This week started with the European Union and Japan making official declarations that they are in a recession. Citigroup announced plans to layoff more than 50,000 employees by early '09. In our industry, American Express, BCD, and Carlson were in the news regarding job cuts. And it's only Tuesday.
What it all means depends on whom you talk to. A director of meetings at a large financial services company told me the company cut all of its 2009 incentives. But the vast majority (84 percent) of the 55 readers who responded to our just-completed online survey say they're not cutting incentive programs in '09, just making tweaks in the number of on-site gifts, tours, activities, meals, and functions to save money. When the nearly 600 attendees at the Financial & Insurance Conference Planners Annual Conference in Cancun in November were polled during the general session, the majority of planners (76 percent) said that they have not canceled any incentives — either booked or not yet booked — and 70 percent are not considering canceling in the future.
An interesting finding from our survey: Among those who said they were “canceling,” 36 percent have reorganized their incentive as an “educational conference,” which in essence means the trip is moving forward in a different form. I see this as the final death knell for the “pure incentive” — it is clearly now a relic of the past. See page 22 for more on how incentive programs are changing as a result of the economy.
The biggest issue right now is the rethinking of site selection, for both meetings and incentives, as a result of rising airfare costs. Two-thirds of respondents to our online survey said they are reconsidering meeting destinations going forward, and 61 percent said the same about incentives. That's more bad news for cities faced with airlift cuts.
For those who reported canceling meetings in 2009, almost half — 46 percent — expect to replace them with virtual meetings or teleconferences. I view this as an opportunity for planners to get involved in sourcing these virtual events and expand their roles.
While all of us are bracing for a slowdown, there are still some positive signs: Inflation appears to be holding steady; people are seeing huge relief at the pumps; and there's the enormous promise that comes with the new administration at the start of the year. But the fact is that we end this year in a place we've never been in the 17 years I've been in this industry — a place where there remain only questions, not answers.
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