A survey finds program cancellations costing planners millions in fees, suppliers billions in lost revenue.
The average meeting planner expects to cancel or postpone meetings worth $560,000 in room revenue in 2009 and 2010, according to a recent survey conducted by the Professional Convention Management Association, American Express, and the Y Partnership. Those canceled or rebooked meetings account for, on average, $81,000 per planner in penalty fees. Fifty-five percent of the survey respondents were association meeting professionals and 45 percent were corporate or incentive meeting pros.
When projected to include all PCMA members and AMEX clients, that's $781 million in lost hotel room revenue and $2.5 billion in total revenue lost for destinations, hotels, and meeting suppliers, but — according to Peter Yesawich, chairman and chief executive officer at the Y Partnership, an advertising and public relations agency — it accounts for just a fraction of the universe of planners. He was one of the speakers in an online press conference in June to release the survey results. Deborah Sexton, president and CEO at PCMA; John Folks, PCMA chairman; and Gary Portuesi, vice president, hotel and resorts group, American Express, also participated.
The report, “The Meetings Market: Outlook 2009/2010,” surveyed 516 meeting planners in April and May, seeking to gauge their intentions over the next 19 months in the face of a struggling economy and media backlash about meetings.
Some 41 percent of those surveyed said they will cancel or postpone meetings due to current economic conditions; about 22 percent stated that they will cancel or postpone due to downsizing or consolidation; and 8 percent plan to postpone or cancel due to “current negative media coverage about the meetings industry.” While meetings canceled because of negative perceptions represent the smallest category of cancellations, they also represent the most expensive meetings — worth $231,479 in room revenue on average. In contrast, the average room revenue of meetings canceled due to economic conditions is $208,182 and of those canceled due to corporate downsizing is $121,000.
67 percent expect their total annual budget for off-site meetings in 2009 to decrease compared to 2008
44 percent of respondents will book fewer off-site meetings between now and December 2010 compared to the number they booked in 2008. Respondents gave multiple reasons: the economy (90 percent), image/public policy considerations (35 percent), cost of meeting facilities (26 percent), cost of food and beverage (26 percent), lodging costs (25 percent), and cost of transportation (23 percent).
56 percent expect attendance at meetings to be down in 2009/2010 compared to 2008.
47 percent of planners expect to decrease the number of meetings booked at resorts in 2009/2010.
The “upper upscale” and “luxury” hotel categories were cited most often as the types of accommodation planners expect to use less frequently in 2009/2010 (50 percent and 54 percent respectively).
Planners expect to make greater use of alternative meeting methods, including webinars (54 percent), teleconferencing (48 percent), and videoconferencing (30 percent).
41%
will cancel or postpone meetings due to current economic conditions