by Loren G. Edelstein | July 17, 2018
In one information-packed hour, MGM's Michael Dominquez enlightened a crowd of 111 meeting professionals about major disruptive forces -- economics, politics, technology, global issues and other broad-scale concerns -- that are reshaping the meetings industry at a breakneck pace. "Every company is struggling with the speed of change," said Dominguez, senior vice president and chief global sales officer for MGM Resorts International. And, he said, research indicates that the majority will fail to do so.
 
His presentation was the opening keynote for Northstar Meetings Group's Destination West, now taking place in Denver at Halcyon, a hotel in Cherry Creek. The two-day agenda includes one-on-one meetings between buyers and suppliers, education sessions and networking events.
 
The critical challenge for corporations, said Dominguez, is that technology is advancing faster than our ability to adapt. In fact, 75 percent of the companies now on the S&P 500 -- an index of the largest U.S. companies holding common stock -- will no longer be on that list in 12 years, according to recent research.
 
Many of today's biggest companies did not exist a decade ago, he added, and those that are thriving today are doing so by completely reinventing their market segments. For example: "Every 60 seconds there are almost a million swipes on Tinder," he quipped, "which might mean we need better quality TV shows." The technology that Amazon is using for checkout-less stores is another indication of how technology is reshaping consumer behavior.
 
The critical lesson for businesses: "Always be learning. You have to be a life learner and not be afraid to jump into technology. If you do not change what you're doing, you will not be around."
 
Among key points for meeting professionals to understand and address:

• Hotels are thriving. The hotel industry has seen record-breaking growth in rate and occupancy for the past six years, and that streak will continue. "I've been doing this for 18 years, and have never seen this cycle before," Dominguez said. "In our lifetimes, we've never seen this kind of demand, and it's not slowing down."
 
• There's no downturn in sight. "Market conditions are not going to change, at least through 2020," said Dominguez. But negotiations for group business don't need to be adversarial. "It's not a buyer's market, and it's not a seller's market, it is the market. It's a relationship between supply and demand. We just have to have a better understanding about it."
 
• Secrecy is counterproductive. "We've played poker in the hotel industry for way too long. We need to put all our cards on the table and say what we are trying to accomplish. I'm really direct, and I'm always telling people, 'Let's have a business conversation.' That's the environment we're in. I'm going to tell you exactly what's happening."
 
• Accurate forecasting is critical. "We are now sharing 90-day forecasts with our ownership and our management. By 90 days out, we should have a good handle on our business. If 90 days out from your meeting you tell me everything is fine, guess how I'm going to forecast? I'm going to say everything's fine. If you tell me you're a little nervous, that helps me, because I'm going to forecast more conservatively." 
 
• We can't always be flexible. "The biggest shift we've seen is that in 2007-2008, most of my business came in a three-week window. But international business is booking 90 to 120 days out. When you're asking us three weeks out to add more rooms to your block, we often don't have the ability to accommodate that."
 
• Transient business is leading the charge. "There are two segments in our business: group and transient. Transient means you're not coming for a meeting or convention. Transient has been leading this recovery, not group. Hotels make their profit in room rate. We get 80 cents on the dollar from room rate. You can tell me your group will be using a lot of F&B, but we get 35 percent from F&B.
 
• New supply is in limited service. "It's salt to the wound for the meeting professional," said Dominquez. "In the past two years, almost every hotel that has opened in the U.S. is in the limited-service segment. Nobody is building ballrooms. New hotels with 50,000 square feet of meetings space or more are opening at an average of about two per year." The largest markets are growing rapidly, he added. New York has opened almost 20,000 rooms in the past 12 months -- but almost all of them at limited-service properties.
 
• Big meetings are getting bigger. "The only meetings growing in size are the largest meetings -- of 1,000-plus -- when we have no new meeting space. I'm not saying this to scare you; I'm saying this because you will have to book further out to get the space you need."
 
• Rate increases are significant. "North America is leading the charge in average rate growth, at 3.5 percent. It's important to understand what that means, because people get stuck on the numbers. In some cases, the percentage increases are getting smaller, but the dollars are bigger because we're starting from such a high rate. The top markets are over $200 for average rate," he said. So, for example, a 3.5 percent rise on a $200 rate (up $7) is more than a 5 percent rise on a $100 rate (up $5).
 
• The second tier is moving up. Cities that used to be considered second-tier, such as Austin and Nashville, have average room rates close to the $200 mark. Are they still second-tier? "That's not what the market environment is telling us anymore."
 
• Demographics don't matter. "Millennials get blamed for everything and credited for everything," said Dominguez, but such common stereotypes are unfounded. "We need to quit overthinking things. Sorry, millennials still prefer hotels. Older millennials are not any different from any other demographic except they use technology more because they were born with it in their hands." Attendees of all demographics want meet face to face, and for the same reasons.
 
"We need to get off the demographics and get on the psychographics," said Dominquez. That means understanding the audience's personality, values, attitudes, interests and lifestyles. 
 
• Forget everything you know. Dominguez concluded his presentation with a quote from the late futurist Alvin Toffler: "The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn."