Associations See Revenue Declines on the Near Horizon

Meetings and conventions were a bright spot for many associations over the past year, but now almost two out of three association executives are bracing for declining revenues—including meeting revenues—in the coming months, according to a survey conducted by ASAE and The Center for Association Leadership.

The study, called Associations and the Economy, finds that 64 percent of executives expect revenue declines in the next fiscal year, with an average drop of 16 percent. Just 11 percent expect to see a revenue increase.

While revenues from membership dues are expected to see the highest percentage declines, associations are also pessimistic about meetings dollars:

• At individual membership associations, 63 percent of executives expect revenues from conventions, trade shows, and meetings to drop, while 62 percent anticipate declines in event sponsorships.
• At trade associations, 70 percent forecast a decline in revenue from meetings, trade shows, and conventions, while 64 percent see a decline in event sponsorships.

Virtual events is the one area where most respondents expect an increase. About 25 percent said they expect an increase in revenue from virtual or online events, while just 2 percent expect a decrease. Approximately 56 percent said the question of virtual events was not applicable to their association.

In contrast, looking back over the past 12 months, meetings-related activities were an area of strength for associations. About 42 percent of executives said they generated more revenues from meetings, conventions, and trade shows than they had the previous year, while 24 percent said those events generated less revenue than the previous year. Further, 34 percent said they earned more in booth sales last year, while 22 percent said they made less. Also, 30 percent said they made more in sponsorships last year than they did in the previous year, but 25 percent said they made less. In addition, 25 percent of respondents said that virtual events provide more revenue last year compared to the previous year, while only 10 percent responded that virtual events brought in less revenue than the previous year.

Revenue decreases often call for budget cuts. Here are the percentages of respondents who are using or expect to use various cost-cutting strategies:

• reduce staff travel, 58 percent
• reduce the use of outside vendors and consultants, 44 percent
• renegotiate meeting contracts, 42 percent
• reduce volunteer travel expenses, 36 percent
• implement staff layoffs, 23 percent.

Also, 42 percent plan to use reserves to address revenue shortfalls, while 36 percent plan to modify their investment strategy. Further, 26 percent expect to have to curtail revenue-generating products or expenses.

The survey was conducted between March and May 2009and is based on 1,103 responses, with each association allowed only one response. For more on the report, go to ASAE’s Web site.

Related article: For more on the current economy’s effect on meetings, see our special report