At The Helm During A Stormy Economy

Roger Helms, founder and CEO of HelmsBriscoe, one of the largest independent corporate meetings management firms in the world, recently spoke with Meetings Today editor Chris Davis about the effects of the recession and Sept. 11 on corporate meeting outsourcing and why it's not the time for volume-based contracting.



Meetings Today: How do you see the state of the corporate meetings industry?

Roger Helms: We saw delays in decisions about meeting activity through October and November. Now, and you'll hear this from a lot of people, everything is very short term and larger meetings have been broken into regional meetings. There are advantages there, as you can bring more people to a series of regional meetings than one large meeting, so that's more substantial volume for hotels. Plus, rates often are lower in the short term and deals are there to find. There are bookings 30 to 45 days out that used to be six months out, but confidence is coming back. We have a substantial base of meetings booked in the first quarter, most of which is short term. Industrywise, 1Q is a concern, and Hawaii and the Caribbean—forget it.

MT: Are those first-quarter meetings postponements from autumn?

Helms: That's accurate, but corporations also want to get messages to and motivate people. People want to know the positions of their companies, because, in some cases, they have not met together since before Sept. 11. People are anxious. We had our annual meeting last month, and everyone agreed it was a good time to get some direction.

MT: How does the economy and Sept. 11 affect your role and that of other third parties? Will there be more outsourcing?

Helms: We will lose some meetings. A lot of third parties revolve around four or five major companies. Some mom and pop operations will have a harder time. When companies come back onboard, they'll look very carefully at who they choose, because there are companies that let go 70 percent or even 95 percent of their meeting planning staff. They will look to outsource.

Outsourcing will have a banner year in 2002. Companies will look at consolidation, so third parties have to demonstrate how they can add value, and the robust companies with the most resources will move ahead.

MT: But will the recession have a chilling effect on companies' desire or ability to make significant decisions about their meeting programs, be it outsourcing, centralization or the adoption of new technology?

Helms: That's a good question. This is an efficiency time: consolidation, technology adoption—these are big decisions and may be delayed. But if consolidation is done correctly, it leads to immediate cost savings. So I see it as the perfect time for them to decide to look at this.

Nobody wants to lay off 20,000 employees and they will look to find ways not to let that happen. So companies will look at what isn't their core competency, and either outsource it or do it more efficiently with technology. Technology, therefore, is a good investment now.

MT: What have your corporate clients asked of you in the past few months?

Helms: Now that the cancellations are through, and the industry was good with that, people want to find new destinations to facilitate driving and avoid flying. Price is not driving decisions: $20 off a room rate is not going to make someone hold a meeting that would not have otherwise. But when the market comes back, buyers will look for low rates and better value.

We will not renegotiate contracted rates; we just don't do that. There would have been a bonfire if hotels had tried to renegotiate contracted rates when the situation was reversed in 2000.

MT: That said, how do you find the hotel and air negotiating landscape? Are suppliers negotiating more on price or offering softer discounts?

Helms: Hotels are offering discounts across the board. Air demand is down, but capacity is also down, so the market is compressed and fares likely will be flat. Hotels are offering more flexibility, so you can do programs like symposia, where you're unsure how many people will show up, and not be hung out to dry on attrition.

It's a heck of a lot easier to negotiate now than it was, say, five years ago. Now, we can focus on finding value instead of just finding space.

MT: Will the recession lead companies to explore different styles of contracting, such as multi-meeting or volume-based agreements?

Helms: Yes, but the problem is that those kinds of deals take a lot of negotiating power to get done, and there's too much uncertainty regarding what meetings will look like in the future.

Those deals won't be taken seriously yet, because we don't know what the industry will look like. It is a time, though, not to have 15 different people working on 15 different meetings. Corporations need to get a handle on this.