Though some of the meeting industry’s smallest suppliers—DMCs and event planners, for example—are reporting the faintest signs of a recovery as meeting volume slowly picks back up, others are struggling to find a way to make up for lost business.

"Sometimes being lower on the industry food chain, we get hurt a little more when the economy goes south," said Lex Lyons, vice president of PRA Destination Management in San Diego. To cope with what he sees as a continuing loss of meeting business, PRA is looking at acquiring shuttle-bus operations in San Diego and other U.S.

Also, spouse programs and special events—the bread and butter for DMCs—are the first to go in recessionary times. "When a company lays off a whole bunch of people, they can’t very well turn around and say, ‘Let’s throw big party,’ " said Helen Moskovitz of the Helen Moskovitz Group, a major DMC in Nashville.

"In times like this, corporations will use DMCs only to do the more difficult tasks of event management and will do the simpler things themselves," added Fritz Lehman, president of Orlando-based DMC Hello Florida. "For instance, they might have you do transportation management, which has a very high staff ratio—and thus is not as profitable for a DMC—and they’ll take care of those evening receptions and special events themselves."

The situation has spawned more mergers among DMCs struggling to stay in business. For example, the Moskovitz merged with Key Event in March. "You’re going to see more mergers with companies like ours that can find a symbiotic match-up with each other," she predicted. She also reported that, in her 23 years in the business, she she’s rarely seen so many DMCs going after long-term contracts with incentive houses and meeting-management companies—a strategy she’s pursuing.

In response, the DMC Network, a 30-year-old consortium of independent DMCs, is pursuing companies and major meeting management firms to partner with the association’s 30 member firms as preferred DMCs. Executive Director Darlene Sweeney said one such deal has already been cut with TG Worldwide, a Colorado-based meeting-management firm, and that another was nearing finalization at press time.

DMCs have different opinions on what the coming year will bring. "Business is better for us this year than it was last year at the same time," reported Janet Elkins, president of Los Angeles-based special-events firm Event Works. Meanwhile, Moskowitz predicted that some companies will "just fall out of the business before 2004. That’s when I finally see things coming back closer to where they were."