ONE OF THE BEST WAYS TO answer the question, “How's business?” as it applies to the meeting and incentive industry is to stroll the aisles at the annual IT&ME Show in Chicago. As we did just that this September, it was clear that business was still way down from what we'd seen a couple of years ago. In some regions, like 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.
“Clearly the economy and the post-9/11 travel world are still recovering,” reports Wayne Dunham, an IT&ME spokesperson. According to his figures, there were 26,123 registered attendees at this year's show, which includes 15,573 registered buyers.
Numbers were up substantially from the 2001 show, which occurred a few weeks after 9/11, but were still down from 2000 by 19 percent. Taking up 163,000 square feet were 1,383 exhibitors.
Over three days, we spoke with dozens of those exhibitors and planners and asked the same question over and over: “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 U.S., she says, and data show that Americans are making shorter-term decisions about where to go.
On the meetings and conventions front, more than 1.5 million people attended approximately 7,150 congresses and conventions in Mexico in 2001, representing 4.3 percent of Mexico's total international tourism revenue.
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 up the Dallas-based international sales office for Camino Real Hotels and Resorts, says it's been a challenging year for hotels at the luxury level. “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 California Camino Real also has 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 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 passengers disembarking at the airport 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 (AIME) is being held next year February 18 and 19 at the Melbourne Exhibition and Convention Centre. AIME is considered 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.londonconvetionbureau.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 calendars, links to meetings 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 the 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 cutting a day off the trip entirely,” 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 since 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, 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 of 2003.
“Business ain't what it used to be,” reports Kathy Paxton, convention sales manager, Seattle Convention & Visitors Bureau. Certain segments have been hit hardest, such as tech meetings, while others, such as medical meetings, have held steady. “Trade association meetings 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 over 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 and marketing for 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 wounded after 9/11. Many incentive planners canceled their programs. “Between September 11 and December 31, of 18,349 confirmed North American bed nights from the meeting, convention, and incentive market, 12,130 were canceled,” says Cindy Hoddeson, director of convention and incentive sales for the Monaco Government Tourist Office. But time heals, and many of those cancellations became postponements, she says. And though Monaco lost a lot of American business initially, it gained a number of European programs that were repositioned from destinations like the Middle East and Turkey. Presently, many companies are treading cautiously, “to see what will happen with Iraq,” Hoddeson says. Still, incentive travel is up in 2003, and bookings continue into 2004 and 2005. Major renovations are taking place in '03 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 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.” On tap: a new incentive program that delves into the culture of Hong Kong, something travelers have been clamoring for. And easy access to pre- or post-trips into mainland China.
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 following 9/11, but now 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 like 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.
Opening in February 2003 will be the Marquis los Cabos, an all-suite luxury property in Los Cabos, Mexico. The new hotel will be located between El Dorado and Cabo Royal golf courses, with 240 suites, 32 of which have private pools, and what sales director Frederique Naffrichous calls “the only swimmable beach.” Its 27,000-square-foot spa will be the largest in Los Cabos.
The opening of The Ritz-Carlton New York, Battery Park last January marked the return of the Ritz Carlton brand to New York after a four-year absence. The hotel occupies the first 14 floors of a striking new glass-and-brick tower, with 298 guest rooms and 12,000 square feet of conference space, including a 4,500-square-foot ballroom and an 1,800-square-foot junior ballroom. In midtown Manhattan, The Ritz-Carlton New York Central Park opened at the end of April. Formerly the St. Moritz hotel, it has 277 rooms including 40 suites. And in October, the original Ritz-Carlton Boston reopened after a major restoration. The oldest Ritz-Carlton hotel in continuous operation in the United States, it anchors Newbury Street in the heart of Back Bay. Noted for the elegance of its signature cobalt blue chandeliers and views overlooking Boston's Public Garden, the hotel's Dining Room is also back, and is now under the direction of Chef Tony Esnault, formerly at the Dining Room of The Ritz-Carlton, San Francisco.
The Madrid-based NH Hotels might be a new name in this country but has been a leading chain for business travelers in Spain, where it manages 95 hotels in more than 45 cities, and a handful of Latin American properties. In 2000, the company purchased Dutch-based Krasnapolsy, which included nearly 50 Golden Tulip hotels in The Netherlands and Belgium. All have been rebranded as NH strives to “become a leader in Europe,” according to Moria Dennert, director, international sales offices.
NH Hotels also purchased the Krystal group of Mexican hotels, which have been rebranded, and the Astran hotel chain in Germany — giving it a total of 238 hotels worldwide. The hotels are known for their “eye for detail,” says Dennert, from technology, to cuisine, to service, “with an aim to be innovative.” For golf incentives and meetings, NH has reached an agreement with Gary Player to design and develop signature golf courses, the first of which will be La Reserva in Sotogrande, Spain.
People performance management were the three most important words heard in the aisles at the recent Motivation Show. That's because Northwestern University has kicked off a Forum for People Performance Management and Measurement that many view as the first significant step toward taking the incentive industry into the business mainstream.
The forum will conduct research to measure the effect of incentives and rewards on the performance of the people in a company who most directly touch the customers, like call center employees or sales personnel. “People performance management lacks a theory base,” said Northwestern professor Don Schultz at the rollout. “It has not been developed, studied, and researched.”
Schultz sees this discipline as being “where sales promotion and direct marketing were 15 years ago.” Today, for example, direct marketing is taught at 102 universities. He even envisions a “Manager of People Performance” in every Fortune 1000 company.
What does this mean for the incentive industry? For starters, Northwestern will work closely with the Society of Incentive & Travel Executives Foundation to bridge the gap in senior management's understanding of incentives. There will be tangible proof from an academic source that links performance strategies to financial outcome.
Incentives have never been looked upon as a legitimate business tool by senior managers — let alone the general public. Now they might be. For more information, visit www.performanceforum.org.
— Barbara Scofidio
During a gala evening at Chicago's Shakespeare Theater in September, SITE awarded seven planners the highest honor in the incentive industry: The Crystal Awards. The winners were chosen for delivering superior results compared to other events, with factors such as client budgets and venue size taken into consideration.
And the winners are:
Most Creative Use of an Incentive Program to Solve a Marketing Problem, Internal: Eugene de Villiers, The Extra Mile Company, Ellerslie, New Zealand. Program: Compaq Asia Pacific, Compaq COMunity and Gold Rush
Most Creative Use of an Incentive Program to Solve a Marketing Problem, External: Michael Hadlow, USMotivation, Atlanta, Georgia. Program: Saab Cars USA, The Genuine Advantage Plus 3: Go for 3%, Cruise with 5%
Best Incentive Promotion and/or Communication Program, Consumers or End-Users: Bill Bryson, MotivAction, Minneapolis, Minnesota. Program: Verizon, La Plaza
Best Incentive Promotion and/or Communication Program, Company Employees: Michael Hadlow, USMotivation, Atlanta, Georgia. Program: Diebold Windows to the World, Tierra de los Conquistadores (Land of the Conquistadors)
Most Outstanding Incentive Travel Program, 5 Nights or More, Over 200 Participants: Salomon Niego, Condor Travel, Lima, Peru. Program: SSL Healthcare, Selva Sierra Litoral/Peru 2002
Most Outstanding Incentive Travel Program, 5 Nights or More, Over 200 Participants: Penny Wing, Incentive Travel LLC, San Diego, California. Program: Viacom Television Stations Group, Themed Time Travel
Most Outstanding Catered Event at an Incentive Program: J. William Boyd, CMM, CMP, CITE, Sunbelt Travel & Motivation Inc., Dallas, Texas. Program: Citrix Systems, President's Club 2001