As meeting professionals begin to plan events for 2023, Mike Dominguez, president and CEO of Associated Luxury Hotels International (ALHI), joined Editorial Director JT Long for his annual Smart Chat Live! predictions conversation about the trends meeting profs need to prepare for in 2023.
You can relive the insights on-demand here, but we grabbed some of the action items below in case you are in a hurry to send that next RFP.
The New Normal Is Here
The world is far from having a 0% Covid infection rate, but meeting professionals have been adjusting back to a new normal. Dominguez noted that even though mega-conferences were absent last year, borders are now largely open and travel is back with a vengeance. Despite the missing Asian demographic, the number of attendees should offer an encouraging future forecast, “There’s no longer hesitation,” said Dominguez, “Right now, we’re normalized. We haven’t seen a drop-off.”
Revenge Meetings, New Meetings Are Driving Demand
Travel is back, in Dominguez’s eyes. For those who did some ‘revenge travel’ last year, Dominguez says ‘revenge meetings’ is the next thing. “People need to get together and they haven’t gotten together in years. Corporations are saying we need to get together. A lot of it is new meetings. There’s a need just to get people together. For a variety of reasons whether its culture driven, strategy driven, for strategic discussion. They’ve having to bring people together quickly.”
Compression Is Here for Awhile
Dominguez predicted 2023 will look a lot like 2021 in terms of compression and price increases. “We’re paying for more labor. Hotels are charging more, but profitability is the same as in 2019,” Dominguez said. “These costs are in there because they are necessary.” With interest rates 4-5% points higher, it has become harder to finance huge new hotel projects. However, Dominguez believes there will be inflation normalization by 2024.
Dominguez encouraged meeting professionals to explain to their stakeholders that when they see inflation decreasing, that doesn’t mean prices are going back to 2019 levels. “When we see a slowdown, it’s the rate of growth that decreasing; it doesn’t mean that the actual pricing is going backwards.”
F&B Prices Are Impacted by War in Ukraine
While Dominguez sees gas prices dropping, he also sees a slow down in growth around food and beverage prices.
“We haven’t seen the [impact of the] wheat shortage [in the United States] yet, which will be coming up sometime in 2023, and a lot of that has to do with Ukraine and Russia. That wheat shortage is going to put pressure on bread pricing. Corn is at an all-time high. We feed a lot of animals a lot of corn which increases prices across the board.”
No Recession for Meetings
Despite the recent layoffs and talk of a recession specifically in the tech sector, Dominguez is optimistic that the meetings industry won’t be impacted. “I think meetings and events isn’t going to behave normally in a recession because many companies haven’t gotten together in two years and there is a need to get together. It’s not optional now. There’s a need.”
International Plane Shortage Resulting in More Domestic Travel
Dominguez predicted that Europe will be back to 2019 meeting frequency levels in four or five months. He saw international air lift as a bottleneck constricting global events. “We need more planes,” he stated. While he sees Boeing poised to deliver, “It’s going to take us some time to get those flights back.”
Read More: Navigating the Bus Driver Shortage
Because of the lack and expense of international flights, people are flying more domestically and locally. That is good news for the Caribbean and the Dominican Republic.
Ask Hotels About Pockets of Availability
While most meeting space rental is tied to guest room blocks, Dominguez advised meeting professionals with a need for relatively more breakout space than guest rooms to talk to hotels in places with big citywide events happening in town to see if they have orphaned meeting space that would be reasonably priced. Planners may have to be flexible about dates, but that is one way to get around the ratios.
Sustainability Is Relative
Even though some people believe staying home beats traveling to events for managing your carbon footprint, Dominguez argued that when everything is taken into consideration, including commuting when at home, energy-efficient features in hotel rooms and an increase in walking when exploring a destination, the two activities are more similar in output than they may appear. “I think, as an industry, we need to celebrate and highlight the sustainable aspects of travel.”