Coping With Price Hikes

Prices are rising in the meetings industry. In an online survey conducted in August, M&C asked planners how they’re coping with higher-than-expected costs. Of the 165 respondents, 45 percent said their meeting budgets increased from 2005 to 2006, while 36 percent said they remained the same and 19 percent saw a decrease.

But budgets do not always mesh with reality. Almost three quarters (74 percent) said their actual meeting costs increased from 2005 to 2006, while only 18 percent said they remained the same and 8 percent said they decreased.

To cover rising expenses, more than half (58 percent) asked for a budget increase in the past six months. Of those, 48 percent were successful in convincing their higher-ups they needed more money, while 32 percent did not get the extra dollars and 20 percent were awaiting a decision.

When asked how they are compensating for higher costs, 41 percent of the sample said they have contracted with less expensive hotels, 29 percent have planned more regional meetings, 22 percent are meeting in more hub cities and 16 percent have renegotiated group airfares.

To cut costs, 49 percent of respondents have solicited more sponsorships, 26 percent have reduced F&B spending, 42 percent are planning fewer off-site events, 41 percent reduced the number of on-site staff, and 40 percent have reduced or eliminated attendee gifts.

Looking to 2007, more than half of the sample (56 percent) expect their meeting budgets to increase, 29 percent expect their budgets to remain the same and 15 percent anticipate a decrease.