• Roger Harvey – Chairman of ITMA

• The ITMA exists to provide a focal point for the events industry in the UK

• Why do we call it the events industry – because the industry has come along way over the last 40 years

• It now incorporate so much more than just conference and incentive travel reflecting a changed corporate profile

• Today it embraces a wide spectrum of live events that provide creative and valuable solutions for corporate customers

• Solutions that show events can be used to deliver effective and powerful marketing and communication messages

• Today in the UK there are in excess of 3000 agencies organising live events

• The total value of this business is estimated to be in excess of £16 billion

• In 2001 business tourism expenditure at 31.7% exceeded leisure tourism expenditure at 29% for the first time

• An additional benefit is that a positive visit by a business traveller stimulates future leisure visits

• Indeed research shows that 40% of people travelling to business meetings or events return on leisure trips.

• Business tourism is sustainable offering higher added value with less negative environmental impact than mass tourism

• The UK enjoys the largest outbound event turnover in Europe estimated at £1.08 billion (M&IT Trends & Spends 2002)

• The UK leads the way in many areas of live events. Skills are increasingly exported to deliver events across Europe and the World

• The growth and strength of the UK sector is reflected in the success of the ITMA Awards where we celebrated the best of 2003 before 970 delegates.

• The diversity and creativity of the projects entered showed the underlying strength of the sector despite difficult times

• The association has three main roles:– Promotion of the sector to the corporate

market

– Protection of our members interests through representation to government and the regulators

– Education through a range of personal development seminars and events that focus on legislative and commercial matters that impact the sector

• So what are the prospects for the UK Events Sector in 2004 and beyond

• Let’s start with the good news – the signs indicate that the business climate is beginning to improve. Our members are certainly more optimistic than they have been for some time.

• But its not going to be easy because….

• Every time we emerge from a recession new trends, new business drivers also emerge and this time is no different.

• The key for the corporate client is ROI – how do they get more value for their money

• Increasingly procurement is involved in sourcing of event services

• What does this mean – it means detailed scrutiny. Every element is examined by the client to ensure they are getting value for money

• On one hand, it means much of what the intermediary (the Event Organiser) is offering is becoming commoditised and is being bought on price

• On the other hand it means that the intermediary has to work harder to find that special element (USP) that will provide real added value for the client

• The overall impact of this is that more time and creative effort has to be put into any proposals presented to the client

• It also means that the intermediary will need to apply the same sort of processes to their own supplier chain

• It also means they will be looking for suppliers to clearly demonstrate the value their services bring to the table

• Whilst price will be a factor so will the quality of service

• No one should be under any illusion, the influence of procurement and purchasing will impact the entire supply chain

• We have to embrace this as applied correctly, these processes both identify and support professional and well run companies

• There is also no doubt that for those of us in the EU the increasing tide of legislation is also having a very real impact :-

• Employment, Health and Safety, PTR, Taxation ………etc

• All add cost and operational challenges

• To meet this challenge the ITMA has appointed a Parliamentary Advisor to assist us in lobbying both Ministers and the Regulators

• We are also meeting with other European Trade Associations to explore areas of potential co-operation

• And Government should be interested -an ICCA survey calculated the average worldwide per day spend of the business delegate as US$343

• The total spend per meeting was US$1.1M

• Per capita this is significantly more than leisure tourism

• In the UK the BTA projects that by 2010 the expenditure by business visitors could represent as much as 45% of total inbound tourism spend - this provides:-– Significant employment and career

opportunities– Significant source of tax revenues

• The 2003 EIBTM Industry Trends Report made for some interesting reading

• It provided information about who was buying and who was selling as seen on the following charts.

• They feature a number of key markets or key main buyers

• The first table will show, for a number of key destinations, their main markets in terms of inbound business tourism for the events market.

• The dominance of the US and the UK as incoming markets for every one of the main European economies is clearly apparent

Destination No 1 No 2 No 3

UK US Germany France

Italy UK US/Germany France

France UK US Germany

Spain UK US Germany

Germany US UK Benelux

• The second chart shows the principal outbound destinations of key main buyers of events

• In terms of inbound business tourism to Europe and within Europe, it is clear that a few key markets dominate, with Spain and France cited most often as the destination of choice.

Key Markets No1 No2 No3

US Spain UK France

UK Spain France Germany

Italy France Spain n/a

France Spain US n/a

Spain France Italy Benelux

Germany Spain Italy FranceSwitzerland US Germany UK

• The continuing impact of both the international political and economic situation remains a challenge

• Business tourism has suffered a number of body blows since the World Trade Centre was attacked and there is a lack of confidence in the ability of politicians to resolve the problems

• Security concerns have increased focus on risk management and the need for robust processes that protect both the intermediary and the client

• Lead times for corporate clients continue to shorten as they are reluctant, in a fragile economic environment, to commit budgets until the last moment

• In the corporate arena there also appears to be a trend towards smaller, shorter but more frequent meetings

• While association meetings still seek to attract large numbers the length of many meetings has reduced from 5 to 3 days

• The style and content of meetings is more business focused – making the message more memorable is the major business challenge

• There is an increase in the use of theatrical and audience participation techniques – all aimed at increasing message retention

• Incentive travel is seen as being in long term decline for a variety of reasons – changes in motivational practices within the corporate arena – taxation – the availability luxury travel

• The introduction of the € has had an inflationary effect

• When corporate clients are looking for even greater value it can be difficult to justify how a weekend in Europe can cost more than a week in Thailand.

• Some of the emerging destinations include:

• Worldwide– China, Cambodia, Vietnam, Costa Rica,

Belize, Argentina, Cuba, Qatar

• Europe– Poland, Croatia, Latvia, Estonia

• Cities– Dubrovnik, Budapest, Krakow, Belfast

• In traditional markets– The US , the Caribbean, South Africa

remain strong – Europe especially Spain, France, Portugal

continue to feature strongly– Competition for business is fierce

• The events industry has now entered a new phase – where contracts, not contacts are the key

• Attractive destinations and facilities are no longer enough – business results are what count – ROI - return on investment

• Whatever the international circumstances and challenges, there will always be a need for people to meet

• The proliferation of text, email and internet messaging has only served to increase the value and importance of face to face communication.

• Without doubt business tourism brings significant benefits to a destination

• Business Tourism is sustainable and has less negative impact on the environment

• Fortunately governments are now waking up to the fact that business tourism is valuable and must figure in the strategic planning for tourism policy.

• We all have to work hard to re-enforce this message because we need all the help we can get!

• All the stake- holders (from NTO’s to DMC’s) must co-operate to build a compelling case for your destination or venue to be on the events map

• To do this effectively requires an understanding of the market and its needs - this requires expertise, local knowledge and research

• The events sector has to be dynamic and cutting edge - it has to accommodate what is fashionable as well as the latest in hi-tec

• Despite the current difficulties the future is bright provided the industry can reflect the changes in demand – this means anticipating and adapting to new trends.

• To ensure our future is secure we all have to add real value to the process to justify our continued place in the events marketplace

• Thank you for allowing me the opportunity to talk to you today, and in closing I would like to leave you with one thought

• Growth through Partnership