Is it a buyer's market yet? How are airline cuts affecting meetings? What are the trends in the medical market? We asked key players from CVBs around the country to tell us what's going on in cities these days — and to do a little crystal-ball gazing to predict what the near future holds. We've got some good news and we've got some bad news….

Positively Cleveland

Dennis Roche, president

On the economic effect

Roche: We're starting to see some downturn, but it came a lot later than we expected — it wasn't until June and July of this year and it wasn't as much a falloff as we might have expected. Interestingly, May came through a lot higher than we budgeted.

This summer, we got a recommendation for the site for our new convention center, which will be built next to a Medical Mart. That's expected to open in 2012, so that changes our focus a little. It's been a challenge for us selling large groups into our current building, and it's too early right now to do more than discuss the new center.

As for value, it could be described as a buyer's market right now, but that's probably less true than in tier-one cities since we've always been told by our customers that we provide a good value.

On airline cutbacks

Roche: Continental has a hub so slightly more than 60 percent of our airlift is through Continental. They have cut some flights, but they tend to be the lower performing flights to begin with so we haven't seen any actual drop-off and it doesn't appear to be affecting meetings.

On medical meetings trends

Roche: This market has been holding steady for us and it's always been a strong market here because of the medical facilities that we have. Once the new convention center opens with the Medical Mart, we expect to have even greater success with this market and be able to attract even larger groups.

San Diego Convention & Visitors Bureau

David Peckinpaugh, president & CEO

On the economic effect

Peckinpaugh: We're holding fairly strong on the meetings side, although we are seeing some softening on the leisure end. As a top-five market, we're still in high demand and we are seeing very few cancellations — a handful here and there, but nothing like what we've seen during other big economic challenges.

We're starting to see more of a buyer's market, including more aggressive pricing from the hotels, although little impact on contracts. In some instances, groups are trading down in terms of what hotels they're using, and we're also seeing some hotels go for group business that they wouldn't ordinarily look at in a stronger market. For example, some hotels are going after state associations when that's not a strong part of their typical market.

One of the other things that helps our market is that we have a lot of new inventory coming online in an 18-month period, including the new Hilton San Diego Bayfront, opening in December.

We also see this as a time to be more aggressive and focused on the meetings market on the whole. We're ramping up our sales efforts, increasing our marketing efforts, and have expanded our sales team by eight people.

On airline cutbacks

Peckinpaugh: So far, we haven't felt any real effect, but moving forward, it's crystal-ball time — there's just no way to know. So far, our year-to-date data is actually up in terms of the number of flights and passengers, but we haven't yet felt the cutbacks that have already been announced. For the fall, we're looking at a potential 8 percent decrease in airlift here, compared to about 11 percent in the industry overall. The most recent information I have says our nonstop direct service is going to be reduced from 54 flights to 41, which is significant.

We haven't seen this yet, but one result of these changes that we expect to see — not just here but nationwide — would be an increase in regional meetings.

On medical meetings trends

Peckinpaugh: Medical meetings are an enormous part of our market and we see that market as remaining very strong.

Orlando/Orange County Convention & Visitors Bureau

Gary Sain, president & CEO

On the economic effect

Sain: We're holding our own, but we're facing the same challenges that many destinations are facing, especially in the corporate market, where we're seeing some last-minute cancellations at hotels, but not at the convention center.

Occupancy is basically flat at the convention center and the hotels right now, but we might see more pressure on business going forward. As we get into the more challenging months from September to December, we'll be providing additional incentives in the meetings market — this fall could be one of the best times to book in Orlando in our history.

It definitely is a buyer's market here as it is in other big destinations that we compete with. But that aspect is based largely on flexibility. If a planner can be flexible, it can be a buyer's market; without flexibility, it's not so much the case. Professional, seasoned meeting planners are asking for more and they're getting it. It might not be a deal on the rate, but if not, they're getting more built into that rate.

On airline cutbacks

Sain: This fall, we will have about 12 percent less seating capacity, primarily from the regional jets and the Delta Connection, so that will affect tertiary markets that will no longer have direct service here. But we'll continue to serve every major destination in the United States.

This summer, we formed Airteam Orlando, a CVB-sponsored task force, in conjunction with the major attractions, convention center, airport, economic development council, and others, to sit down and communicate with the airlines directly about what our needs are. Since we've formed the task force, I've actually received some calls from airlines that don't serve us that now have an interest in us.

In the international arena, we're doing very well with air service.

On medical meetings trends

Sain: According to the Healthcare Convention Exhibitors Association, Orlando has hosted more medical meetings annually than any other city in the country for the past decade. We're seeing more scrutiny of the meetings' return on investment. It's up to both the planner and the destination to help sell the story of why it's important to have this meeting and what we can do to make it more successful.

A lot of the medical meetings have international attendance, and that goes hand in hand with our increase in international air service. Lufthansa's service direct from Frankfurt has been so successful that they're adding more capacity this fall, Aer Lingus has started very successful direct service from Dublin, and we hope to have good news from South America within the next 30 days.

This fall, Orlando is hosting its first ever Medical Meetings and Tourism Summit to discuss how we can create opportunities to increase our standing with medical meetings and start to develop that market in a more branded fashion.

Atlanta Convention & Visitors Bureau

Mark Vaughan, executive vice president & chief sales & marketing officer

On the economic effect

Vaughan: We look at it two ways: In the long term, we're doing very well, but in the short term, we're seeing some challenges. So much of our future is developed today for five-plus years out, and that segment remains strong. But we're seeing a softening with the groups that typically book about 18 months out, which is mostly corporate and some smaller spinoff associations.

In terms of a buyer's market, we're not really seeing that. What we're seeing is a real balance — suppliers offering value-adds and trying to create value — but not a wholesale shift like after 9/11.

We recently held a customer advisory board meeting and planners told us they were looking for ways to help offset financial losses they might be incurring from things like additional costs for fuel for buses. They're looking for ways to enhance their bottom line, and that can include upgrades as well as price value.

On airline cutbacks

Vaughan: We're the world's busiest airport so we're a little insulated from some of the challenges other cities are facing. Although we are facing some cutbacks, we haven't seen the kinds of cuts that other airports are facing, and we're really optimistic about the future pending the outcome of the Delta/Northwest merger. On the whole, we're expecting a 5.5 percent decrease in domestic capacity. But new service to India has just been announced and we're hopeful that the international expansion of Delta will continue to put Atlanta on the map as the gateway to the world. The airport is also opening a dedicated international terminal in 2011.

On medical meetings trends

Vaughan: People are holding off on making decisions. Our lead volume with medical association groups is still extremely good, but our closure rate on groups that traditionally book within 18 months has been a little slower, which puts our pace for that segment behind right now. Those groups have the luxury of knowing that availability is open; they can sit back and take their time before they have to make a decision.

On the plus side, the groups that book further out are still continuing to book in the same way.

Las Vegas Convention & Visitors Authority

Chris Meyer, CMP, CEM, vice president of convention sales

On the economic effect

Meyer: The biggest impact we're seeing is in the number of days that groups are staying here, which is down. But the volume of activity is still very strong — in fact, in July we were up 1.2 percent in convention attendance over the previous year.

We also track leads and my lead volume is actually up, which is an indicator of future business.

We currently have about $30 billion worth of development going on here, with 32,000 guest rooms under construction as we speak and slated to open over the next four years — obviously hotel developers are still very bullish on Las Vegas.

But we have seen it turn into a buyer's market, which is prevalent across the country according to the attendees at the MPI WEC [Meeting Professionals International World Education Congress] that we hosted in August. We've seen some impact on room rates — there's a lot of value out there. We believe this will be the death of the hotel revenue manager position at hotels, and there's a loud cheer from planners about that.

On airline cutbacks

Meyer: I was just on a panel discussion at MPI and for the 150 planners in the audience, changes in airlift was their single biggest concern. The nice thing for us is that we have a diversified mix of carriers here: Even if one cuts service significantly, it won't hurt us as much as some of the gateway destinations that have only one or two carriers that are their bread and butter. We've created five different task force committees, including one focused on business travel, to talk directly with the airline industry.

We are losing some flights but they are flights that aren't being filled now anyway. We will still be serviced from 126 domestic markets and international is actually growing for us. We have new service from Korean Air, Virgin Air will start service in September from New York to Las Vegas to tie into their international arrivals at JFK, and we're in talks with a number of European carriers.

On medical meetings trends

Meyer: It seems like they're taking a step back. In the past, they would book really far out, but now it seems like they're questioning whether that's a good approach. In the meantime, we are still seeing a lot of medical association meetings business.

Greater Boston Convention & Visitors Bureau

Pat Moscaritolo, president & CEO

On the economic effect

Moscaritolo: I was actually trained as an economist, but I've given up on trying to forecast what's going on. There's been a lot of talk and speculation, but we have not seen it turn into a buyer's market here yet. Consumer confidence is low, the stock market is volatile, gas is so high — these are all factors that should say that it would be difficult for the lodging industry to survive without fire sales, but it's not happening here.

The simple answer is that we're well insulated here for a couple of reasons: We're very well diversified and attract financial, medical, educational, biotech/life sciences, international, and other meetings groups. We're also trying to take advantage of that insulation and we're continuing to grow our international marketing efforts as it relates to those markets. The data shows us that international meetings, corporate and association, are a growth opportunity for us.

On airline cutbacks

Moscaritolo: It's a similar situation with the air carriers: No carrier here controls more than 22 percent of the total seats, which helps from a competitive point of view. Still, we are losing some flights in the fall and I expect that there will be a further retrenchment of the airlines — and when that happens, it could change my answer. Boston is also an easy gateway for international service and we've seen added nonstops from Milan, Frankfurt, Munich, and Stockholm, along with an increase in flights from London.

We're also well served by Amtrak, especially with New York, Washington, Portland and other parts of Maine, and even Canada. There's been a dramatic market shift for Amtrak, and the New York to Boston run is the fastest growing shift right now.

On medical meetings trends

Moscaritolo: They're still coming; we haven't seen a large change in that. One thing that's surprised us is the move toward using more off-site venues for events for subsets within medical associations, such as an international group or regional subset or particular specialty. They're doing their functions on off-nights and many of them are using private special-events venues.

Something else that we've been tracking is the number of international attendees at medical meetings. It used to be around 16 percent or so and it's now up to between 20 percent to 40 percent. The value of the euro versus the dollar makes U.S. meetings much more affordable, along with the addition of international flights into Boston.

Greater Phoenix Convention & Visitors Bureau

Kevin Kamenzind, CMP, senior vice president, sales & marketing

On the economic effect

Kamenzind: So far, we've seen very little change. The meetings market typically has a six-month lag as it relates to the economy, because so many meetings are booked months or years in advance. For hotels, we're not seeing a buyer's market right now. Occupancies might be a bit down, but rates are holding strong.

Moving forward, we're also still seeing business as usual as it relates to bookings, although we're seeing a hit on the leisure side. Our convention center expansion is scheduled to open in January 2009 and our new headquarters hotel, the 1,000-room Sheraton Downtown Phoenix, is slated to open this October. So it's like we're a brand-new destination here. There's been a lot of pent-up demand and anticipation — and now we're on rotations where we weren't previously.

On airline cutbacks

Kamenzind: In terms of travelers through the airport, right now we're just about on par with where we were last year at this time. But there's no way to say what will happen in the months to come. We've heard that US Airways is going to cut 6 percent to 8 percent here, and that we might lose as much as 10 percent capacity altogether, but it hasn't happened yet. Southwest remains very strong, with no announced cuts.

On medical meetings trends

Kamenzind: With the new hotel downtown, we're able to attract medical meetings that we couldn't host here before, so we're finding a lot of new interest from the medical meetings market. We haven't seen this yet, but I suspect that we might find attendees cutting back on traveling with their families or deciding not to spend extra days after a convention on vacation. Right now, though, that's just speculation.

Up In The Air

For an update on airlift cutbacks and other airlines trends, watch for the December issue.