The headlines are heavy with stories about giants such as Compaq Computer Corp. and Dell Computer Corp. nixing plans for large user conferences. Meetings are smaller and closer to home.attendee figures have tumbled. But it's not all bad news, say industry observers.
While it may seem like a small number, U.S. hotel occupancy dropped 1.7 percent in March, according to Smith Travel Research. A comparison of year-to-year figures in major cities, such as San Francisco/San Mateo, reveals some huge drops: 16.9 percent. While California's energy crisis may have compounded that drop, New York City was down 8.2 percent, and Orlando, Boston, Chicago, and Detroit showed declines of more than 7 percent each. Those major cities were particularly hard hit by the slowdown in individual business travel, small internal corporate and training meeting bookings, and out-and-out meeting cancellations — especially in the technology and financial services sectors.
“We've seen both a downsizing of technology meetings as well as out-and-out cancellations,” says Joe Stern, director of sales and marketing for the Grand Hyatt Hotel in Washington, D.C. Rick Keating, vice president of sales and marketing for two Millennium hotels in New York, estimates that city hotels have lost about 20 percent of their group business from technology-related companies. In San Francisco, Shannon Barnett, director of sales and marketing for the Argent Hotel, also estimates that 20 percent of her group business has disappeared.
Edina Lessack, CMP, Meetings & Events USA, Chicago, reports that “many clients who were planning events like road shows and product/services launches are putting them on hold for the time being.” However, the demand by pharmaceutical companies, at least near their corporate headquarters in New Jersey, remains strong, according to Arne M. Sorenson, executive vice president and CFO of Marriott International Inc.
Hotel industry analysts aren't overly anxious about the situation. “I think this is more of a panicking in the press than anywhere else,” says John Fox, senior vice president with PKF Consulting in New York (www.pkfc.com). “Things are slower than they were last year, but they're still very healthy. The sky is not falling.” He points to cities such as Anaheim, San Diego, and Houston, which are more than holding their own — as are room rates.
David Scypinski, senior vice president, industry relations, Starwood Hotels and Resorts, is also cautiously optimistic: “Business travelers are being cautious, and will take a wait-and-see approach, probably through the summer.”
Many companies are paring their meeting-related costs in a number of ways. Denise Wesalainen, corporate events manager for San Francisco-based Walker Interactive Systems (www.walker.com), says the $51 million finance software developer combined two meetings and has stopped contracting out a lot of tasks for its users group meeting — such as registration, collateral material design, speaker coordination and Web site design.
Videoconferencing is getting a second look, and e-conferencing, with a group viewing a remote presentation simultaneously using laptops in a meeting room, is gaining fans. Frank Nicholas, general manager at the Holiday Inn Wall Street District in New York, a state-of-the-art facility, has seen “a cutting down on face-to-face meetings, and an incremental increase in e-presentations.”
Despite canceling those high-profile user conferences, both Austin, Texas — based Dell Computer Corp. (www.dell.com) and Houston's Compaq Computer Corp. (www.compaq.com) continue to hold smaller meetings and events. Steve Sievert, a Compaq spokesman, says the $42 billion company still stays in touch with important customers. “It just means executives are traveling more, and our salespeople and professional services staff are reaching out. We're just not bringing everyone to Houston.”
Hot Dates, Hot Rates
According to Jim Stanton, vice president of marketing for HDHR.com, a Web site owned by Scottsdale, Ariz.-based site selection company HelmsBriscoe, hot dates/hot rates “really have not been much of a bargain for the past couple of years. Now that the market's shifting, we're getting flooded by calls from planners saying, ‘We know there are bargains out there,’ and from hotels saying, ‘Do you take credit cards? Sign me up today!’” Hotels pay a fee to be listed on HDHR, and planners can access the site for free.
What does all this mean for meeting executives? Independent planner Lynne Tiras, CMP, president of International Meeting Managers Inc., Houston, tells of the upside: “We just booked a Four Seasons that had a group cancel. We fit in perfectly for the hotel, and we were able to get great rates.”
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