Has the Worm Turned?

President's Message

By Brian Stevens

Over the past several weeks, I've been in conversations with various hotel chains about their respective business pipeline. It does appear that the business travel market is starting to shift in a declining pattern. Groups seem to be holding strong, but there is a clear pattern that we are heading again from a seller's market to a buyer's market. Spend any amount of time in our business and you'll quickly note that our industry is a cyclical one. I think it comes down to two principal questions:

What do we do about the business on the books right now?

If you booked a meeting assuming growth year over year and that is not the case we could well be overbooked in many existing contracts. If this is clearly the case, sooner than later it would be prudent to have an open conversation with the hotels that could be affected. Our experience in the last recession was highly favorable if we gave hotels enough time to resell the reduced space. Attrition is something that we saw a great deal in the recession. Playing "Monday Morning Quarterback" is painful and unnecessary. Work with your ConferenceDirect Associate to see what the contract performance calls for and if you think that your meeting attendees will meet these obligations. We would strongly suggest you examine 2009-2010 if you have bookings that far out. Experts are saying this hotel buyer's market will be a shorter one than in the past because of supply and demand in the meetings market.

What do we do about bookings for the future?

We have seen a number of organizations slow down their booking pace. So if you're with an entity that normally books three years out for a meeting, we're seeing more and more groups booking just two years out. If your meeting attendee count is questionable there may be prudence in waiting to see how 2008 finishes before adding another year. Again, a great opportunity to discuss with your ConferenceDirect Associate. My working definition of a buyer's market is when a group can do one of two things – either get the city you have always wanted and could not afford, or obtain more favorable dates in your established market. Savvy professionals will consider both of these angles in trying to save your organization money while still delivering a fantastic meeting at the levels to which your organization is accustomed.

STAYING AHEAD OF THE GAME

IndustryInsights Customer Seminars

ConferenceDirect will be inviting customers to a half-day educational seminar in four locations across the United States.

• Hyatt Regency Houston – November 6, 2008
• Westin Buckhead, Atlanta – December 3, 2008
• Microsoft Studio/Hyatt Bellevue (Seattle/Redmond) – December 9, 2008
• Hyatt Convention Center, Denver – February 3, 2009

The day's packed agenda will include industry experts offering insights on saving money on meetings in a bear market economy, a update on the latest in meetings technology, and Strategic Meetings Management Program (SMMP) presentation. We look forward to seeing you!

Industry Insight: Economies DOWN / Opportunities UP

By Jeff Devine

If there's ever been a time when concepts such as flexibility, fluidity, ROI, and strategy are at their highest demand, it's now.

Daily, we receive news of the most recent bear markets and further reports predicting the economic downturn may continue into 2009. The American consumer is buckling in for a rough ride which is causing an inevitable reaction from the travel and meetings industry. But one thing Americans have learned over the course of five official recessions is not stand on the sidelines and wait for the solution; rather, create the solution and if your first attempt fails, keep trying.

Although we are at risk of using some of the same terminology within the industry we have used so many times in the past (ROI, Strategy, Flexibility, SMMP), the fact is, the focus on these areas is back and here to stay for awhile.

What are we seeing, hearing and observing about the meetings and convention industry's reaction to this new environment?

If I had to narrow it down to two focus areas, I would call it, initially, the Hybrid Environment (and I don't mean the continued focus on hybrid vehicles) and second, getting to true Partner Relations. When times are good, there is a default that tends to take over within the conference management industry, causing there to be much less focus on cost-cutting measures, efficiency and strategy. And, inevitably when economic times are tighter – like now – the focus on these areas increase dramatically which is what is defining the current trend in today's meeting and conventions industry – thus, a hybrid environment.

The shift is dramatic and obvious. Buyers of conference management services are not only responsible for, but now accountable for reaching multi-faceted objectives including cutting costs of their meetings (ROI factor), customizing their procurement of conference management so that they can maintain their own internal meeting management structure (Flexibility), developing a strategic meeting management process (SMMP – Strategy) and last but not least, being able to increase or decrease any of these factors at a moment's notice (Fluidity). The days of clients wanting conference planners to manage the "total show" have diminished dramatically, rather now the need is to manage 5%, 35%, 75% and still in some cases, 100% of the conference management needs. Conference Management and Marketing departments are no longer focused on only meeting their conference budget; rather they are interested in building models to meet the multitude of objectives listed above. In addition, the byproduct of this new environment means that the sales cycle prior to the conference planning process taking place has been extended to allow more time to identify what each client's conference objectives are and to develop a plan to address them.

This brings us to the second environmental concept mentioned above, Partner Relations. Both corporations and associations are not only looking for doers to execute what they have laid out as their objectives, but are also looking for conference management professionals to tell them how to execute those objectives. There is an ever increasing conversation requiring conference managers to make recommendations and introduce new strategies that continue to cut costs, increase efficiencies, and help to formulate such policies as an SMMP processes within a corporation. Therefore, the trend within conference management goes far beyond the conversation of identifying objectives but actually identifying on how to deliver those objectives. In other words, there is resurgence of reserving a seat at the table for the conference manager to not only be the doer, but to be a strategic partner for the client.

In many regards, our industry can take comfort in one benefit that inevitably comes out of this new economy: the integration of the conference management provider into the mix as a strategic partner. This reinforces the client / supplier relationship for the long-term, such as when the economy returns to so-called "normal". With objectives such as the challenge of meeting budgeted revenues with fewer attendees, the shift from Big Box conferences and exhibitions to more smaller-regionalized conferences with less travel dollars, movement to co-located shows and to the growing need for more meeting management technologies, the opportunity to forge stronger relationships from doers to strategic partners is large and timely. Many corporations and associations are asking for this kind of partnership point blank.

That's not surprising – we've seen this wave of trends form in the past and if history repeats itself, we'll see it again in the future. The difference is the tools and strategies we use to manage this trend as they will be different each time a challenging economy appears. Keeping abreast of the latest technologies, marketing trends within corporations and associations, and pushing for not only logistic, but strategic conversations with clients will be the foundation for the next economy to come.

In this time of multi-faceted objectives (again, our Hybrid Environment,) don't position yourself to only be a doer for your clients, position yourself to be a partner for the long-term. Take advantage of this challenging, but opportunity-rich economic environment.

About the Author: Jeff Devine, CMP is ConferenceDirect's Vice President of Conference Management.