2016 member survey - aipcaipc.org/2016/aipc 2016 member survey report 16.6.pdf · 2016 member...

2016 Member SurveyDiversification & Adaptation

aipc.org | 22016 Member Survey Diversification & Adaptation

Table of Contents

Introduction .............................................................................................................................................3

Executive Summary ................................................................................................................................4

I.) Growth & Revenue .............................................................................................................................7

II.) New Buildings, Expansions & Renovations .....................................................................................19

III.) Client Trends ...................................................................................................................................23

IV.) Competition and Subventions .........................................................................................................28

V.) Security ...........................................................................................................................................34

Conclusion .............................................................................................................................................37

Diversification & Adaptation2016 Member Survey


IntroductionThis is the seventh 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 issues impacting industry growth along with how members are dealing with competition, subventions and venue security issues.

AIPC conducted the survey of all members around the world between February and April 2016. The survey received responses from 114 member venues, which represents a 65% response rate. The report covers the following key areas:

• Growth and Revenue

• New Buildings, Expansions and Renovations

• Client Trends

• Competition and Subventions/Incentives

• Security

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.


Executive SummaryWhile there are many key opportunities and challenges facing the industry, five of the most important findings and insights from the new survey are summarized here.

Top Five Key Insights

1.) AIPC Member Revenue Grew by 8% in 2015. This compares to 5.8% in 2014 and 3.1% in 2013. Growth for 2015 had been forecast by members at only 4.6% in last year’s survey. For 2016, members are expecting more subdued 4.2% revenue growth.

Average Revenue Growth Worldwide

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2.) 59% of Members Implemented an Innovation Over the Past Two Years – and 40% Added a New Revenue Stream

Due to ever increasing event producer and group requirements as well as change in technology, centre management teams have to innovate. The highest percentage of members in North America (69%) and Australia (67%) indicated they added an innovation or important new idea over the last two years.

3.) The Top Three Innovation Areas are Technology, F&B and the Client Venue Experience. For a number of years these have been, and are expected to continue to be, the “Big Three” innovation areas for convention centres.

3.1%

5.8%

8.0%

2013 2014 2015


4.) The Strongest Regions and Markets are Getting Stronger – but the weaker are staying weak when comparing results to the question: How do you characterize the current strength of overall economic activity and business growth in your region? This year, 21% of members say economic growth is strong compared to only 13% in 2015.

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5.) Event Producer Requirements and Attendee Changes are Accelerating. According to a number of members, many events are changing their formats mainly to better serve more technology savvy and informal attendees. A key trend is the increased usage of public space and different educational and networking formats. And, of course, technology and bandwidth requirements continue to increase significantly. Here are a few insightful member quotes on how event clients and attendees are changing:

• “(Event producers and attendees want) more open rooms, more flexible spaces, more technology, more digital services, more networking areas, comfort, parking accessibility, welcoming spaces.”

• “Clients are experimenting with meeting architecture and design. What they want is larger function spaces that are more adaptable to new seating configurations, and retain (or enhance) the meeting technology infrastructure (wi-fi, internet connectivity, audio/production flexibility) but without the functionality or cost efficiencies of dedicated spaces or systems.”

• “Less exhibition space, more hospitality suites, networking opportunities for delegates.”

• “Less formal settings, more use of multifunctional spaces.”

• “More engagement during events requiring more break out rooms with flexible configurations. Everyone is looking for a unique setting requiring more facility flexibility to change the look and feel of the experience.”

• “Request for less formal settings, more public, open gathering and communication areas.”

• “Technology and connectivity are driving facilities to be able to handle multiple device connections for every show and have much more bandwidth capability inside the show.”

• “There’s a need for more lounge and interactive areas with tools that promote that interaction, design-wise, technological, etc.”

• “(Attendees) are expecting the living room experience at the venue, immediate Wifi, great AV they can control, POD or other social space.”

Executive Summary

2016

2015

Strong growth/activity

Moderate Weak, flat or recession

13%

21%

61%

51%

26%28%


Member Survey Response by Region

Fifty-six percent of the survey respondents are European members, 15% are from North America and 13% are in Asia.

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More information on the five primary insights and the full survey results are provided in the remainder of the report.

Executive Summary

Europe

56%

15%13%

5% 7%3% 3%

North America

Australia

Asia

Africa

Middle East

Latin/South America


I.) Growth & Revenue

Worldwide Gross Revenue Growth 2010 to 2015 – and Expected for 2016

AIPC members collectively experienced strong revenue growth of 8% in 2015, the fastest growth ever tracked by this survey, which was first conducted in 2010. The growth rate expected for 2016 on average worldwide is a more subdued 4.2%.

2010 to 2015 Revenue Growth with 2016 Forecast

2010 Gross Revenue Growth Actual






2016 Gross Revenue Growth

ExpectedWorldwide 6.8% 5.7% 6.7% 3.1% 5.8% 8.0% 4.2%

Europe 3.9% 5.2% 3.0% 2.8% 7.7% 7.9% 5.0%

North America 2.2% 5.3% 1.1% -0.3% -1.2% 6.9% -1.6%

Asia 26.1% 2.4% 17.8% 1.4% 5.2% 9.0% 18.0%

Australia 9.3% 9.1% 10.1% 3.3% 2.7% 11.3% -4.2%

Africa -- 7.8% 36.7% 9.2% 15.6% 16.1% 6.4%

Multi-Year Trends: Centre Revenue Growth 2010 to 2015 with World GDP – and 2016 Forecast

Collectively AIPC member venues continue to experience revenue growing much faster than global GDP growth as tracked by the IMF.

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Worldwide APIC

Worldwide GDP (IMF)

Source: AIPC, IMF

2016 Forecast

8.0%

201520142013201220112010

4.2%

5.8%

3.1%

6.7%

5.7%

6.8%

3.2%3.1%3.4%

3.0%

3.2%

3.9%

5.2%


2010 to 2015 Total Gross Revenue Growth

For the first time this year, the survey asked members to provide the total percentage of gross revenue growth using 2010 as the base year through 2015. The survey question was: Looking back five years, by what percentage has your facility’s total gross revenues changed from 2010 to 2015? Overall, revenue increased by a total of over 29% worldwide between 2010 and 2015.

The most growth has been seen in Africa (58.9%) over the five year period and the lowest level has been in Europe (25.7%). The growth rates in most all of these regions have likely been stronger than members may have forecasted back in 2010, although this is speculation.

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Worldwide 29.1%

Europe

North America

Asia

Australia

Africa

25.7%

26.0%

27.9%

27.7%

58.9%

Growth & Revenue


Attendance Growth

2010 to 2015 Attendance Growth and 2016 Forecast

Attendance increased at a strong rate last year in Europe, while it declined in North America and Asia.

2010 Attendance

Growth Actual

2011 Attendance

Growth Actual

2012 Attendance

Growth Actual

2013 Attendance

Growth Actual

2014 Attendance

Growth Actual

2015 Attendance

Growth Actual

2016 Attendance

Growth Expected

Worldwide 1.0% 5.4% 2.0% 2.7% 4.5% 4.9% 4.0%

Europe -0.8% 5.2% 0.3% 0.9% 4.6% 8.4% 4.2%

North America -6.3% 6.8% 0.1% -1.1% 5.1% -0.8% 1.4%

Asia 15.5% 2.8% 12.8% 13.0% 4.2% -4.7% 12.7%

Australia 6.7% 4.3% -3.5% 0.7% 1.3% 3.7% 0.7%

Africa -- 22.0% 10.0% 11.7% 11.0% 13.1% 7.5%

Worldwide Attendance Growth 2010 to 2015 with Forecast for 2016

Attendance growth worldwide was healthy in 2015 at 4.9%, which was the fastest attendance growth since 2011. Members are forecasting 4% overall expansion in attendance this year.

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2016 Forecast

201520142013201220112010

4.0%

1.0%

5.4%

4.5%4.9%

2.7%

2.0%

Growth & Revenue


2010 to 2015 Total Attendance Growth

Also new this year is analysis of 2010 to 2015 total annual attendance growth. The survey question was: Looking back five years, by what percentage has your facility’s total number of event attendees and delegates changed from 2010 to 2015? The fastest total attendance growth over this five-year period was in Africa and the slowest was in North America.

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Strength of Economic Growth

A total of 72% of members say they are experiencing either strong or moderate economic growth in their region. This year 21% of members say economic growth is strong compared to 13% in 2015. Twenty-two percent said growth is weak vs. 18% last year.

All % Europe N. Amer. Asia Australia Africa

Strong growth/activity 21% 21% 21% 20% 25% 22%

Moderate 51% 51% 53% 60% 50% 33%

Weak 22% 21% 21% 20% 25% 22%

Very weak, flat to no growth 4% 4% 0% 0% 0% 22%

Negative growth, recession 2% 2% 5% 0% 0% 0%

Worldwide All Regions 15.9%

Europe

North America

Asia

Australia

Africa

16.3%

5.8%

6.8%

12.5%

24.8%

Growth & Revenue


Strength of Economic Growth: 2015 and 2016 Comparison

The table provides a comparison of level of growth activity seen by members this year vs. 2015.

All % 2015 All % 2016 Differential

Strong growth/activity 13% 21% +8%

Moderate 61% 51% -10%

Weak 18% 22% +4%

Very weak, flat to no growth 6% 4% -2%

Negative growth, recession 2% 2% --

Risks to Continued Recovery in Your Regional Economy

The main regional risk is simply that the underlying economy turns weak, followed by government policies or political changes.


Overall economic weakness 63% 58% 74% 80% 75% 56%

Government policies including reduced spending 43% 45% 21% 40% 50% 56%

Political changes, instability 31% 35% 21% 13% 13% 44%

Changing government priorities 25% 22% 37% 20% 25% 44%

Unemployment 19% 17% 16% 20% 0% 56%

Other 15% 10% 21% 13% 13% 44%

Risks Specifically to Centre Business Performance

The top two risks to centre business performance are growing competition and rising hotel occupancy and prices.

Some of the key regional differences include:

• 88% of Australian members see growing competition from other centres and regions. Also, 50% of Australian members say changing government priorities may be an issue.

• Hotel availability and pricing is an issue for 63% of North American members.

• 47% of North America members say air travel issues such as pricing and availability is an issue.

Growth & Revenue


Risks Specifically to Centre Business Performance


Growing competition from other centres / regions 68% 74% 68% 40% 88% 38%

Hotel availability and pricing 47% 55% 63% 20% 50% 13%

Overall economic strength 44% 35% 53% 60% 63% 50%

Air travel issues (pricing, avail-ability, airlift, route access, etc.) 31% 29% 47% 27% 38% 25%

Government / corporate restric-tions on meetings 26% 23% 21% 27% 25% 75%

Changing government priorities 18% 11% 11% 33% 50% 38%

Immigration or visa require-ments limiting access 9% 8% 11% 7% 0% 13%

Increases of corporations and individuals using digital media and communications

4% 3% 11% 7% 0% 0%

Sustainability concerns 4% 3% 5% 7% 0% %

Replacement of events with online alternatives 2% 0% 11% 0% 0% 0%

Other 11% 11% 11% 20% 13% 0%

Percentage of Venues Seeing Significant Economic or Political Change Impacting Business Performance

One-third of members worldwide say there has been an important economic or political change that has significantly changed their business performance, client bookings or growth outlook. In contrast, 89% of African members say they have experienced one or more of these issues.

0 5 10 15 20 250 5 10 15 20 25

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Europe

North America

Asia

Australia

Africa

33%Worldwide All Regions67%

72%

74%

71%

62%

28%

26%

29%

38%

89%11%

Yes

No

Growth & Revenue


Key member comments on this area include:

• “Because of the political and geographical situation, we have a challenge with security.”

• “Falling oil prices have had a huge impact on Government spending in general, and funding for the Centre in particular.”

• “Government cost cutting measures hence price cuts for government and its institutions meetings and events.”

• “Government has significantly invested in tourism.”

• “Mining industry strength is dropped and many other venues coming online in the near future within the area.”

• “Terrorism concerns, reduced spending, especially from government sectors.”

• “Visa regulations, restrictions being introduced on government meetings.”

Revenue Growth Expected in 2016: Percentage of Centres Seeing Increasing Revenue

The table below provides the revenue sources with the largest percentage change expected this year vs. 2015. Food and beverage has been selected by the highest percentage of centres in terms of expected revenue increases this year, and this was also the top category in 2015. The next most selected revenue categories in terms of expected growth are event services, and telecommunications and technology services.

2016

Expecting Increase

2016 Expecting Decrease

2016 Expecting

to Stay the Same

Not Applicable

Food/beverage sales or concessions 53% 21% 22% 4%

Event services including equipment rental and Audio-Visual 52% 11% 33% 4%

Telecommunications, internet and technology services 51% 8% 32% 8%

Exhibit hall and meeting room rent 49% 15% 35% 2%

Signage and/or advertising 30% 9% 37% 25%

Other vendor commissions/revenue share 28% 10% 40% 22%

Events owned/produced by the venue 24% 4% 18% 55%

Parking revenues 18% 13% 37% 32%

Public/private partnership(s) 10% 1% 20% 70%

Portion of hotel occupancy tax 9% 1% 14% 77%

Direct government funding 7% 7% 23% 64%

Naming rights 3% 0% 14% 83%

Growth & Revenue


Centres with Gross Profit

Thirty-eight percent of AIPC member centres realize a gross profit, net of any debt service or loan payments. The region with the highest percentage of profitable venues is Australia, and Europe has the least.

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Governmental Payments

A follow-up question asked: (If the centre does not realize a gross profit) Does your venue receive any governmental payments or subsidies to fund operations or pay debt service or loans? Thirty-eight percent of these members receive governmental payments or subsidies to fund operations or pay debt service or loans.

0 10 20 30 40 50 60 70 80

0 20 40 60 80 100

0 20 40 60 80 100

Europe

North America

Asia

Australia

Africa


75%

60%

42%

25%

25%

40%

58%

75%

67%33%

Yes

No

Europe

North America

Asia

Australia

Africa


63%

33%

71%

60%

37%

67%

29%

40%

0%100%

Yes

No

Growth & Revenue


New Revenue Sources

There is continued focus by venue management on developing new revenue streams and services. The focus is on adding more services, as one member said in the survey “We try to be an integrated services company.”

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Examples of new revenue streams include:

• Venue-owned events and partnerships with event producers.

• Digital signage and advertising.

• Enhanced event services, as one member said the “full cycle of event services”.

• In-house catering.

• VIP and Entertainment offers.

• Naming rights.

• Registration.

• Enhanced technology and wifi services.

• Meeting area structures and environments.

Europe

North America

Asia

Australia

Africa


54%

75%

54%

71%

46%

25%

46%

29%

14%85%

Yes

No

Growth & Revenue


Percentage of Members that Implemented an Innovation Over the Past Two Years

Convention centre and venue management is changing, primarily due to ever increasing event producer and group requirements as well as technology. In short, centre management teams have to innovate. To quantify this area, the member survey for the first time asked specifically about innovation and new ideas. The survey question was: Have you implemented at least one important new operational, management or systems innovation or impactful new idea over the past 18 to 24 months?

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Innovation examples include:

• “App, online reservation systems.”

• “Better customer satisfaction tracking.”

• “Created a multifunctional area for events only (no conference rooms).”

• “Increased wifi bandwidth and connectivity throughout campus.”

• “New automated staff scheduling software and social tables software for event related setup diagrams.”

• “New design of offers and internal process analysis to evaluate working procedures.”

• “New digital signage system.”

• “New event planning process and process management. Built in projectors and screens in meeting rooms.”

• “Online reservation system for in-house events.”

• “Price policy: all-inclusive packages.”

• “Streamlined event delivery teams.”

• “Using virtual reality technology to show clients the Centre at client meetings.”

• “Visitor tracking, digital signage system.”

Europe

North America

Asia

Australia

Africa


41%

31%

46%

33%

59%

69%

54%

67%

50%50%

Yes

No

Growth & Revenue


Areas of Innovation and New Ideas Focus

The top three innovation areas are telecommunications and technology, F&B and the client and attendee experience. For a number of years these have been, and are expected to continue to be, the “Big Three” innovation areas for convention centres.

Some of the key regional differences include:

• Food and beverage is a particular focus in Australia, Africa and North America.

• The client, attendee and exhibitor on-site/in-venue experience is most important is Australia and North America currently.

• AV is a key focus in Australia and Africa.

Growth & Revenue


Areas of Innovation and New Ideas Focus


Telecommunications and tech-nology services 66% 71% 73% 62% 57% 40%

Food and beverage services 62% 48% 73% 62% 100% 100%

Client, attendee and exhibitor on-site/in-venue experience

61% 59% 73% 46% 86% 60%

Marketing and communications 54% 59% 33% 54% 57% 80%

Audio-Visual services 52% 59% 13% 31% 86% 80%

Signage 38% 41% 60% 8% 43% 20%

Meeting rooms functionality and experience 35% 41% 33% 31% 0% 40%

Staff management 34% 36% 13% 38% 57% 20%

Operations 27% 32% 7% 46% 14% 0%

Pre-function spaces functionality and experience 20% 16% 40% 23% 0% 20%

Vendor and supplier management 19% 18% 20% 23% 14% 20%

Outdoor, outside areas func-tionality and experience 17% 16% 27% 8% 14% 0%

Venue connections and links to transportation, such as shuttle bus and taxi areas

16% 13% 13% 23% 14% 20%

Exhibit hall functionality and experience 15% 20% 0% 8% 0% 40%

Ballroom(s) functionality and experience 13% 14% 20% 8% 0% 20%

Other concession areas and store-fronts 13% 7% 33% 15% 0% 20%

Venue connections and links to hotels or other key buildings 9% 11% 7% 8% 0% 0%

Parking areas functionality and experience 8% 7% 13% 0% 0% 20%

Loading dock and related areas functionality and experience 4% 2% 13% 0% 0% 20%

Not Applicable 2% 4% 0% 0% 0% 0%

Other 2% 2% 0% 8% 0% 0%

Growth & Revenue


II.) New Buildings, Expansions & Renovations

This year major capital investment project activity including expansions and renovations is similar to the findings from last year’s survey. While 63% of members said they had some type of major project underway or in planning stages in 2015 in this year’s survey the figure has increased by only 1% to 64% of members worldwide. Generally, over the past few years the focus has shifted from new builds and expansions to renovation projects.

2016 AIPC Members Planning or Currently Developing/Constructing a New Build, Expansion or Renovation Project

Ten percent of members say a new build project is underway or in the planning stages. A significant 42% have a renovation program underway. Seventy-one percent of African members have an expansion project underway or in planning stages. Forty-three percent of Australian members are expanding and/or renovating currently, or are in the planning states.


New build 10% 7% 12% 8% 14% 29%

Expansion 27% 25% 24% 15% 43% 71%

Renovation 42% 49% 29% 46% 43% 29%

No development plans 36% 35% 47% 31% 14% 14%

Multi-Year Trends: AIPC Members Worldwide Planning or Developing a New Build, Expansion or Renovation Project 2010 to 2016 – All Regions

2010 2011 2012 2013 2014 2015 2016

New build 17% 12% 16% 15% 20% 10% 10%

Expansion 32% 25% 20% 31% 28% 31% 27%

Renovation 17% 23% 36% 33% 39% 41% 42%

No plans 35% 40% 36% 38% 29% 37% 36%


Spaces and Areas in Most Need of Enhancement or Investment

The venue areas in the most need of enhancement or investment, according to the members, are meeting rooms, technology and exhibit halls.

Key regional findings include:

• Meeting rooms as well as technology infrastructure and services need the most investment in Australia and Africa.

• Asia is the region with the highest percentage of members that say their exhibit halls need enhancement or investment.

• North American members say they need to focus on their pre-function spaces.


Meeting rooms 58% 56% 54% 54% 67% 86%

Technology infrastructure or services 54% 50% 54% 54% 83% 71%

Exhibit halls 41% 35% 38% 62% 50% 57%

Signage 34% 33% 31% 31% 33% 57%

Pre-function spaces 32% 20% 77% 31% 50% 29%

Client-facing food service areas and restaurants 27% 20% 31% 31% 50% 57%

Ballroom(s) 25% 7% 46% 54% 50% 29%

Outdoor, outside areas 17% 17% 15% 15% 50% 14%

Venue connections and links to hotels or other key buildings

13% 13% 8% 15% 0% 29%

Loading dock and related areas 13% 7% 15% 23% 33% 29%

Kitchen(s) 12% 9% 0% 8% 33% 29%

Venue connections and links to transportation, such as shuttle bus and taxi areas

12% 9% 15% 15% 0% 29%

Business centre 8% 7% 0% 8% 17% 29%

Other concession areas and store-fronts 5% 0% 23% 15% 0% 0%

Other 13% 17% 15% 0% 0% 14%

New Buildings, Expansions & Renovations


Multi-Year Trends: Spaces and Areas in Most Need of Enhancement or Investment

The table below provides the top three venue spaces and service areas that members have said were in the most need of enhancements or investment going back to 2010. Over the past few years technology has become more important while the focus on meeting room upgrades has remained steady.

Rank 2010 2012 2013 2014 2015 2016

1. Meeting rooms (42%)

Meeting rooms (53%)

Meeting rooms (49%)

Technology (56%)

Technology (67%)

Meeting rooms (58%)

2. Exhibit halls (34%)

Exhibit halls (46%) Signage (43%) Meeting Rooms

(54%)Meeting Rooms (53%)

Technology (54%)

3. Ballrooms (24%) Signage (35%) Exhibit halls (42%)

Exhibit halls (46%)

Exhibit halls (44%)

Exhibit halls (41%)

Is Government More or Less Inclined to Invest in Convention Centres

Overall, one-third of members say government is more inclined to invest in the centre industry right now. This is up from only 18% that said this in both 2012 and 2013.


More inclined to invest 33% 30% 38% 38% 29% 43%

Less inclined to invest 30% 21% 56% 31% 29% 43%

No change 37% 49% 6% 31% 43% 14%

Multi-Year Trends: Government Inclination to Invest in Convention Centres

2012 2013 2015 2016

More inclined to invest 18% 18% 34% 33%

Less inclined to invest 41% 37% 27% 30%

No change 41% 45% 39% 38%

What Changing Event Formats and Client Requirements are Prompting a Re-Assessment of Facilities and Services

Some of the key themes from the many write-in comments are:

• More informal and casual meeting spaces

• Flexibility in terms of space usage and faster room change overs

• More use of pre-function space

• Focus on networking

• More technology usage and bandwidth requirements

• Different education and meeting room formats



Select member quotes:

• “Ability to offer more interactive ‘pop up’ spaces where delegates can share info, supported by technology.”

• “Clients are experimenting with meeting architecture and design. What they want is larger function spaces that are more adaptable to new seating configurations, and retain (or enhance) the meeting technology infrastructure (wi-fi, internet connectivity, audio/production flexibility) but without the functionality or cost efficiencies of dedicated spaces or systems. It’s very reminiscent of “black box” experimental theatre spaces of 40 years ago, except that there’s a higher premium on comfort.”

• “Constant IT and technical innovation.”

• “Flexible space to host diverse mix of events including sporting, concerts, religious events as well as keynote speakers and more traditional general session configurations.”

• “Higher focus on security since Paris event.”

• “Increased requirements to technological infrastructure, change of formats within the event that result in necessity of quick transformation of meeting space, hybrid events which combine face-to-face and on-line formats.”

• “Increasing break-away rooms for small groups 10-20 pax. Increasing demand for ‘public catering’ as organisers move away from paid lunches etc. Will need to look at developing a large ‘public catering’ facility with a quality set menu at the least cost.”

• “Innovative setups requiring more flexible space and more informal spaces for parallel sessions and casual meeting.”

• “Less exhibition space, more hospitality suites, networking opportunities for delegates.”

• “Less formal settings, more use of multifunctional spaces.”

• “More engagement during events requiring more break out rooms with flexible configurations. Everyone is looking for a unique setting requiring more facility flexibility to change the look and feel of the experience.”

• “More flexibility in room and lobby space settings, signage, wlan-technology, food and beverage performance.”

• “More flexibility in the food and beverage offer.”

• “More flexible meeting spaces, modern technology, sustainability and security demands.”

• “More high tech infrastructure.”

• “More informal meeting and networking spaces.”

• “More interactive hubs for people to meet in - not boring meeting rooms.”

• “More open rooms, more flexible spaces, more technology, more digital services, more networking areas, comfort, parking accessibility, welcoming spaces.”

• “More use of our pre-function space, less exhibits and more sponsor activation.”

• “Need for flat rooms (ballrooms) instead of amphitheaters with fixed seats.”

• “Networking spaces, from furniture to services to technology such as beacons, higher WIFI density, and pricing.”

• “Request for less formal settings - more public, open gathering and communication areas.”

• “Rise of hybrid or convex events which require versatile spaces conducive to both exhibitions and conferences/summits.”

• “Space that is flexible and can easily be transformed.”

• “Technology and connectivity are driving facilities to be able to handle multiple device connections for every show in addition to attendance have much more bandwidth capability inside the show.”

• “There’s a need for more lounge and interactive areas with tools that promote that interaction, design wise, technological, etc.”



III.) Client Trends This section covers how event producers and clients are changing. Event producer requirements and attendee changes are accelerating. According to a number of members, many events are changing their formats mainly to better serve more technology savvy and informal attendees. Key trends are is the increased usage of public space and different educational and networking formats. And, of course, technology and bandwidth requirements continue to increase significantly.

Event and Group Segments with the Best Current Growth or Near-Term Prospects

Around the world members see both association conventions with exhibits and national and international corporate meetings as the strongest client segments.

Key regional differences include:

• Association conventions are particularly strong in Asia and North America.

• Corporate meetings are considered the best sector currently by Australian members.

• Exhibitions are especially strong in Asia.


Association conventions with exhibits 64% 55% 75% 92% 63% 50%

National or International corporate meetings 64% 57% 53% 54% 75% 67%

Association conferences and meetings 58% 55% 56% 62% 63% 67%

Local corporate meetings 46% 48% 44% 38% 38% 33%

Exhibitions, trade shows and trade fairs 43% 38% 50% 69% 13% 50%

Entertainment events 31% 38% 13% 23% 50% 17%

Consumer and public shows 28% 23% 31% 38% 25% 33%

Governmental events and meetings 27% 27% 19% 23% 13% 50%

Sporting events 14% 13% 19% 8% 38% 0%

Other 6% 3% 6% 23% 0% 0%


What Clients Ask For – and What’s Provided by Centres

Survey Question: What do your top clients typically ask for or require in terms of subventions, incentive funds, rebates or discounts – and what do you provide?

All Worldwide Respondents What Clients Ask/Require

What Centre or DMO-CVB

ProvidesDifferential

Exhibit hall rent reductions, discounts 84% 62% 22%

Ballroom or meeting room rent reductions, discounts 77% 53% 24%

Food & Beverage functions or discounts 68% 27% 41%

Audio-Visual services or discounts 59% 20% 39%

Discounts on other venue services, costs (besides rent) 55% 25% 30%

Reduced hotel room rates 48% 26% 22%

Pre-signing sales activities (site visits, sales trips, entertainment) 47% 39% 8%

In-City attendee transportation, shuttle busing or mass transit discount or passes 39% 27% 12%

Marketing support (e-blasts, website, emails, bro-chures) 39% 38% 1%

Free Ballroom or meeting rooms 36% 12% 24%

Civic receptions 34% 26% 8%

Free exhibit hall rent 29% 9% 20%

Conference and evening function venues 29% 21% 8%

Direct cash subsidy 26% 22% 4%

Hotel rebates to event producers 21% 13% 8%

Guarantees for exchange rates fluctuations 15% 3% 12%

Travel, flight, train transportation discounts to get to the city 11% 15% -4%

Contribution or loans for attendance marketing 9% 10% -1%

How Event and Group Clients are Changing

The survey asked: How are event producers and group client expectations or practices changing in ways that are impacting your business? Key themes are:

• More subvention and contract concessions

• Desire, expectation of free wifi

• More individual solutions and requirements

• Shorter term bookings

• Negotiations

Client Trends


• More inclusive package rates and options

• Watching costs

• F&B pull-back

• More areas with comfortable seating for networking

• Shorter stays

• Different F&B requirements

Select member comments:

• “Asking for additional and higher concessions (e.g. rental reduction) or incentives as other destinations are providing complementary rental; larger shows are growing and asking for additional move-in days.”

• “Asking for more efficiency and more individual solutions.”

• “Bigger requirements to provide free facilities to secure the overall event. Not something we can cover - may lead to eventual loss of business.”

• “Clients are buying less food and beverage for attendees.”

• “Clients are negotiating on prices, rental terms, etc. more than ever.”

• “Clients expecting more extra’s to be included, the need for high-end digital infrastructure is becoming vital for many clients.”

• “Cost conscious, more engagement with the local community and will sometimes only consider the destination if there is potential for membership growth.”

• “Customization, green practices, budgetary constraints, increased security concerns.”

• “Expect the venue to have more flexibility in payment terms and condition.”

• “Expectation of free WIFI, More off site receptions and dine-arounds; Engaging local social enterprises in conference; Requesting table and chair configuration changes, more casual seating.”

• “Expecting more incentives but reducing overall event spend.”

• “F&B offering reducing or cash catering option, no pre-booked. Want all inclusive rates. Want easy ‘get out’ contract options. Want more commission as see the value of their event to a destination.”

• “Higher expectation on advanced information technology and connectivity and also, enhanced digitalized products and services.”

• “Increase in use of individual digital media/telecommunications, complicated technological component of the event.”

• “Increased technological demands; increased requirement to support with key opinion leaders working locally.”

• “Last minute confirmation, harder to plan. More incentives to them.”

• “Late decisions, hard negotiators, shorter meetings (breakfast / half day or one day instead of two). Appointing third party service providers very late in the planning process.”

• “Late decisions, last minute deals, late confirmations, late cancellations and changes in contracts.”

• “Looking for value adds. Using cash support to replace declining sponsorship. They understand their value to the city and expect discounts and support accordingly.”

• “More added value expected. More discounts expected. Shorter lead times. More changes and short notice cancellations.”

Client Trends


• “More aggressive in requesting discount. Asking to reopen contracts for discounts and threaten to pull future events if they don’t get what they want.”

• “More bespoke and detailed Quotes; Quicker Responses; More extensive AV including streaming; More interactive AV and Client workshop spaces.”

• “More break-out-rooms, more flexible room and lobby space, more technical infrastructure.”

• “More careful of their budgets and are not willing to commit to all of the space upon signing the license. Some exhibition organizers will not resign until the annual show has run to limit their risk.”

• “More demanding of rebates and also late notice in bookings.”

• “More flexibility in all aspects.”

• “More services for less revenues, booking outside the block, wanting free rent, room rebates, commissions for their events.”

• “More short term; ask for a lot of discount and other incentives; want fixed prices for years ahead.”

• “New technology, Social Media, Wifi, Flexibility, Venue experience.”

• “Public risk catering instead of paid lunches; Short-term requests increasing; Reluctance to sign contracts well in advance of events.”

• “Short time reservation. Discount requirement for the whole Budget (including catering, etc...) and finally change of number of attendees in last minute. Less revenue of the event.”

• “Significantly less willing to commit to long-term booking; commitment is more typically no more than 3 years out, rather than 5-10 years out. Significantly less willing to accept contractual performance guarantees (e.g., room block attrition penalties, minimum revenue guarantees as a condition of rent reductions); expectation of incentive/subvention as a condition of booking.”

• “Strong demand for IT and technology services. Security concerns.”

• “They ask for discounts and bring their AV. Food and beverage habits are changing a lot. They are asking for sandwiches and cheap menus.”

• “They now expect that WIFI will be free and that rentals as well. If not, the destination is no longer considered. This is mostly true with the American Association market.”

• “They want to bring in their suppliers and not to use our services.”

• “Third party planners affect location selection and discounting. Hotel rates are high.”

• “Very high expectation at a very low price.”

• “Wanting more for less, more added value.”

Member quotes on how attendees are changing:

• “A lot of attendees stay only for one or two days and not for the whole time of the congress.”

• “Attendees expect free wifi and current and relevant information on their devices. Also, complimentary small spaces for discussions and cheaper F&B pricing options.”

• “Demanding free internet.”

• “Digital in growing and changing the request of spaces necessary to organisers.”

• “Eating offsite so F&B income reducing. Attending multi day events for less days so reduced economic impact. Not using hotel blocks so CVB’s income reduced.”

• “Flexibility to handle different type of event and market segment.”

Client Trends


• “Greater demand for concurrent wi-fi users. More charging stations for mobile devices.”

• “Greater use of public areas for personal workspace/networking activity that is more independent of scheduled programming; less willingness to commit to attending/exhibiting at meetings +30 days out from conference date; expectation of fast wi-fi bandwidth; diversity of food selection at retail outlets.”

• “Higher expectations of their experience e.g. fast WiFi, choice of F&B , Healthy options.”

• “Higher expectations towards AV Quality and Wifi.”

• “Increased requirements for tech support. Increased requirements for electricity to charge devices. Increased variety of special dietary requirements. Increased requirements for facilities to cater for various ethnic and religious needs.”

• “Less delegates and delegates attend less days and less social events to do with the Convention.”

• “Local menus, immersion into local cultures, high technological expectations, possible hybrid events.”

• “Looking for more technology options; Open spaces for informal meetings; Healthier food options.”

• “More charging stations and accompanying seating options.”

• “More desire for interactive information exchange in less formal settings.”

• “More hubs and interactive spaces required as part of the event programme.”

• “More informal, more activities in public space.”

• “More interactive formats, less large pleanaries and more hands-on sessions. Event apps and e-learning.”

• “More need for whitespace zones (lounges with free wifi, etc), focus on healthy food options, need to be connected all the time (wifi) .”

• “More networking and pop-up small meetings.”

• “More off premise activities for food and beverage instead in the building or hotel.”

• “More technology devices on site per person. Looking for more engagement during the conference with the local community.”

• “Ratio of devices per delegate is increasing rapidly. More activities happening in common spaces outside the traditional meeting rooms.”

• “They are expecting the living room experience at the venue, immediate Wifi, great AV they can control, POD or other social space, Content delivered before the meeting so the interactions with colleagues during becomes the most important aspect of their time on site. more exciting and continuous grazing options.”

• “They are looking for more lounging areas with technological services like wifi.”

• “We are seeing a reduction in delegate stay. They are coming for the conference and then leaving.”

• “We have to be more and more flexible in order to accommodate attendees last minute request and changing behaviors.”

Client Trends


IV.) Competition and Subventions

Last year’s survey covered centre and DMO-CVB relations in-depth. This year’s study focuses on new competition and subventions, incentives and discounts.

New Competition

New competition is a key issue for many centres around the world. In particular new national competitors have emerged in Africa, but also in Europe and North America over the past few years. Survey Question: Overall, over the past one to two years has the number of key competitive venues and destinations impacting your business or bookings increased?


Yes, new Regional competitor(s) 45% 42% 40% 46% 50% 57%

Yes, new National competitor(s) 53% 54% 53% 46% 50% 71%

Yes, new International competitor(s) 40% 44% 27% 38% 25% 57%

No 12% 11% 33% 8% 13% 0%

Unsure 1% 2% 0% 0% 0% 0%

Response to New Competition

The primary response to new competition have been to invest in technology or to make other major enhancements, change marketing messaging, and work closely with the DMO-CVB.

Important regional trends include:

• Sixty-three percent of Australian members have invested in new technology, and 75% have changed their marketing approach or messaging.

• North American members in particular are working more closely with their DMO-CVB partners.


Response to New Competition


Invested in technology or other major enhancements 55% 61% 47% 38% 63% 43%

Changed our marketing ap-proach or messaging 54% 57% 40% 54% 75% 57%

Worked closely with DMO-CVB 52% 48% 67% 31% 75% 57%

Reviewed our pricing and service levels 48% 48% 27% 62% 50% 57%

Gathered more competitive information/intelligence 41% 38% 40% 54% 25% 71%

Invested in new build, ex-pansion or renovation 38% 36% 33% 46% 38% 57%

Pursuing other markets 35% 39% 33% 31% 25% 43%

Hired more salespeople 34% 39% 20% 38% 38% 29%

Worked closely with hotel partners 30% 25% 27% 38% 25% 43%

Increased our marketing budget 22% 25% 20% 23% 13% 14%

Increased subvention and incentive activity 12% 4% 27% 0% 38% 14%

No Change 6% 7% 7% 8% 0% 0%

Not Applicable 5% 2% 20% 0% 13% 0%

Other 4% 5% 0% 0% 0% 14%

Competition and Subventions


Percentage of Venues Engaging in More Incentive or Subvention Activities

Thirty-eight percent of members say they have increased the level of incentive and subvention activities in the past year, while 49% say the level has stayed the same. Compared to five years ago, 58% of members worldwide say they have increased this activity. The survey question was: Has the level of subvention and discounting you provide to key clients and prospects increased, decreased or stayed the same over the past year – and how has this level compared to five years ago?

0 10 20 30 40 50 60 70 80

0 5 10 15 20 25 30 35

0 10 20 30 40 50 60

Change of Total Cash Value of Subventions and Incentives

According to members around the world, the average total cash value of subventions, incentives and discounts has increased by 7% in the past year and by 17% when compared to what was provided five years ago. The survey question was: Please estimate the percentage change of the total cash value of subventions, incentive funds, rebates or discounts provided to clients over the past year as well as the total change compared to five years ago?


% change last year 7% 3% 5% 7% -1% 18%

% change compared to five years ago 17% 11% 15% -12% 35% 60%

53%Increased Over Past Year

Compared to 5 Years Ago

Decreased

Same

38%

19%

14%

49%

28%



Events and Groups Offered Subventions, Incentives and Discounts Over the Past Year Compared to Five Years Ago

The percentage of key clients and groups being offered subventions and incentives has not changed much over the past five years. The survey question was: Please estimate the percentage of events and groups that were offered subventions, incentive funds, rebates or discounts over the past year as well as the percentage provided these five years ago?

0 10 20 30 40 50 60 70 80

0 5 10 15 20 25 30 35

0 10 20 30 40 50 60

Europe

North America

Asia

Australia

Africa


27%

29%

1%

14%

27%

32%

15%

19%

34%

% Last Year

% Five Years Ago

14%



Criteria Used to Provide Clients with Subventions and Incentives

Worldwide the main criteria used to decide what clients are offered subventions are:

• Event producers that will sign long term agreements to anchor to the destination or to add the destination to a set rotation pattern, 53%

• Event producers and groups with a certain level of historical economic impact, 46%

• Impact on other venue revenue besides exhibit hall or meeting room rent, 37%

A relatively high percentage of North American members use a number of these criteria.


Event producers that will sign long term agreements to anchor to the destination or to add the destination to a set rotation pattern

53% 56% 67% 31% 57% 17%

Event producers and groups with a certain level of historical economic impact

46% 48% 60% 31% 43% 33%

Impact on other venue revenue besides exhibit hall or meeting room rent

37% 37% 60% 15% 57% 17%

Event producers and groups with a certain level of historical attendance

28% 28% 33% 0% 57% 33%

Event producers and groups with a certain level of historical total hotel room nights

24% 17% 60% 15% 43% 0%

Only select event produc-ers with a certain combi-nation of a high level of historical economic impact and total hotel room nights

22% 15% 47% 15% 43% 17%

Only event producers that ask for discounts and/or incentives from the venue or DMO-CVB

15% 15% 7% 23% 14% 33%

Other 23% 20% 33% 23% 14% 50%



Is There a Specific Budget for Subventions, Incentives and Discounts Maintained

About half of centres and the their DMO-CVB partners in Australia (57%) and North America (47%) maintain a joint subvention and incentive fund budget. Sixty-two percent of European members says there is not a specific budget maintained for subventions and incentives.


Yes, by the Centre 14% 11% 21% 23% 14% 17%

Yes, by the DMO-CVB 22% 21% 20% 31% 14% 33%

Yes, jointly by the Centre and DMO-CVB 18% 9% 47% 15% 57% 0%

No 52% 62% 33% 31% 29% 50%

Source of Subvention and Incentive Funds

The source of subvention funds ranges although 52% of members say these are provided from centre operating income or reserves, and 40% say from the DMO-CVB budget.


Convention centre operating income or reserves

52% 56% 60% 42% 57% 50%

DMO-CVB budget 40% 38% 47% 42% 43% 33%

Municipal (or other) government general fund and/or tax rev-enues

33% 49% 6% 17% 29% 17%

A special fund allocated by the hotel and hospi-tality community

5% 4% 13% 0% 0% 0%

Hotel tax segregated for incentives 5% 2% 13% 0% 14% 0%

Convention centre or tourism-related taxing district

3% 0% 7% 0% 14% 0%

Other 5% 0% 13% 0% 14% 17%



V.) Security

Due to understandably heightened concerns about safety and security, new to the member survey this year is coverage of security issues.

Has the Security Situation Changed Over the Past Three Years?

Just over half of members say the security situation in their destination or facility has changed over the past three years.

0 10 20 30 40 50 60 70 80

0 10 20 30 40 50 60 70 80

0 1 2 3 4 5 6 7 8

Comments on how the security situation has changed include:

• “Close working arrangements with police and fire departments and health authorities.”

• “Complete turnaround in safety and security procedures and technique.”

• “Increased demand for security services.”

• “Introduced a scanner, more security conscious.”

• “Introduction of some full-security bag checks at some shows.”

• “Minimum standards now following airports.”

• “More events are asking for a security service, even just a small service to give a more secure atmosphere.”

• “More security staff in the entrance hall.”

• “No bags allowed.”

Europe

North America

Asia

Australia

Africa


49%

44%

29%

51%

56%

54%

71%

57%

Yes

No

43%

46%


Are Clients’ Security Concerns and Expectations Increasing?

The survey asked if members have seen their clients express increased levels of security concern and expectations. Worldwide, 58% of members say their clients’ security concerns are increasing.

0 10 20 30 40 50 60 70 80

0 10 20 30 40 50 60 70 80

0 1 2 3 4 5 6 7 8

Member comments on what clients require:

• “CCTV and increased Surveillance.”

• “Increase use of bomb/explosive detection dogs.”

• “Increased police presence, metal detectors at entry points, limiting access into and throughout Centre.”

• “More scanning and thorough security checks.”

• “They rarely ask for specific measures or precautions unless they know that their particular event contains specific risk factors.”

• “Tighter event restrictions and request for more on-site security.”

• “We set up meeting with the police forces for our clients, in order to make them aware of the (good) security situation in our country.”

Europe

North America

Asia

Australia

Africa


43%

27%

43%

57%

73%

69%

57%

43%

Yes

No

57%

31%

Security


Security and Safety Procedures Implemented in the Past Year

Over the past year members have primarily done the following in terms of implementing security and safety:

• Reviewed security and safety procedures and team

• Implemented new safety and security procedures

• Enhanced safety and security technology


Reviewed security and safety procedures and team 81% 78% 80% 77% 100% 100%

Implemented new safety and security procedures 56% 53% 33% 77% 83% 83%

Enhanced safety and secu-rity technology 49% 43% 53% 38% 100% 67%

Added safety and security equipment 41% 39% 47% 23% 67% 67%

Hired security consultants 17% 12% 20% 23% 67% 0%

Consulted with Govern-ment and safety officials 51% 45% 47% 54% 67% 83%

Trained staff 57% 53% 67% 54% 67% 67%

Discussed with or trained clients‎ 24% 12% 40% 31% 50% 50%

No changes to date, but we plan to over next 12 months 2% 2% 0% 0% 0% 0%

Other 5% 4% 7% 15% 0% 0%

Security


Conclusion

This conclusion reiterates some of the key findings from the 2016 Member Survey and provides a summary of how event formats and attendees are changing.

Key Member Survey Findings

• Revenue growth has been accelerating overall worldwide for members: 8% top line growth in 2015, 5.8% in 2014, and 3.1% in 2013.

• It looks like the strongest regions and markets are getting stronger – today, 21% of members say economic growth is strong compared to only 13% in 2015. But the weaker regions may be stagnant in terms of growth.

• Nearly six out of ten members have implemented an innovation over the past two years – and 40% added a new revenue stream. The “Big Three” innovation areas are technology, F&B and the client venue experience.

• Event formats and attendees are changing in meaningful ways – and these trends look to be accelerating. The formats are changing to better serve more technology savvy and informal attendees. A key trend is the increased usage of public space and different educational and networking formats. And, of course, technology and bandwidth requirements continue to increase significantly.

How Event Formats and Attendees are Changing

• Increased use of public space and multifunctional areas.

• More informal, comfortable formats.

• Networking focus.

• Trying to be experiential.

• Different education and meeting room formats.

• Ever expanding technology and bandwidth requirements.

• More individual, custom requirements.

• More negotiations; more subvention and contract concessions.

• More inclusive package rates, options.

• Desire, expectation of free wifi.

• Booking closer to event dates.

• More last minute changes.

• Watching costs.

• Some reducing F&B.


Key member quotes on these trends and changes include:

• “Attendees are expecting the living room experience at the venue, immediate wifi, great AV they can control, POD or other social space.”

• “More open rooms, more flexible spaces, more technology, more digital services, more networking areas, comfort, parking accessibility, welcoming spaces.”

• “Greater use of public areas for personal workspace and networking activity that’s more independent of scheduled programming.”

• “Clients are experimenting with meeting architecture and design.”

• “Everyone is looking for a unique setting requiring more facility flexibility to change the look and feel of the experience.”

The Era of Increasing Revenue Growth

0 10 20 30 40 50 60 70 80

0 10 20 30 40 50 60 70 80

0 1 2 3 4 5 6 7 8

Overall AIPC members have collectively experienced accelerating revenue growth over the past few years. As stated in previous member survey reports, since the last recession, the industry has fared well overall. To quote the 2014 member report “the years following the 2008 and 2009 period did not turn out quite as challenging as feared.” Right now one of the biggest challenges is working with event clients that are booking later in the cycle and requiring more for less. Related to this are the trends of adding more event activities and networking, and using more pre-function space, technology and other services often outside of exhibit halls. Still one of the key discussions throughout the events and venues industries is how best to serve the millennial generation and ensure they see value and participate in major conventions, exhibitions, meetings and other events.

Today is within a phase of increasing revenue growth. Yet this is a cyclical industry. Solid growth can certainly continue for years – and most likely will continue. But there will be a slowdown at some point. It’s time to start preparing or at least thinking about what has been learned over the past ten years and to start to get prepared for potential changes ahead.

Conclusion

2014

2013

8.0%2015

3.1%

5.8%

International Association of Congress Centres55 Rue de l’Amazone1060 Brussels, BelgiumPhone: [32] (496) 235327Fax: [32] (2) 534 63 38E-Mail: [email protected]

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