Meetings Industry Sees Tough Times Ahead

There are few sectors of the economy that haven't been impacted by the global recession, but the meetings industry has been hit particularly hard, grappling with not only inevitable drops in attendance and cancellations, but also falling hotel rates, clients' reduced budgets and nagging perception issues.

For larger meeting planning companies, all these problems have created something of a perfect storm that has led to falling revenue and tougher times.

Even with the negatives, though, there have been some positives for the companies : they might be losing revenue, but some still are gaining business. With corporate clients scaling back their internal meeting planning divisions, there's been more outsourcing.

Smack dab in the middle of the storm is Scottsdale, Ariz.-based HelmsBriscoe, a global company that has 1,000 associates in 45 countries and revenue that depends heavily on commissions from hotels where they book meeting attendees. “Overall, our bookings are down about 20 percent year over year,” said Greg Malark, COO of HelmsBriscoe. “We can attribute that all to the economy.”

ConferenceDirect, a Los Angeles-based company that has 285 employees and offices in Charlotte, Denver and Atlanta, also derives a good portion of its annual revenue from the number of people it books into hotels.

With fewer people attending meetings and the average daily room rate down in hotels across the country, the double-edged sword has led to a 30-percent decrease in booked revenue, according to Brian Stevens, president and CEO of ConferenceDirect.

“If a medical society's attendance is 10-percent down and the average rate is down, then we are down 24 percent,” Stevens said.

Adding to the headache is something he referred to as “helicoptering,” when a company holds onto a contract longer than usual before signing it.

“Things are happening very last minute,” Stevens said.

St. Louis-based Maritz Travel, a full-service meeting planning company that has 600 employees and offices in Walnut Creek, Calif., Detroit and Philadelphia, too, is dealing with falling revenues.

“There have been a lot of cancellations,” said Chris Gaia, vice president of marketing of Maritz Travel. “We're down 25 percent year over year.”

A lot of those cancellations, he added, came from incentive and employee recognition programs, as well as “customer-facing” events that were scaled back.

“For events that were held, attendance was down, which led to an immediate drop in budgets,” Gaia said.

In the scope of things, Atlanta-based Meeting Expectations, which has 68 employees and offices in Chicago, San Francisco and Salt Lake City, has fared slightly better. Brian Meyer, the company's president and CEO, said, “(The downturn) has impacted us on all levels. We're 10- to 15-percent down in 2008. We're all hurting out there, and we're all scrambling.”

At the same time that companies have been struggling with revenue declines, so have their clients, which, in most cases, has led to smaller budgets set aside for meetings.

Stevens said one way his company works with clients' budget restrictions is by renegotiating the rates with hotels, particularly for anything that was booked before August of last year.

“Across the board, people's budgets are 20- to 30-percent lower than they were a year ago,” he added.

Malark said HelmsBriscoe has had to dramatically broaden its searches for value hotel rates to find the best deals for its customers.

“(There's) a lot of fluctuation week to week,” he added. “There's no price stability. It's a buyers' market.”

Malark also said there's been a lot more renegotiating of rates with the hotels, especially if the attendees are paying for their own rooms, as opposed to a company picking up the tab.

“Everyone is working with a sharper eye toward cost,” he added.

At Maritz, Gaia said one of the primary objectives is to help people understand the value of meetings, events and incentives. “We have been working with the U.S. Travel Assn. since the perception (issue) hit meetings,” he added. “Certainly, to be able to tell the story of the positives of having a meeting and help tone down the (negative) language is an important part of our outreach.”

Maritz also helps its clients take a good, hard look at the way their meetings are structured. “We ask them, 'What should you be doing differently as a company?'” Gaia said.

He added Maritz encourages its clients to invest in tools that help them put on effective meetings. In addition, Gaia said Maritz offers a virtual suite of products across four different platforms. “Virtual can really help you increase the value of the events you are doing anyway,” he added.

Meyer said Meeting Expectations “puts their money where their mouth is” when it comes to helping their clients. Meaning, if the scope of the meeting has changed, such as a lower budget or fewer attendees, Meeting Expectations will drop its fees, he added.

“Also, we'll really go to bat for our customers,” Meyer said. “We will go to the hotel to get the room rate down.”

Meeting Expectations also asks its clients to re-examine the way they have their events and consider where cuts can be made.

“For example, .... we ask them, 'Is it necessary to go offsite for an event and rent out the entire property? Or is it better to stay onsite?',” Meyer said. “They can still have a high-quality event and save a lot of money.”

Though it's been a difficult year, ConferenceDirect, HelmsBriscoe, Maritz Travel and Meeting Expectations haven't had to let any staff members go or make any other serious cutbacks in their companies.

In fact, both Stevens and Malark said their companies actually have been hiring more people to handle all of the business they are getting from outsourcing. “We're very lucky,” Stevens said. “There's a lot more outsourcing going on right now, ... and we're hiring a record amount of people.”

Malark added, “Corporations' needs are changing, and we're able to help them. We haven't cut back at all.”

The real question is – when will things turn around for the meetings industry?

Stevens said once a publicly traded company has two consecutive quarters of recovery, it might be “feeling a little more randy about meetings and having a meeting.”