Features - March 2009

By John Buchanan

In February, as the global economic tsunami swept across the globe and the word “bailout” was a daily headline somewhere, the turmoil struck the meetings industry with full force. Goldman Sachs, a recipient of bailout money, abruptly cancelled a Las Vegas conference. A few days earlier, Wells Fargo, another recipient of federal funds, had done the same thing. As a result, the headline of a story in The New York Times a week later said it all: “Las Vegas Sags as Conventions Cancel.” The newspaper reported that Las Vegas had lost 30,000 room nights, and $20 million in revenue as a result of January meeting cancellations.

It didn’t help that President Obama had said publicly that companies getting government assistance should not go to Las Vegas on taxpayer dollars.

But it wasn’t just Las Vegas that took the hit. Virtually every major meetings destination did, along with landmark resort properties such as the venerable Greenbrier and The Broadmoor. The result has been a ripple effect that has shaken the industry to its core.

Another Sea Change

“Everyone is in duck-and-cover mode, because the shells are coming in heavy and fast,” said Roger Dow, president and CEO of the U.S. Travel Association (U.S. Travel) in Washington, DC. “I have seen lots of things over the years, including multiple recessions and downturns in this industry, and September 11, which basically shut down the industry. September 11 was a sea change for our industry. Some things were changed forever, like the ease of getting through an airport or back into the U.S. I think what we’re seeing right now is potentially an equal or bigger sea change for this industry. If we don’t do something about it, then the old saying will come true that if you don’t define your future, others will define it for you. And that’s what’s happening right now.”

For example, Dow said, some of the most loyal and enthusiastic users of meetings and events — insurance and financial services companies as well as automakers — represent foundational corners of the industry. And they all now have bull’s-eyes on their backs, thanks to populist politicians and a cynical, ill-informed media.

Perception Overwhelms Reality

As a result, Robert A. Gilbert, CHME, CHA, president and CEO of the McLean, VA-based Hospitality Sales & Marketing Association International (HSMAI), has coined a term that is widely understood to mean those unfortunate moments in business or life when perception overwhelms reality.

Gilbert has dubbed the current meetings industry madness “optics.”

“Optics is about how the venue for your meeting will be perceived by non-stakeholders,” he said in mid-February, days after The New York Times article and a few days after an anti-meetings segment personally narrated by anchorman Brian Williams was broadcast on NBC Nightly News. “Companies are thinking about what will happen if the media finds out about one of their meetings, or if a government official who doesn’t know anything about meetings hears something and starts looking at them.”

But the most important point, Gilbert noted, is that so far all of the major media reporting has been decidedly one-sided and shrill. No one has yet been able to tell the other side of the story — the meetings industry’s side.

But that imbalance has begun to change. At PCMA’s annual convention in January, a Meeting, Event and Incentive (ME&I) coalition was formed to lobby lawmakers on the importance of the meetings industry to the U.S. economy. The coalition’s founding members, led by U.S. Travel, joined together — for the first time ever — in a common cause that has now been branded “Meetings Mean Business” (www.meetingsmeanbusiness.com). The unprecedented joint initiative includes Meeting Professionals International (MPI), the National Busi­ness Travel Association (NBTA), American Hotel & Lodging Association (AH&LA), International Association of Exhibitions and Events (IAEE), Destination Market­ing Association International (DMAI), Professional Convention Management Association (PCMA) and Site (Society of Incentive & Travel Executives).

In response to recent U.S. Trea­sury draft regulations on incentive, meeting and event expenditures for TARP-recipient corporations (Troubled Asset Relief Program), the coalition held a press conference in Washington, DC, on February 9, 2009, to issue a set of model practice guidelines to serve as a best practice benchmark (see box on page 20). The goal is U.S. Treasury acceptance of meetings industry self-regulation through adoption of the new guidelines.

Since then, a groundswell of support from all facets of the meetings, events and incentive industries has found a voice in the e-petition “Keep America Meeting,” created by major destination management company TBA Global in partnership with U.S. Travel, with support from the Event Marketing Institute. Supporters are visiting keepamericameeting.org by the thousands to sign the petition, peruse the coalition-endorsed letters to local media and elected officials, link to social networks, and download promotional materials and press clippings.

With a goal of 1 million signatures, the petition urges legislators to take proactive steps to publicly support the meetings and events industry in order to hasten the U.S. recovery.

In addition, U.S. Travel and most industry organizations now offer supporters and members “tool kits” designed to help planners do everything from contacting their congressmen to sitting down with their top management executives to reinforce the value of their events. (See box above.)

Planners Control Their Destiny

But not everyone is thrilled with the contention that the government or anyone else should tell companies what they can and cannot do to conduct their business. Veteran industry figure Sharon Marsh,

Meetings industry leaders at One+ Real Time, the opening session of MPI’s MeetDifferent 2009, included (l to r) Matt Brody, JW Marriott Starr Pass Resort and Spa; George Aguel, Walt Disney World Resort; Katherine Overkamp, US Airways; and Michael Owen, EventGenuity. Photo by Tkatch Photo

CMM, CMP, meetings group manager at Santa Rosa, CA-based medical device manufacturer Medtronic Cardiovascular, raises a dirty little industry secret — and an open one, too — that many planners have avoided in the past. Now, however, it could be their downfall.

They and their management team don’t really know how much the company is spending on meetings or why. They can’t account for the total. Nor can they objectively demonstrate a tangible return on investment (ROI).

As a result, many planners are now under siege from their own executives. And the problem is a grave one that must now be seriously addressed, said Marsh. “I’ve been in this industry a long time and I’ve seen how little thought is put into the decisions that are made,” she said.

That kind of behavior, she added, must by definition become a thing of the past — and quickly.

Rhonda Marko, CMP, CMM, DMCP, president and CEO of Destination Nashville and president of the Association of Destination Management Executives (ADME), agreed wholeheartedly with that conclusion. “There is now a negative perception about having meetings,” said Marko, another longtime industry veteran and leader. “But the truth is, you have to have meetings — if there is a reason to have a meeting. If there is not a genuinely good reason in the first place, you shouldn’t be holding the meeting. So the job of a meeting planner right now is that if they haven’t been doing it already, they have to start measuring ROI now. They have to be very clear about the measurable objectives and the results of their meetings. Then they have to educate themselves and their management and board about what is going on. If they’re not already sitting at the table in the C-suite, then they need to get up there.”

Marko concurred with Marsh that the planners who still cannot measure and report meeting spend are the ones who will suffer the harshest personal consequences over the coming months — and maybe much longer.

Meetings Are The Solution

Bruce M. MacMillan, CA, president and CEO of MPI, said that the first thing that planners and their companies must understand and react to is that “the meeting industry is under attack, on a number of different levels. But now, as an industry we are responding. And we are focusing on two things. One is that we have to set the record straight, publicly and politically. But the truth, in both cases, is that meetings and conventions are big business in this country. Our industry does a lot for both the social and economic fabric of America.”

But the most important point the industry — including planners — must drive home is that “meetings are not the problem. They are the solution.” To support his point, MacMillan cited new research he said shows that the great majority of Fortune 1000 companies see meetings as a key activity that must be continued.

Independent hotelier Harris Rosen, president and COO of Rosen Hotels & Resorts, which operates seven hotels in the premier meetings destination of Orlando, said the current debate must be handled gently, not loudly, because the U.S. government has a concern he can understand. “Government is saying to the banking, finance, insurance and automotive industries, ‘You guys have raised your hands. You guys need help to survive. For a multitude of reasons, we are going to help you. But there are going to be some conditions.’ We’re seeing now that those conditions have more to do with perception than anything else. And I can understand that in the current climate.”

On the other hand, based on his vast experience as host to meetings and events from insurance and financial services companies at his three major convention hotels in Orlando, Rosen lamented that no one in Washington or the national press seems to comprehend that for those businesses, “better meetings” is a time-honored strategy for maintaining the loyalty of top-producing brokers and agents.

But Rosen also said that planners and their organizations should understand intuitively that now is not the time for extravagant meetings, regardless of their line of business (see “Proactive Steps For Planners” on opposite page).

Guidelines For Better Or Worse

For his part, Dow went even further, noting that a genuine “paradigm shift” is underway for planners.

“Their lives have recently changed a little bit, and they are going to change, if they are going to be successful,” he said. “Meeting planners have said for a long time that they want a seat at the table, that they want to be more than the person who books the evening entertainment or the guy who makes sure the microphones are working. So, this is an opportunity for a lot of meeting planners to take these voluntary and very practical guidelines we’ve created and use them as an opportunity to increase their value to their organization.”

But Marsh argued against the concept of having to follow formal guidelines: “I don’t like the idea,” she said. “It will impact me as a planner, in that there is going to be more reporting required. The end result of all this will be that meetings and events will go on, but there will be fewer of them because budgets will be decreased. And we’ll also have to be reporting more.”

The unfortunate reality, she said, is that the current debate about “government regulation” misses the point that Sarbanes-Oxley (SOX), which she welcomed, has been very poorly enforced. “The government doesn’t have enough people to enforce current regulations that already exist like SOX, which said you had to be transparent and frugal and you had to spend your money wisely and be cognizant of the interests of shareholders,” Marsh said. “So, every year the CEO and CFO of public companies had to sign off on saying ‘we’re going to act frugally and responsibly.’ But has anyone ever heard of anybody being audited for SOX?”

On a larger scale, Marsh instinctively reacts negatively to the notion of anyone telling her company what it can spend or how it must spend to meet its business objectives.

But Marsh also has a very specific concern about the current situation. “Right now, it’s just about the TARP-recipient companies,” she said. “And that’s unfair, because it puts them at a disadvantage against their competitors. And I also just don’t think it’s right for the government to tell organizations how much they can spend on meetings, when members of Congress just don’t understand how big and important the meetings industry is. It’s very frustrating.”

In the current climate of controversy and a barrage of bad headlines, Gilbert cautioned that the meetings industry had better be self-motivated to regulate itself, lest it become more beholden to the political whims of members of Congress or regulators — and even more draconian rules and regulations. “If I am a planner and I am told by my board or top management I’ve got to create policies to get meetings approved, these guidelines are now being provided for planners,” he said.

A Time To Strengthen Partnerships

Richard Harper, vice president of sales and marketing for Mandalay Bay in Las Vegas, recently weighed in with his ruminations on the meetings industry crisis and sincere considerations for the plight of planners. “If I were a corporate planner in today’s environment, I can only imagine the boardroom discussions taking place right now as it relates to future meetings. ‘Should we do the meeting? How are we going to add value to the meeting? How are we going to measure the success of the meeting? What will it cost? Where should we hold it?’?”

Harper suggested that the hotelier/sales manager is there to help planners wrestle with the challenges they face down the road. “Here is where we truly define the word partnership,” he said. “As a hotelier, it’s my job to educate you and supply you with all the necessary talking points that will address each of these topics straight on. A great sales manager has this skill set and should be an extension of your team in identifying your real needs while providing solutions to those needs.”

Harper added, “Let me also remind the buyers that all the reasons that Las Vegas owns the top spot for meetings and conventions are still here. Nothing has changed with the exception that it’s now even more affordable.”

To counter the bad press, Harper touted the benefits of holding world-class meetings in Las Vegas: “Spend less, get more, get in and out faster, stimulate the senses, access to unlimited services, ability to stay under one roof allowing for maximum networking time, avoiding poor weather risks, and even save money on parking as compared to most other cities. It’s still free here the last time I checked.”

Face Up To The Challenges

The most important single message for planners right now, Marsh said, is “they need to not be afraid. They need to evaluate their requests to hold a meeting and get the meeting sponsor to clearly identify the objectives of the meeting. They should not be afraid to speak up and say, ‘There is a better way to hold a meeting,’ if indeed there is a better way to do it.”

But for many companies, such as Cisco where Marsh used to work and at Medtronic where she is currently employed, budgets have already been trimmed to bare essentials as a result of the strategic meetings management juggernaut that has transformed the discipline of meetings over the past several years. “The truth,” said Marsh, “is that at companies like Medtronic, we cut out the fat a long time ago. We do training meetings and educational meetings, so there is very little fat to cut, because the goals of the meetings are obvious.”

Marko suggested that planners follow a simple new mantra: “Don’t cancel the meeting. Instead, demonstrate the value and ROI of the meeting.”

And Brenda Anderson, CEO of Site, offered a companion piece of advice for planners that she believes is critical.

“Don’t run away from the problem,” she said. “Run into it because meetings and recognition programs are exactly what we need to help get the economy going again.”    C&IT