number of responses in some regions is small the survey data has high validity. A small number of responses in certain regions equates to a high proportion of AIPC members and very often the total number of venues in each of the major regions of the world. AIPC and Access Intelligence Research & Consulting thank all of the member respondents for their invaluable contributions to this study. aipc.org 3

4 Executive Summary While there are many key opportunities and challenges facing the industry, seven of the most important findings and insights from the new survey are summarized here. Top Seven Key Insights 1.) Centre Revenue was Strong Again in % on Average for AIPC Members Worldwide While average gross revenue growth slowed compared to the 2015 member survey findings, 2016 still experienced strong top line expansion of 7.1%. AIPC members collectively forecast more subdued 3.8% revenue growth for % 8.0% 7.1% % 3.8% Gross Revenue Actual 2014 Gross Revenue Actual 2015 Gross Revenue Actual 2016 Gross Revenue Actual 2017 Gross Revenue Forecast aipc.org 4

5 Executive Summary 2.) Member Sentiment About Regional Economic Activity is Improving The chart shows steady improvement in how members view the strength of their regional economic activity. In % of members indicated the economy was strong compared to 30% in the new survey. Today, 57% of members see moderate to strong economic growth in their regions. AIPC Members View of Their Regional Economic Activity % 51% 57% % 21% 30% Strong growth/ activity Moderate 26% 28% 13% Weak, flat or recession 3.) Increasing Competition and Rising Hotel Occupancy and Prices are Main Risks to Centre Recent investments in centres and facilities as well as hotels has increased competition. Hotel occupancy and prices continue to rise and this is seen by just over half of members as a potential risk to centre business. A separate question also found that 40% or more of members currently see the following as having challenging impacts on centre business or DMO partners: online business disrupters such as Airbnb, currency value fluctuations, and increasing security risks. Main Risks to Centre : 2015, 2016 and 2017 Comparison Growing competition from other centres / regions 72% 68% 78% Hotel availability and pricing 43% 47% 51% Overall economic strength 43% 44% 42% aipc.org 5

6 4.) Over Half of AIPC Members Added a New Innovation in the Past Year Fifty-two percent of members added a new innovation or meaningful new operational, marketing or business management idea in the last year. Examples of innovation areas that received multiple mentions by members include: CRM and booking systems implementation or upgrades. Focus on customer service management and related procedure changes. Overall operational structure changes. Applying standardization and best practices. Added IT and technology upgrades. Enhancing way-finding and signage. 5.) Member Quotes on Biggest Innovation Challenges and Opportunities The top Innovation challenges are generating ideas, budgets, implementation, measurement and organizational culture. Here are quotes on the key innovation challenges and opportunities seen by members. Providing even more customized solutions. Creative non-traditional use of space. Integration of all the areas, departments and services into a holistic kind of service/business. More focus on the delegate and her/his total experience. How attendees absorb content. How attendees use venues to socialize, network and collaborate. Our biggest challenge is being able to prioritize the ideas with the biggest impact. Securing decent return on investment, not enough profitability to take chances. 6.) Major Corporate Meetings are Strongest Client Segment A strong economy after many years of slow but steady expansion in most regions, equals strong corporate meetings business. Members by far say major national and international corporate meetings have the best current and nearterm growth outlook of any client segment. Yet an issue with the corporate meetings market is that they are the most cyclical part of the industry. Types of Clients and Groups with Best Outlook All Members % Major corporate meetings 78% Association conventions with exhibits 63% Association conferences 59% Local corporate meetings 55% Government events 35% Exhibitions, trade shows 35% aipc.org 6

7 7.) Economic or Political Issues Impacting Centre Business UK Brexit is not having an impact yet, although 92% of members feel this could have an impact in the future. Similar sentiment is expressed related to implications of new US America 1st policies. Business disrupters i.e., Airbnb 44% 63% Currently Impacted Currency value fluctuations 42% Potential Future 67% Impact Increasing security risks 40% 78% US immigration travel restrictions News about Bank solvency Threats to trade agreements 22% 20% 18% 81% 80% 82% New US America 1st implications 10% 93% UK Brexit 9% 92% Respondents by Region Over sixty percent of the respondents are based in Europe, followed by 12% from Asia and 10% are based in North America Europe Asia 62% North America Australia Africa Latin/South America Middle East 12% 10% 3% 2% 6% 5% More information on the main insights and the full survey results are provided in the remainder of the report. aipc.org 7

8 I.) & Revenue Worldwide Gross Revenue 2010 to 2016 and Expected for 2017 While average gross revenue growth slowed compared to the 2015 member survey findings, 2016 still experienced strong top line expansion of 7.1%. AIPC members are collectively forecasting more subdued 3.8% growth for Gross Revenue Actual 2011 Gross Revenue Actual 2012 Gross Revenue Actual 2013 Gross Revenue Actual 2014 Gross Revenue Actual 2015 Gross Revenue Actual 2016 Gross Revenue Actual 2017 Gross Revenue Expected Worldwide 6.8% 5.7% 6.7% 3.1% 5.8% 8.0% 7.1% 3.8% Europe 3.9% 5.2% 3.0% 2.8% 7.7% 7.9% 6.5% 2.7% North 4.1% 2.6% 2.2% 5.3% 1.1% -0.3% -1.2% 6.9% America Asia 26.1% 2.4% 17.8% 1.4% 5.2% 9.0% 22.1% 2.6% Australia 9.3% 9.1% 10.1% 3.3% 2.7% 11.3% 2.3% 0.3% Africa % 36.7% 9.2% 15.6% 16.1% 3.3% 3.4% Multi-Year Trends: Centre Revenue 2010 to 2016 with World GDP and 2017 Forecast The centre industry represented by AIPC members continues to grow much faster than worldwide GDP as tracked by the IMF % 7 6.8% 6.7% 7.1% Worldwide AIPC Worldwide GDP (IMF) 6 5.7% 5.8% Source: AIPC, IMF % % % 3.2% % 3.0% % % % % 3.5% 2017 Forecast aipc.org 8

9 Executive Summary 2011 to 2016 Total Gross Revenue Total revenue growth over the past five years has been, on average, 25% according to the survey data. Asia has grown the most, by a significant 63% over the past five year period. Worldwide 25.0% Europe 22.8% North America 19.3% Asia 63.0% Australia 14.3% Africa 25.7% aipc.org 9

10 Attendance 2010 to 2016 Attendance and 2017 Forecast Attendance growth was decent again in 2016 at 5.4% on average worldwide. Yet members are more pessimistic about 2017 with a forecast of only 0.7% growth Attendance Actual 2011 Attendance Actual 2012 Attendance Actual 2013 Attendance Actual 2014 Attendance Actual 2015 Attendance Actual 2016 Attendance Actual 2017 Attendance Expected Worldwide 1.0% 5.4% 2.0% 2.7% 4.5% 4.9% 5.4% 0.7% Europe -0.8% 5.2% 0.3% 0.9% 4.6% 8.4% 5.6% -3.4% North America -6.3% 6.8% 0.1% -1.1% 5.1% -0.8% -0.9% 6.5% Asia 15.5% 2.8% 12.8% 13.0% 4.2% -4.7% 17.5% 11.2% Australia 6.7% 4.3% -3.5% 0.7% 1.3% 3.7% 10.2% -0.8 Africa % 10.0% 11.7% 11.0% 13.1% -5.7% 5.8% Worldwide Attendance 2010 to 2016 with Forecast for 2017 This chart tracks annual attendance growth going back to 2010 with a forecast for As past member surveys have shown, AIPC members often under-forecast attendance growth (as well as revenue) % 4.5% 4.9% 5.4% % 2.0% 2.7% 0.7% Forecast aipc.org 10

11 2011 to 2016 Total Attendance Over the past five years attendance growth has been subdued at a total of 13.7% over the period compared with revenue growth. Worldwide 13.7% Europe 15.2% North America 5.5% Asia 50.2% Australia 6.0% Africa -22.0% Revenue Expected in 2017: Percentage of Centres Seeing Increasing Revenue Over 60% of members expect their food and beverage, exhibit hall and meeting room rental revenues to increase this year compared to Expecting Increase 2017 Expecting Decrease 2017 Expecting to Stay the Same Not Applicable Food/beverage sales or concessions 65% 15% 16% 4% Exhibit hall and meeting room rent 62% 9% 26% 3% Event services including equipment rental and AV 57% 15% 25% 3% Telecommunications, internet and technology services 51% 14% 31% 4% Signage and/or advertising 33% 6% 42% 19% Other vendor commissions/revenue share 30% 8% 41% 21% Events owned/produced by the venue 30% 3% 24% 43% Parking revenues 24% 12% 34% 30% Public/private partnership(s) 17% 0% 13% 70% Portion of hotel occupancy tax 11% 3% 10% 76% Direct government funding 5% 13% 31% 51% Naming rights 4% 0% 13% 82% aipc.org 11

12 Strength of Economic in Members Regions AIPC member sentiment about their regional economic activity is improving. In 2015 only 13% of members indicated the economy was strong compared to 30% in the new survey. Still, moderate to strong economic growth is seen by 57% of members. The survey question was: How do you characterize the current strength of overall economic activity and business growth in your region? All % Europe N. Amer. Asia Australia Africa Strong growth/activity 30% 35% 50% 25% 13% 0% Moderate 57% 52% 50% 67% 75% 67% Weak 11% 13% 0% 8% 0% 17% Very weak, flat to no growth 2% 0% 0% % 12% 16% Negative growth, recession 0% 0% 0% 0% 0% 0% Strength of Economic : 2015, 2016 and 2017 Comparison The chart shows steady improvement in how members view the strength of their regional economic activity. In 2015 only 13% of members indicated the economy was strong compared to 30% in the new survey % 61% Strong / activity 26% Moderate % 51% Weak, flat or reccession 28% 30% % 13% aipc.org 12

13 Risks to Continued Recovery in Your Regional Economy Besides a weak economy, risks to regional growth are seen by members to be mainly political in nature. All % Europe N. Amer. Asia Australia Africa Overall economic weakness 45% 43% 25% 67% 38% 50% Political changes, instability 41% 40% 50% 42% 50% 33% Government policies including reduced 34% 28% 58% 25% 50% 67% spending Changing government priorities 27% 21% 33% 17% 75% 33% Unemployment 20% 22% 8% 17% 0% 33% Other 13% 16% 17% 0% 0% 17% aipc.org 13

14 Risks to Centre Business Increasing competition and rising hotel occupancy and room rates are the main risks to centre business growth. Recent investments in centres and facilities as well as hotels has increased competition. A separate question found that 40% or more of members currently see the following as having challenging impacts on centre business or DMO partners: online business disrupters such as Airbnb, currency value fluctuations, and increasing security risks. Risks Specifically to Centre Business Performance All % Europe N. Amer. Asia Australia Africa Growing competition from other centres / 78% 77% 67% 83% 100% 83% regions Hotel availability and pricing 51% 51% 75% 50% 63% 0% Overall economic strength 42% 41% 33% 50% 38% 50% Air travel issues (pricing, availability, airlift, route 28% 27% 42% 8% 50% 50% access, etc.) Changing government priorities 23% 18% 25% 25% 63% 33% Government / corporate restrictions on meetings 17% 13% 33% 25% 13% 33% Immigration or visa requirements limiting 16% 10% 42% 0% 0% 50% access Increases of corporations and individuals using digital media and 11% 13% 0% 17% 13% 17% communications Replacement of events with online alternatives 8% 10% 8% 0% 0% 17% Other 7% 6% 17% 8% 0% 0% Sustainability concerns 3% 3% 0% 17% 0% 0% aipc.org 14

15 Top Risks to Centre Business : 2015, 2016 and 2017 Comparison Over just the past two years members have seen even more competition and hotel availability and pricing is now considered a risk to over half of members Growing competition from other centres / regions 72% 68% 78% Hotel availability and pricing 43% 47% 51% Overall economic strength 43% 44% 42% Economic or Political Issues Impacting Centre Business Forty percent or more of AIPC members currently see the following as having challenging impacts on centre business or DMO partners: online business disrupters such as Airbnb, currency value fluctuations, and increasing security risks. UK Brexit is not having an impact yet, although 92% of members feel this could have an impact in the future. Similar sentiment is expressed related to implications of new America 1st policies. Business disrupters i.e., Airbnb 44% 63% Currently Impacted Currency value fluctuations 42% Potential Future 67% Impact Increasing security risks 40% 78% US immigration travel restrictions 22% 81% News about Bank solvency 20% 80% Threats to trade agreements 18% 82% New US America 1st implications 10% 93% UK Brexit 9% 92% aipc.org 15

16 Other Major Economic or Geopolitical Issues Impacting Centres Below are member comments in response to this open-ended survey question: Are there other major economic or geopolitical issues that have or you feel will introduce uncertainties for your centre business over the next few years? (Or if you see positive impact please note as well.) Select write-in responses: Changes in political regimes. Changes in the Pharma Codex. Restrictions. Dismantling the European Union or border. International travel restriction. Political relations with North Korea and other superpowers (US and China, specifically). Positive: Due to strong economic growth, many foreign investors come. Negative: Political parties and Presidential election in Protectionism. Situation in particular in Syria and involvement of external powers with the resulting political tensions and economic implications. The future of the European Union related to the results of the elections. Anti-European governments would lead to political and economic troubles. Pro-European Governments may strengthen stability, prosperity and development. The relationship between mainland China and Hong Kong and the policies towards it. Travel avoidance. US Immigration and travel restriction, can bring positive impact (some new international events for us) and negative as well for some events. US political decision against their financing of UN organizations. Years Out Centre Business is Forecasted The industry is basically grouped in thirds 30% forecast five years; 30% forecast three years; and 27% forecast only one to two years out. The survey question was: How many years into the future do you forecast centre business, specifically total gross revenue and/or the number and type of event bookings? All % Europe N. Amer. Asia Australia Africa One year 15% 14% 18% 18% 29% 0% Two years 12% 13% 27% 9% 0% 0% Three years 30% 33% 27% 18% 43% 17% Four years 5% 8% 0% 0% 0% 17% Five years 30% 23% 27% 45% 29% 0% Over five years 5% 5% 0% 9% 0% 67% Not Applicable 3% 5% 0% 0% 0% 0% aipc.org 16

17 II.) New Revenue Streams & Innovation This section covers how members are adding new revenue streams, innovations and other new management, operations and marketing ideas. New Revenue Stream Added in Past Year One-third of members added a new revenue stream over the past year. North American members on a percentage basis were the most likely to add new revenue streams. All 33% 67% Yes Europe 28% 72% No North America Asia 44% 50% 50% 56% Australia 33% 67% Africa 33% 67% Examples of new revenue streams include: Signage, advertising. AV services and equipment. Vendor contracts/commissions. Enhanced F&B. Events produced by the centre. Sponsored, branded spaces. Retail and office space rent. Parking. Other event services. aipc.org 17

18 Multi-Year Trends: Centres that Added New Revenue Stream 2012 to % % % % % 45% New Innovations Added in Past Year Fifty-two percent of members added a new innovation or meaningful new operational, marketing or business management idea in the past year. All Europe North America 40% 52% 48% 52% 48% 60% Added New Innovation No Asia Australia Africa 33% 40% 50% 50% 60% 67% aipc.org 18

19 Areas of Innovation and New Ideas Focus The three main innovation areas are technology, client experience and F&B. All % Europe N. Amer. Asia Australia Africa Telecommunications and technology services 72% 74% 83% 63% 50% 67% Client, attendee and exhibitor on-site/in-venue experience 64% 65% 50% 75% 75% 33% Food and beverage services 64% 61% 50% 75% 75% 67% Audio-Visual services 60% 71% 33% 38% 75% 67% Marketing and communications 59% 58% 50% 63% 100% 33% Meeting rooms functionality and experience 51% 65% 17% 50% 25% 33% Strategic partnerships 51% 55% 50% 50% 25% 67% Staff management 49% 45 33% 63% 75% 67% Signage 40% 42% 33% 0% 75% 67% Operations 34% 32 17% 50% 50% 33% Outdoor, outside areas functionality and experience 28% 26% 33% 13% 75% 33% Exhibit hall functionality and experience 25% 32% 0% 13% 25% 33% Parking areas functionality and experience 21% 16% 50% 13% 0% 33% Vendor and supplier management 21% 19 17% 13% 25% 67% Pre-function spaces functionality and experience 19% 23% 17% 13% 25% 0% Venue connections and links to hotels or other key buildings 17% 19% 17% 13% 0% 33% Ballroom(s) functionality and experience 15% 23% 0% 13% 0% 0% Venue connections and links to transportation, such as shuttle bus 13% 16% 17% 13% 0% 0% and taxi areas Other concession areas and storefronts 11% 10% 50% 0% 0% 0% Loading dock and related areas functionality and experience 8% 10% 0% 0% 0% 33% Other 6% 3% 33% 0% 0% 0% Not Applicable 0% 0% 0% 0% 0% 0% aipc.org 19

20 Member Quotes on Biggest Innovation Challenges and Opportunities The top innovation challenges are generating ideas, budgets, implementation, measurement and organizational culture. Here are quotes on the key innovation challenges and opportunities seen by members. Providing even more customized solutions. Creative non-traditional use of space. Integration of all the areas, departments and services into a holistic kind of service/business. More focus on the delegate and her/his total experience. How attendees absorb content. How attendees use venues to socialize, network and collaborate. Our biggest challenge is being able to prioritize the ideas with the biggest impact. Securing decent return on investment, not enough profitability to take chances. Areas of the Industry in Need of Innovation The survey question was: What areas of the event and venue industry do you feel require more innovation? Below are select member quotes. Ability to add more hands on learning vs. traditional learning techniques. Creative non-traditional use of space; technology integration into meetings; sustainability and zero-waste innovation and processes. Flexible CRM capability. Guest Experience. How attendees absorb content, how attendees use venues to socialize, network and collaborate, and spaces need to be conducive to multiple uses. Information Technology, security. Introducing VR and AR as an integrated part of the physical meeting/exhibition. Materials recycling and sustainable booth design. More focus on the delegate and her/his total experience. The layout/recipe for any Conference has been much the same for several years, but almost every customer will be expecting more from an event then 10 years ago. Operations and creating more welcoming and warmer pre-function spaces. High technology events require failproof telecom infrastructure. Showing value of meetings to individual delegates and their financial supporters. Venue infrastructure technology - keeping pace with delegates quickly evolving needs. Classic event business model leaves limited funding for new experiences and investments. Technology, digital signposting. The venues has to change from logistics partners to hospitality consulters. There are plenty of ideas and concepts around, what it takes is to implement them on a broad scale. Innovation Needs to be driven by clients and customers alike. There is definitely an opportunity for the events industry to operate more efficiently in the use of space and temporary event infrastructure. There appears to be a great opportunity for greater collaboration amongst organisers to streamline investment in infrastructure and resources. aipc.org 20

21 III.) Investment: New Buildings, Expansions & Renovations Overall worldwide, centre industry investment in new building activity is increasing along with expansions and especially renovations AIPC Members Planning or Currently Developing a New Build, Expansion or Renovation Project Overall, a significant 72% of AIPC members indicate they have some type of major facilities or infrastructure investment project underway or in the planning stages. North American members have the smallest percentage of venues with a major project currently. All % Europe N. Amer. Asia Australia Africa New build 22% 27% 0% 30% 0% 33% Expansion 24% 22% 20% 10% 50% 33% Renovation 45% 58% 20% 30% 17% 33% No development plans currently 28% 22% 60% 30% 33% 17% New Builds, Expansions & Renovations 2012 & 2017 Centre industry investment in new building projects, expansions and renovations is increasing overall worldwide New build 16% 22% Expansion 20% 24% Renovation 36% 45% No plans 36% 28% aipc.org 21

22 Centre Spaces and Areas in Most Need of Enhancement or Investment Technology infrastructure or services are still the number one area in need of investment, and this is most pronounced in Asia. Meeting rooms, as well as pre-function spaces, at many North American convention centres are also considered to need investment and enhancement. All % Europe N. Amer. Asia Australia Africa Technology infrastructure or services 48% 45% 50% 70% 50% 50% Meeting rooms 42% 51% 60% 10% 17% 30% Exhibit halls 37% 36% 50% 30% 33% 50% Signage 36% 45% 20% 10% 33% 33% Client-facing food service areas and restaurants 32% 24% 40% 40% 50% 33% Pre-function spaces 22% 16% 60% 20% 33% 17% Outdoor, outside areas 20% 24% 30% 10% 33% 0% Kitchen(s) 20% 20% 0% 30% 33% 33% Ballroom(s) 17% 11% 40% 30% 17% 17% Venue connections and links to hotels or other key 15% 13% 20% 10% 0% 33% buildings Venue connections and links to transportation, such as 15% 11% 10% 30% 0% 17% shuttle bus and taxi areas Loading dock and related areas 13% 16% 10% 10% 17% 0% Business centre 5% 9% 0% 0% 0% 0% Other concession areas and store-fronts 4% 5% 10% 0% 0% 0% Other 17% 15% 20% 20% 33% 17% aipc.org 22

23 Centre Spaces and Areas in Most Need of Investment: 2015, 2016 and 2017 Comparison The table below shows that technology and telecommunications are still the main areas that management feels needs the most investment along with meeting rooms although the three year trend shows F&B may be gaining more attention, and investment funds. Tech infrastructure, services Meeting rooms 42% 54% 48% 53% 58% 67% Exhibit halls 44% 41% 37% Signage 36% 34% 35% Client-facing F&B areas 24% 27% 32% Is Government More or Less Inclined to Invest in Convention Centres While under one-third of members say their government is more inclined to invest in centres, 51% say there has been no change seen in the past year. All % Europe N. Amer. Asia Australia Africa More inclined to invest 30% 27% 30% 30% 17% 100% Less inclined to invest 19% 13% 40% 20% 33% 0% No change 51% 61% 30% 50% 50% 0% aipc.org 23

24 Multi-Year Trends: Is Government More or Less Inclined to Invest in Centres Comparison to 2012 Findings Another sign of growth and confidence, governments seem positive to neutral to centre investment. As shown in the chart below, there has been a significant sentiment increase since More inclined to invest 18% 30% 2012 Less inclined to invest 19% 41% 2017 No change 41% 51% aipc.org 24

25 IV.) Event & Group Trends This section provides data and analysis covering how AIPC members see clients and key groups changing. Event and Group Segments with the Best Current or Near-Term Prospects Major corporate meetings are the strongest industry segment by far. A strong economy after many years of slow but steady expansion in most regions has set the stage for strong corporate meetings business. Members say major national and international corporate meetings have the best current and near-term growth outlook of any event industry segment. Yet an issue with the corporate meetings market is they are the most cyclical part of the industry. In the last recession in the 2008 and 2009 period the corporate meetings sector was down by about 50%. All % Europe N. Amer. Asia Australia Africa National or International corporate meetings 78% 83% 82% 64% 83% 33% Association conventions with exhibits 63% 63% 45% 45% 83% 67% Association conferences and meetings 59% 61% 45% 45% 67% 67% Local corporate meetings 55% 56% 64% 64% 50% 33% Exhibitions, trade shows and trade fairs 35% 34% 9% 18% 50% 83% Governmental events and meetings 35% 29% 27% 36% 50% 83% Entertainment events 34% 31% 27% 27% 83% 33% Consumer and public shows 24% 15% 36% 45% 50% 50% Sporting events 19% 19% 18% 27% 33% 17% Other 7% 9% 9% 9% 0% 0% Differences by region include: Association conventions with exhibits are particularly strong in Australia. African members indicate they see strength with exhibitions and government-sponsored events. aipc.org 25

26 Types of Clients and Groups with Best Outlook: 2015, 2016 and 2017 Comparison The strong economy equals a healthy corporate meetings business. This year, major corporate meetings are breaking out beyond the other client segments in terms of growth outlook. National and International corporate meetings 64% 72% 78% Association conventions with exhibits 64% 63% 74% Association conferences 64% 58% 59% 45% 2015 Local corporate meetings 46% 55% % Government events 27% 35% 2017 Exhibitions, trade shows 35% 45% 43% Entertainment events 33% 31% 34% Consumer shows 27% 28% 24% aipc.org 26

27 How Client Business Practices and Behaviors are Changing These findings show the continuation of long-term trends. In short, clients want more of most all services and venue capabilities to be better, faster and lower cost. The top single trend is shorter booking windows and contract times, followed by increasing technology and bandwidth needs. Regional differences include: Shorter booking windows are particularly a trend in Australia and Africa. All of the North American member respondents indicate they see their clients requiring more technology services and/or bandwidth. All of the Australian members say they are seeing increasing client negotiations. All % Europe N. Amer. Asia Australia Africa Shorter booking windows and contract times, they are booking closer to the event 86% 87% 80% 67% 100% 100% dates Requiring more technology services and/or bandwidth and related services 73% 70% 100% 67% 83% 83% Increased negotiations 70% 68% 60% 56% 100% 83% Increasing demands for concessions, incentives and discounts 66% 55% 80% 56% 100% 100% Asking for significantly more data and information during RFP process or 48% 53% 30% 44% 67% 17% negotiations Asking to use their own vendors instead of your exclusive or preferred vendors/ 44% 43% 50% 44% 33% 50% partners Requiring higher-quality food and beverage 43% 40% 50% 67% 67% 50% Renegotiations or meaningful change requests after contract is signed 42% 40% 30% 22% 83% 67% Asking for more outreach to city and regional leaders 23% 26% 10% 0% 50% 33% Focusing more on event design and ambiance 20% 19% 50% 22% 17% 0% Requiring attendance promotion assistance 16% 11% 30% 11% 50% 17% Asking for more Public Relations assistance 13% 13% 0% 22% 33% 17% Longer booking windows and contract times, they are booking further from the 8% 11% 10% 0% 0% 0% event dates Other 2% 0% 10% 0% 0% 0% aipc.org 27

28 Changing Event Formats and Client Requirements are Prompting a Re-Assessment of Facilities and Services Overall there are four main themes seen in the various write-in responses to this question about how event formats and clients are changing: Want improved Wi-Fi. More focus on F&B dietary issues, and more casual meals. Enhanced security. More flexible venue spaces. A few select member respondents include: Sponsors demanding experiences. Decrease of exhibition sizes; increasing demand for networking and hospitality space. Events are bigger and bigger, demand for variation of premises during the same day and same event. Larger breakout rooms to facilitate educational seminars different style layouts to enable the speaker to engage with the audience and/or to facilitate workshops. More individualisation and personalization of customer journey. More space needed for informal meetings and networking. aipc.org 28

29 V.) Economic Development New in this year s survey is a focus on economic development and how centre management teams play a part in this important area. Centre Economic Development Trends Hardware & Software An apt metaphor is hardware and software to describe the two aspects of the typical major centre s role in economic development. Centre-related economic impact and related influence tends to fit in one of the two categories below: Hardware / Infrastructure New builds, expansions and renovations. Convention hotels. Retail and entertainment areas around the centre and convention district. Transportation links to the centre or near-by areas. Software / Events and Influence Targeted event and group bookings that fit with regional economy. Direct and in-direct influence on economic development issues. Having a seat at the table by serving on boards and committees. Hosting meetings at centre related to economic development. Public relations, communications about value of events, conventions and centre. Convention centres most closely resemble major colleges and universities in terms of the dual role of impacting economic development via both hardware and software. aipc.org 29

30 Is City Undergoing Large Government or Private Development, Infrastructure or Renewal Project There s significant development in many first and second tier cities worldwide. All % Europe N. Amer. Asia Australia Africa Yes, large-scale governmentsupported project 48% 41% 40% 50% 67% 83% Yes, major private sector development 31% 31% 30% 13% 67% 33% No 38% 43% 40% 50% 0% 17% Major City Projects Completed in the Last Year, Underway or in Planning Hotel and centre projects have been some of the largest projects around the world. Survey question: Which of the following types of major projects have been completed in the last year, are underway or are in the final planning stages that impact your centre. All % Europe N. Amer. Asia Australia Africa Major hotel development 59% 60% 30% 44% 83% 67% Our own convention centre new build, expansion or 44% 46% 20% 44% 67% 50% major refurbishment Housing development, construction 28% 27% 40% 11% 17% 50% Airport 27% 27% 20% 11% 17% 50% Rail 26% 29% 30% 11% 17% 33% Roads 22% 17% 10% 33% 17% 50% Office building(s) 21% 15% 30% 11% 17% 33% Another convention centre new build, expansion or 19% 17% 10% 22% 17% 33% major refurbishment Ground transportation 15% 15% 20% 11% 0% 17% Educational 13% 12% 0% 0% 0% 50% Major retail development 13% 6% 10% 22% 17% 33% Marine, seaport 10% 8% 10% 11% 0% 33% Park(s) 7% 6% 0% 0% 33% 0% Other 10% 6% 10% 22% 33% 0% aipc.org 30

31 Does Your City Have a Formal Economic Development Strategy Nearly seven out of ten AIPC members say their city has a formal economic development strategy. All Europe N. America Asia Australia Africa 0% 0% 0% 0% 12% 19% 14% 11% 20% 17% 17% 28% 57% 69% 80% 83% 83% 89% Yes No Unsure Is Centre Part of Regional Economic Development Discussion and Process? Most centres have an important seat at the table as part of the economic development strategy and efforts in their cities. The most engaged members, on a percentage basis, are in Asia and North America. All 43% 57% Yes Europe 44% 56% No N. America 30% 70% Asia 22% 78% Australia Africa 50% 50% 50% 50% aipc.org 31

32 Member Cities Economic Development Emphasis Worldwide the top three areas of economic development efforts are focused on technology, hotels and hospitality, and education. The survey question was: Which of the following are the areas of economic development emphasis in your city or region (i.e., resource, technology, medical)? All % Europe N. Amer. Asia Australia Africa Technology 60% 61% 70% 33% 67% 67% Hotels and hospitality 59% 64% 30% 56% 67% 67% Education 45% 48% 60% 22% 33% 50% Encourage corporate headquarters or divisions to 42% 50% 40% 44% 17% 17% move to the city / region Biotechnology 41% 43% 60% 33% 33% 17% Services 36% 30% 20% 67% 17% 67% Sports 31% 30% 50% 22% 33% 17% Other transportation infrastructure 30% 30% 40% 33% 0% 67% Airport(s) 26% 29% 20% 11% 17% 50% Media and entertainment 22% 25% 10% 22% 0% 33% Manufacturing 22% 16% 0% 44% 17% 83% Retail 20% 16% 10% 11% 17% 83% Housing 17% 14% 40% 0% 17% 50% Trade areas such as Ports or Free Trade Zones 17% 11% 0% 22% 17% 50% Media 16% 21% 0% 22% 0% 0% Parks and recreational areas 16% 14% 30% 11% 33% 17% Government facilities investment such as major 15% 11% 0% 11% 50% 50% office buildings Other 17% 16% 20% 22% 33% 17% aipc.org 32

33 How Centres Engage with Economic Development Projects and Process The survey question was: Are you and your venue organization engaged and part of the economic development discussion and implementation process? If yes, what s the mechanism or level of your engagement? Select write-in responses: A part of the organizing committee. Actively participate at Working Group on Convention and Exhibition Industries & Tourism to provide professional advice to the government. Board member of city promotional agency and CVB. Centre is part of a Major Business Group which meets with government regularly. Chair/Representation on various town working groups. Work closely with Local Government. Full engagement with government stakeholder network. Member of and attendance at city wide strategy planning. Membership and directorship of local Economic and Tourism Industry groups. Part of community economic road map implementation team. Strong engagement in the development plans for the local surroundings of the centre. Through the Local Enterprise Partnership. We participate to consultancy boards. Economic Development Project Descriptions and Centre Role and Impact Survey Question: Please describe the project or projects in your city and the centre s role and how the centre will be impacted? Select write-in responses: City and County owned and operated complex (arena, performing arts center, exhibition space) to undergo master plan for redevelopment in 5 to 10 years. Creating a new Downtown flex street, centre is on the team developing terms of reference Implementing new bus rapid transit with a lot of road infrastructure upgrades taking place impacting centre access. Creating MICE Valley and developing the area to be the hub for transportations. Designing events to boost job creation. Digital strategy and sustainability. aipc.org 33

34 Expansion of International Airport will allow more International and Regional airlines into the airport. Improvements modernization of roads and railways will reduce traffic jams. Construction of new tourist class hotels and refurbishments of hotels will increase bed capacity and more delegates to our convention centre. Hotel development giving the Centre an opportunity to grow business. New offsite function spaces adding to the marketability of the city. Master plan on venue site will bring operational impact both positive and negative. Knowledge Quarter will bring global leaders in education and life sciences and increased opportunity o host international events, Airport route development will increase connectivity and make the destination a more appealing sell to international events. New airport in development, new hotels openings, malls development, office park. New Rapid Transport System linking airport to CBD and Convention Center. Big improvement. Integrated public parking plan for CBD - benefit for our clientele. Number of new hotels which will facilitate greater number of visitors. Redevelopment in the part of the city where the venue is located. The building of new hotels are bringing more possibilities of hosting bigger events. The Business Events initiative is working to increase conference business, using our building as well as our hotel partners as potential venues, ours being the largest in the city. The Centre is spearheading the process of establishing the Convention Bureau which will help in marketing the destination as a meeting destination. The centre mainly plays a supportive role in supporting economic development strategy by targeting and hosting relevant events. This role is generally recognized by government. The Authority is working closely with state and city partners to increase development and partnership opportunities between local industry and event attendees, especially those considered key decision makers for corporate site locations and investments. The Project is to develop the closest surroundings of the centre, by setting a common plan together with the city and the owners. The goal is to decide on a attractive profile for the area that today is not very welcoming and provides very little attractions apart from the centres own activities. We have just built a new park within our complex. This will bring more clients interested in holding their event in our Convention Centre, and enjoying the new park as a teambuilding activity. aipc.org 34

35 Conclusion The main finding in the 2017 AIPC Member Survey is that moderate to strong growth continues for most regions and member centres. Overall, centre gross revenue growth on average worldwide has been strong since 2014, averaging close to 7% annually. The chart below compares worldwide AIPC member average revenue growth annually with global GDP tracked by the IMF. Worldwide Average Centre Revenue 2013 to 2016 with 2017 Forecast 8.0% Worldwide AIPC % Worldwide GDP (IMF) Source: AIPC, IMF 6 5.8% % 3.0% 3.4% 3.1% 3.1% 3.8% 3.5% Forecast A strong economy after many years of slow but steady expansion in most regions has produced a very healthy corporate meetings industry. Members by far say major national and international corporate meetings have the best current and near-term growth outlook of any event industry segment. Yet an issue with the corporate meetings market is that they are the most cyclical part of the industry. In the past, very strong corporate meetings markets have signaled the economic growth cycle had nearly reached the top. This multi-year period of growth, while very welcome, has resulted in driving even more competition for most centres and has also fueled strong performance for hotels in major cities, resulting in both high occupancy rates and higher room rates. Competition and hotel rates are considered the top challenges to centre managers and their DMO partners. The chart shows how these two challenges have increased in a meaningful way over just the past two years. aipc.org 35

36 Top Risks to Centre Business : 2015, 2016 and 2017 Comparison Growing competition from other centres / regions 68% 72% 78% % Hotel availability and pricing 47% 51% This growth is providing centre management teams the flexibility to implement new ideas and innovate. Over the last year, 52% of members added a new innovation or meaningful new operational, marketing or business management idea. The Big Three innovation areas are technology, client experience and F&B. The top innovation challenges are generating ideas, budgets, implementation, measurement, and organizational culture barriers. Top Five Innovation and New Ideas Focus Areas Telecommunications and technology services 72% Client and attendee experience F&B 64% 64% Audio-Visual services 60% Marketing and communications 59% aipc.org 36

37 The convention and congress centre industry, while facing a number of challenges, has experienced a number of years of good growth. There is more focus on innovations (52% of members) than implementing new revenue streams (33% of members). Recommendations on how to generate ideas and new innovations, based on the AIPC Member Surveys and other venue and event industry research includes: Recommendations on How to Generate Impactful Ideas Have a strategy. Focus on getting the most out of staff discussions. Ensure you are asking the right event client satisfaction survey questions. Use internal and external advisory boards for idea feedback. Pull together the full range of internal and external sources for ideas and data. Visit two or three leading centres and facilities that have a reputation for innovation. Prioritize your ideas and opportunities. Focus on implementing your highest priority opportunities less is more. Implementation Recommendations Have a detailed but flexible plan for each new idea and innovation. Identify what success will look like, and how you will measure success. Draft the schedule to implement with key milestones. Develop a communications plan, internal and external. Assign a project leader. A team is important but an innovation owner is important. aipc.org 37

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