While to say that corporate meetings have gone through a near-death experience may be an exaggeration, there were times last year when it seemed to be the case. Meeting cancellations, even when it meant forking over stratospheric attrition fees, were the order of the day.
So what is the outlook for this year and beyond? Are corporate meetings on the comeback trail? To what degree are perception concerns still driving decisions on where to meet and what to include in the agenda? Are those corporate meetings going forward this year markedly different from those way back in the "good old days" of 2007 and early 2008?
Another big question: Who is planning corporate meetings these days? Has downsizing meant that companies are relying more on third parties or on people within their organizations who are not full-time planners?
To gain some perspective, Meetings South spoke with a variety of top hospitality and meetings executives who have seen their share of business cycles over the years. While the pendulum has yet to swing back all the way, the consensus is that it appears to be moving in the right direction.
In comparison with last year, how does this year look in terms of corporate meetings business?
Greg Champion, chief operating officer, Benchmark Hospitality: I wouldn’t say there are drastic signs of improvement, but there is a lot more activity—especially short-term activity—than there was before. Right now we’re seeing some of our markets that were the hardest hit by the downturn—Arizona and Florida—coming back. The expectations we had for them were so low that that the improvements are phenomenal.
At the same time, however, we’re competing a lot more with five-star properties. Everyone talks about the AIG effect, but there are still plenty of planners out there who are taking advantage of the once-in-a-lifetime deals out there.
Mark Sergot, vice president-global sales, Fairmont Hotels and Resorts: In the third quarter of 2009, we started to see rising interest and confirmed bookings for 2010. This was a significant departure from earlier in the year, when we saw interest, but little or no confirmation. We’re continuing to see a good level of confirmations for 2010 and interest for 2011 is strong.
This ties in with what we are hearing from our planner focus groups and from the comments I got from planners at PCMA this year. They are indicating that their corporate leaders are more comfortable with the economy and they realize they must get back to business.
Ben Fusco, area vice president-Arizona, Hilton Worldwide: There is a slow and steady uptick that we’re seeing, with more leads and more bookings for 2010 and 2011. The pace is up, but I’ll add the caveat that rate is still a challenge for us. The customer still has high expectations of favorable rates and contractual terms.
Kemp Gallineau, senior vice president and chief sales officer, Gaylord Hotels: When you look at 2009, everyone was reacting to what was going on in the press and the banking industry. Now people are not just reacting to things, but are moving forward in a strategic way.
Tom Hubler, vice president of sales-Americas, Four Seasons Hotels and Resorts: We’re seeing more momentum for long-term business—for 2011 and 2012. Companies know there is so much flexibility in pricing now. They know if they can get the approvals and get the decisions made, they can take advantage of the marketplace. They’re aware that once demand comes back, the pricing and the value will change.
Casey Cote, president, Meetings Consultants, Atlanta: This year is looking much better. Last year was gloom and doom and clients were cancelling events left and right. Companies are now starting to loosen up and talk about doing some of those meetings and large events that were cancelled last year. Some of these events are getting funded a lot quicker than last year.
To what degree are perception concerns still driving corporate meeting decisions?
Sergot: Perception is still a concern, but it’s looked at differently than it was last year. In 2009, it was all about not having your name exposed—a real knee-jerk response to staying out of the public eye. Now if a meeting is needed, companies are saying, "Let’s have a really solid, defined purpose, so we can feel confident if questions should arise from the public, from shareholders."
The perception issue has evolved into being able to show the ROI of a meeting or of the incentive, so any questions can be answered. Companies see the need to have the tangible evidence at their fingertips. In prior years, things were less tangible.
Mike Schugt, regional vice president of sales-Southeastern U.S., Caribbean and Latin America, Hilton Worldwide: I don’t think perception issues are a long-term problem at all. Since the panic happened over AIG, our industry has really come together—organizations like USTOA, MPI, PCMA—to educate people, including Congress and the president, about the value of meetings and what they mean to the labor force.
Cote: There was over reaction at first, but now things have settled down. We have a client who had a soft contract for a big event in Las Vegas but, because of perception concerns, asked us to look into less glitzy, non-resort destinations. Now, however, it looks like they will go to Las Vegas, after all. Partly it’s an economic decision. Vegas is a good deal and it’s efficient to run a large meeting there.
Liz Franzese, director of sales and marketing, Westin Kierland Resort, Scottsdale, Ariz.: Perception issues are still a consideration for every meeting planner and every corporate entity. It’s one of the first things they look at. They want to make sure they’re presenting the very best value.
What changes are you seeing in corporate meetings over prior years?
Robert Becker, president, Meeting Planners, Indianapolis: I work primarily with small companies who are very cost-sensitive. I’m seeing more doubling up, with people sharing rooms. They are also taking a long time to make hotel decisions because they want to get the best deal possible—and think that it pays to wait. I try to convince them that the sooner they commit, the better deal they will get.
Schugt: Lead times have definitely lessened. Corporate America has been through so many changes in the past two years that nothing is planned long-term, including meetings. Meetings are not put down on the calendar six months or a year out—companies meet when they feel they need to. The nature of business has changed.
Gallineau: Some of the big corporate meetings have been broken down into three or four regional meetings. There’s more concern of having a direct impact on what those regions need. There are fewer people at meetings. And the extra half day because you’re in a great place—that’s been cut.
Networking has always been one of the biggest reasons people attend meetings and that hasn’t changed. In fact, in tough times people have even more of a need for this.
Sergot: The lead times for 2010 are very short term, and we feel this will continue. It’s not unusual to see a meeting for 300 to 500 people planned less than 30 days out, while smaller meetings might just be a few days out
Peter Regan, director of sales and marketing, The Wyndham Virginia Crossings Hotel & Conference Center: We have seen programs scheduling meetings to begin mid-day so attendees can fly in that day, whereas in prior years they would have checked in the night before. Similarly to 2009, there is a focus on being productive in a shorter time window. Meetings have compressed accordingly.
Fusco: Demand for spa and golf is down, but groups are demanding more meeting space and more work space. The emphasis is on efficiency and ROI. We’re also seeing that meetings are shorter—two or three days—and are being kept to just the size they need to be. Some companies are consolidating their meetings, including several different departments, so they can address all their constituents at one time.
Who is your point of contact on the corporate side these days? Are you dealing more with third parties or people who are not full-time planners?
Gallineau: We are seeing some companies shifting to third parties as they downsize. What we’re also seeing is that a lot more people are involved in the decision-making process than there used to be. Procurement people, the CEO—they all have to sign off on the bill. So we may be dealing with the meeting planner, but we also have to understand the view of the CEO and the procurement department as well.
Franzese: Companies are doing more with less. Meeting planning departments have been downsized, and the demand on people’s time is greater. Some companies are leaning more on third-party providers.
However, when it gets down to specific hotel selection, they are relying less on third parties. Site inspections used to just involve planners, but now we’re seeing more top executives involved in site selection and contract signing. As you have more people involved in the decision-making, it further complicates things. Everyone has an opinion and it creates conflicts.
Sergot: There have been changes in the corporate structure. We are seeing a growing trend of executive assistants, sales coordinators or other people who have a primary role other than planning meetings. We [Fairmont] have the Global Meetings and Solution Group specifically designed to assist the junior planner, the one not used to sourcing and leads. They go through a whole menu of questions. We’ve noticed an increase in demand for this service.
Champion: A lot of planners are stretched. They are obviously wearing many hats. Unfortunately, there are companies who want to have meetings and just take for granted that they will come together perfectly. But it really takes a fair amount of time and effort. When working with a person new to the planning role, perhaps an executive assistant, we try to anticipate what they might not be anticipating themselves. If we can make their lives easier, we have an opportunity to build relationships.
Fusco: We’re seeing more meetings handled by executive assistants or by third parties like HelmsBriscoe or ConferenceDirect. We’re also seeing fewer meeting planners per meeting, so they are under a lot of time constraints. The onus is on the hotel to very quickly handle the queries that come our way. And we need to keep things simple and straightforward. No surprises.
