From left: Paul Van Deventer, President and CEO, Meeting Professionals International (MPI); Susan Adams, Vice President, Engagement, Strategy & Corporate Services, Next Level Performance; Valerie Bihet, Owner, Director VIBE Agency; Kurt Paben, CEO, Hosts Global.

The year 2022 was one of recovery for the meetings and events industry. In many destinations, in-person meetings, events and conferences returned, or nearly returned, to 2019 levels.

However, the industry still has a long way to go, as supply-chain issues, inflation, worker shortages and even fluctuating fuel prices are affecting company bottom lines. As such, many decision makers in C-suites worldwide are taking a cautious approach to fully opening the purse strings for things to return to “normal.”

We asked a few industry experts to give us their take on the State of the Industry as we head into 2023, nearly three years after the devastating effects of the COVID-19 pandemic and resulting shutdowns. Here are their thoughts.

Paul Van Deventer, President and CEO, Meeting Professionals International (MPI)

Paul Van Deventer

As the return to face-to-face business events continues — coming back from the pandemic and the quickest, most severe decline we’ve ever seen — there are, naturally, challenges, but also tremendous opportunities.

While in late 2021, only 3% of respondents to MPI’s quarterly Meetings Outlook survey said their business levels were back to pre-pandemic levels, by this fall, 10 times as many (32%) said the same, and an additional 31% anticipate a return to 2019 business levels in 2023. If realized, that means that, by the end of next year, almost two-thirds of meeting professionals will be working at levels they’d not seen since before the pandemic.

There are complications to this full recovery, of course, including significant aspects that are more or less beyond the control of meeting professionals. They’re not just dealing with getting back to business, but facing record inflation and the threat of a global recession, leading to the costs for many essential meeting and event elements rising greater than budgets. In addition, regional conflicts, political upheaval and various forms of general uncertainty are creating supply-chain delays, which will continue as long as manufacturing and international shipping are impacted by these and other factors. There are numerous headwinds facing meeting professionals, and that’s not going to change anytime soon.

Over the past year, we’ve seen a dynamic change in the primary reason to attend an event, switching from education to networking. Education at events is and always will be very important, but genuine face-to-face interaction — spending that important time with others in the same space — simply cannot be replicated online. In 2023, we’ll continue to see people attending in-person events in order to experience the joy that’s been missing for many, including some who still haven’t ventured out and experienced a face-to-face event since the start of the pandemic. So, when designing events, meeting professionals must be keenly aware of the enhanced level of elation and excitement among many participants, as well as the apprehension of others, and strike a delicate balance in accommodating every attendee in a manner they will feel comfortable.

That excitement and optimism is what I’m most thrilled to see. And within that are some of the greatest opportunities.

The near future is an ideal time for meeting professionals to approach their work differently — there’s been a lot of soul searching and innovation going on, in particular, the advancement and integration of technology and a focus on overall attendee wellness. Event professionals need to ask themselves what did you realize, personally or professionally, that you’d been taking for granted? Now is as good a time as any to address those matters to create the future that you want. Re-examine the goals of your events and how you can achieve them in a fresh way. Why do you and your organization do what you do, and how can you take a big step into the future rather than simply returning to 2019?

Despite the uncertainty that remains, I’m confident 2023 is going to be a marvelous year for meeting professionals and the public’s perception, and understanding, of the value of in-person meetings and events.

Susan Adams, Vice President, Engagement, Strategy & Corporate Services, Next Level Performance

Susan Adams

From a complete standstill to an explosion of demand, the incentive travel industry’s experience of 2022 served as a magnified view of the strain that was placed on workforce resources, corporate budgets and social and travel policies at large. While industry leaders felt confident in a strong return to travel in 2022, even these predictions and confidence underestimated the rush of demand. As the market experienced this resurgence, industry-wide labor shortages, inflation and ever-changing COVID-19 regulations made it a challenge to operate efficiently at every turn.

The year 2023 is shaping up to be another busy year for incentive travel, despite widespread discussion of the U.S. market potentially entering into a recession. The pressures of 2022, however, are not fully behind us. Here’s a look at a few of the factors that will shape the year:

Incentives and Recognition are Essential

The Incentive Research Foundation (IRF), FICP and SITE have just released the 2022 Incentive Travel Index (ITI). It states that 91% of buyers and sellers of incentives indicated that incentive travel has an even more important role in building engagement and company culture with a dispersed workforce.

With an increase in remote and hybrid workplaces, and with travel restrictions that have only recently been lifted in some organizations, the opportunity for face-to-face networking between employees or with customers is more important than ever. Incentive travel can facilitate sharing best practices, public recognition for a job well done and driving home company messaging or culture.

In the ITI study, participants reported that “soft power” benefits, such as a focus on culture, engagement and relationships, were of greater importance now than “hard power” benefits, such as increased sales. Even in this environment, however, the study revealed that senior leaders still view incentive travel as a “profit driver” and “source of competitive advantage.”

This is consistent with the demand seen in 2023 and beyond, as incentive travel programs are accepted as essential to the health of an organization.

Labor, Onboarding and the Service Gap

In July 2020, The American Hotel & Lodging Association reported that 87% of hotels had laid off or furloughed staff. In fact, at that time, 70% of hotel employees had been laid off. A year later, a survey from the University of Central Florida showed that 30% of hospitality workers had left the industry or were planning to.

Airlines did not fare any better, laying off 90,000 workers by late 2020. Hiring and retraining in such a technical, complex sector proved challenging, and the result was unprecedented numbers of canceled flights, stranded luggage and consumer complaints.

With demand resurging, the need to recruit, hire and onboard employees from every corner of the industry is intense. The Wall Street Journal reports that by the end of 2022, hotels will have recovered about 84% of their workforce.

But with so much hiring comes onboarding and training. It takes time for an employee to fully master their role, resulting in lagging service levels and productivity. In a recent Incentive Research Foundation (IRF) webinar focused on expectations and realities, panelists noted end-user clients no longer see the labor shortage as a valid reason for reduced service.

Having struggled with capacity and hiring throughout 2022, the hope and expectation is that this will normalize in 2023, as new hires become more integrated into their roles, narrowing the gap between expectations and service.

Budgets

According to the recent Incentive Travel Index (ITI) study, 64% of respondents indicated that spending will be “above” or “significantly above” 2019 levels by 2024. The index also states that 80% of respondents surveyed believe that future challenges faced by incentive travel professionals include rising costs and inflation. With inflation hovering at 7% to 8%, and hotel and airline prices responding to the extreme demand and higher costs of doing business, many programs are already faced with higher costs or reduced program agendas.

It remains to be seen if inflation, or a potential recession, will cause the market to return to a more normal pace, but so far, it does not seem to have affected the pace of interest. In the same Incentive Research Foundation (IRF) webinar on expectations, a representative of an international DMC noted that demand is plateauing at a very high level, and all agreed.

Participant Preferences

The IRF’s recent Incentive Travel Destination Preferences study noted that 91% of participants rated incentive travel as “extremely” or “very motivating.”

After months of lockdowns and travel restrictions, the most important things to survey participants were time to relax during the program, ability to take a friend or spouse, luxurious accommodations and experiences, and spending money to cover extra costs. In 2023, we can expect that program guests who are faced with exceptional inflation at home may particularly appreciate all-inclusives or programs where the changes for out-of-pocket expenses are reduced.

As always, beaches and sunshine led the way in terms of destination preferences, but in a post-pandemic world, wellness, cruises and a return to cities moved up in the ranks.

As the industry recovers from the many challenges of the last years, the focus in 2023 can and should return to delivering on the promise of the experience for participants, while driving business results for organizations. The current resurgence in travel demand serves as a reminder of the one constant that research proves year after year: business gets better when people get together. And group travel will remain as strong as the need to catapult business forward.

Valerie Bihet, Owner, Director, VIBE Agency

Valerie Bihet

The event landscape in 2023 will center around a few key things in my opinion: strategy, effective budgeting, education and sustainability, technology and experiential marketing.

Here’s what I mean: In regard to strategy, we’ll see events move from being multiday or week-long affairs, to maybe only one or two days. The overall days of an event will be shorter, and the focus will continue to move from international and national events to be more local and regional. This change will be balanced by the continual presence of virtual and hybrid events to still allow bigger reach without the necessity of everyone being on-site, or concerned about health risks.

That directly ties into budgets, which will be tight because of the speculation around a recession. Events are booked with shorter timelines, costs continue to increase and budgets do not. We will continue to contend with it next year, and agencies need to really understand how to sell during a “crisis mentality” that will be rampant.

Next is education and sustainability. As event professionals, we need to always educate ourselves about what is going on in other industries and our own. This ties directly into the importance of sustainability, which comes around every few years, but is a big topic of importance to Generation Z as they step into the workforce. Their influence will be felt on events, and it’ll be positive for us all.

We have been on a digital evolution in events since 2020, and I see that continuing. Having technology, whether it’s metaverse, hybrid, virtual reality or whatever as part of your event will be even more of a requirement, as well as an expectation of attendees and clients alike, rather than a “nice to have.”

And finally, we’ll see the focus continue to shift to the experiential direction, rather than just events for meeting’s or event’s sake. Companies are seeing the impact that experiencing a brand can have on sales and overall brand perception, and so experiential marketing tactics will be more in-demand than ever before.

Kurt Paben, CEO, Hosts Global

Kurt Paben

At Hosts Global, we are optimistic about 2023 as we continue to see a very active pace of booking. Today, the experience matters more than ever. Recovery is progressing, program design is evolving, and the role of the DMC as a local expert is more important than it’s ever been as the desire to travel to new destinations has increased for North American buyers. Interest in and booking trends for our international destinations has increased significantly for 2023, which will result in a continued expansion of our Hosts Global Alliance.

The reality of rising costs of goods and services has resulted in a need for stronger than ever communication as we assist clients with their program planning — using our local expertise to make the most fiscally sound recommendations for clients that also delivers the impact they expect from their investments. As availability tightens, the need for clients to lock in decisions sooner has become critical to ensure success and reduce risk.

Program design continues to evolve — we have seen a new emergence of key wellness program activities as well as CSR opportunities, and sustainability has become increasingly more important. There has been an abundant understanding of the value of having in-person meetings. Now, more than ever, the emphasis on the importance of companies looking to restore culture and improve communication dynamics among their teams is bringing on more internal meeting opportunities. C&IT