Costs associated with travel and events are set to rise throughout 2024, but there are ways to soften the impact.
The state of pricey travel and events seen in 2023 is not expected to go away as the New Year slips in, as a cocktail of demand and supply side pressures continues to push meetings and events prices up significantly.
According to CWT’s 2024 Global Business Travel Forecast, the average daily cost per attendee for meetings and events rose 58 per cent in 2022 compared to 2021. CWT expects the cost per attendee to climb a further 5.6 per cent this year, followed by a three per cent increase in 2024.
In tier-one cities in Thailand and Vietnam, group accommodation and meeting package prices have risen 15 to 20 per cent over 2019 rates while in destinations like Japan and South Korea, the same are up 20 to 30 per cent over 2019’s.
Moreover, with the persistent inflation in food prices, the average F&B cost per attendee is expected to rise 6.9 per cent this year and 2.2 per cent in 2024. Meanwhile, the average daily rate for group hotel bookings is projected to climb 4.4 per cent in 2023 and 3.5 per cent in 2024.
Petrina Goh, regional commercial director, South-east Asia & Hong Kong at CWT Meetings & Events, noted that labour shortages, mounting talent management costs, volatile fuel prices, inflation, and capacity restrictions are putting upward pressure on prices across the whole travel, meetings and events supply chain.
Manpreet Bindra, president of FCM India Meetings & Events, also warns of expensive travel and events in 2024.
He said: “Increased energy costs, fuel costs, airfares, and global inflation are all impacting in-person events. The rapid surge back to live events has been a challenge for venues, hotels, airlines, and event planners. Travel constraints, capacity issues, labour shortages, supply chain issues and travel disruptions are all easing, but they are factors that are not expected to fully stabilise until 2024.”
This is despite global airline capacity tracking at 100 per cent for October 2023, according to Flight Centre Travel Group’s Cirium Data as of October 9, 2023.
Domestic capacity leads recovery at 102 per cent, while international is under 97 per cent.
Price alert for Japan
Bindra told TTGassociations that event organisers would need to be especially mindful of costs in Japan where most four- to five-star hotels plan to raise their prices in 2024 – by more than 20 per cent per room a night on top of the current rate and by 50 per cent during peak seasons. The heftier price tags are due to manpower woes.
Despite higher room rates this year, hotels were able to sell out very quickly. This has led hotels to withhold contract rates until they get a clearer idea of market demand. Some have even applied BAR rates instead of contract rates, shared Bindra.
According to FCM Meetings and Events Japan, hotel partners said their rates would only cool down at the end of 2024.
Meetings and events bound for Japan in 2024 should also brace for pricier ground logistics. The Ministry of Land, Infrastructure, Transport and Tourism has decided to remove a maximum limit on transport fares, allowing bus companies to set however high a price they want. In the Kanto region, for example, most bus companies have risen an average of 26 per cent on prices for all new requests from October 2023.
Look elsewhere, plan early
To combat higher prices in the coming year, CWT’s Goh recommends that meeting organisers consider secondary cities such as Pattaya, Koh Samui, Phu Quoc, Nha Trang and Yogyakarta for their engagement activities in 2024.
These destinations “offer great value for money”, she said, as they are “rich in culture, have diverse offsite activities” and offer delegates “a greater sense of exploration, learning, and well-being (opportunities)”.
Goh also urges meeting organisers to “begin the planning process early”.
Bindra agreed, saying: “Include your travel partners early so you can boost your bargaining power, increase the chances of better purchases, secure better deals, and reduce the strain on execution capabilities.”
Iain Bitran, executive director of the International Society for Professional Innovation Management (ISPIM), suggests paying attention to currency conditions and locking in rates for meetings planned in destinations with a weakening currency.
Nooch Homrossukhon, director, conventions department at the Thailand Convention and Exhibition Bureau (TCEB), shared that financial assistance from convention bureaus like hers could provide some relief at a time when the “cost of travel and events has increased everywhere in the world”.
She said requests for more subvention support are increasingly common with associations and meeting organisers that TCEB works with.
In addition, TCEB has also observed associations creating an exhibition component for their usual conference, so that revenue could also be made from booth sales.
“Meeting organisers have to carefully manage their expenses. They cannot simply raise registration fees, as they would meet resistance from potential attendees. So, they have to come up with new revenue streams,” said Nooch.
Focus on content value
Octavio Peralta, founding CEO of the Philippine Council of Associations and Association Executives, is not perturbed. He told TTGassociations that “great event experiences, great content, and great speakers” are the key to overcoming cost pressures. The presence of these conditions will allow association events to attract members and sponsors.
“Members pay for education and networking; sponsors pay for visibility and business generation. Associations have to consider these aspects,” added Peralta, who is also executive director of Global Compact Network Philippines.
Enrique Florencio, executive director, Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), said despite higher airfares, hotel rates and meeting costs, members and sponsors still do participate in worthy meetings.
Florencio added that it was also important to “make sure that not just the conference content has great value”. At ADFIAP meetings, a fellowship day is held on the last day for activities outside the conference room, such as educational sessions and tours.
Proving that quality engagement is a strong force against cost concerns, Florencio said the 46th ADFIAP Annual Meeting held in Almaty, Kazakhstan in May enjoyed an unusually high number of nearly 400 attendees when the usual number was 150 to 200.
The Philippine Nurses Association (PNA) had the same experience of high attendance at its 101st Founding Anniversary, 66th Nurses’ Week Celebration and National Convention held in Iloilo, the Philippines in October.
“We have an overwhelming high attendance despite the increased cost of hotel accommodation,” said Melbert Reyes, PNA’s immediate past president, who added that sponsorships and partnerships were able to help finance the event and allow the registration fee to be charged at cost.
ISPIM, which draws 85 per cent of its income from events, has decided to expand its annual event calendar to four meetings. This allows the association to engage with more of the innovation community and to get deeper into geographical areas rich in innovation developments.
The new addition is the ISPIM Connects Osaka Conference, set for 2025, shared Bitran, who added that the association intends to anchor one of its regular events in Japan where the spirit of innovation runs high, while keeping an eye out for other Asian destinations for future editions, as the region is active in the space of innovation.
Michelle de Ocampo-Ballesteros, director, government and consumers’ affairs, Philippine Marketing Association, said online-offline hybrid meeting formats could also be a useful way to manage costs while achieving the target profitability or return on investment for the project.
“In this way, there can be smaller space for onsite (and allow for) more participants online,” explained de Ocampo-Ballesteros, who is concurrent president of Pasig City Chamber of Commerce and Industry.
“Although people nowadays are inclined to attend the events onsite, online attendance is a good option for them to… gain the information they wish to have wherever and whenever,” she pointed out. – Additional reporting by Rosa Ocampo and Karen Yue