Economy, Backlash Rock Overseas Mtg. Demand, Triggering Deals

The economic slump and recent backlash against corporate events have taken their toll on U.S. outbound meetings and incentive travel. Some international planners are pursuing meetings business outside of planning, while industry experts urge planners to leverage deals now for future meetings abroad.

International hotelier David Gabri, president and CEO of Associated Luxury Hotels International, which handles sales and marketing for meetings hotels and resorts in the United States, Europe, Mexico and the Caribbean, said "significant retractions" in overseas meetings and business travel have occurred, predominantly in Europe.

"The characterization of meetings, incentive and awards as junkets has been very damaging to international travel," Gabri said. While companies have taken conservative approaches to international travel because of the downturn, Gabri noted they "don't want to add fuel to the fire with anything that can seem excessive."

"At no other time have we been so under the microscope by the public," said Catherine Peters, president of Denver-based Expert Incentives, which plans high-end programs in Europe, Australia and New Zealand. "Companies that do incentives have large sales forces—usually public companies that have to answer to stakeholders."

While Gabri noted small signs of market confidence returning, former National Business Travel Association president Kevin Iwamoto, now vice president of enterprise strategy for StarCite, said analysts at the March 30 NBTA Business Travel Financial Forum in New York City were grim. Iwamoto said some analysts warned hospitality executives that a business travel turnaround might not occur until 2011.

Peters anticipates incentive programs will feel the brunt in 2010. "International groups aren't going to cancel at the last minute if they can help it," she said, "but they won't sign contracts for next year, or the programs will be scaled back and closer to home," citing Hawaii, Mexico and the Caribbean as potential beneficiaries. "Salespeople won't make their numbers in this economy, so there will be fewer qualifiers."

Peters, who mostly organizes incentives for fewer than 50 attendees, is prepared to apply her expertise in meetings contracts. "When companies scale down, meetings departments are outsourced, so they'll look for temporary planners to do contracting and planning work," she said.

Latin America meetings specialist Eli Gorin, owner of Aventura, Fla.-based GMeetings Inc., is looking to shift his business focus to consulting, speaking and training on international meetings. He is developing a training program for Latin American hotels, providing them with intelligence for hosting U.S. groups, and plans to consult for U.S. organizations that hold meetings in Latin America, and train groups on risk management.

Gorin said he has no meetings this year, citing cutbacks by clients due to both belt-tightening and perception issues. "The economy is making me reassess my business. I have no plans to give up the meetings industry. I'm looking at other avenues to pursue that would be beneficial to the industry."

International business at Carlsbad, Calif.-based meetings firm Concepts Worldwide hasn't dropped disproportionately to the general decrease in business, said president and CEO Terri Breining. "The programs are a little less lavish, but nothing that hurts the integrity of the meetings," she said.

ALHI's Gabri said planners can take advantage of "incredible values, prices and terms" now. Said Gabri: "It's an absolute buyer's market. Planners who can negotiate 2014 and 2015 contracts on today's terms and conditions will be in fantastic shape. European hotels are doing extraordinary things to attract U.S. business."