An Overview of the Corporate Travel and Events Industry in Spain, 2018

Investments in the Industry

The future of the events industry is looking positive, with a rise in demand that is more than the national average across all industries. Agencies can expect their clients to invest 10 – 20% more in events in 2018 than in 2017.

However, it is important to note that companies are now tending towards having more open budgets (constantly changing, rather than set budgets for the year), which, depending on how well they have done that year, could be either a good or a bad things for the events industry as companies no longer know at the start of the year how much money they will have in their budget to spend on events.

Another significant matter to note is that despite the growing demand for events, since the recession in 2008 companies have tended to take a more frugal approach to the amount that they spend on each event. For this reason, the industry is now seeing a rise in the number of smaller, more intimate events (so that a company can hold more events with the same budget as before).

According to a study carried out by ´Eventoplus´ agencies on average can expect to organize around 79 events per year, with an average of 275 people attending each event (although more than half of all events have less than 100 attendees).

With regards to incentive trips, budgets have not grown very much (generally 10% or less than the previous years), with an average of only €2210 being spent per attendee.

For corporate event and travel agencies, the industry is looking tough. Due to an increasing demand by clients for honesty and transparency, clients are reluctant to pay extra outsourcing costs. Around 25% of clients will now only pay professional fees, and around 40% of clients tend to pay only professional fees the majority of the time. This then leaves the cost of outsourcing to be covered by the agencies themselves.

Furthermore, providers are reducing the amount of commission that they will pay to agencies, with some providers preferring to settle for a fixed fee, rather than paying commission. Agencies do not feel that they are in a position to negotiate due to a higher level of demand than supply for top providers (such as hotels Mariott and Hilton who have reduced the commission that they will pay agencies from 10% - 7%).

This has led to 30% of travel agencies charging only fees and not commission to try and keep up with the demands of the industry, showing the lack of acknowledgement within the industry for the necessity of agencies.

General Trends

What do Customers Want?

More and more companies are moving towards sustainability, with these companies becoming more popular over the last few years. For this reason, many agencies have adapted to offer Corporate Social Responsibility (CSR) activities.

What factors will affect the market in 2018?

One of the main factors affecting the selection of where to hold an event or meeting is the political and economic instability of the world.

What events are most popular?

-          Congresses and fairs make up 1/5 of events.

-          Event ´festivals´ are becoming increasingly popular. An Event Festival is a large festival style event in which a group of companies come together to display different things. An Event Festival incorporates many different events into one larger festival.

-          People want events and incentives in which they can choose what to do (rather than standard activities for everyone). They prefer to be able to sign up to sessions that they want to do, as well as have some free time to do their own thing, instead of having every minute of the day planned out for them.

-          Although mindfulness events aren´t really popular, many events like to incorporate mindfulness into their events e.g. a few minutes of mindfulness at the start or end of a session, or by offering healthy teas/smoothies.

What do customers look for in an agency?

In the past, customers tended to go to lots of different agencies for different things. Due to this, agencies have developed to provide a more complete and comprehensive service. However, specialization is still valued highly, with the feeling that an agency can´t be good at everything.

Post-Recession Developments

Workforce

During the recession, the demand for events was lower, and thus naturally the demand for a workforce was lower. Due to the high number of unemployed people, event and travel companies were able to offer the bare minimum and were still able to gain skilled workers. However, in 2018 the workforce needs are expected to increase by 10.1% to meet to growing demands of the industry. As the recession is now over, companies must now implement better employee schemes to recruit and keep skilled employees, as there are more recruitment options available to them.

The Role of Agencies

During the recession companies preferred not to outsource their work and would organize events internally to keep costs low, choosing to go directly to suppliers, rather than collaborating with an agency. Now that there is more work to do, they don´t have the time and are once again outsourcing to agencies. Since the end of the recession, suppliers have seen an 8% drop in clients going directly to them, indicating the growing importance of the more specialized agencies.

Event Spaces

During the economic crisis, everything within the events and travel industry had to adapt due to the rise in competition and the struggle to get work. This has affected the industry positively as nowadays the general standard of events is much higher. Furthermore, it led to the development of newly renovated event spaces that offer a wider variety of experiences such as catering and ready-installed technology.

Types of Events

Luxurious, exclusive and adrenaline spiking events are on the decline due to social and economic changes. As a result of the recession, people no longer view luxury positively and having a nice drink in a bar is just as good as having an expensive cocktail in a penthouse. In fact, with this new ´all inclusive´ mind set, exclusive events may be viewed negatively and people are now looking for more ´authentic experiences´ than luxury experiences. Many customers believe that communication within an event should be a top priority, and big fancy ´wow-ing´ scenery is no longer needed to make an event successful. With regards to adrenaline provoking activities, people are already stressed enough in their everyday lives that they don’t need an event to get their adrenaline fix!

Problems Facing the Industry

One of the biggest problems that the industry is faced with is the lack of appreciation for agencies. Loyalty is hard to find within the market with less than 40% of agencies working regularly with the same clients. Clients don´t seem to understand that to pull off a great event or incentive trip, an agency should know their client´s needs well. One common problem is that many clients tend to decide on which agency to go for by price rather than specialization or added value. They will call upon many different agencies to receive different quotes so that they can drive the price of their chosen agency down. The problem is that they do not actually meet with each agency and consider what each one has to offer.

Marketing and Data Collection

Events are a great chance to collect a wide variety of data that can later be used for marketing purposes and ´Eventoplus´ recommends that you use your event to gather as much information as you can about your target audience. Events provide a great opportunity to talk to people, network and get their opinions. With the growing use of technology in events, there is literally no excuse to not be informed about your target audience through your event.

Eventoplus suggests that some of the best ways to market include:

-          Going viral

-          Networking during the event

-          Pop ups

-          Taking photos at events and putting them on social media

Use of Technology

Apps

The use of apps in events is already normal and app use in incentive travel is also gaining popularity. Apps are a great way to share information about the event, whilst gathering data about trends and what people are doing. Many companies are now actively gathering data at events through apps in order to gain a wider understanding of their target market.

Virtual Conferences

Virtual conferences and events are not really taking off as well as previously anticipated due to people being unable to stay attentive in front of a computer for long periods of time.  

Holograms

Although, in theory, holograms are a great way to host the same event in different locations at the same time, in practice the technology is not yet sufficiently developed to be worth the high cost of using it. Many people like the idea of using a hologram, but at present it is not affordable enough to be a viable option for widespread use.

Virtual Reality (VR) Experiences

VR technology has developed tremendously over a relatively short period of time; however its place in events is still limited. Although used, it tends to be more of an add-on feature to enhance an event, rather than the main focus of the event itself. However, with the improving quality of equipment, it is likely that it will grow in popularity over the next few years.

Biometrics

Although not yet really a part of events, interest has been shown in integrating biometrics into events (i.e. gathering data about a person´s personal characteristics and behavior), however, events specialists are yet to find a way to incorporate it effectively into mainstream events.

Contactless

It is important to note the technological advancements in contactless solutions when considering the evolution of events. Contactless solutions such as paying at a festival with a wristband that you merely tap on a contactless receiver are now widely recognized. Not only is it quicker and easier, it is safer than handling lots of cash. Furthermore, facial recognition technology is developing so that customers may pay for things at an event with their face alone, without having to come into contact with anybody (much like in the latest Amazon stores).

Artificial Intelligence (AI)

AI is not yet a widespread trend in the events world, although it is expected that it will be in the not so distant future.

Data Protection

With the advancements in technology, the EU has put into place a new law which requires companies to have a data protection officer to ensure maximum security of the data being handled. A company can be fined up to 4% of their sales for security breaches.

Data Source: Eventoplus´s market study, 2018.

Written by: OliviaTaylor-Firth