One of the best ways to take the pulse of the meeting and incentive industry is to stroll the aisles at the annual IT&ME Show in Chicago. As we did just that in September, it was clear that business was still way down from what we had seen a couple of years ago. In some regions, such as the Middle East and Asia, the silence was almost deafening.
It was also clear that some U.S destinations, especially Las Vegas, have benefited from companies' decisions to keep their meetings and incentives closer to home. Las Vegas' booth could only be described as gargantuan, complete with Elvis impersonators, neon, and glitter on every flat surface. For days, “Heartbreak Hotel” could be heard throughout the aisles in every direction.
Over three days, we spoke with dozens of those exhibitor attendees and asked them all same question: “How's Business?” Here's what they had to say.
Mexico Tourism Board General Director Maria Elena Mancha reports that Mexico saw an up-tick in visitor arrivals in 2001, reflecting the fact that many U.S. travelers stayed closer to home. Per-visitor spending is down. Some 85 percent of visitors to Mexico are from the United States, she says, and data show that Americans are making shorter-term decisions about where to go.
New tourism developments worth more than $1.6 billion are ongoing in the country, among them a new convention center in León, Guanajuato, and the new Expo Santa Fe convention center in Santa Fe, Mexico City's upscale commercial district. In June, the Flamenco Xcaret Resort in Playa del Carmen opened as an all-inclusive resort within the Xcaret ecological park.
Jorge Bravo, who heads the Dallas-based international sales office for Camino Real Hotels and Resorts, says it has been a challenging year for luxury hotels. “In our company, rates have been flattened, and we came to a point in Cancun where we said, ‘We are well-established in Mexico. This is our product, this is our rate, take it or not.’”
The chain's newest hotel is the 155-room Loreda Baja Golf and Beach Resort, on the peninsula of Baja, Calif. Camino Real also completed about $40 million in renovations and expansions in '02, principally in its flagship Mexico City hotel, along with its Guadalajara and Acapulco Diamante properties.
Michael Londregan, vice president for the Americas at the Australian Tourist Commission, reports that Australia's market share of international meetings has grown from 3.8 percent to 6 percent in just three years. Another good piece of news for those groups considering Australia: Qantas has moved closer to American Airlines at its Los Angeles hub, with the Australian airline using AA's new immigration facilities at LAX's Terminal 4. That provides disembarking passengers a faster immigration and passenger clearance process, and an easier transfer for those taking its code-share flights with American to other U.S. destinations.
For those who want a first-hand introduction to Australia or other Pacific destinations for meetings and incentives, the annual AsiaPacific Incentives and Meeting Expo is being held next year February 18 and 19 at the Melbourne Exhibition and Convention Centre. AIME is considered to be the southern hemisphere's largest incentive and meeting industry show, attracting about 600 exhibitors and about 300 hosted buyers (out of a total of 2,500).
According to Mady Keup, head of the London Convention Bureau, London is enjoying some short-term corporate business bookings, and 2004 is really “firming up.” The bureau launched a new Web site, www.londonconventionbureau.com, during the show. It includes a venue/services search engine, which you can search by name or by capacity, including banquet-, boardroom-, classroom-, reception-, and theater-style, as well as a special events calendar, links to meeting calendars, and a link to www.visitLondon.com.
Attendees at a focus group discussion held by the editors of The Meetings Group and sponsored by Barcelo Hotels & Resorts all had the same report about their clients' destination choices in the past year: They're seeing incentives staying closer to home, with a huge interest in Mexico and Canada. Where companies are traveling internationally, they're choosing tried-and-true destinations: Rome, London, Paris. The hot site in Central America is unquestionably Costa Rica. Treatment of qualifiers has remained at the highest level: “Rather than cutting the per-person costs, they might not be taking as many people, or [they might] cut a day off the trip,” reports Julie Carroll, national director, industry relations, WorldTravel Meetings & Incentives, Chicago.
John Lynch, executive vice president of sales worldwide for Sandals Resorts, has had less to worry about than most in the past year because Sandals relies on groups for only about 15 percent of its business. “We've been lucky and business has stayed on track,” he reports. In fact, the company's business has grown 200 percent in the past five years. The other factor working in Sandals' favor: For companies concerned about airline safety, the Caribbean is still considered to be, as Lynch puts it, “a short hop.” Sandals' focus on groups is growing, and the Sandals White House in Jamaica will have its own conference center, with a capacity for meetings of up to 650, when it opens in November 2003.
“Business ain't what it used to be,” reports Kathy Paxton, convention sales manager, Seattle Convention & Visitors Bureau. Segments such as tech meetings have been hit hardest, while others, such as, have held steady. “Trade have seen shrinkage, but those with education have held up,” she reports. (The Insurance Conference Planners Association just used the Westin Seattle for its November meeting.) Stays by frequent business travelers are down. The bonus for her city was that many cruise lines pulled their European ships and brought them domestic, and Seattle is seeing a boom in the cruise industry, with more than 100 sailings a year and a new terminal opening in 2003.
“Everything seems to happen at the last minute these days,” says Arthur Chernov, vice president of sales andfor the Turnberry Isle Resort & Club in Aventura, Fla. “I just got a request for 260 rooms for four nights in March,” he reported in late September. “Imagine, 260 rooms, four nights, at a five-star, five-diamond resort — with that window. People have fallen into this thing where they think there's that kind of space available on short notice.” Turnberry's business mix is 60 percent group, with 20 percent of that being incentives and 80 percent meetings. Chernov is still seeing smaller attendance at meetings, and reports that things “still aren't back to where they were in 2000.” For him and his peers, he says, “There's no quick fix. We just have to work harder.”
Like most, Monaco was hurting after 9/11. Although Monaco lost a lot of American business initially, it gained a number of European programs that were repositioned from destinations such as the Middle East and Turkey. Presently, many companies are treading cautiously, “to see what will happen with Iraq,” reports Cindy Hoddeson, director of convention and incentive sales for the Monaco Government Tourist Office. Still, incentive travel is up in 2003, and bookings continue into 2004 and 2005. Major renovations are taking place in 2003 at The Hotel Hermitage, which is adding two floors, increasing its room count by 60. Nearly 85 percent of the hotel will be closed for the six-month project, scheduled for completion by the end of 2003. And Le Metropole Palace will close completely for six months in the first half of 2003 for a major renovation that will convert existing guest room space into a world-class spa.
Hong Kong is working hard to show that it is a world-class destination. Its biggest hurdle in the last year and a half is perception. “Hong Kong is a very safe destination, more so than you might think,” says Mabel Hung, senior manager, business development, Hong Kong Tourism Board. “The city hosted the Forbes Global CEO Conference in September at the Grand Hyatt Hong Kong. Nearly 300 CEOs attended, many from the United States.” And the World Congress of Accountants will assemble in November. “We're hosting many more meetings than incentives,” says Hung, “and international business is up.”
We're in challenging times,” says Arthur T. Lugo, manager, group and incentives sales, Bermuda Department of Tourism. Meeting and incentive travel to Bermuda was down after 9/11, but business is returning “gradually, but definitely,” says Lugo.
A bonus for meeting and incentive professionals: Bermuda's tax status. Meetings in Bermuda are tax deductible, just as in the States. And Bermuda has just made arrangements with a third-party air supplier to provide discounted rates out of JFK airport in New York that are 30 percent to 50 percent lower than the usual rates, says Lugo. On the hotel front, there's a new spa and expanded Fairmont Gold Club at the Fairmont Southampton Princess.