Nobody knows for sure what 2021 holds – we believe day delegate rates will start to increase in the 2nd to 3rd quarter of 2021, and here is why:
First the bad news: PWC released their annual Hotel occupancy report last month see HERE. This was based on 2 assumptions, as of yesterday their first assumption, a vaccine in 2021 seems most likely. They forecast hotel occupancy of 52.4% in London and 59.2% for the regions. This represents a decline of 31% and 16% respectively, really depressing figures. Put another way, the report estimates that RevPAR in London won’t return to 2019 levels until 2024 and 2023 in the regions. This is a far longer and deeper downtick than the last recession. In that hotels hold the vast majority of the inventory of conference and meeting space (i.e. the UKCAMS report here, shows 59% of all conferences being held in Hotels, 18% in conference and training centres and 18% in unusual / multi-purpose venues), it is an absolute certainty that what affects the hotel sector will impact the conference and events industries. Of less significance, hotel supply which has been growing fast will fall back, however, we are talking about 1% to 2%, not enough to impact. Almost certainly some hotels will discount their conference rooms in an attempt to drive bedroom business etc, and from past experience, this is likely to be particularly prevalent in the mid-market to cheaper sectors
However, declining occupancy won’t necessarily translate into declining rates. Lessons have been learnt from the last recession, and perhaps not all of the mistakes made then will be made again. The nightmare of a central London venue group offering a £10 Delegate Rate hopefully will not happen again. We questioned a number of venue sales managers about how they see 2021 and the challenges they face when it comes for forecasting for next year. Many said that given the situation we are in, there is not enough margin to reduce Day Delegate Rates, and they are concentrating on making their venues Covid-safe and “Supercharging” their existing packages and venue facilities to provide added value to their clients.
On the demand side, it’s very hard to predict what will happen. Talking to clients, there seems to be a huge appetite for ‘get back to work’. We imagine that in the first instance this will translate into rising demand for team meetings etc, then maybe in the early summer the rebirth of the ‘conference’. We see this as coming back very strongly for two reasons. As we all know, huge numbers of events were cancelled in 2020, and this has created a pent-up demand. At the end of the day, there is no substitute for networking with your contemporaries. A year of isolation for many of us will lead to demand at the individual level, and subsequently at the corporate level. Many companies have been operating in the dark, not knowing what is happening in their industry. There is simply no substitute for events and conferences and the role they play in enabling communication both formal and informal at all levels.
We believe this combination of pent-up demand and pricing restraint learnt from the last recession will mean that there is no return to the slash and burn pricing models of previous years and will herald a slow uptick in delegate rates through 2021. The proverbial ‘joker ‘in the pack is Brexit – will it result in huge queues at the airports? Will the pound devalue hugely?
At The Venue Booker, we will find you the perfect venue for your event. From meetings, seminars and conferences to receptions, dinners, parties and accommodation, our free venue finder service will source the perfect venue for you and secure you the best rates when you book through us. We bring over 20 years’ experience in hospitality and have a wide network of high quality venues within London and across the United Kingdom. At The Venue Booker we specialise in booking venues for charities, associations and other 3rd sector organisations. Don’t hesitate, get in touch now!
With over 20 years experience in the hospitality industry you can be confident that our expertise and extensive knowledge will ensure the success of your event.
There is no charge for our service. Let us do the work for you.Tell Me More