The global recession hit the international meetings industry hard, and its effects promise to be felt for years to come. How to make the best of it right now? Get booking.
For the global meetings industry, 2009 represents the best of times and the worst of times.
In the category of “worst”:
The global air transport industry will lose $4.7 billion this year, according to the International Air Transport Association. Looking ahead, Giovanni Bisignani, IATA's director general and CEO, says, “Expecting a significant recovery in 2010 would require more optimism than realism.”
Based on 500,000 interviews with business and leisure travelers in 58 countries, research firm IPK International predicts a declining 2009, a neutral 2010, and small growth likely in 2011 and 2012. “We are in a full global economic crisis. Consumer greed of the last few years has turned into consumer fear,” says IPK CEO Rolf Freitag, who presented the survey results at the ITB Convention in Berlin in March.
In the category of “best”:
A wave of negative press about business meetings has given the industry a unified voice in defense of events. As organizations scrutinize their own rationale for planning meetings and for sending employees to conferences and trade shows, the industry is bound to emerge stronger.
If you are still holding a meeting in 2009, you're getting a deal.
For international suppliers to the U.S. meetings industry, the “worst” category continues to edge out the “best.” And yet U.S. meeting planners would do well to look at overseas destinations now, says Scott Graf, president, BCD Meetings & Incentives, in Chicago. “Compared to the recent past, this is a good time to leverage the international situation,” he says. “Economy and especially premium-class airline seats have increased in availability. In particular, the business-class cabin between the United States and Europe is pretty empty compared to six months ago. Why not negotiate a block of coach seats with upgrades? That's an appropriate conversation to have right now.
“You can get an attractive price, flexibility with payment options, and the most favorable cancellation/attrition clauses. The exchange rate is better in recent months for both the euro and the British pound. Nearly every element of doing an international program is more attractive now than it has been in a long time.”
Of course, at this moment the decision to meet overseas is not a straightforward budget issue. “In light of the economic downturn, recent negative press, and the latest issue regarding swine flu, our U.S. clients are now faced with an even more challenging task — managing perception and safety,” Graf says. “Clients are under tremendous pressure to justify meeting, incentive, and event expenses. An all-inclusive package program in the Caribbean may offer a better value than a domestic program, but some of our clients will recommend the domestic program internally, even with a slightly higher price tag.
“We continue to work closely with our clients to provide information, including negotiated savings details and destination comparisons, to ensure they are prepared to address any concerns about their destination choices.”
Graf relates the story of one client recently evaluating whether or not to move forward with a 250-person incentive reward trip to Asia. “The client asked, ‘How will this be perceived? What will our board of directors think? The dealers? The employees?’ We had candid discussions with them about the internal and external factors to consider. There was the emotional factor — the company wanted to deliver on a commitment made to their dealer community, who had been working very hard and very successfully to quality for the trip. A related consideration was the incentive program's impact as a business-building tool. Within a competitive, dealer-based distribution channel, incentive travel programs can help to retain top performers and drive incremental gains across their entire dealer network. Failure to move forward with the trip could negatively impact market share.
“Finally there is the financial factor, and what the company would have to pay in attrition and cancellation penalties. After several weeks of evaluation, the company went forward with the trip. The executives felt they needed to follow through, to personally interact with their dealers and to look those winners in the eye and to thank them. In the end, that was the most important element of the decision-making process.”
Graf believes this type of program scrutiny will be valuable over the long haul. “The responsible use of corporate meetings, incentives, and events is important to the well-being of our economy. I firmly believe our industry will emerge stronger as a result of this recession.”
Phelps Hope, CMP, vice president of meetings and expositions, Kellen Meetings, division of Kellen Co., Atlanta (an association management company)
“The greatest potential for membership growth for our association clients is in the international community. Whether our clients are working to grow membership in established international chapters, or to develop new chapters, holding meetings in the respective regions globally is the best tool to achieve this goal.”
Todd Zint, CMP, CMM, vice president, meetings and event marketing, NFP Insurance Services Inc., Austin, Texas
“Although the economy is depressed, our clients are rewarded by travel experiences they would not be able to achieve as an individual travelers. This year we had a group go to Buenos Aires and another will travel to Punta Mita, Mexico. In 2010, both groups have elected to stay domestic because of the current economic conditions and perceptions. However, in 2011, Europe is definitely on the radar — especially now that hotel rates have dropped along with the euro/U.S. dollar exchange rate.”
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Brad Langley, president and COO, Creative Group Inc., Appleton, Wis.
“We operate in a global economy. It's difficult to find a U.S.-based company that isn't somehow dependent on foreign commerce for its ongoing success. It's critically important for any business to take steps to expand their business perspective and not become U.S.-centric when it comes to how they market, sell, distribute, and develop new product lines. Yes, we are in a global recession, and our ability to come out of this depends on reaching out as opposed to ‘cocooning.’ We all have a vested interest in learning techniques, processes, and innovations from our international colleagues. To think otherwise would suggest that as Americans we have all the answers to these business-related issues — which isn't the case.”
Lauren Deaton, meetings and events manager and Carla Battle, senior project manager, Courtesy Associates, Washington (a planning company)
“Even though an industry is contracting in the U.S., it may be expanding in another region (for example, Asia). Taking a meeting closer to a new demographic can increase/counterbalance meeting attendance and expose the organization to a new market. Education will always be important whether in breakouts or during coffee breaks. Healthcare providers from East Africa and from Central Africa who both work in rural communities may have similar challenges: unpaved roads, lack of funding, etc. They can learn from each other and share best practices. There is also the understanding at the end of a meeting that you are part of a global community. You return home feeling energized, you bring home new ideas, and you have an arsenal of new contacts to draw from.”
Michael Payne, executive vice president, SmithBucklin Corp., Washington (an association management company)
“It is more important than ever to continue with international meetings and events. A difficult situation is not the time to eliminate one of the best vehicles for conducting business-to-business events, networking, and education. Be more cost conscious, manage the event differently, but don't stop meeting. That in itself is bad for business.”
Steven Hacker, president and CEO, International Association of Exhibitions and Events, Dallas
“It's important for us to continue our international meetings because despite all of the obstacles, commerce is global these days and we have to make it possible for buyers and sellers to come together, no matter what the current state of the economy. The biggest challenge is to convince buyers as well as the sellers that they need to come together to plan for the time when the economy is robust again. But the good news is that, of all types of events, exhibitions are the most resilient.”
Jeff Broudy, EVP and COO, United Incentives, Philadelphia
“Content is king. The only reasons to have international destinations for a domestic corporation at the moment are: As a competitive response to others in the industry who are trying to attract the same audience (for example, dealer/distributor incentives where the sponsor is appealing to an audience that can purchase competing products), or as a way to engage the audience with their business (for example, taking them to an international manufacturing headquarters or introducing them to a ‘best practices’ environment that isn't available locally).”
Robert Guerriero, president and executive director, The Journeymasters, Salem, Mass.
“International destinations are where the allure is. And an incentive without allure is spaghetti without meatballs. The adage of The Journeymasters has always been: ‘The exceptional deserve the unforgettable.’ A journey to Europe, Australia, or Asia, properly designed, is unforgettable.”