Maintaining a commitment to meetings will be crucial as companies try to climb out of the economic hole created by the recession. This was the conclusion of Larry Roth, president and CEO of AIG Advisor Group, and other panelists on a February 18 “State of the Industry” audio conference, organized by Financial & Insurance Conference Planners.
Roth joined Chris Gabaldon, vice president, sales, Ritz-Carlton Hotel Co. LLC; and Charles E. Jones Jr., manager,sales group and meeting travel, American Airlines, as panelist for this Talk Radio event, moderated by Kim Boriin, CMP, events specialist, Guardian Investor Services, and FICP's vice president, education.
Roth reported that AIG Advisor Group has canceled half of its events in terms of numbers, and about three-quarters of its events in terms of budget. (Last November, his group's parent company, AIG International Group, canceled 160 meetings and events when it was pilloried in the press for holding a recognition meeting after accepting an $85 billion bailout from the federal government.)
But despite the cancellations, Roth said his group remains “absolutely enthusiastic about meetings,” particularly for competitive reasons. Roth is convinced “our best competitors are still out there doing meetings,” so it's critical for meeting professionals to remind their management teams of the importance of meetings.
“Meetings are a cost-effective part of our business,” Roth said, adding that in the run-up to the recession, during a time when meeting budgets were constantly expanding, management teams “may have lost track of why we do all of these meetings.”
Gabaldon agreed that meetings can be a strategic investment, describing Ritz-Carlton as a “top-10 client for itself” when it comes to meetings. “There's never been a more important time to focus on training, communication, and rewarding employees,” he said, adding that investing in meetings now will be a prerequisite for success for any company looking for a jump-start when the economy eventually turns.
Gabaldon characterized today's market as “the toughest environment I've experienced in 18 years in the business,” and one that has yet to hit bottom. The combination of the recession and the media's scrutiny of meetings is having an impact that he called unprecedented.
“Everyone is afraid of being on CNN and on the cover of The New York Times,” he said. “I truly understand the pressure that all firms are under at this point.”
American Airlines' Charles Jones also painted a bleak financial picture. “Airlines suffered huge losses in the last quarter of 2008,” he said. “Things were not much better in the first quarter of 2009.” Jones emphasized American's commitment to the meetings market, noting that the airline, unlike several of its competitors, continues to offer a meetings product.
Put in historical terms, economic downturns usually see(revenue per available room) declines for six to eight quarters, Gabaldon said, explaining that the industry is now in its third quarter of declines. Gabaldon expects the slide to continue for another two or three quarters, with a recovery beginning in late 2009 or early 2010.