Headlines all over the world in the last few weeks have been focused
on escalating energy prices, particularly in the UK, with research from
Deutsche Bank showing the UK has higher energy prices, comparative to
other economies in Europe. The situation is equally bleak in the US,
with energy prices expected to spike before winter.
Much of the attention has been focused on households but with energy
prices showing little signs of any decrease, it begs the question of how
venues - such as hotels, conference centres and meeting spaces are
faring, and whether planners in other regions, such as APAC are shunning
those destinations that are reporting high energy costs.
Ian Cummings, global head at CWT Meetings & Events says that
higher energy are keeping prices across Europe and the UK at a premium
for the foreseeable future and into 2023: “At present, we remain with
high pent-up demand, despite the increased prices of accommodation and
F&B, but venues will have little choice than to pass this onto
clients. Concerns remain around higher pricing, which lead to eventual
cancellations due to budget constraints.”
Cummings adds that corporates [from within Asia and elsewhere] will
need to make informed decisions about locations, number of attendees,
measurable ROI on events and apply a rigorous approval process, if
hosting events in those destinations with high energy prices.
“The need for people to meet remains as high as it ever has been,
fuelled by the great “working from home” switch in work practices
post-pandemic, and therefore corporates must be prepared to encourage
the power of human connections to ensure alignment, connectivity,
culture and engagement,” he says.
“Location choice will be very important and there will always be
areas looking to remain competitive compared to the main European
capitals such as London, Paris, Milan and others. Secondary cities can
often represent better value for money and therefore in the UK, the
likes of Manchester, Liverpool and Birmingham should all be considered
when selecting a location.”
At a recent webinar hosted by AIPC, the International Association of
Convention Centres, participants discussed the impact of rising energy
costs on convention centres, with some suggesting that venues should not
bear the brunt of these higher energy costs. The discussion suggested
that venues could consider asking for a share of the event profit, to
offset the higher costs of energy from hosting the event.
Martin Boyle, chief executive officer at The International
Association of Professional Congress Organisers (IAPCO), who took part
in the webinar, said: “[All event stakeholders] benefit if they work
together so a shared risk model is a really interesting point. Now is as
a good a time as any to have those types of conversations with PCOs and
Natalie Crampton, founder of Dubai-based agency TEC, says that taking
into account rising energy prices when choosing a destination is
proving to be a challenge, as many corporate clients have caps on what
they are allowed to spend at events.
“A large number of corporate client EMEA offices are in the UK and
budgets given are often in GBP… they will now be getting less than ever
for their money - could they now look to other destinations such as
Turkey or Morocco?,” she asks.
Crampton suggests that soaring energy prices may lead to venue
expectations being revised or lowered, for example considering a
four-star venue over one with five stars.
“We could potentially see companies cutting budgets, “ she adds. “For
example, if they were going to send five people to an event, they may
now decide to only send three.”