Exploring the industry’s ‘softer side’

Spatial configurations are one of the most obviously challenging areas for convention centres, but what about equally important things like technology, services and business relations? These too are evolving in ways important for both centres and their clients, says AIPC president Edgar Hirt.

Technology is king

Nowhere have expectations changed faster than in the world of technology. Innovations like social networking can create expectations and agendas far in advance of an event, and both sessions and presentations require increasingly sophisticated support – up to and including remote participation. The good news is that much of the new technology is wireless and user-driven, which means that the main challenge for centres is often more related to capacity than hardware.

However, there is also some bad news: new technology and capacity have to be paid for and as expectations for free services grow, the ability to finance required additions becomes a huge challenge. This can create tensions that make it more difficult for centres and their clients to come to an understanding, particularly in times where finances are strained all around.

Another big technology question is based on the fact that as perhaps the most rapid area of change, it requires constant monitoring and updating of both equipment and expertise, raising questions like what to invest in and who should do the investing. In-house vs outsourcing has therefore become another part of the puzzle: should centres be making these investments themselves or look to outside suppliers to both supply the expertise and take the risk? Will larger events of the future be more likely to arrive with their own technology and, if so, how will this interface with in-house capabilities? Will areas like virtual or hybrid meetings eventually require dedicated spaces, complicating the configuration issue even further? These are all questions that centres need to address in order to be better prepared for all eventualities.

Food and beverage: a distinguishing feature

One area that has evolved more than most is the matter of more sophisticated food and beverage offerings. In fact, this has, in many cases, become a defining factor for many events and a big issue for both planners and delegates. Here again, centres have responded with innovation and creativity, to the point where one of the primary selling features for many centres is their cuisine and how it not only delivers quality but often reflects the local experience too. One feature of particular note is how many centres now address their sustainability agenda through meal services, with local food products and sustainable preparation forming an important part of the product offering.

Unlike other areas, this seems to be one where there’s a general willingness by clients to pay for what they get. As a result, it’s become an important factor in maintaining reasonable revenues even when traditional revenues for space and services erode.

Support service expectations are growing

Another area increasing demand is that of overall event servicing, sometimes extending to assistance with on-site coordination. Many centres are now being called upon to deliver these higher levels of event support, not only because of increasing event complexity, but because the client’s own resources may have been reduced as a result of corporate or association cutbacks and outsourcing too.

Generally, centres have done everything they can to accommodate such requests, but when it reaches a point where they need to beef up their own staff, it quickly becomes a matter of cost increases and the question of who will pay. Interim measures are something everyone tries to address. However, as expectationscontinue to rise it again challenges the whole financial equation.

New conditions demand new relationships

A large chunk of the financial basis for the meetings industry was built on the willingness of governments to invest in facilities that would attract major events in return for an anticipated benefit of economic surge from delegate spending. The formula still works, but more and more governments are simply incapable of making the major investments required to build and maintain costly facilities. Furthermore, this can only be expected to get worse, at least for the foreseeable future, while global economic uncertainties remain. Under these conditions, the expectation that centres will continue to make major concessions in order to secure business becomes less realistic, and alternatives need to be considered.

Various centres are now exploring new models for how risk and reward are shared, including rent concessions in return for participation in any upside that may result from increased attendance. Similarly, strategies that reduce costs and increase certainty, such as multi-year agreements or guarantees of particular service levels, can introduce new ways of ensuring everyone benefits from a successful event. These will have to be the innovations of the future if there’s to be the kind of equitable distribution of costs and benefits needed to sustain the industry.

Good communication is the key to all these issues and should be top priority for centres and clients alike. Knowing what each party is facing and being willing to pursue collective solutions has been a key to success in the past and will be even more important as we evolve together into the future.