While the seller’s market continues to hold steady, with hotel room rates continuing their precipitous climb during the first three quarters of 2007, jitters ranging from stock market uncertainty to the recent mortgage meltdown and the related softening of the condo-hotel market in some key meetings destinations translates into a year of relative uncertainty in 2008.
Factor in the wild card of unpredictable but volatile energy price fluctuations—both pain at the pumps and rising airline fuel costs—and predicting how 2008 will transpire may be best answered by consulting a Magic 8-Ball.
Ask the Expert
“People are asking us a lot how 2008 will be. They’re fearful because they’re not sure how the credit crunch and the stock market will affect corporate money and money on the leisure side,” said Jan D. Freitag, vice president of global development for Hendersonville, Tenn.-based hospitality industry consultancy Smith Travel Research (STR). “If there is an economic downturn, the first thing to go is meetings, such as training seminars. The people that have to have meetings will find themselves in a little better position with hotels that may say, ‘I’ve just lost this account, so here’s another incentive.’”
According to STR, hotel rates increased 6.1 percent, to an average of $103.73 per night, during the first 10 months of 2007, when compared to the same time period in 2006.
“If you think about the rate of inflation being roughly 3 percent, this is double the rate of inflation,” Freitag said. “And that’s on top of the rate increase of 7.8 percent in 2006.”
Freitag said that room rates in the luxury segment increased 8.2 percent during the first 10 months of 2007, and that the prediction for 2008 across all segments is a 5.2 percent room rate increase.
While room rates are expected to rise, savvy planners may still be able to find a deal if they do their homework because of the amount of projects in the pipeline.
“The good news is that new supply is coming into a lot of markets,” Freitag said. “So while you’re looking to secure meeting space, be aware of who’s coming into the market. They may only have a pre-opening office, but they’re coming in to the market, so there may be an opportunity for a bargain.”
Freitag singled out Washington, D.C.—with its massive new Gaylord property set to open in late April—and San Antonio as major meetings destinations with a lot of supply coming on-line.
“I think the new supply, especially in specific markets, will make existing hotels negotiate—it will drive them to the table, basically, because they know they’re not the only game in town,” Freitag contends. “If you are negotiating for rooms, everything’s in play. The room rate may encompass a lot more than rooms, though. You may not get the best deal on the room, but you may be able to get free Internet, free meeting space, free breakfast, etc. You have to see what that room rate encompasses.”
Condo-hotel projects—the financing darling of the last few years—are standing on shakier ground these days as the mortgage morass deepens.
“The credit crunch probably impacted condo-hotels in the sense that people who buy second homes are not probably as easy with the trigger these days,” Freitag said. “Overall, our condo-hotel pipeline is down sharply from prior years.”
The Planner Perspective
Meetings Media polls its readers on a variety of questions every year as part of its Meetings Market Trends Survey, and this year’s responses reflect the ambivalence, uncertainty and portents of economic gloom coming from the hospitality industry consultants and economic forecasters, although an overwhelming majority said they are very happy with their career choice.
“I believe things are going to get rough in 2008,” said Robin R. Dixon-Jefferson, meeting and special events coordinator for the Federal Railroad Administration, based in Washington, D.C. “With the price of fuel, taxes and per diem rates going down in prime locations, planners are going to be scrambling to make things fit. I think the entire industry is going to get hit hard.
“Government planners are really going to have a hard time because of the restraints we have regarding the cost of sleeping rooms, room rentals, etc.,” Dixon-Jefferson added. “Hotels are going to become more selective about booking our groups. I hope that our overall budget is increased enough to make use compatible with the private sector.”
While government planners such as Dixon-Jefferson generally have to cope with stricter meetings budgets than their association and corporate counterparts, even corporates are planning for a pinch next year, and devising strategies to navigate a landscape of higher costs.
“I think 2008 will be a good year,” said Lois E. McLean, an administrative assistant with Princeton, N.J.-based FMC BioPolymer, a company that utilizes renewable resources to create ingredients and technical solutions for the food, pharmaceutical, personal care, and biomedical markets. “Hotels, conference centers, etc., all seem to be aware of everyone’s budget constraints and are offering more enticing meeting packages. Unfortunately, costs for everything are going up; there is no way that venues can avoid being part of that. Planners will just have to be more creative in how and where we plan our off-site meetings and more selective in our choice of venues and meeting ‘go-withs.’”
Steven Kinsley, principle of Littleton, Colo.-based meetings management firm Kinsley & Associates, is taking a “glass half full” attitude into 2008.
“We feel that 2008 is tracking toward another good year for the meetings industry,” Kinsley said. “Costs will continue to rise, but not as dramatically. We are seeing a little more availability for 2008 for some of our short-term customers and better availability in 2009 and 2010 for our longer-term customers. We feel that budgets will remain constant based on what our customers are telling us, and attendance will be the same or higher. We feel optimistic overall for 2008.”
Respondents to the survey were generally optimistic that they’ll have more money to work with next year, with 26.3 percent of association planners, 31.2 percent of corporate planners and 35 percent of independent planners expecting their budget to increase.
The typical duration of a meeting was three days, by a large margin, across all three planning segments (19 percent, association; 20.9 percent, corporate; 24.4 percent, independent). While this number held relatively steady when compared to last year’s study, the number of planners who responded that their typical meeting lasted four days was down 3.1 percent (-3.4 percent, association; -2.7 percent, corporate; -3.2 percent, independent) across the board in this year’s survey.
“We’re trying to shorten each meeting by a half day to reduce costs, such as hotel and F&B, and reduce the amount of time the sales staff is removed from their territory,” said Linda Peters, sales office administrator with Palo Alto, Calif.-based Varian Medical Systems. “We’re trying to pack more into each day to shorten the meeting duration by reducing group events and networking to allow staff to return to their sales territory more quickly.”
Kevin L. Weakland, president of Ocean City, N.J.-based LasVegasConventionTravel.com, echoed the trend toward more meeting content packed into fewer days.
“Meeting schedules are more compact, with the maximum number of sessions increasing, but the number of days is shrinking,” Weakland said. “Spending on entertainment and social events is decreasing slightly. Clients now insist on restricting open bars and limiting meal selections to save money. Activities are being incorporated on a case-by-case basis; it depends mostly on cost.”
One planner said she is dividing her programs in order to save social events.
“When more meeting sessions are added, we expand the meeting into two tracks, therefore no social or entertainment events are sacrificed,” said Melissa Matarrese, meeting/marketing director for the National Council of Structural Engineers Associations in Chicago.
While most planners responded that more fluff is generally being cut from their programs, it seems corporations are buying into team building as an important component of their meetings.
The number of corporate planners who selected team building as a typical activity incorporated into their meetings jumped 8.3 percent in this year’s survey, but fell 6.8 percent in the association segment and 1.8 percent with independents.
“We’re seeing a lot of team-building events lately,” said Hannah Greenberg, director of conference services for Voorhees, N.J.-based Meeting Mavericks. “They build camaraderie, boost morale and enhance both the employee/company relationship as well as customer relationships.”
Golf is also on the upswing—61.4 percent of respondents said they incorporate it in a typical program—but in perhaps some unusual planner segments. The number of association planners who typically incorporate golf into their programs rose 5.6 percent in this survey, and 7.7 percent more independents answered in the affirmative. Corporate planners who typically incorporate golf fell 2.7 percent, however. Overall, 3.5 percent more planners in this year’s poll responded that they incorporate golf.
Trendwatch
This year’s survey queried planners about their involvement with the hottest trend in the industry: green meetings.
Nearly 38 percent of respondents said they have either planned a green meeting or expect to plan a green meeting during the next year (42 percent, association; 36.6 percent, corporate; 35 percent, independent).
“Though we don’t have a formal green meetings plan, we try to be as environmentally responsible as we can when planning meetings,” said Marie R. Schlump, CSEP, sales event manager for Shelton, Conn.-based Prudential Annuities. “We try to use pitchers of water and iced tea on tables rather than the individual bottles that usually wind up only half-used and in landfills. We forgo single-serving condiment packages in lieu of larger containers for the table or buffet, and hardly ever use pre-boxed meals or Styrofoam. Every small thing that we can do to reduce, reuse or recycle helps the green effort.”
One survey respondent can speak quite authoritatively on the subject of environmentally responsible meetings, as she is the co-founder and executive director of the Atlanta Green Meetings Council.
“As the V.P. of education overseeing the entire MPI-Georgia Chapter educational programs last year, I introduced and incorporated best green practices into the overall logistical planning process per meeting,” said Loriann White, CMP, who also is regional vice president for Canton, Ga.-based Conference Direct. “I decided to concentrate on one eco-friendly element that I felt could help make an immediate impact and a difference: recycling and the reduction of paper use and waste.
“Each month I measured and communicated the results. After 10 programs, averaging 220 in attendance, we saved over $17,000 in print cost savings alone,” she continued. “We utilized technology by increasing communications via e-mail to drive interest to our website as an alternative to print on paper. We communicated our mission to go green with every speaker and they complied by hosting the speaker handouts online, on our website, instead of printing and distributing them at each meeting. This act alone reduced a healthy amount of paper usage. Papers used were 100 percent recycled as well as having printing on both sides, so as you can see, this initiative benefited our chapter’s bottom line as well as help save five average-size trees in the process.”
Debbie Gilley, environmental manager for the Florida Department of Health, based in Tallahassee, Fla., is definitely walking the talk when it comes to green meetings for her governmental organization.
“All meetings will be in green hotels after Jan. 1,” she said.
While at least the seeds of green meetings are germinating, meeting planners still don’t seem to be too concerned about, or required to report, the return on investment for their meetings.
Only 31.9 percent of planners said they are required to demonstrate ROI (30.6 percent, association; 32.9 percent, corporate; 31.8 percent, independent), which dropped 0.5 percent from last year’s survey, although corporate planners who responded that they are required to show ROI rose 6.7 percent. Only 8.1 percent of respondents said they report to a procurement department (7.5 percent, association; 10.5 percent, corporate; 11.7 percent, independent), which dropped 1.7 percent overall from the previous survey.
Although the need to report ROI is flat or dropping in most cases, meeting planners do seem to be embracing, albeit mildly, the need to develop a written emergency/contingency plan, with 4.4 percent more overall this year saying they have one, although the total number of planners who do not have a written plan came in at 62.1 percent (62.8 percent, association; 67.7 percent, corporate; 52.5 percent, independent).
“After 9/11 it would be foolish not to have one,” said Dawn Crum, account manager for Indianapolis-based VMS Inc. “We have also helped write the SOP [standard operating procedure] on a disaster plan for one of our clients.”
According to Conference Direct’s White, tapping into industry educational offerings was convincing enough to prompt her to get her ducks in a row.
“Several years ago, Carol Krugman came to our MPI-Georgia Chapter and spoke on this very subject,” White said. “At that time, my tenure in the industry was 15 years and I was embarrassed to admit I didn’t have a disaster or risk management plan. As a planner, my company didn’t have one nor did I know of anyone who had or even needed one—so I listened and learned. In October 2006 I took pen to paper and wrote a plan that eventually my chapter, industry peers and colleagues started to adopt and use.”
Pursuit of Happiness
Another new question in this year’s survey aimed to get to the bottom of perhaps the most important issue to meeting planners: Are you happy with your career choice?
A resounding 54.9 percent of meeting planners responded that they were “extremely satisfied” with their career, 31.8 percent said “somewhat satisfied,” 11.7 percent replied “content,” 1.5 percent checked “not very satisfied,” and a scant 0.2 percent were “not satisfied at all.”
Association planners led the happy camper pack, with 56 percent being extremely satisfied, followed by 55.6 percent of independents and 53.3 percent of corporate planners.
As part of the follow-up to the survey, respondents were asked to list the best and worst aspects of being a meeting planner.
“Are you kidding? I wouldn’t still be in it [if I wasn’t happy]—and it ain’t for the money,” said Sandy Biback, CMP, CMM, principal of Toronto’s Imagination + Meeting Planners Inc. “My career is moving more toward training, facilitating, knowledge transfer, and education. I love that, because I get to share what I know and I get to learn new things, and I get to watch careers launch and perhaps be a part of that…The worst [aspect] is clients not understanding the depth of planning as it exists today.”
Jill G. Bell, CMP, conference and meeting manager for Atlanta’s Association of Minority Health Professions Schools, is also in the extremely satisfied camp.
“I’m more than satisfied; it’s what I was meant to do—I found the perfect job!” she enthused. “The best is seeing your plans come to life, knowing you planned all aspects of a meeting and all had a great time, and the worst [part] would be when they didn’t have a great time.”
For some, the challenges of being a meeting planner drive their satisfaction.
“In my current position, meeting planning is a great career,” said Cathi Lundgren, CAE, convention manager for the Florida Dental Association, based in Tallahassee, Fla. “It presents challenges on many different levels and the opportunity to see the results of hard work. I could not be satisfied with a career in meeting planning that did not include the challenge of growing revenue and increasing quality. I think the hardest part of being a ‘meeting planner’ is overcoming the public’s perception of what a meeting planner is. We are business managers. Many of us manage budgets that exceed the budget of most small businesses. Many people who pursue a career in meeting planning have no idea what the profession really entails.”
But perhaps Colleen Goodin, membership director, meeting planner and managing editor for San Francisco’s National Employment Lawyers Association, sums up the experience of many meeting planners best:
“I’m a meeting planner by default—but I love it!”
