The cost of travel soared in 2023, as prices on airfare, hotels, and F&B as pent-up demand fuelled an eager return to in-person events. Moving into 2024, it appears that a cocktail of demand and supply side pressures will continue to push meetings and events (M&E) prices up significantly.
“Although demand from group travel, meetings and events has rebounded strongly, and there is growth in incentive travel as companies seek to motivate and reward employees, volatile fuel prices, labour shortages, inflation, and capacity restrictions have put upward pressure on prices across the whole travel and M&E supply chain,” said Petrina Goh, regional commercial director, South-east Asia & Hong Kong, CWT Meetings & Events.
According to CWT’s 2024 Global Business Travel Forecast, the average daily cost per attendee for meetings and events rose 58 per cent in 2022 vs 2021. CWT expects to see the cost per attendee climb a further 5.6 per cent this year, followed by a three per cent increase in 2024.
In tier-one cities in Thailand and Vietnam such as Bangkok, Phuket, and Ho Chi Minh City, CWT is also reporting group accommodation and meeting package prices around 15 to 20 per cent higher than 2019 levels. Meanwhile, in destinations like Japan and South Korea, group accommodation rates are currently 20 to 30 per cent above 2019 levels.
Moreover, with the persistent inflation in food prices, the average F&B cost per attendee is forecast to increase 6.9 per cent this year and 2.2 per cent in 2024. Meanwhile, the average daily rate for group hotel bookings is projected to climb 4.4 per cent in 2023 and 3.5 per cent in 2024.
Manpreet Bindra, president of FCM India Meetings & Events, expects 2024 to be more expensive for M&E too. He said: “Increased energy costs, fuel costs, airfares, and global inflation are all impacting in-person events. The rapid surge back to live events has been a challenge for venues, hotels, airlines, and event planners. Travel constraints, capacity issues, labour shortages, supply chain issues and travel disruptions are all easing, but they are factors that are not expected to fully stabilise until 2024.”
This is despite global airline capacity tracking at 100 per cent for October 2023, according to Flight Centre Travel Group’s Cirium Data as of October 9, 2023. Although clocking in at 100 per cent, this is being driven by domestic capacity at 102 per cent, while international is still just below 97 per cent. Overall, carriers are seemingly more optimistic with 2024 travel, and capacity in December has increased.
For FCM, two M&E markets in Asia-Pacific stand out – India and Japan.
This comes as FCM Meetings and Events India achieved better performance than pre-Covid levels by more than 50 per cent.
“While the 2023 travel uptick reflects the removal of country restrictions coupled with a deep desire to travel, we envisage that as capacity and pricing stabilise, 2024 will be a better indicator of the true demand,” said Bindra.
Over in Japan, FCM Meetings and Events Japan finds that most four- to five-star hotels plan to raise their prices in 2024, by more than 20 per cent per room a night on top of the current rate and 50 per cent up during peak seasons. Even with higher room rates this year, hotel rooms sold out very quickly.
Many travel agencies were not able to get contract rates until the last minute, as hotels were waiting and checking their competitor’s rates. Some hotels even changed to the BAR rate instead of the contract rate. According to FCM Meetings and Events Japan, its hotel partners feel that their room rates will cool down only by the end of next year.
Inbound groups into Japan should also expect higher ground-handling in 2024, as the Ministry of Land, Infrastructure, Transport and Tourism has decided to raise the minimum rate from 10 per cent to 22 per cent, and remove the cap on maximum rates. This means that bus companies can set however high a price they want. For example, in the Kanto area, most of the bus companies raised an average of 26 per cent for all new requests from October 2023.
To combat higher prices in the coming year, Goh recommends that planners consider secondary cities such as Pattaya, Koh Samui, Phu Quoc, Nha Trang and Yogyakarta for events.
“The crowds are smaller and there’s a greater sense of exploration, learning, and well-being availability. These locations are rich in culture, have diverse offsite activities, and offer great value for money,” she elaborated. Goh also encouraged meeting and event organisers to “begin the planning process early”.
“Include your travel partners early, this way, businesses can boost their bargaining power, increase the chances of better purchases, secure better deals, and reduce the strain on execution capabilities,” agreed Bindra.
“We are still seeing extremely short lead times for events. Organisers should be looking at 2024 with a 12-month planning cycle if they want to have a good choice of locations and keep prices at a reasonable level. If you start sourcing earlier, you are in a much stronger position to secure availability and negotiate on pricing,” added Goh.
Bindra is also seeing “last-minute bookings” and events with short lead times, resulting in problems securing venues. “All these factors mean that the cost of a meeting per attendee has increased during a time when business budgets are tight, and employees are working at capacity,” stated Bindra.
