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Will you make a corporate compromise and ditch the caviar for pie and mash? René Proske, managing director, PROSKE group, describes a changing corporate hospitality climate…

The recession has affected all aspects of society, not least business big and small. Stories of redundancies, cutbacks and closures are reported in the media every week and the era of decadence that we enjoyed at the turn of the new Millennium seems to be well and truly behind us.

So it would appear inappropriate for companies to spend lavish amounts on corporate hospitality at a time when they may have to be making people redundant or cutting their prices to remain competitive.

The nature of business these days has changed dramatically since the arrival of technology that provides for everything from cheaper telecommunications, documents travelling to the other side of the world by email at the touch of a button and the advance of video and conference calling.

But that cannot hide the fact that personal interaction is at the heart of good business and that is why companies of all shapes and sizes, from small businesses to global corporations still seek corporate hospitality support.

There are fewer inquiries for corporate lounges, hospitality boxes and business seats for major events than two years ago and certainly, companies look for more cost-effective options.

It seems that clients’ clients are also now less likely to accept lavish hospitality invitations than a few years ago because they feel it is inappropriate. Beer and sausages are replacing Champagne and caviar.

Access for all

Companies that have felt the financial pinch more acutely are also expecting more of their staff, making a week-long trip to attend a sports event, simply out of the question.

Companies are also taking longer to commit to buying hospitality packages or tickets and are waiting until the last minute to see if there are deals to be done. Some corporate packages are still available or unsold at the FIFA World Cup 2010 in South Africa and that is going to have a major impact.

Other rights holders and event organisers may lower their prices to ensure supply meets demand – there is nothing worse than blocks of empty seats at prestigious events. The upside is that corporate hospitality is now more accessible to organisations that may not previously have considered it from a financial point of view.

As well as the FIFA World Cup, this year sees the inaugural Youth Olympic Games in Singapore, which will be followed by the Winter Youth Olympic Games in Innsbruck in 2012.

Both events will attract a wide range of sponsors and corporate clients looking at youth as a key market. The Youth Olympic Games are an opportunity to deliver educational and sports programmes for young people and sport is a catalyst for education and development. New markets and new opportunities are opening and we need to look at new innovative approaches to new service provisions such as using Facebook and Twitter to engage with youth.

After the conclusion of the FIFA World Cup 2010 in South Africa, in terms of corporate hospitality, corporations and sponsors will immediately turn to the UEFA EURO 2012 and London 2012. However, the big names have already planned ahead for those events, and it is the smaller businesses and sponsors that will start doing their planning shortly.

Major sports events such as the upcoming 2010 FIFA World Cup in South Africa, the 2010 IHF Men´s World Ice Hockey Championships, UEFA EURO 2012 and London 2012 will continue to count on the popularity of their events and remain an attractive platform for sponsors.

Hospitality is still a popular marketing and business development tool for global corporations and brings proven long-term benefits if it is managed well. At its best, it helps to sustain and grow business and enhance reputation in ways that go beyond the tangible investment.