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Groups and Meetings: Market Opportunity Redefined
PhoCusWright, Jan 2007, Pages: 48
Information technology (IT) adoption in the groups and meetings arena tends to lag behind other travel industry sectors, but this is about to change due to a convergence of several factors, including a host of competitive activities and new market entrants, advances in technology and technology standards within the industry, and a growing disdain for the status quo. As a result, this space is quickly becoming one of the industry’s next major competitive battlegrounds, and given the dollars at stake, it should be.
In the latter half of 2006, we conducted extensive research on groups and meetings within the United States to better understand the current state and, more importantly, where this business segment is headed. Specifically, its research goals were to size the overall groups and meetings market, to determine what portion would be driven by electronic commerce, and to establish an initial baseline for future tracking and monitoring.
The results of this first-ever research effort are presented in this report, Groups and Meetings: Market Opportunity Redefined. One key finding is that the size of the market opportunity is big – really big. By the end of 2006, groups and meetings revenue was projected to reach US$164.1 billion. The market is projected to grow to $175 billion by 2008, with travel (air, hotel, car rental, ground transportation, cruise and tour) representing 54% of the total. Non-travel expenses (e.g., meeting rooms, catering, audio/visual equipment) represent the remaining 46%. By 2008, 41% of all groups and meetings travel revenue, or $39 billion, will be booked online.
Given the overall size of the groups and meetings marketplace and subsequent online opportunities, many will find this space remarkably attractive and worthy of pursuit. As traditional suppliers, intermediaries and new market entrants vie for market share, there will be great shifts in competitive dynamics and the industry landscape as a whole, making this an exciting space to watch but a difficult one to navigate. Companies have found it difficult to develop compelling business cases with an articulated return on investment (ROI) for many technology initiatives supporting the groups and meetings space. This report should change that. It should also help hospitality, travel, and technology executives interested in the groups and meetings arena understand how the marketplace is changing, the market potential, and what sorts of actions are necessary to remain competitive.
Although developments in this market arena tend to be more evolutionary than radical, no one can afford to sit on the sidelines taking a wait-and-see approach. Given the tipping point this market is reaching, companies must be both proactive and agile and work aggressively to automate the entire distribution network and supply chain supporting groups and meetings or else risk ceding control of this space to competitors and/or new entrants.
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