Revenues generated for the hospitality industry by meetings and conventions are expected to grow to $175 billion by 2008, compared with $164.1 billion in 2006, according to “Groups and Meetings: Market Opportunity Redefined,” a study by HSMAI and PhoCusWright.

Travel revenues (including air, hotel, car rental, ground transportation, cruise and tour expenses) represent 54 percent of the total revenue. Non-travel expenses (including meeting rooms, catering and audio/visual equipment) represent 46 percent of the total.

Corporate meeting revenues are expected to grow to $75.8 billion by 2008, up from $73.4 billion in 2005. PhoCusWright predicts the online corporate travel market to hit $24 billion by 2008, or 60 percent penetration, up from $19.8 billion in 2005.

Association meeting revenues represented only 5 percent of the market, or $8.5 billion, in 2005. While the number corporate meetings per organization increased 11.2 percent from 2005 to 2006, association meetings declined 2.1 percent. However, this sector is forecasted to reach $10.4 billion in 2008, or 5.9 percent of the market.

Online revenues in the U.S. groups and meetings market are expected to grow to $39.1 billion, or 41 percent of the total market. The online sector accounted for only 33.7 percent of the market in 2005 and 37 percent in 2006. Online travel revenues are expected to grow from $33 billion in 2006 to $39 billion in 2008, with $18 billion of the total coming from air travel and $15.4 billion from hotel bookings.

The No. 1 factor inhibiting online booking is the lack of personal contact. Forty-four percent of survey respondents prefer to talk to someone in person while booking.

Other findings include:

- Hoteliers are working to centralize their groups and meetings inventories and rates to enhance offerings and optimize resources.

- Large meeting components continue to move online to achieve efficiency and offload tasks to planners and attendees.

- The rise in new market entrants and efforts by established players to automate aspects of groups and meetings will draw attention to technology tools, educate the marketplace and encourage people to book online.

The study was conducted between August and October 2006. PhoCusWright contacted more than 35 executives from 24 supply companies, 2,000 meeting professionals and corporate meeting decision-makers, executives from 17 technology providers and more than 1,100 consumers. Responses were collected via e-mail and telephone.

A full copy of the report is available at PhoCusWright for $250 for HSMAI members or $300 for non-members.