Luxury Events: Regional trends across the world
A snapshot of what’s happening in luxury events markets in the key regions across the globe, from our first-ever inSPIRE trends report…
EMEA
There is a continued interest and investment in face-to-face meetings and events across the EMEA region “as businesses increasingly understand that the best way to get a message across is to get people to experience it”, according to CWT M&E vice president EMEA Ian Cummings.
The UK market is unsurprisingly on tenterhooks waiting to see how Brexit plays out, but so far budgets for 2019 are largely remaining flat, according to Worldspan managing director Sophie Morris. “Overall, Sterling’s weakness versus the Euro continues to play a strong narrative, and this is pushing some clients to decrease budgets on certain events,” she says. “Naturally, it depends on the type of event but, where budgets are decreasing, clients are actively looking to save budget on the logistics elements in order to maximise investment in the content of the event”.
With the government still in deadlock and Brexit no closer to being resolved (despite the original and extended deadlines having passed), there is a definite sense of cautiousness creeping in. “I am not as optimistic as I have been because everyone is so deeply wrapped up in Brexit. I am certainly not pessimistic, and I think we are going to see more of the same in 2019 as last year, but I would be happy for stability at the moment,” says OrangeDoor managing director Elizabeth Heron.
SevenEvents managing director, Angelee Rathor, adds: “We are all worried about Brexit and what it will mean for the incentives that we have in the EU. The way in which we bill for services may have to change but we are uncertain of the immediate effects. The general forecast however still seems to be positive and we will be doing our upmost to stay ahead of the game.”
Across the rest of Europe, the mood is generally positive. Jan De Ridder, owner of Belgium-based agency The Boosting Group says that budgets are improving as client confidence returns. “We’re already booking incentives for 2020. Where previously clients were waiting until the last minute to confirm, they are more confident to book further in advance,” he says.
Cummings reports that business in Spain and France is steady, with lots of events in the automotive and pharmaceutical sectors in particular, as well as strong demand for outbound incentives. Julia Bary, general manager at Paris-based Grand Luxury Experiences, is predicting double-digit growth in 2019, while David Richard, associate director at Com & Sea in France says that business is steady. “My customers are asking for shorter stays, and we have more pressure on costs. The expectations for luxury are still the same but for less money,” he adds.
Johanna Mukoki, group CEO of Travel with Flair, is seeing a similar trend in Africa: “We have noticed a decrease in budgets, but the client is still expecting value for money. Group sizes and length of stay are also decreasing, which is a plus as an overall lower budget with less participants and a shorter stay does ultimately leave us with more budget per person to enable us to still offer a luxury experience.”
Another trend she is seeing is clients wanting to combine their incentive tours with a sporting event for maximum impact, which results in higher rates due to global interest in the event from countries with stronger currencies. “This is a challenge for countries like South Africa with a volatile and weaker currency against the USD, EUR and GBP,” she explains.
Asia Pacific
Despite the economic slowdown in China, growth in the Asian meetings and incentives market remains solid with strong inter-regional business. “The outlook is for growth in all regions especially for a number of our clients within APAC,” says BCD Meetings & Events strategic meetings manager, Chantal Challenger.
“We have just increased our headcount in APAC with another account manager now sitting in Hong Kong and are looking to grow our teams to facilitate the growing demands of these client accounts and their expectation of further aggressive growth and productivity within 2019.”
Established MICE destinations such as Thailand, Hong Kong and Singapore continue to be among the most popular for local and in-bound business, while emerging destinations such as Vietnam, Cambodia and Sri Lanka are attracting more incentives from European and international clients.
Clients based within Asia are willing to spend more, according Challenger, but continue to seek the best value for their dollar spend. “As well as suppliers becoming more competitive, clients have already done their research a lot of the time and know what incentives, benefits, discounts can be achieved by further negotiations and discussions with suppliers. Now more than ever, expectations are on the sourcing teams and event management teams to deliver,” she explains.
Other key challenges include short lead times and limited resources to support unique luxury events for larger groups. “While the demand is strong for luxury events, there is still a lot of work for luxury products (in Asia) to cater their product to larger audiences,” says Challenger. “Currently services and venues offered suit smaller groups under 100, however our challenge is to find the right venue, service, product offering, which can deliver the personalised service and key luxury experiences to larger groups.”
USA
Although event budgets are largely flat in the US, Philip Cochrane, head of global business development at Destinations Inc believes they will “increase with higher company profits this year.”
In spite of the recent government shutdown, ongoing trade battle with China and stock market volatility, the US economy remains remarkably sturdy with strong jobs and manufacturing gains reported at the start of 2019. Both corporate and agency planners based in the US are positive about the potential for further growth in luxury events.
Joost de Meyer, chairman and CEO at First Incentive Travel, says: “You never know what will happen with politics and there are concerns that we may be due another recession. But I think we will see more growth this year and next, particularly in incentive travel as companies want to reward their employees.”
Director of incentive travel at beauty and cosmetics brand Mary Kay Corp, Steve Hodges agrees and says the increased interest in luxury events and incentives is being driven by “society moving from materialistic rewards to experience rewards”. However, he adds that extra attention is required now to ensure there is the best return possible attached to budgeted dollars.
“You look more closely at your qualifier population to decide what motivates them. For example, some of our groups have basically the same population from year to year and they all know each other well but only see each other a few times a year,” he explains. “Rather than spend a lot of money on welcome evening entertainment, we use those funds elsewhere because at the welcome event, we know that networking and socialising is more important than being entertained.”
The US market is also experiencing short lead times, and as a result “many hotels are full in many destinations markets, so booking has been tough for groups. This means travel is up though which is good,” says Cochrane.
This feature is taken from our first annual trends report.