The beginning of the year has been challenging for Europe's meetings, incentives, conferences and exhibitions market (Mice).

This has been caused by the US credit squeeze and travel limitations within the financial and pharmaceutical sectors, says Evert Schuele, regional director of sales in north-west Europe for Starwood Hotels and Resorts, one of the world's leading hotel and leisure companies.

But he says: "The overall conference and incentive business to mainland Europe remains strong because of the wide range of high-quality products available and the proximity of these hotels to the UK.

"We have also seen an increase in Mice groups to central and eastern Europe, because of improved infrastructure and transport links - and in particular to Poland, Hungary and Lithuania."

Mr Schuele adds: "The continuing economic cycle will, however, affect the occupancy of all conference hotels and the average spend of meeting customers in Europe, especially in key financial cities such as Munich, Rome and Madrid."

His own company is responding by using its dedicated Mice team to work with conference and incentive organisers to provide flexible arrangements that meet both business requirements and budgetary constraints.

Peter Rieder, senior vice-president international for Starcite, online provider of global meetings solutions, says: "Airport destinations are becoming more popular because people are struggling with transport and, providing these hotels are of the right quality and venue, that will continue. Using airport venues often means that organisers can reduce the length of an event by a night - and that is cost-effective too."

In terms of venues, Mr Rieder says, cities such as London, Paris, Amsterdam and Barcelona are still hugely popular.

However, as a congress and meetings destination, Germany is number one in Europe. And, according to a study by the International Congress and Convention Association (ICCA), on a world-wide scale Germany ranks second after the US. It is the fourth year in succession that Germany has attained top spot and second place worldwide. Spain, in fifth place last year, has passed England and France to reach third place.

One of the reasons for Germany's position as the European market leader is its excellent infrastructure, with plenty of high-quality meeting hotels and congress centres and a wide variety of locations.

Joakim Johansson, vice-president advisory services of American Express Business Travel EMEA, says: "While many European businesses are keeping an even closer eye on their T&E spend in the current economic environment, in the main meetings and events continue to be seen as a vital investment to sustain and grow businesses.

"For 2008, we predicted that hotel rates in Europe would rise by 12-14 per cent and short-haul economy fares would rise by 2-5 per cent, and these are currently relevant four months in. Strong demand for meetings is also impacting other meetings-related costs, such as meeting rooms, food and beverage and meeting technology.

"These factors are clearly impacting costs of hosting any meeting or event, and companies are focused on driving value out of any investment. Whether it's an internal event or for client engagement, the impact of face-to-face meeting continues to drive engagement internally and potential business deals externally.

"We are seeing customers increasingly focus on getting greater control over small meetings spend, and balancing savings with how to cost-effectively tailor meetings to fulfil business needs."

The annual FutureWatch survey by Meeting Professionals International with American Express, which reports on industry trends, says European planners are expected to show considerably more interest in conference centres and universities, convention centres and unique venues, but are less likely to bring their meetings to resorts.

Of the facilities by type that planners are likely to choose for meetings, it says 40.7 per cent will be in a city hotel, 11.5 in a resort hotel, 21.9 in a conference centre or university, 18.1 in a convention centre, 8.6 in an airport or suburban hotel and 14.3 per cent in a restaurant or other unique venue.

The Meeting & Event Barometer 2007, created by the European Institute for the Meetings Industry, not only presents quantity and sales figures, but also compares event regions in Germany.

The most favoured metropolitan and industrial region for meetings and events from the organisers' viewpoint is Berlin, followed by the Rhine-Main area.

Munich, Cologne/Düsseldorf and Hamburg share the number three spot. Stuttgart, the Ruhr Area, Dresden, Hannover and the Rhine-Neckar region, Mannheim, Heidelberg and Karlsruhe follow suit.