As the UK braces for further energy price hikes following last week’s price cap increase by regulator Ofgem, meeting and event planners should expect further price increases across the board next year, according to the 2023 Global Business Travel Forecast recently published by CWT and the Global Business Travel Association.
The report estimates that the average cost-per-attendee in 2022 is expected to be around 25% higher than 2019 levels and is likely to rise a further 7% in 2023.
It said that an influx of events, fuelled by pent-up demand coupled with shorter lead times – are driving up prices across venue hire, accommodation, food & beverage and production.
Price hikes across categories are being driven by rising inflation in general, combined with higher costs of labour and supplies.
Supply and demand issues
Demand for meeting space is high, with corporate meetings competing for space with the wide variety of events that have been rescheduled over the past two years, and many hotels and venues in key markets now fully booked for large groups until 2024. Additionally, the report noted that many companies that have given up office space over the past two years now must book meeting space to bring employees together.
Hotels and venues are struggling to recruit staff to meet this surge and are operating at reduced capacity, while shorter lead times for events, varying from one to three months, are also contributing to this perfect storm.
The report also noted that it is likely that higher food and beverage prices are linked to global food inflation and the impact of Russia’s invasion of Ukraine.
Incentive & destination trends
In more positive news, CWT expects to see an increase in incentive travel spend, as companies seek to reengage with employees and reignite culture.
Corporates are looking to travel to destinations where they can make a positive impact, with the report noting that alongside the reward element, there is a trend for incentives that offer an experience and an opportunity for participants to ‘connect’ with a particular location and to return motivated and engaged.
CWT predicts that the most popular destinations for corporate events in 2023 in EMEA will be London, Paris, Milan, Berlin, Stockholm and Barcelona, with New York topping the North American destinations, and Singapore taking the top spot in Asia Pacific.