If there’s one word that describes the current state of the meetings industry as 2012 comes to a close, it’s this: “flat.” And as organizations look toward 2013—and specifically the potential for higher taxes and spending cuts from the “fiscal cliff”—that word could quickly become “downturn.”
Meeting Professionals International’s recent version of its bi-monthly Business Barometer features many predictions for the year ahead, most with a common theme of little to no growth in 2013. The respondents, a select group of senior-level meeting professionals chosen from among MPI’s membership, have reported little or no growth in budgets for the past three years, with 47 percent predicting they will remain flat in 2013. Though this number is a significant improvement from 2009, when 70 percent of respondents reported decreasing budgets, the challenge is that clients continue to expect more bang for the buck each year, the report says.
Meanwhile, the Business Barometer reports that the number of meetings in the United States, Canada, and Europe rose by 2.8 percent, 3.3 percent, and 3.2 percent, respectively, in 2012. The outlook for meeting industry employment is also slightly better, with 35 percent of meeting professionals seeing a positive trend in the amount of full-time jobs coming available, up from 22 percent at this time last year.
However, when asked about general business conditions, the response, once again, was flat. One bright spot is the level of concern over the European economy, which appears to have subsided among meeting pros for now.
The big question for the meetings and business travel industries is the fiscal cliff—a nightmare scenario that could result from tax increases and spending cuts in the U.S. if the Budget Control Act of 2011 goes into effect as scheduled on January 1, 2013.
According to a report just released by the Global Business Travel Association, going over the fiscal cliff could lead to a loss of $20 billion in business travel spending over the next nine quarters, the result of companies cutting 32 million business trips.
If the dramatic cuts and tax increases are avoided, GBTA predicts that business travel spending and volume will grow $5.5 billion over the next nine quarters.
"Given business travel's indispensable role in spurring economic growth, these findings dramatically illustrate the potential impact of the fiscal cliff on the overall economy," said Joseph Bates, vice president of research at the GBTA Foundation.