There is no way to sugarcoat the news about cancellations and cutbacks in the meetings and incentives industry, but there are trends that can—and should—be treated as opportunities for planners and suppliers.

Greater percentages of planners said they are canceling more meetings than incentives; of course far more meetings than incentive programs are held every year, so in terms of absolute numbers, there will still be more meetings than incentives. Going by the wayside are true or “pure” incentives—those luxury programs that are travel rewards with no education or training included. (Also out the door are hosted spa treatments and high-ticket celebrities and speakers.) While incentive planners still spend far more per head on incentive programs than on meetings, both meeting and incentive expenses will be scaled back, as much for perception as for budget reasons. Those programs that might have been headed outside the U.S. will book closer to home or to more regional locations that are easier to get to.

According to Smith Travel Research, convention hotels, which represent 12 percent of the U.S. room supply, have trended lower than other types of hotels in both average daily rate and revenue per available room. STR sees this as an opportunity for smaller-market convention hotels that are less expensive since planners are far more price sensitive.

STR also cautions hotels to not cut their rates too steeply, so that the climb back to higher profits is not as precipitous as it was post-9/11. However, hotels at every price point will be more willing to negotiate with meeting planners, if not on rate, on many other concessions.

Clearly, all segments of the meeting marketplace are shifting to destinations that offer good airlift at affordable prices, with enough direct flights so that attendees don’t have to add on a night due to travel. Those cities that offer good airlift and affordable hotels will obviously come out on top.

There are opportunities for smaller cities that are considered drive-in markets; all segments report taking some national meetings and making them regionals in order to cut costs or attract more attendees.

Planners who have contracted with hotels and are having to cancel are paying cancellation penalty fees in some cases, meaning hotels can recoup some—but not all—of the revenue that would be attached to the meeting actually taking place. We don’t have stats on this from the corporate market, but certainly more hotels are enforcing cancellation and attrition penalties post-9/11. Some 41 percent of association meeting planners who responded to our poll anticipated paying attrition penalties for 2009 meetings.

Association meetings are not canceling at the rate of corporate meetings, as to be expected, since meetings are the lifeblood of associations and association business needs to be conducted. Associations also have the advantage of loyalty and brand awareness among potential meeting-goers, but many will move their education online in order to cut costs. Corporations will likely schedule more meetings around large association events they attend, called co-locating, in order to save on expenses.

Destinations that are willing to help market associations’ meetings will be particularly attractive to association, medical, and religious conference planners. The more price-sensitive segment of religious meeting planners, while more optimistic about their attendance than association meeting planners in general, will look to third-tier cities as well as colleges and universities as meeting sites to shave costs.

And hotels that are willing to help meeting planners be creative with meetings, sharing ideas that they’ve seen at other meetings, finding cost-saving measures that will help the planners’ budgets, will win the business.

The biggest opportunity lies with companies that offer online or virtual meeting applications, which will replace many face-to-face meetings. And hotels that are able to offer both—live meetings and enough meeting space and appropriate audiovisual equipment so that planners can extend the live meeting to those who are not able to attend—will definitely survive this downturn.

The Stats

Meeting managers canceling one or more meetings

CMI
• 56 percent (of that number, 58 percent cutting up to 20 percent of meetings; 16 percent cutting between 21 and 60 percent)

FIM
• 65 percent

AM
• 9 percent canceling meeting(s) in 2009

RCM
• 8.9 percent canceled meeting(s) in fall 2008

• 14 percent canceling 2009 meeting(s)

Postponing meetings

CMI
• Nearly a third, 31 percent, said they are postponing meetings until later in the year or to 2010
• 40 percent said they are planning quarter-to-quarter (wait and see, not yet canceling)

Canceling one or more incentive programs

CMI
• Only 16 percent of respondents said they plan to cancel or postpone 2009 trips.*
- 41 percent said those trips would move forward
- 43 percent were uncertain

*Among those who said they are “canceling,” 36 percent have re-organized the incentive trip as an “educational conference,” which in essence means the trip is moving forward in a different form—a meeting!

For 2010 incentives/not yet booked
• 28 percent could decisively say yes, moving forward
• 68 percent said they were uncertain

FIM
(Results from an on-site poll taken at the Financial & Insurance Conference Planners Annual Conference in November)
• 76 percent reported that they have not canceled any incentive programs, either booked or not yet booked
• 70 percent are not expecting to cancel any incentive programs in the future

Changes to meetings
Shortening length/days of meetings

CMI
• 52 percent shortening the number of days

FIM
• 28 percent reducing the length of meetings

AM
•6 percent will plan shorter meetings

RCM
•21 percent shortening the meeting

Taking larger or national meetings and making them into smaller or regional meetings

CMI
• 31 percent said they are taking larger meetings and making into smaller or regional meetings

AM
• 15 percent offering regional in place of national

MM
• 14 percent will offer some regional meetings instead of national meetings

Reducing number of attendees (corporate only)

CMI
•48 percent reducing number of attendees

FIM
•26 percent reducing the number of attendees

Site selection/changing destination based on airfares and costs

CMI/2009
• 65 percent said they would choose meeting destinations with lower airfare

CMI
• 58 percent said they would rethink incentive destinations due to airfare
• 65 percent said they would consider using less-expensive properties for meetings
• 50 percent said they would consider using less-expensive properties for incentives
• 20 percent said they would book during the shoulder or off-season

AM
• 34 percent change to more affordable destination

RCM
• 43 percent change to more affordable destination

Other changes to meetings

FIM/2009
• 38 percent eliminating nonessential meetings

RCM/2009
• 19.4 percent do not plan to make any changes to cut costs [Good News!]
• 58 percent are increasing efforts to attract attendees
• 30.6 percent are eliminating some small meetings

AM/2009
• 13 percent reported NO negative fallout [Good news!]
• 27 percent said they won’t cut costs [Good news!]
• 22 percent are eliminating smaller meetings
• 58 percent said economic factors will force them to cut some services and/or programs that they typically offer at the annual meeting

MM/2009
• 41 percent will eliminate some small meetings

Changes to incentive programs

CMI
• 25 percent said NO changes to budget for 2009 incentive programs [Good news!]

• Among those who said they are “canceling” an incentive program, 36 percent have re-organized the trip as an “educational conference,” which in essence means the trip is moving forward in a different form.
[Good news!]

CMI
• 41 percent of respondents said they will cut the number of on-site gifts
• 25 percent said they will cut the number of tours and activities for qualifiers
• 22 percent said they are sponsoring fewer tours/activities
• 20 percent said they will cut meals and functions

Moving meetings online

CMI
• 42 percent of those who are canceling or postponing meetings said they would replace them with virtual meetings or teleconferencing

RCM
• 31 percent said they will replace some live meetings with virtual meetings or conference calls

AM
• 38 percent said they are replacing some live meetings with virtual meetings

MM
• 54 percent said they will replace some live meetings with virtual meetings or conference calls

Attendance Trends (association markets)

AM
2008: 46 percent said attendance held steady at meetings that have taken place since September [good news]
49 percent said attendance was down 5 percent or more
5 percent actually saw some gains for their annual meetings this fall [good news]

2009
72 percent said they expect to see attendance slip at least 5 percent
55 percent said they will see sponsorship dollars shrink
40 percent said they will see exhibitor income shrink
13 percent reported no negative fallout [good news]
41 percent anticipate paying attrition penalties for 2009 meetings

MM
Medical Meetings survey of medical association planners
• 67 percent of respondents are concerned that the economy will significantly reduce attendance (more than 5 percent) at their 2009 annual meeting
• 92 percent are concerned that economic and/or regulatory forces will significantly reduce revenue from exhibits/sponsorships at their 2009 annual meeting
• 87 percent are concerned that economic and/or regulatory forces will significantly reduce revenues (by more than 5 percent) from their 2009 annual meeting
• 58 percent say economic factors will force them to cut some services and/or programs that they typically offer at the annual meeting

RCM
2009
• 24.7 percent anticipate no negative effects on 2009 meetings [good news]
• 13 percent believe attendance at their meetings will decrease by more than 10 percent
• 9 percent said they expect attendance to increase in 2009 [good news]
• 31.2 percent said they are reducing attendance as much as 5 percent
• 15.6 percent reported reducing attendance by 6 to 10 percent
• 13 percent said they are reducing attendance more than 10 percent

2008/fall meetings
• 7 percent said attendance was up
• 48 percent said attendance was the same
• 9 percent said attendance was down by 5 percent or less
• 7 percent said attendance was down by 6 to 10 percent
• 21 percent said attendance was down by more than 10 percent
• 18 percent said they anticipate facing attrition issues for our 2009 meeting(s)

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