Why is the transient market important to meeting planners?

You may think that this is a subject that only the hoteliers out there care about but I would argue that it is one that all planners should pay attention to. In my recent post on meeting planning and the economy, I posited that the ups and downs of leisure travel were an indicator of the how the industry as a whole would perform in the future. Why is that? What is my reasoning for taking such a position?

Primarily, it comes down to the mentality of individuals. Since predicting the behavior of individuals can be tricky, though, it is sometimes helpful to look instead at the behavior of masses – in this case market segments. I combine leisure travel and transient business into one segment. Corporate, association, and government are the others that I typically look at when reviewing trends in the industry. These do not encompass all of the possible market segments but they do allow me to view, in broad brush strokes, the landscape of the hospitality industry. However, each segment is usually treated as separate and somewhat unrelated. So why does the transient market have such an impact that I consider it to be an important indicator of economic trends? Why not one of the others?

My stand is that it is the beliefs and attitudes of individuals that drives our industry. If enough individuals believe that the economy is bad and do not want to travel (whatever the reason), those beliefs have a negative impact on each market segment. The same is true if they believe that the economy is good and feel comfortable with travel and going to meetings. Here’s how I see it working…

Individuals have opinions about traveling, be it for personal or professional reasons. When they do not feel like they can afford to travel personally (usually for fiscal reasons), the transient market drops. The more people who feel that way, the more that market segment is affected.

Then, when they go to work, they carry that attitude with them – maybe not consciously but they carry it nonetheless. That affects their willingness to attend conferences (especially if it involves out-of-pocket expenditures) and their perception of the value of meetings and conferences in general. If enough people carry these feelings into the workplace, then it can cause the corporate market to sag. Add into the mix the fact that such feelings usually have some basis in real economic conditions and you have a situation where companies are already beginning to tighten their belts and clamp down on “extraneous expenditures”. Meetings and conferences tend to get eliminated from the budget along with anything else that is seen as unnecessary or wasteful.

Association events tend to weather downturns in attitudes and economies a bit differently. Because many of these events are voluntary rather than having mandated participation, you often see their events get downsized rather than eliminated completely when the economy sours. Those involved have a personal desire to attend and may work harder to do so. However, the attitudes they carry about personal travel certainly still have an impact here.

On the plus side, these same forces work when people believe that they are secure financially. They are more willing to travel in their personal lives, which translates to more willingness to travel professionally. Since their choices affect the transient market first, then the corporate and association markets, I keep an eye on trends in leisure and transient business at hotels to give me an early glimpse of what the future may have in store for my meetings and events.

~ Karl Baur, CMP • Project Director, RDL enterprises