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Chicken instead of Beef’: How the Meetings Industry is Adapting to Meet Economic Challenges
The current economic crisis is forcing everyone in the meetings industry to get creative with strategic solutions to meet client needs, ease budget concerns and keep events from being canceled. Cutting back has been the primary cure-all.
“[We’re seeing] chicken instead of beef, shorter reception times, less audio visual, simpler staging and simpler décor,” says Pat Ahaesy, CMP, CSEP, of P&V Enterprises in New York City. “A little snip here and a little snip there does add up to savings.”
Tips for Tough Times:
1. If you’re an in-house planner, consider outsourcing some of your planning process if it will save time and money. If you’re a third-party planner, consider offering hourly options as part of your service menu. “Many corporations are hiring us at an hourly rate to plan where they stay, menus, ground and air transportation, and entertainment for training programs and meetings. Most of our clients have internal event planners, but use our services as contractors to ensure dedicated service to the program they are planning,” says Forte Events’ CEO Tami Forero.
2. Renegotiate contracts with vendors, such as hotels and caterers. “For the first time ever I have seen hotels that command high $300 rates dropping to mid $100s,” says Christi Evans, global director of sales for K Hotels. “It is a buyer’s market. The phone doesn’t ring like it used to, relationships are key and sales people are going back to their roots and having to pick up the phone and prospect once again. ”
3. Move your meeting to a less expensive state or location. Think Philadelphia instead of New York; Columbus instead of Chicago; or Lisbon instead of London.
4. Divide annual meeting costs into two or three separate events a year. This way, expenses are divided among fiscal quarters.
5. Nurture your relationships and contacts. “Our approach is to continue working the strong relationships we have with our clients – corporate groups, associations, etc.,” says Jill Cecala, Hershey Resorts’ director of northeast sales and marketing. “Our clients know us, know the quality of products and experiences we offer, and know that we will work hard to meet their needs.”
Cutting back also helps alleviate clients’ fears of looking extravagant or out-of-touch à la AIG. Karen Healy, managing partner of OnTrack Communications, had a client who was concerned about how an event would be viewed. They went through all the scheduled expenses and activities to determine which ones might be considered inappropriate. “As a result of that exercise, we eliminated some significant items from the budget,” Healy says.
For some clients, however, just cutting back isn’t enough. “One client canceled a meeting which had already been contracted and incurred a penalty with the hotel of over $150,000 for doing so,” Healy says. “Their main reason was the ‘impression’ that having a conference at a lavish resort would give to employees, investors and customers.”
As a result, many companies are restricting where planners can hold meetings. “Planners are looking to stay close to corporate headquarters,” says Christi Evans global director of sales for international chain K Hotels. “I have even been told by a longtime friend and meeting planner that her clients are telling her, ‘No more than a 200-mile radius of HQ.’” At a recent PYM Town Hall, hoteliers suggested properties with the word “resort” in their name find another name to do business as so that planners could send out information about the property without raising any red flags.
Even though events are being scaled-down, planners still need help meeting expectations. “Event planners still insist on [having] the ‘Wow!’ moment,” says Marianne Moore, the director of catering and conference services at the Four Seasons Hotel in St. Louis. Because of that, Jim Douglas, founder of California’s Prime Time Entertainment says, “Planners are expecting more value from their core vendors.”
Douglas and Moore agree that meeting the challenge of delivering more with less has positive benefits for both planners and suppliers. “We’ve seen more communication going on and a willingness to create stronger partnerships and awareness across the board,” Douglas says. Moore adds, “In the end, the planner and the hotel both look better for working together.”
Another serious challenge planners face is attrition. Mark Ragan, CEO of Ragan Communications, creates conferences and seminars for PR people, internal communications professionals and social media professionals. Demand for their Las Vegas conference on social media — usually a red-hot topic — is off last year’s numbers by 50 percent. “We are now taking the unprecedented step of offering free airline tickets to our customers if they sign-up,” Ragan says. “We think this will help them make a case to their boss for approval. It’s the only time any conference organizer has done this (at least as far as I know). We’re also giving half-price deals through telemarketing and working with the Drake Hotel to reduce our room block.”
Planners aren’t the only ones using incentives. Hotels and destination management companies are offering everything from no attrition clauses to gas cards to lure business. In Atlanta, the “Atlanta Means Business” campaign is offering attractive discounts on local hotels and meeting venues through 2009. “[Those] that have value-added offers are communicating the rates to us, and we are communicating the savings to our clients,” says Mark Vaughan, executive vice president and chief sales & marketing officer of the Atlanta Convention and Visitors Bureau.
Incentives can only go so far, however. Fred Stringfellow, executive vice president of King Stringfellow Group, points out that some attendees and planners are at the mercy of new internal regulations. “Many private companies and government entities have imposed mandatory travel restrictions/bans on their employees, in response to the extreme economic conditions,” Stringfellow says. “For many of these individuals, it is almost impossible to circumvent these restrictions, regardless of whether they’re serving on a committee [or] a volunteer board. For these individuals, it does not matter how cheap the hotel rates or air travel prices are — they simply cannot travel.”
Stringfellow doubts things will change soon. “I think people are nervous, and there hasn’t been a lot of positive news of late to change people’s sentiments,” he says. “Even in industries that have not been hit hard yet, they are preparing for the worst. [But] I would like to think that things will start to turn around in late summer, going into the fall.”
The companies that are managing to thrive in this environment are the ones that have recalibrated their offerings. “We looked at the business two years ago and asked, ‘What else can we offer and how can we differentiate ourselves?’” says Tami Forero, CEO of Colorado Springs’ Forte Events. “We added consulting and speaking divisions to the company, hired a PR firm, and continued to network and sell consistently.” As a result, Forero says, they were able to triple their conference and meetings business in 2008, and are on track to beat that record in 2009. “We are still a small company, but business has been great for us despite economic concerns [because] we have been flexible, offering services on an hourly basis as consultants and logistics contractors. We’ve had great success selling this to our corporate meeting clients.”
Full-service event production, branding and marketing company ASE Group Inc. also has found that flexibility is key. In addition to offering by-the-hour pricing, they now offer a service where they arrange the front-end items, such as rooms, food and beverage, audio/visual and ground transportation, but do not staff or execute the event; the client’s in-house or on-site staff does. “These two new services have been warmly welcomed by businesses struggling to contain costs,” says ASE Group President and CEO Bonnie Siegel.
