The financial crisis made corporate hospitality something of a no-no, but as the global economy picks up, so the industry is making a comeback, as Rachael Glazier discovers
Any 1980s executive worth his shoulder pads would sadly shake his head of slicked-back hair at the change in the corporate hospitality industry over the past 30 years. In 1983, Apple, then a tiny company, hired the whole of Disneyland one evening for all the guests of a giant computer conference and exhibition. And only 10 years ago events could easily - and did - include such madness as being sent to Greece where ex-SAS personnel would escort attendees onto boats for a three-day-long treasure hunt. Random, extremely fun and utterly unthinkable this side of the banking crisis.
Not only are long lunches now frowned upon and open bar tabs a (very) hazy memory, but big budget events for vast crowds also seem to be out of favour. The financial crisis in 2008 put an end to such reckless extravagance, with corporate spending in the UK dropping from £1.04bn in 2008 to £993 million in 2009 and to £930 million in 2010 according to Mintel"s UK Corporate Hospitality 2012 report.
The decline in corporate hospitality hasn"t simply been down to companies being more budget-conscious, as Martin Couchman, Deputy Chief Executive of the British Hospitality Association (BHA), explains. “It was exacerbated by the fact that a lot of the spending in those days was by financial institutions, banks and so on, and they were particularly hard hit by the financial crisis - and also, of course, their reputation suffered,” he says. Fat cats drinking champagne while homes were being repossessed was so clearly a scenario designed to give PRs heart attacks that banks even went so far as to not having their name on the door when renting a room in a hotel for a conference.
The implementation of the Bribery Act 2010 has also had a subtle effect on the industry. “Certainly our members who provide things like Ascot and similar events have said that they noticed that there was a cutback, but this was also around the time of the recession, so it"s a bit hard to disentangle the two,” Couchman explains.
Making a comeback
The corporate hospitality industry is, however, a resilient animal. Just as 1980s fashion has (inexplicably) made a comeback in the last year or so, corporate hospitality has also crept back into favour, albeit in a slightly more sophisticated, budget-aware form. Mintel"s projected figures for the UK spend on corporate hospitality in 2016 are just over £1bn - and those on the ground, including in the Channel Islands, are already reporting an upturn.
“We"ve seen a marked improvement,” says Robert Jones, Director of catering and ceramics firm Jersey Pottery. “January is always a good barometer for us, and pre-booked events for the whole of 2014 were 100 per cent up on the previous year by the end of January.”
Nigel Robson, Chief Executive of The Royal Yacht in St Helier, is slightly more cautious in his optimism. “I don"t think there"s as much corporate hospitality as there used to be, but there are definite signs it"s coming back again. I"d say we"re starting on an upward curve now - I think there are more corporates that are entertaining clients,” he says
The type of hospitality is far more considered post-crisis, and companies are more selective about who they take. The corporate hospitality strategy at Ipes, a fund administration and outsourcing services firm in Guernsey, is to go for regular, smaller types of entertainment rather than one or two big events a year.
“Personal relationships are absolutely essential in our line of business so we plan intimate events that we know will be enjoyed by clients and industry partners,” says Sarah Vennard, Senior Marketing Manager at the firm. “A recent example includes our sponsorship of the Siam Cup in the Channel Islands, where we took two tables in the corporate hospitality tent and invited clients, lawyers and non-executive directors.” There is, she says, greater scrutiny over return on investment.
Bill Dolan, Chairman of Dolan Hotels, also reports a higher demand for bespoke events, explaining: “Companies are not looking for set packages or ideas anymore. Tailoring an event to individual budgets and needs is much more cost effective.”
Fresh thinking
Spectator sports events still top the corporate hospitality list, according to Mintel, with football, motor racing, golf, horse racing, rugby, cricket and tennis being the key attractions. The next sector consists of participatory events such as shooting, motor activities, sailing, paintball games and wine tasting; followed by artistic and cultural events such as the Chelsea Flower Show, Glyndebourne and the Kew Jazz Festival. The final sector includes events such as visits to museums and art galleries, and imaginative surprise events.
It"s not enough to have a fantastic hotel and hope that corporates will endlessly continue to use it for client entertainment. As Robert Jones points out: “It doesn"t matter how good something is, you can get tired of it reasonably quickly, and we find that the corporates are always looking for that little "edge". You don"t want to be doing the same thing all the time in a small community.”
Innovation is key if the Channel Islands are going to continue to cash in on the corporate market, which is why the recent refurbishment of The Royal Yacht included the creation of a wine-tasting room, a restaurant with an open kitchen to provide culinary theatre, and a late-night bar and dance venue styled on the London scene. All three are proving extremely popular, according to Robson. “The wine cellar can seat six people for an intimate meal while a sommelier talks them through the wine and introduces them to new ones. It"s a talking point and everyone that"s used it absolutely loves it,” he says.
The talking point at the Grand Jersey Hotel is its private cinema, which can seat 35 people and was fully booked by corporates for all of England"s World Cup games this summer. The Merchant House Brasserie, part of Dolan Hotels and next door to the Jersey Museum, is also providing quirky client entertainment. “We recently arranged for exclusive access to Jersey Museum with a private tour and period entertainment in conjunction with Jersey Heritage for a client,” Dolan explains.
These clever twists to traditional client hospitality need to be backed up by the islands" tourist boards and governments if companies from outside the Channel Islands are going to view the islands as a compelling place in which to entertain clients.
“To fly 50 or 100 executives in from the UK to Jersey is a huge expense,” acknowledges Eamonn Elliott, General Manager of the Grand Jersey. He would like to see many more big events such as the Battle of Britain Week, and says: “If we just carry on the way we"re going and don"t create new and exciting events, then there"s no reason for firms to turn up. We"ve got the people, we"ve got the infrastructure, we"ve got the food, the dining, the location - we"ve got everything. But we"ve got to be even more than that.”
Fine dining and karaoke in Birmingham may please the financial controllers; Jersey and Guernsey have the potential to please both them and their clients.
Extreme hospitality
Golf days and spa treatments may appeal to the masses but can feel a little, well, bland. Here are our top three extreme examples of corporate hospitality, adrenaline guaranteed.
1. As part of the Battle of Britain Week in September, the Jersey International Air Display offers traditional corporate hospitality in the form of marquees for lunch and a fine view of the air display. Oh, and guest flights on jets, warbirds or helicopters. Yes, that does say warbirds, which is pretty exciting in our eyes. Private viewings of vintage and modern aircraft at the airport can also be arranged.
www.jerseyairdisplay.org.uk
2. Imagine running a marathon. Now imagine running five and a half marathons. With a backpack. And through the Sahara desert. Welcome to the Marathon des Sables, the ultimate ultra-marathon and, incredibly, an event that some companies have used as part of their corporate hospitality programme. Really. With a minimum of 12 months" training this is a serious commitment by the company, the employees and the clients.
www.marathondessables.co.uk
3. Space tourism is set to become a reality towards the end of the year with the first commercial flight to space planned by Virgin Galactic. The SpaceShipTwo carries six passengers, with each getting two windows to look out of, all for just $250,000 per person. Okay, so it"s a bit out of most corporates" budgets at the moment, but Virgin Galactic"s Gateway to Space, where the space fleet can be found as well as its astronaut training rooms, is also available to hire for more down-to-earth events in New Mexico.
www.spaceportamerica.com