Kyle Jordan, Ed.M., MS, CAE, CMM, CMP is a meetings architect and association strategist, currently serving as the Director of Conferences and Meetings for the Financial Planning Association (FPA) headquartered in Denver, Colorado. Jordan is a Certified Association Executive (CAE), a Certified Meeting Professional (CMP), and recently completed his Certificate in Meeting Management (CMM). He is also a member of the FICP Education Committee. This article originally appeared on ficpnet.com. Visit ficpnet.com/blog.
Every year, whether we want to or not, there comes a time when we must start working on our budgets. Budgeting allows us to create a spending plan to help us best achieve our financial goals for the upcoming fiscal cycle. However, what happens when you’re trying to create a budget in a year of potential economic uncertainty?
If you’ve been following some of the press, both industry-wide and otherwise, there have been gentle whisperings about the potential of an economic slow down and maybe even a little ‘r’ recession in 2020. Now, I’m not a fortune teller, but I’m concerned about budgeting for the 2020 economy, and it’s my responsibility to understand how economic fluctuations can impact our budgets and our budget forecasting.
While there are lots of potential causes for a possible slow down — trade wars, the impact of Brexit, possible instability of the oil supply and our own upcoming election cycle, to name a few — there are data points and trends to which we as meetings professionals need to pay attention.
Recently, news reports gave us our first real inside the industry insight of a possible slow down with the article, “Corporate Group Bookings Decline for 2020: Cvent Data.” The article, which focuses on the data from Cvent’s Group Business Outlook report, indicated that group bookings will continue to increase during Q1 and Q2 of 2020 before taking a negative turn in Q3 and remaining negative through the first half of 2021. Outside of our industry, the RV Industry Association reported in July that “the total number of RV shipments dropped by 23.2 percent in July compared to the previous year. The drop was the 12th-straight month of year-over-year declines, and 2018 was the first annual decline in RV shipments since 2009.”
So, what does this mean exactly, and why do we care if people are buying fewer RVs?
Industry leaders like Michael Dominguez, president and CEO of Associated Luxury Hotels International (ALHI), have long been highlighting the record occupancy and demand, not only from the group business, but from the leisure and transient sectors, thus driving up rates. However, 2019 is the second year in a row where shipments of recreational vehicles to dealers have fallen, behavior which preceded the last three recessions. And we’re starting to see growth and demand slowing in the hotel market. So what does this mean exactly? With luxury purchases like RVs slowing down and booking patterns reducing comparatively to the growth of inventory, we’re likely to see some stabilization and rate corrections in the markets (courtesy GBTA).
Every meetings professional has their own approach to budgeting, but here are some steps I’m taking to help lessen any significant hits on my expense line items in my 2020 budget.
While we won’t know specifically how and when an economic slowdown or recession will actualize, you can take steps now to make sure you’re protecting your budget and your organization from any negative impacts that the economy may throw at you. I&FMM