Definitely Doug 10/28/22: The Trade Show Duel

This week I will divert from my more typical subject matters to talk about something that is near and dear to my heart, and that has recently been the subject of much discussion in the North American (and global) hotel tech community. And that is dueling industry conferences sponsored by associations.

A Little Background on the Association World

Associations play an important role in our industry. A lot of people don’t really understand how they work, however, so before we get into the topic of association-sponsored conferences, some background may be helpful in explaining how they work and what drives their decision making.

There are many types of associations in the business world, focusing on a variety of issues such as political advocacy, education, cooperative problem solving, and standards development. In the U.S. and many other countries, most associations (including all the ones discussed here) are not-for-profit. That does not mean they can ignore revenue or expenses, in fact just the opposite. With no shareholders or owners, non-profits cannot sell stock. They cannot, therefore, access capital markets for funding to cover cumulative losses. An association that spends more than it takes in runs out of money.

Associations rely on membership dues, sponsorships, and events for most of their revenues. We would like to think that the associations we know, love, and volunteer for would play nicer with each other than competing for-profit businesses. However, the reality is that they are all competing for funding from the same budgets (mostly the marketing budgets of members and sponsors, although this can vary). So even if the missions of two associations and their events are mostly complementary, funds are limited and a decision to join one association or to sponsor one event often comes at the expense of another.

In addition, while most associations employ at least some paid staff (larger ones may have dozens or even hundreds) for administration, marketing, and management of various member activities, much of the effort expended by associations comes from member volunteers. Associations compete for volunteers’ time as well as funding. The ones that get the most time are the ones that provide the most interesting and engaging opportunities to their volunteer members (and to their employers, who fund their salaries and travel expenses).

Many associations play important roles in the global hospitality technology space as educators, innovators, or even just as voices for key user groups. These include Hospitality Technology and Financial Professionals (HFTP), Hotel Electronic Distribution Network Association (HEDNA), OpenTravel Alliance, American Hotel and Lodging Association (AHLA, which expanded its technology role through its merger with Hospitality Technology Next Generation, or HTNG, in 2021), and Hotel Sales and Marketing Association International (HSMAI), and the International Hospitality Information Technology Association (iHITA).

In an ideal world, major associations with overlapping missions align their activities to divide and conquer. They need to avoid too much duplication, in order to be seen as responsible stewards of the financial contributions and volunteer time commitments made by their members and sponsors. In past years, leaders of many of the organizations listed above met informally once or twice a year to discuss areas of actual and potential overlap and coordinate to achieve this – and to leverage each other’s strengths to support common missions. It wasn’t perfect, but it worked well.

Over the years, the hospitality tech associations coordinated on major event scheduling to make it easy for sponsors and attendees alike to attend the ones that mattered to them. This played out through both cooperative agreements (for example HSMAI and iHITA hold conferences in connection with HFTP’s HITEC) and by informal consultation among the association leaders as they started finalizing conference schedules. It was in their interest to avoid conflicts with any other events that were important to a significant proportion of their members. Over the 11 years as CEO of HTNG and planning 32 conferences around the world, I spent more time than you can imagine trying to avoid conflicts, both with association-sponsored and with brand-sponsored, vendor-sponsored, and commercial events. We (and others) often had to make last-minute changes in venue, city, or dates when we discovered another event being planned on the same dates.

The 2023 Conflict

This year, as readers of Hospitality Upgrade likely already know, the history of cooperation broke down when AHLA announced a new trade show in Las Vegas, The Hospitality Show, on the same exact dates for 2023 as HFTP’s HITEC show had already been scheduled in Toronto. AHLA is the largest and best-funded association in hospitality, and the new show is intended (in part, but only in part) to be a successor to the popular HT-NEXT conference, which HTNG previously co-organized with Hospitality Technology Magazine (HT-NEXT was itself a successor to standalone HTNG North American conferences prior to 2017). HITEC is, of course, by far the largest hotel technology trade show, while HT-NEXT was the largest standalone conference dedicated to hospitality technology.

While AHLA’s event will reportedly include more non-technology elements than HITEC, it is intended to still have a significant technology focus, and unlike HT-NEXT will be a full trade show with a major exhibit floor. Starting next year, it will replace HT-NEXT, which was never really a trade show but rather a large conference and networking event with a few dozen tabletop exhibits. HITEC and HT-NEXT always avoided scheduling at the same time of year. Attendees, sponsors, and exhibitors who found value in both shows could easily manage to attend both – and many did.

The reaction from the vendor community to the AHLA announcement about the new conflicting event in 2023 was harsh. I have spoken with absolutely no one who is happy about it. I estimate that vendors fund at least 98% of both HITEC and HT-NEXT. Most could not believe that AHLA’s choice of timing was anything other than intentional, although I have been told it was not. Descriptive words I heard included “bizarre,” “tone-deaf to the needs of members and sponsors,” and “a slap in the face of supporters.” Several members of the AHLA/HTNG Vendor Advisory Council were livid that their group, representing the companies who fund both events, was not even consulted until after the decision had been made. Whether intentional or not, the decision showed poor management of a complex decision, and a complete lack of sensitivity to the technology community. Not to mention that at least with respect to the technology component, it would be a much more successful event if the dates did not conflict.

Many of the vendors and hoteliers with whom I have spoken are puzzling over how this duel will play out, and how to approach the competing shows. Vendors are trying to figure out which show their customers and prospects will attend, because they must lock up exhibit space soon (many had already done so for HITEC). Customers and prospects are more fortunate; they can take a wait-and-see attitude and decide next spring which event to attend. But vendors – especially those too small to support two simultaneous events financially and/or logistically, don’t have that luxury.

Las Vegas or Toronto?

Having attended 31 consecutive HITECs since 1991, and every one of the 49 HTNG conferences around the world since 2005 (the first 32 of which I organized), I have a unique perspective on why attendees and sponsors choose to engage a particular event – or not. Lake many in the industry, I will have to choose which event to attend next June. In doing so, I will break one of those streaks and miss one event that I consider unmissable. While I have made a tentative decision which one I will likely attend, I am fortunate that I don’t have to make a final commitment until closer in.

To be sure, everyone will have their own equation, but I will offer some thoughts that might help vendors (in particular) evaluate their options. Hoteliers, like me, can wait to decide.

Many hoteliers – technology buyers – come to events where the technologies they are currently interested in will be on display, and where they will be able to conveniently meet with multiple key vendor executives. Others come just to see what is new and interesting that might be relevant, maybe with a few areas of focus but mostly to explore. They also come to network, both because they have many friends with whom they want to catch up, and because they know that job security isn’t that great in hospitality IT, and strong personal networks can reduce the risk. Some come principally for the educational program; this group tends to skew toward technologists who are earlier in their careers, who tend to be in less senior positions or with smaller hotel groups. A few come mostly for the after-parties, of course. For most, it’s a combination of reasons.

Vendors come to events where they expect to find their target customers and prospects. This sounds simple, but it’s often complex. AHLA has signaled its ability and intention to lobby CEOs of first- and second-tier brands to send their more senior executives to The Hospitality Show next June. This will be effective: AHLA’s standing with the CEO-level hotel executives on its board is very strong due to its effective advocacy during the pandemic; they can call in favors and I am told they have done so.

The question is how much it will matter. Only a few categories of vendors sell primarily and directly to brands – mostly those in distribution, loyalty, marketing, and sometimes payments, and in non-industry-specific technology services like data hosting and security. Brand relationships matter in many other categories, but are more in the nature of hunting licenses, with brands approving multiple vendors and real sales made only to owners or management groups.

For this reason, smaller hotel groups (including second tier brands and all but a few management and ownership groups) and independents account for the bulk of sales made and hot leads obtained by most vendors. Based on my review of past HITEC hotel attendee lists, only about 10% are typically from larger brands, with the remaining 90% from smaller groups and independents. I don’t expect many of the latter to switch, at least not in the first year. Further, HSMAI will continue to co-locate its Marketing Strategy and Revenue Optimization Conferences with HITEC, and this has always been a draw for brand marketing and revenue management executives as well as for vendors in those spaces, making it likely that many will attend HITEC.

Consultants play a significant role as well, particularly in conference educational programs. They’ll go where their customers go – and most of them sell to both hotels and vendors. Many consultants are active in HFTP and/or HTNG activities, which may guide their choice. This one is a toss-up.

For many hotel technologists, a big value of HITEC and HT-NEXT (and the predecessor HTNG conferences) was the ability to network with others who share similar responsibilities, interests, and challenges – meaning primarily other technologists. That will remain a value proposition for HITEC, but will not transfer as well to The Hospitality Show, which will have a much broader audience and therefore dilute the attendee base from “mostly tech” to “some tech.” The broader networking opportunities with non-IT business executives should be able to deliver a different value, helping technologists better understand how technology fits in the bigger corporate and industry picture. However, while most hotel technologists already relate to the HITEC and HT-NEXT networking value propositions, The Hospitality Show’s will have to be acquired, and many will not see the compelling value until the show has become established.

Conference quality matters for attendees too, but since The Hospitality Show is new, it doesn’t have a reputation. To be sure, the merger of AHLA and HTNG improved some of the programming at HT-NEXT last year. AHLA’s influence was also evident, and very positive, at last week’s HTNG European Conference in Edinburgh, which I thought was one of the best conferences HTNG had ever run. AHLA’s access to hotel CEOs helped draw in some new speakers and raise the profile of some important topics where HTNG had previously been challenged.

HITEC’s conference program is well-established but often hit-or-miss, like those of many associations in other industries that use a large volunteer committee to create it (my perspective is informed by having served on that committee for three years). Topics are planned almost a year in advance and sometimes focus on issues of declining importance or miss emerging and future-looking ones.

The quality of each individual HITEC session has varied from outstanding to horrible, based (in my experience) largely on the knowledge and network of the one or two HITEC Advisory Council members assigned to find speakers for it. The formal process for vetting speakers is perfunctory and rarely involves the kinds of reviews many other events require (such as watching presentation videos and getting references for first-time speakers), so it’s not unusual to get speakers who, even if they know their material, don’t know how to deliver an effective presentation.

Except for keynotes, HITEC has no budget to pay speakers or their travel. This makes it difficult to get experts on technologies that are not already heavily used in the hotel industry (like most new and emerging ones), because the talent pool is limited to people who plan to attend HITEC anyway, plus a few locals in the city where the event is held.  Paid HITEC keynote speakers, while sometimes interesting, most often cover topics unrelated to hospitality technology.

The lack of quality, hotel-tech-focused speakers at HITEC is reflected in session attendance: even the top HITEC keynote typically draws only about 10% of all HITEC attendees, compared with 60% to 80% at a typical HTNG or HEDNA event. AHLA can likely put together a better program, and past HT-NEXT attendees will likely expect them to. But it will take years for The Hospitality Show to establish any reputation in the mass market that knows HITEC but not the historical HT-NEXT/HTNG events, which targeted a much smaller, more senior set of attendees.

As I see it, the bottom line is this:

• Larger and midsized brands will send some top executives, tech and non-tech, to The Hospitality Show. Mid-level tech executives will probably split based on their areas of responsibility and where they can see the relevant vendors. A few brands may force the issue at all levels, but most will likely allow mid-level staff make their own choices, and many of them will only be able to accomplish their mission at HITEC.

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• Smaller brands and all but the largest ownership and management groups, as well as independents, will mostly continue to attend the show they know, which is HITEC. Some who have not been happy with HITEC may try the new option, but I think this number will be small. Many hoteliers have told me they would like to attend both, but the scheduling makes that impractical in 2023.

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• Larger vendors who need access to key brand executives will exhibit at both. They’ll decide closer in which event will get their A-team and which their B-team. A few have said they plan for their key leaders to be on a morning flight from Toronto to Las Vegas on Wednesday morning so that they can cover (and be seen) at both. That’s not a particularly good use of eight hours of top executive talent in the middle of two of the biggest events of the year, but for some it will be the right choice.

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• Smaller vendors will mostly stay with HITEC, although a few will likely do both shows or just The Hospitality Show. HITEC booth deposits have already been paid, and the show is a known quantity with lower risk. And most smaller vendors do not sell to the large hotel groups anyway; that’s the domain of the larger vendors.

My understanding is that AHLA is aware (at least now) of the discomfort its timing has caused key audiences, and will seek different timing, perhaps in the fall, for 2024. That’s a move I think everyone would support. There is absolutely room for both events, and some real positives to AHLA’s concept. Competition will improve the options for everyone, both creating a new show with a different value proposition, and hopefully persuading HFTP to rethink some of its past practices, particularly in the HITEC education program.

I’ll be keeping my ear to the ground on this over the coming months and would be interested to hear your thoughts. Drop me a line and let me know!

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