A slew of surveys and reports were released in the closing weeks of 2008, all highlighting the near-term economic situation, which is at best uncertain and at worst very dark indeed.
Here's a recap: Long decline for hotels: Atlanta-based PKF Hospitality Research projects that the hotel industry will see seven straight quarters of declining revenue per available room (), starting with the third quarter of 2008. Miami, Phoenix, and Orlando are expected to take the hardest hits, while New Orleans stands out as the only destination with a projected RevPAR increase for 2009. In 2010, economic indicators are forecast to drive hotel demand upward, according to PKF.
Meetings and travel under the microscope: American Express Business Travel, which delayed release of its annual Global Business Travel Forecast and Trends report so analysts could consider the impact of the economic slowdown, sees corporate scrutiny of meetings reaching a fever pitch. In a press teleconference in October 2008, Hervé Sedky, vice president and general manager, Global Advisory Services, AEBT, said corporate clients “are balancing the cost of travel with the business that will come from that trip.” Travel that is not generating revenue will be cut or replaced with webcasting or teleconferencing, he said. “The larger meetings, which account for 20 percent to 30 percent of meeting spend, will be fewer in number and are going to be scaled down.”
On the supply side, Sedky said even first-tier cities will see slowdowns in rate increases to single-digit levels, while hotels in general become more amenable to negotiating concessions. Some cities where hotel rates are dropping but air routes have not yet been cut, such as San Diego, may become more popular meeting destinations, AMEX officials predicted.
If it's nonessential, it's out: During a live survey at the 2008 Financial & Insurance Conference Planners Annual Conference, 38 percent of planners reported cutting “nonessential” meetings. Asked about their biggest challenge for 2009, 48 percent chose tight budgets while 25 percent chose air travel. Asked to predict when the economic climate would return to “normal,” 45 percent of planners and hoteliers said things won't start looking up until 2010.
Cancellations up, budgets down: When sister publication Corporate Meetings & Incentives surveyed its readers in November, 56 percent reported canceling or postponing a meeting due to economic conditions. Of the 44 percent of respondents moving forward with all programs, nearly three-quarters are making some kind of change: 44 percent will send fewer in-house staff, 40 percent expect to send fewer qualifiers, and 30 percent will cut the number of nights. Meanwhile 56 percent of respondents reported a decrease in per-attendee spending on incentive programs in 2009.
Special events stay the course? Another sister publication, Special Events, also surveyed its readers last fall. Although 3 out of 4 said the uncertain economy is their greatest concern for 2009, many said they are optimistic about their own prospects. Among in-house event pros, 61 percent said they will stage the same number or more events in 2009 than in 2008; among independent event planners, the number was 58 percent.
MPI Taps Expertise of Global Planners
Meeting Professionals International has recruited 18 high-level meeting professionals for a new Executive Advisory Council, which will advise MPI on the needs of global meeting planners and what MPI can do to be more relevant to them. Angie Pfeifer, CMM, will serve as chairwoman of the council. Pfeifer is immediate past chair of the MPI Board of Directors and AVP, corporate meetings, travel and incentives, at Investors Group in Winnipeg, Manitoba. Among the members of the Executive Advisory Council are Patricia Kerr, CMP, director of distribution sales support, Manulife Financial Corp.; Margaret Moynihan, CMP, director, Deloitte & Touche; Carol Muldoon, CMM, director, meeting services, KPMG; and Jim Sharpton, vice president, meetings and conventions, Primerica.
Annual Incentive Trends Survey: We're stuck with incentive cutbacks straight through 2010
MeetingsNet/An Analysis of the Economy’s Impact on Meetings and Incentives by Market Segment