Annual Member Survey - AIPC CONFERENCE/1501760276_AIP… · • 8th edition of the AIPC Member Survey. • 119 member responses; 65%+ response rate. • New this year: focus on innovation

Annual Member Survey

Michael Hughes

Managing Director Research & Consulting

Sydney 2017

Innovation & Renewal

2

Objectives

- Growth & Revenue & Innovation

- Event & Group Trends

- Investment

- Economic Development

- Conclusion / Outlook

3

About the Study

• 8th edition of the AIPC Member Survey.

• 119 member responses; 65%+ response rate.

• New this year: focus on innovation and

economic development

• The full report will be on member site in July.

Respondents by Region

62%

12% 10%6% 5% 3% 2%

0%10%20%30%40%50%60%70%

Europe Asia NorthAmerica

Australia Africa Latin / SouthAmerica

Middle East

4

Quotes

Growth, Revenue & Innovation

5

Strength of Economic Activity in Region 2015 to 2017

Moderate to strong economic growth is seen in most regions.

13%

61%

26%

21%

51%

28%30%

57%

13%

Strong growth/activity Moderate Weak, flat or recession

2015 2016 2017

6

Risks to Centre Business Growth

Competition is increasing. And hotel occupancy and prices continue to rise…

72%

43% 43%

68%

47%44%

78%

51%

42%

Growing competition from othercentres / regions

Hotel availability and pricing Overall economic strength

2015 2016 2017

7

Economic or Political Issues Impacting Centre Business

44% 42% 40%

22% 20% 18%

10% 9%

63%67%

78%81% 80% 82%

93% 92%

Businessdisruptersi.e., Airbnb

Currencyvalue

fluctuations

Increasingsecurity risks

USimmigration

travelrestrictions

News aboutBank

solvency

Threats totrade

agreements

New US “America

1st” implications

UK Brexit

Currently Impacting Potential Future Impact

Airbnb and other hotel booking disrupters look to be having an impact on centres,

DMOs and hotels. Currency value fluctuations and security are concerns as well.

8

2016 Revenue Growth – All Regions

7,1% 6,5%

4,1%

22,1%

2,3%3,3%

Worldwide AllRegions

Europe North America Asia Australia Africa

Strong growth worldwide with Asia the standout.

9

Centre Revenue Growth Worldwide 2010 to 2016

Source: AIPC, IMF

6,8%

5,7%

6,7%

3,1%

5,8%

8,0%

7,1%

5,2%

3,9%

3,2% 3,0%

3,4%3,1% 3,1%

2010 2011 2012 2013 2014 2015 2016

Worldwide AIPC Worldwide GDP (IMF)

Recovery Expansion / Stabilization Growth…

10

Europe – Revenue Growth 2010 to 2016

3,9%

5,2%

3,0%2,8%

7,7% 7,9%

6,5%

2010 2011 2012 2013 2014 2015 2016

Strong growth yet down a little from 2014-2015.

2017 Forecast: 2.7%

11

North America – Revenue Growth 2010 to 2016

2,2%

5,3%

1,1%

-0,3%

-1,2%

6,9%

4,1%

2010 2011 2012 2013 2014 2015 2016

Steady, modest growth; U.S. economy is strong.

2017 Forecast: 2.6%

12

Asia – Revenue Growth 2010 to 2016

26,1%

2,4%

17,8%

1,4%

5,2%

9,0%

22,1%

2010 2011 2012 2013 2014 2015 2016

Continued trend of erratic industry growth.

2017 Forecast: 2.6%

13

Australia – Revenue Growth 2010 to 2016

9,3% 9,1%

10,1%

3,3%2,7%

11,3%

2,3%

2010 2011 2012 2013 2014 2015 2016

Subdued growth following strong 2015. 2017 Forecast: 0.3%

14

Africa – Revenue Growth 2011 to 2016

7,8%

36,7%

9,2%

15,6% 16,1%

3,3%

2011 2012 2013 2014 2015 2016

Growth has slowed after very strong first half of the decade.

2017 Forecast: 3.4%

15

Worldwide Attendance Growth 2010 to 2016 with

Forecast for 2017

1,0%

5,4%

2,0%

2,7%

4,5%

4,9%

5,4%

0,7%

2010 2011 2012 2013 2014 2015 2016 2017Forecast

Strong attendance growth but concern about 2017.

16

All Members Worldwide: Revenue Streams Expected to

Grow in 2017

Good growth expected in key revenue areas.

65%62%

57%

51%

33%

F&B Exhibit hall andmeeting room rent

Event servicesincluding

equipment rentaland AV

Telecom, internetand tech services

Signage,advertising

17

Years Out Centre Business is Forecasted

The industry is basically in thirds – 30% forecast five years; 30% forecast three

years; and 27% forecast only one to two years out.

15%

12%

30%

5%

30%

5%3%

One year Two years Three years Four years Five years Over fiveyears

NotApplicable

18

New Revenue Streams &

Innovation

19

New Revenue Stream Added in Past Year

New Revenue Streams

• Signage, advertising

• AV services and equipment

• Vendor contracts/commissions

• Enhanced F&B

• Events produced by the centre

• Sponsored, branded spaces

• Retail and office space rent

• Parking

• Other event services

33%

67%

Added NewRevenueStream

No

39% 40%33%

2015 2016 2017

% Members with New Revenue Streams ’15-’17

20

New Innovations Added in Past Year

52%

48%

Added NewInnovation

No

New Innovations - Multiple

Responses

• CRM and booking systems

implementation, upgrades

• Customer service management,

procedure changes

• Operational structure changes

• Standardization and best

practices

• Added IT and technology

upgrades

• Wayfinding, signage

• Event equipment services

21

Focus of Innovation and New Ideas – Top Ten

Still “the Big Three” areas: tech, client experience and F&B.

72%

64% 64%60% 59%

51% 51% 49%

40%34%

Top Innovation Challenges: Ideas, Budgets,

Implementation, Measurement, Culture

22

Quotes

“The way we conduct business.”

“The management and operation of the

venue and the form of events.”

“Classic event business model

leaves limited funding for new

experiences and investments.”

Areas of the Industry in Need of Innovation

23

Innovation Challenges & Opportunities

“Providing even more customized

solutions.”

“Creative non-traditional use of space.”

“Integration of all the areas, departments

and services into a holistic kind of

service/business.”

“More focus on the delegate and her/his

total experience.”

24

Innovation Challenges & Opportunities, continued

“How attendees absorb content. How

attendees use venues to socialize, network

and collaborate.”

“Our biggest challenge is being able to

prioritize the ideas with the biggest

impact.”

“Securing decent return on investment,

not enough profitability to take chances.”

25

Quotes

Event & Group Trends

26

Changes in Event Formats & Requirements

• Want improved Wi-Fi.

• F&B; more focus on dietary issues, and more casual.

• Enhanced security.

• More flexible spaces.

• “Sponsors demanding experiences.”

• “Decrease of exhibition sizes; increasing demand for networking and hospitality

space.”

• “Events are bigger and bigger, demand for variation of premises during the

same day and same event.”

• “Larger breakout rooms to facilitate educational seminars – different style

layouts – to enable the speaker to engage with the audience and/or to facilitate

workshops.”

• “More Individualisation and personalization of customer journey.”

• “More space needed for informal meetings and networking.”

27

Types of Clients and Groups with Best Growth Outlook

Strong economy = strong corporate meetings business.

78%

63%59%

55%

35% 35% 34%

24%

28

How Client Business Practices and Behavior is Changing

Continuation of long-term trends: clients want more – and better, faster, cheaper…

86%

73% 70%66%

48%44% 43% 42%

23% 20%

29

Leading Event Producer Trends (from other studies)

• About 2/3rds of top event producers are optimistic about growth outlook

• More new event launch activity, risk taking

• Collecting data, but not sure how to use it

• Some sectors, such as IT, want more female engagement at events

• Using more video

• Want from Centres: enhanced technology and AV; help with attendance

promotion; want to “amplify” live event experience via social media; more

flexibility; larger growing shows want more space...

30

Investment

31

New Builds, Expansions & Renovations 2012 & 2017

Overall worldwide, new building activity is increasing along with expansions and

especially renovations.

16%

20%

36% 36%

22%24%

45%

28%

New build Expansion Renovation No plans

2012 2017

32

Centre Spaces and Areas in Most Need of Investment

Technology and telecommunications are still the main focus – along with meeting

rooms – but F&B may need or more attention again…

67%

53%

44%

36%

24%

54%58%

41%

34%

27%

48%42%

37% 35%32%

Techinfrastructure,

services

Meeting rooms Exhibit halls Signage Client-facing F&Bareas

2015 2016 2017

33

Is Government More or Less Inclined to Invest in Centres

Another sing of growth and confidence, governments seem positive to neutral to

centre investment… see significant sentiment increase since 2012.

18%

41% 41%

33%30%

38%

30%

19%

51%

More inclined to invest Less inclined to invest No change

2012 2016 2017

34

Quotes

Economic Development

35

Is City Undergoing Large Government or Private

Development, Infrastructure or Renewal Project

There’s significant development in most first and second tier cities worldwide.

48%

31%

38%

Yes, large-scalegovernment-supported

project

Yes, major private sectordevelopment

No

36

Major City Projects Completed in the Last Year,

Underway or in Planning

Hotel and centre projects have been some of the largest projects around the world.

59%

44%

28% 27% 26%22% 21% 19%

15% 13%

37

Does Your City Have a Formal Economic Development Strategy

69%

12%19%

Yes No Unsure

Is Centre Part of Regional Economic Development Discussion & Process?

57%

43% Yes

No

Most centres have an important

“seat at the table” – if you don’t,

why not?

38

Centre Economic Development Trends – Hardware & Software

“Hardware” / Infrastructure

• New builds, expansions and renovations

• Convention hotels

• Retail and entertainment areas around the centre and convention district

• Transportation links

“Software”

• Targeted event and group bookings, fit with regional economy

• Direct and in-direct influence on economic development issues

• Hosting meetings at centre; having a “seat at the table”

• Public relations, communications about value of events, conventions, centre

39

Conclusion

40

Centre Revenue Growth 2010 to 2016 with 2017 Forecast

Source: AIPC, IMF

6,8%

5,7%

6,7%

3,1%

5,8%

8,0%

7,1%

3,8%5,2%

3,9%

3,2% 3,0%

3,4%3,1% 3,1% 3,5%

2010 2011 2012 2013 2014 2015 2016 2017Forecast

Worldwide AIPC Worldwide GDP (IMF)

Recovery Expansion / Stabilization Growth… slowing…

Body Bullets7,4%

6,9%

3,1%

7,0%6,6%

9,1%

Worldwide Europe N. Amer. Asia Australia Africa

41

Annual Gross Revenue Growth Forecast Over Next

Three to Five Years

There’s confidence about revenue growth over the next few years.

42

Conclusion

• Good growth – good times continue

• But near top of the economic cycle

• Strong investment cycle

• Focus on internal innovation

• Ask for what you need now

• Watch out for internal complacency…

Q&A