At PCMA Annual Mtg., Planners Urged To Convey Value
DALLAS—Industry leaders at the Professional Convention Management Association's 2010 Annual Meeting here in January urged meeting planners to hone a new skill this year: communicating the value of meetings within their organizations and to the population at large.
"Meetings are a powerful business weapon," Meeting Professionals International president and CEO Bruce MacMillan said during a roundtable in which meetings industry leaders gave their outlook for 2010. "We just need to be able to tell the story better."
More than a year after the emergence of the AIG effect—which U.S. Travel Association president Roger Dow said cost the industry $2 billion early last year—industry leaders still are working to counter a perception that meetings are frivolous. Successes, Dow said, included top travel CEOs gaining the ear of the White House and General Motors defending a luxury event for fleet buyers that represented more than $1 billion in fleet sales and a step to repay public funds.
Perception issues linger, however, particularly for incentive travel, said Brenda Anderson, CEO of incentive professionals association Site. As a result, meetings and incentives this year will focus less on luxury and more on service or sustainability components, she said.
Corporate meeting planners should expect to see their roles broaden, MacMillan said. They'll be expected to connect more with social networking technology as well as present a return-on-investment case to management, he said.
"ROI is not a new concept, but it's become a more important concept," MacMillan said. "We need more education around that."
Most association meeting attendance numbers are down between 9 and 15 percent, though a few, such as medical associations, are up in attendance, said John Graham, president and CEO of the American Society of Association Executives and the Center for Association Leadership. He didn't expect further falloff as the job market has increased the need for education and networking.
Most of the leaders said 2010 would be a stable year for meetings, followed by growth in 2011 and 2012, though Destination Marketing Association International president and CEO Michael Gehrisch said "the first half of the year is going to come back quicker than people think." Destination marketing organizations are facing their first major funding decreases in 25 years—down 16 percent last year and about another 4 percent this year—but most have not made cuts on the sales and marketing side, he said.
Globally, the meetings industry faces a brighter outlook, said Martin Sirk, CEO of the International Congress & Convention Association. The United States' meeting industry took a much harder hit than anywhere else, except a few spots such as Greece and Dubai, he said.
Dow, meanwhile, said the industry must remain united in presenting the necessity of meetings. This year, he hopes to bring one major segment holdout into the conversation. "We're working to break down the barriers in the various industries," Dow said. "The airlines are not at the table, and the airlines have to be at the table."
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American Airlines CEO Gerard Arpey and Southwest Airlines president and CEO Gary Kelly don't expect to restore capacity within the next 18 months and agree more industry consolidation during that period remains possibile. The executives said the demand outlook remains unclear for the next year and a half and will depend on growth in the gross domestic product. Until then, they said current capacity levels should remain stable.
"We are not planning any capacity cuts, but we're not thinking about adding a lot of capacity," Arpey said.
The CEOs said there still is room for consolidation within the industry. Kelly acknowledged that Southwest seems due for an acquisition, but said that "if we do one, it has to be under the right circumstances, and I would view it as a vehicle for growing the company. I wouldn't contemplate a merger at this point."
Arpey, however, said antitrust regulators and union opposition would be a significant barrier to consolidation. Additionally, capacity cuts already have negated some of the pressing need for consolidation on the investor side, he said.
"If you look at the past two years and do the math, the equivalent of one of the large airlines has left the space. That's how much capacity has come out of the industry," Arpey said. "So, you don't necessarily need consolidation to get supply and demand where it needs to be."
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PCMA welcomed its new board chair, Microsoft Corp. event marketing director Kati Quigley, marking the first time a corporate meeting professional has held the position.
Quigley has worked for Microsoft for more than seven years and spent 11 years prior as an on association planner. PCMA this year will focus on consolidating its offerings and conducting research on the economic impact of meetings, she said.
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Loews Hotels chairman and CEO Jonathan Tisch said financing would remain a deep concern for hoteliers throughout the next several years as many hotels are poorly financed, and there still is very little credit available in the hotel industry. He said about $20 billion in hotel loans are coming due in 2011 and 2012.
"This downturn, we're seeing hotels get foreclosed by some of the best operators in the business," Tisch said. "Where this credit is going to come from and when that credit market is going to unfreeze is a very big concern."