Vendor's Role

Renewed Optimism

From a vendor’s perspective, the hospitality industry holds much promise. Most vendors look forward to another year of growth, even in the face of a slowing, uncertain economic future. “This was a terrific year and next year might be just a little bit better,” says Dave Herman, director of marketing and sales for Big Event Productions in Minneapolis. “Everyone’s being careful with their money, but they’re still spending it on communicating when they need to.”

The mixed economy notwithstanding, some vendors continue to see their corporate business increase, some substantially. “My business has doubled since last year, and most of that is corporate events,” says Alice-Lynne Olson, owner of The Late Bloomer Floral Design Studio in St. Louis Park.

Dan LaFond, founder of Special Events Midwest in Crystal, reports similar experiences. While events have been a bit smaller than in years past, his restaurant delivery business (which delivers food cooked at specified restaurants to events) has gone up by 34 percent this year.

“I’m seeing more smaller meetings than big events right now,” says LaFond. “They had been trending upward until this year, and now they’ve dropped off; I think it’s just that we’re hitting the beginning of a recession and people are re-evaluating their budgets.”

Meetings and events business continues to play a vital role for many vendors’ businesses. The largest slice of vendor respondents (18 percent) says their business was 91 percent to 100 percent reliant on meetings and events. And more than half say that this has increased in the last year, while only 14 percent say that it had decreased, suggesting that there was plenty of business to be won. Of the vendors who responded to this year’s survey, 80 percent have a sales or marketing department directed toward gathering meeting/group business—up from 69 percent a year ago.

While vendors see the market’s potential, they maintain an eye on operational trends that affect business relationships between vendors and meeting planners. We asked vendors whether attrition, commoditization (the forces that reduce purchasing decisions to those of cost), price concessions or budget constraints, or standardization policies had had the biggest effect on their business relationships. As you might expect, price concessions or budget constraints led the pack; 66 percent of respondents say considerations affected them the most. Another 18 percent of respondents chose commoditization, partially a budget decision as well since its based on the fear that planners will view all products on the market as interchangeable.

Vendors are uniquely positioned to assess the Twin Cities market for meetings—and to say how the rest of the nation views it. We asked them which factors keep international or national meetings or events from coming to the Twin Cities: Not surprisingly, many (44 percent) cite outsiders’ perceptions regarding regional winter weather. Others cite the lack of a convention center hotel or public transportation, but nearly one-fifth of respondents say that the cost of doing business here compared to other, similar cities is a contributing factor. And of those who cited another, unlisted reason, half of them cited the difficulty with finding reasonable air fares and direct flights. Nonetheless, 46 percent say they didn’t know what prevents the area from being a destination of choice—what’s
not to like?