Andy Vinsen: Calling all corporates

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Andy Vinsen, Keith Prowse’s acting commercial director, looks at the trends set to jolt the corporate hospitality landscape and shape the market next year…

In July 2010, a five-year forecast from industry analysts GIA projected an increase in demand for corporate hospitality in the UK reaching £1.47 billion in 2015. After slowed growth over 2008-2009 due to economic factors, 2010’s pick-up has paved the way for a successful 2011. Falling in between World Cup and Olympic years, 2011 will see an increase in entertaining at the UK’s flagship sporting events. This means the cornerstones of the UK’s social season, such as Cartier International Polo, Henley Royal Regatta and The Championships and Wimbledon.

In 2010, there was a need to offer added value during the financial downturn, and this played into the hands of those entertaining and being entertained. The Stonehage Affluent Luxury Living Index showed that the average price of luxury sports and recreation products in London actually fell 3.0 per cent from 2009 to 2010. Although the industry has shown clear signs of a recovery this summer, hospitality suppliers continuing to offer extortionate rates will fall by the wayside – buyers know when they are being taken for a ride.

Companies want their clients or employees to be able to taste the atmosphere at Twickenham or Wimbledon, and not be shut off from the spirit of the event. Gone are the days when a well-presented three-course meal and seats in a hospitality box would be sufficient for guests being entertained at the UK’s top sporting events. They want the priceless experience of interaction with famous current or ex-sports stars, fresh from the pitch in some cases.

Discussions at the SpoBiS international sports business conference in Munich earlier in the year confirmed the emergence of a new market for the industry; younger sports fans wishing to indulge their passions with an unforgettable day out. Packages have now been created with relaxed dress restrictions and an informal pre-game atmosphere encouraged by using well-stocked open drinks fridges, table football and Nintendo Wii zones.

I believe 2011 will be the year when corporate hospitality becomes the ultimate employee incentive, with companies looking after their most valuable commodity – their staff. During the 1970s corporate hospitality emerged as a way of winning new clients through business lunches and dinners. Over the past decade buying patterns have changed, with entertaining at the UK’s big sporting events coming to be used for more subtle purposes such as strengthening business relationships and a chance for valuable face-to-face time away from the office; this will branch out even further into team building and incentives schemes in the future.

Last year there were reports of fake and scandalously overpriced packages being sold at events such as the 2010 Ryder Cup and 2010 FIFA World Cup. In 2011, this small minority of unsanctioned suppliers will find life increasingly difficult thanks to a number of initiatives, which are already underway. By expanding buyer awareness through high-profile campaigns and best practice guides a culture of trust can be developed which will put pressure on bogus providers.

Sponsoring a high-profile competition is more than just advertising, it offers a world of opportunities to entertain at an event, allowing easier access to players and ensuring the best seats in the house. We have seen companies grow increasingly eager to attach their brand to an iconic sporting event, which reflects desirably on them, and one of the reasons for this are corporate hospitality opportunities. Corporate hospitality brings money to all levels of sport in a way that is often hidden from view, unlike advertising and sponsorship. In 2011 sport will benefit from the continued influx of funds from corporates across all sectors – sport sells.

From the huge demand for Twickenham packages through the autumn and winter to the summer’s healthy Wimbledon sales, 2010 proved beyond a shadow of a doubt that corporate hospitality is on the agenda. Despite media reports to the contrary, the 2010 FIFA World Cup was the second most successful in the history of the competition in terms of corporate hospitality sales, so no need to panic on that front. The challenge now is to keep that momentum going by ensuring entertaining remains an indispensible part of marketing strategies.