A perfect storm is gathering in the business events and meetings industry, one that could change the industry forever – delegates want bigger experiences and clients want more for smaller budgets. Firm evidence shows that to address this demand, event planners who traditionally favour ‘tier 1’ cities such as New York, London, & Hong Kong, are hosting large global events in smaller, lesser known second tier and third tier destinations, the likes of Sheffield, Nashville, & Rotterdam.
Factors in success
In the “Decision to Attend Study,” a collaboration between IAEE, PCMA, and The Experience Institute, 82 percent of respondents said that the destination plays a part in their decision-making on whether to attend a meeting or conference. There should be no doubt that getting the destination city right is vital, so why are planners taking what could be perceived as a risk on smaller cities?
Second-tier cities are loosely defined as those with a population under one million people, third tier is fewer. They are increasingly seen by millennials as attractive places to find a lower cost of living, easier commutes, and closer connections with family, but also, they are attractive because they offer more approachable, neighbourhood-oriented versions of the urban lifestyle promise that previously caused many people to move to larger cities. Between 2010 and 2015, cities such as Colorado Springs in the US saw their millennial populations grow by more than 10 percent.
In its summary of the European meetings market, the American Express Global Meetings Focus Report 2018 states, “While 82% of respondents predict large cities as the primary locations for meetings in 2018, 12% identify second-tier cities as the primary location, up from 10% last year” and in the US, the survey forecasts second-tier cities as the primary location for 23% of meetings.
These figures are backed up by business activities in smaller cities. For example, according to Cvent, the number of eRFPs (Electronic Request for Proposals) for meetings in the Tucson area has increased dramatically year-on-year, with a 25 percent rise, while Lanyon’s Smart Events Cloud says there is a rise of almost 39 percent. And in Louisville, Kentucky, they’ve seen convention business increase by more than 55 percent in a decade.
Another vitally important factor in the success story of second and third-tier cities is price. As rates for hotel rooms, meeting venues, food and beverage, and other services increase every year in tier 1 cities, events budgets are struggling to keep up. Smaller cities are more affordable, a meeting in Liverpool or Newcastle can cost 30-40 percent less than a one in London.
How are small cities responding?
To support their wide-reaching investments in urban regeneration, events infrastructure and transport links, smaller cities have been working more collaboratively with business and governments with the aim of growing their economic base. They see business events as a key part of this strategy.
Attracting events that match the destination’s cluster profile is the key to using sector strengths and local university specialisations to attract events and investment from the industry sectors that can benefit from them, and thereby help the local economy attract investment and growth.
In Hamburg for example, the Convention Bureau is located in the same office as the city’s development authority. The latter’s role is to identify the region’s successful clusters and bring in companies associated with those clusters and then feed back to the CVB, with information that enables it to target associated events.
Along with promoting sector strengths and municipal investments, many smaller cities have invested in clever brand messaging to highlight the city’s unique characteristics and offering – Nashville’s long-term association with the music industry is a prime example that is paying huge dividends – many organisers consider the city as tier 1 for events.
Smaller cities can also promote the availability of local government officials and leaders in core sectors as hosts, exhibitors, sponsors and speakers. You can conceivably expect the Mayor of Sheffield to come out and welcome your group, whereas this is out of the question for the Mayor of New York.
In this respect, there has been a complete turnaround, being a small city is now an advantage. Being smaller means it’s easier for meeting attendees to get about, their experience is more authentic and personal – they can feel like the city is theirs and, of course, the costs for everyone in the city are considerably less.
Smaller cities are giving corporate event planners greater choice, better pricing and no compromise. Which is why more and more event planners are looking toward second and third-tier cities to host their events. Not surprisingly, many smaller cities are heavily promoting their advantages, brand image and complete conference packages – at IBTM, we’ve seen exhibitor and sponsor numbers from this category increase substantially and we expect it to continue.
If you are an event planner looking to place your next event in a small city, register to attend IBTM World 2018 to meet up-and-coming destinations.
If you yourself represent a small city, looking to showcase your destination to quality buyers, you may want to browse the promotional opportunities at IBTM World this year.