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