2019 Meeting & Incentive Costs Have Gotten Tougher to Predict

April 30, 2018 Kevin Edmunds


While the U.S. economy continues to hum along, some inflation signals have emerged that were predictable and which we all know will affect meeting and incentive costs in the coming year. For instance, hotel demand is strong so rates have risen. Second, a strong employment landscape means hotels must pay more to keep good workers, so labor costs are rising too. Third, rising interest rates from the U.S. Federal Reserve Bank make money more expensive to borrow. So the many hotels that are renovating and upgrading while business is strong (so they can attract business when the economy weakens) are paying more for those upgrades. These costs are generally passed on to customers over time.

But some other cost hikes are likely to come about because of recent developments that were not easily predictable, and which could put a hole in 2019 group budgets. In particular, the rise in crude oil to a price that’s consistently above $60 has happened, for the first time since 2014. This has started to raise the cost of both auto and jet fuel by a sizable amount.

For meeting and incentive planners, the cost of jet fuel is significant to their budgets. With American Airlines saying this week that its fuel costs are up 26 percent versus last year, they also said they will have to raise their prices to compensate. So if you have a group program going to a European, Asian or African destination, the total cost of airfare could be higher by literally tens of thousands of dollars.

Here at the AIC Hotel Group, one thing we make sure to talk to event planners about is cost versus return. With our properties located in Miami, the east and west coasts of Mexico, and the Dominican Republic, there is so much history and culture that groups can take in. There’s also the relaxing elements of our properties, where people can simply sit poolside or beachfront and unwind between program elements. And the best part is that while our properties and destinations are unique and exciting, they are not a distant flight from anywhere in the U.S.

So for 2019 events, we are emphasizing to meeting and incentive planners that there’s an easy way to ensure that event budgets don’t get blown up by variables such as rising jet-fuel costs. Have your unique and memorable group experiences a bit closer to home, and maximize your ROI.


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