Next big travel opportunity: meetings and conventions

Looking for the next new big travel opportunity? Go no farther than groups and meetings.

This complex but steady marketplace, valued at over $164 billion in the US alone, is expected to reach $175 billion by 2008, according to PhoCus Wright’s “Groups and Meetings: Market Opportunity Redefined.”

The group terms it “one of the next frontiers and key competitive areas for e-commerce and one of the last major revenue streams to move online.”

Travel revenues including air, hotel, car rental, ground transportation, cruise and tour expenses represent 54% of the total revenue. Non-travel expenses including meeting rooms, catering and audio/visual equipment represent 46%.
By 2008, 41% of all groups and meetings travel revenue, or $39 billion, will be booked online, according to the study.

But the online opportunity will be even greater for small leisure gatherings (under nine rooms), a segment which has fallen outside of the traditional “group” definition.

This segment, which includes family reunions, weddings and religious groups, will have online penetration of 53% by 2008, nearly three times the rate of larger leisure groups, says the study
PhoCusWright suggests that suppliers need to automate their entire distribution network and supply chain supporting groups and meetings or else risk ceding control of this space to competitors and/or new entrants.

“Groups and meeting inventory and rates must be centralized and well integrated into other core systems, including hotel property management, revenue (yield) management, central reservations, customer relationship management, e-commerce and dynamic packaging,” it says.

In addition, the report urges companies to apply Travel 2.0 capabilities to the groups and meetings arena, placing particular emphasis on the elements of community, user-generated content and social networking.
Other Key Findings:
—Smaller, simpler groups and meetings are on the rise in both the leisure and corporate segments. Because these tend to have fewer variables, they can be moved online with the entire business being transacted – from contract to bookings – without the need for a request for proposal (RFP).
—Hotel companies are working to centralize their groups and meetings inventory and rates to enhance offerings and leverage/optimize resources to achieve efficiencies and economies of scale. As they build their technology capabilities, they will push supply online.
—Components of large meetings which include RFP processing, housing management and attendee registration will continue to move online largely to achieve efficiencies and to empower or off-load tasks to planners and attendees.
—The rise in new market entrants such as Groople, Group Travel Planet, TripHub, and efforts by established players to automate portions of the groups and meetings lifecycle will help to draw attention to the technology tools, educate the marketplace and encourage people to book electronically online.

Report by David Wilkening