Mark Pursell has no illusions about next month's International Builders Show. “It would be foolish not to expect some sort of downturn in attendance,” says Pursell, senior staff vice president of marketing and sales at Washington, D.C.-based National Association of Home Builders, which puts on the show. “We knew this was coming because we see it with our members — [they]are definitely hurting,” he says. “We expect to see a downward trend in both attendance and exhibit sales.” While its 2008 show attracted 92,000 attendees, Pursell anticipates 10 percent to 25 percent fewer for its January 2009 show in Las Vegas.
While his industry has been hit particularly hard by the economic slowdown, there's probably not a meeting planner in the country who doesn't share Pursell's concerns. With the U.S. economy in a recession that many say will get worse before it gets better, planners are facing the prospects of lower attendance, attrition, budget cuts, and revenue loss for their 2009 meetings.
But meeting professionals are working hard to mitigate any shortfalls. Some, like Pursell, are changing their pricing models. Others are shoring up attendance by redoubling their marketing efforts and seeking out new segments to target. Still others are reducing room blocks, making deals on exhibit space, and cutting back on everything from shuttle service to food and beverage events.
NAHB is taking on the bear housing market's potential impact on its 2009 convention by providing a la carte options to make registration more affordable, allowing attendees to register for individual educational tracks at a much lower rate. Previously, one registration fee gave attendees access to the entire meeting. For the 2009 show, they can purchase as many individual tracks as they want and if they purchase four, they get one free: if they purchase seven, they get three free.
The National Association of RV Parks and Campgrounds (NARVC) used a similar model for its annual meeting, held in November in Nashville. It offered daily passes that got such an explosion of interest that the group was able to meet its room block mark a week out from the deadline, explains Micki Leak, director of meetings at the Larkspur, Colo.-based association.
Incentives also helped the association meet its numbers and avoid attrition, says Leak. She sent an e-mail blast to members right before the deadline offering a prize — an item they had an overabundance of in the storage room — to the next 50 people who signed up. “It stirred those people who were on the fence, and it wasn't expensive.”
Further, members who sign up for next year's annual convention by the end of 2008 get 15 percent off their registration fee. The National Association of College Stores, Oberlin, Ohio, is putting on a “Buy Three, Get the Rest Free” promotion to encourage multiple registrations from each company for its 2009 event.
While many associations trim marketing budgets in tough times, NAHB is increasing its marketing budget for the 2009 annual meeting by 50 percent. “We feel that we owe that investment to our exhibitors, constantly reaching out for different niches in our industry, different levels of players,” says Pursell. The marketing dollars will go to everything from researching new markets to list acquisition to advertising in targeted publications and on the Internet.
For its 2009 meeting in San Antonio this April, the Oncology Nursing Society will reach out to segments of the nursing population that they haven't courted before — like the growing number of non-oncology nurses who are treating cancer patients, says Karen Hochberg, director of marketing and public relations at ONS.
Going global is another option, given the weak U.S. dollar and the relative bargain the U.S. has become for foreign visitors. The American Academy of Ophthalmologists, San Francisco, has tapped into foreign markets through joint meetings with international counterparts. Two years ago in Las Vegas, the meeting was jointly sponsored by a society from Asia and it had record attendance. For the 2008 meeting in Atlanta, AAO partnered with a European society and international attendance was up 8 percent.
Travel is also a concern. The Industrial Research Institute had a 10 percent no-show rate of registered attendees who couldn't travel to the meeting because of travel bans at their companies. That led to an attrition penalty. Due to worries that travel bans will have an impact on next May's annual meeting in Boston, the IRI is reducing the size of the room block, explains Bart Ecker, director, forums and meetings at the Arlington, Va.-based association. Just prior to NARVC's meeting in October, Leak also asked the hotel to reduce the size of the block when she saw attendance trending low. In both cases, the hotel obliged. That kind of jockeying was unheard of as recently as last year.
That's perhaps the one silver lining for planners in this stormy economy — planners are finding hoteliers more amenable to changes like reducing the size of the room block in exchange for bumping up food and beverage or raising the room rate. “For them, it's all about revenue management, so it's a matter of coming up with a compromise,” says Ecker.
Attendance is the key to attracting the economic engine of association meetings: exhibitors. But exhibitors have their own problems to contend with as well.
Due to the tightening of credit, many of the very companies that sponsor and exhibit at conventions are in a holding pattern for the next 12 to 18 months and some are even contracting because they don't have the research and development money to create new products to exhibit. When you consider that the typical association gets about 70 percent of its meeting revenues from exhibits, a drop in exhibit sales can really hurt the bottom line. And it's already happening.
For AAO's meeting in November, exhibit sales were down about 5 percent. The decrease stemmed not from a drop in the number of booth sales, but from downsizing, says Debra Rosencrance, CMP, CEM, vice president, meetings and exhibits. “We had 24,000 net square feet of downsizing — anchor booths that decided not to take the full amount.”
At NAHB, exhibit sales are expected to be down about 10 percent to 15 percent for the January show for the same reason: booth downsizing. Attendees probably won't notice it, but show organizers will as overall revenues will be down 10 percent to 15 percent, since exhibitions account for the vast majority of show revenues. “Exhibit revenue is hard to make up, because that revenue percentage is much larger than sponsorships or attendance revenue,” says Pursell.
NACS usually has the exhibit hall for its annual meeting sold out by now, with 100 companies on the waiting list. For the March 2009 meeting in Anaheim, Calif., there still are 42 spaces to sell and no waiting list. “We'll probably sell the last 42 spaces, but it's been a lot more difficult than in years past,” says Hugh Easley, vice president of meetings and exhibitions at NACS.
NARVC has already noticed a drop-off in exhibit and sponsorship dollars. For the 2008 meeting, the association saw about a 30 percent decline in the number of sponsors and some that did sponsor the meeting committed less money than usual. Exhibit sales were also down about 10 percent, adds Leak.
Given the circumstances, more exhibition organizers are willing to make deals on booth space, says Doug Ducate, president, Center for Exhibition Industry Research, Dallas. Exhibition organizers don't usually budget off the established rates, says Ducate, but tough times call for creative measures. NARVC, for example, gave 5 percent discounts to exhibitors at the 2008 meeting who signed up on the spot for the 2009 conference.
There's been a sharp increase in overall meeting costs over the last 12 months as prices for everything from transportation to food and beverage have risen, says Pam Ballinger, CMP, vice president of meetings, exhibits, and trade shows at Association Headquarters, a Mount Laurel, N.J.-based association management company. For one of her larger meetings this year, she budgeted her usual $40,000 for transportation, but costs were more than double that thanks to skyrocketing fuel costs. “We may just not use the shuttles next year,” she says.
Traditionally, food and beverage costs go up about 5 percent annually, but this past year, it was up 8 percent to 10 percent, says Ballinger. NARVC's Leak is looking at doing food stations instead of plated meals or buffets and lowering food and beverage guarantees based on historical patterns. “We're being smarter in the way we serve them,” she says.
Green initiatives — e-marketing and paperless meetings — are also good ways to reduce costs. Leak is using recycled badge holders from past meetings and “green” tote bags, which are cheaper. “Everyone is looking at budgets right now and making changes,” says Ballinger.
In these uncertain times, planners are being extra careful. “Members are scared out of their gourd; they have no idea what's going to happen to their businesses in 2009,” says Leak. “We are being very cautious in our budgeting mainly because we have no clue. …We have no clue.”
Association executives are being forced to make some hard decisions in the current economic climate, including axing meetings.
The Promotion Marketing Association has decided to postpone the debut of two new smaller conferences and invest in its two largest meetings, the Integrated Marketing Conference in March and the Marketing Law Conference in November. Bonnie Carlson, president of the New York City-based association, says, “We're going to wait until corporate budgets have eased before we add new products.”
The National Association of College Stores canceled one of its 2009 meetings outright. “With the economy the way it is, we didn't want to take a chance on attendance being really low,” says Hugh Easley, vice president of meetings and exhibitions. Plus, if members have to make a choice between going to the large annual conference or this smaller one, the association would rather see them go to the annual conference.
This fall, the National Association of Home Builders merged two events into one — a design conference and a custom builders symposium. “We had one event that wasn't looking like it was going to hit its numbers, and another event that was somewhat related to it, so we merged those two events,” says Pursell. The move increased the density of attendees, which helped meet room block requirements and food and beverage minimums.
While the economy is not going to sink an event like the International Builders Show, which is coming off a string of successful years, other shows may not be so fortunate. That could give rise to creative partnerships between associations, experts say, such as co-locations, joint meetings, and merged meetings. There may also be a push to regionalize some national meetings, and that could lead to the creation of some new events.
In an online survey conducted by Association Meetings in late October and early November, association planners revealed their worries about their 2009 annual meetings.
42 % EXPECT TO FACE ATTRITION ISSUES FOR THEIR 2009 ANNUAL CONFERENCE
Cost-saving choices planners are considering:
REPLACE SOME LIVE MEETINGS WITH VIRTUAL MEETINGS OR CONFERENCE CALLS:
38%
CHOOSE A MORE AFFORDABLE DESTINATION AND/OR FACILITY:
35%
ELIMINATE SOME SMALL MEETINGS:
23 %
38% SAY ECONOMIC FACTORS WILL FORCE THEM TO CUT SOME SERVICES AND/OR PROGRAMS THAT THEY TYPICALLY OFFER AT THE ANNUAL MEETING.
New revenue strategies: adding economy-related workshops; webcasts; virtual trade shows
See “Check In” on page 6, and the following pages, for more survey results.
Related articles: