Host cities: will the pandemic change the rules of engagement?
The relationship between international associations and the cities who host their meetings has never been entirely straightforward. Although generally a happy and fruitful one, it has been beset by the same thorny issues that crop up in any relationship that is essentially transactional in nature.
Over the years, each party has accused the other of not being wholly transparent, of over-promising and under-delivering, of wasting the other’s time. But, in the case of large meetings attracting thousands of delegates, it was clear where the power lied – with the association. In recent years there has been talk of upgrading the relationship to one based on partnership, but every time someone mentioned the ‘s’ word (subvention!) that noble aspiration rang a little hollow.
So, has the pandemic changed the relationship? Here’s how it might….
Speak to some international association leaders and they will tell you they do not expect to attract the same number of delegates to their physical meetings ever again – that Covid-19 was a watershed moment for conferences in terms of virtual and hybrid formats. If they are right, then their buying power could be significantly diminished. With most cities facing huge budget shortfalls as a result of the pandemic, subventions – once the mad scramble for post-Covid business has abated – may start to dwindle for all but the very largest of meetings, as convention bureaux prioritise only events that are guaranteed to generate the biggest return on investment.
Online rental sites, loyalty programmes, and the trend for independent travel had already combined to make the hotel room block look a bit quaint. The pandemic could hasten its demise. Many associations had already decided that housing delegates was no longer worth the hassle. There were plenty of rooms available anyway, so why risk a hefty attrition fee if your delegates decided to book their own digs? If hotels recover quickly from Covid-19 and delegate numbers fall, expect this cautious attitude to prevail and the room block added to the growing list of ‘how we used to do things.’
However, if a significant reduction in room stock is a lasting scar of lockdown and in-person delegate numbers do recover, we are suddenly back in a sellers’ market and the dangers of not having a room block could loom large for associations. A report from The Wall Street Journal suggests 20 per cent of New York’s hotel supply (about 25,000 rooms) could close permanently and if this plays out in other major cities around the world, the room block may live to breathe another day.
Flexibility…and genuine partnership?
The uncertainties around travel restrictions are likely to persist until most countries have brought Covid-19 under control. This makes the task of organising an international meeting very complex. It also means associations will be looking for leeway in their negotiations with suppliers – extended cancellation periods, shorter lead times, perhaps a widening of the definition of force majeure. Cash starved suppliers will have to compromise, but they have troubles of their own. Perhaps, then, this is when the relationship becomes genuinely about partnership, with both sides working together to ensure the best possible outcome. It will require trust and transparency and, crucially, a shared vision of what success looks like.
Factor in the growing desire of associations and cities to create legacy and prove the societal benefits of meetings and the stage may be set for a new, deeper relationship, where long-term outcomes are put above metrics that only measure immediate financial returns. This is not a new aspiration, but, until now, only a select group of CVBs have shown genuine commitment to embracing it as a business model. Now they seem ahead of the curve. Expect others to follow.
Another thing to consider is the attitude of City Halls to large groups of visitors, which will be driven by how far residents are prepared to tolerate them. Over-tourism is a particular problem in European cities with ancient infrastructures that have high numbers of residents living in the city centre. Cities like Vienna, Copenhagen and Amsterdam have already designed frameworks for the visitor economy that foreground sustainability and the rights of residents to a decent quality of life. Unlike previous economic shocks – 9/11 or the financial crisis – the pandemic appears to have pushed sustainability up, not down, the agenda. In some cities we could see the political implications of hosting large meetings starting to clash with the economic implications of not hosting them. This scenario was famously played out in 2015 in Barcelona when the incoming mayor Ada Colau appeared to question the benefit of that city hosting the Mobile World Congress, an event that pumps around €500m into the city – along with 100,000 temporary visitors.
Published Date: 25/06/2021