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Corporate Hospitality Market Report 2002
Key Note Publications Ltd, Jan 2002
Despite uncertainties in some of the market's main sectors, such as finance and IT, Key Note estimates that the corporate hospitality market grew by 2.7% in 2001, to reach a value of £760m.
Corporate hospitality is divided into two main categories: client based and staff based, although they are not mutually exclusive. The market for client-based hospitality is expanding, owing to the growing realisation that corporate hospitality plays an increasing role in companies' integrated marketing communications strategies, particularly for service-based companies.
The main product sectors for corporate hospitality are spectator sports, participatory activities and sports, other sports-related activities, and arts and culture. Spectator sports dominate the corporate hospitality market, accounting for nearly two-thirds of all corporate hospitality revenues.
The main sport for corporate hospitality is football, driven by this sport's overall popularity. Nearly 5% of major league club seating capacities are devoted to corporate hospitality offers, although many of these are taken up by individuals. Compared with other sports, prestigious events in rugby union, golf, motor sports and tennis command relatively high premiums for corporate hospitality organisers.
In the early 1990s, the corporate hospitality market was severely affected by the downturn in economic conditions. Since then, the quality and expectation of corporate hospitality has changed and the market has become less vulnerable to changes in economic conditions. As a result of its increasingly integral part of marketing communications strategies, corporate hospitality is required irrespective of economic conditions.
As the industry has matured, a nucleus of firms has become well established in the top tier of the market. By and large, these are exclusive hospitality agents for the most prestigious events, and can offer global marketing packages for their clients. The market also supports a multitude of smaller firms, which tend to offer a standard range of products within a particular sector.
Prospects for the corporate hospitality industry are favourable. The market is expected to remain stable, sustaining annual growth, much of which will be driven by the spectator sports sector. While there are relatively few barriers to entry, the trend towards industry concentration is forecast to continue.
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