The inexorable shrinking of lead time has become the most widespread and inescapable reality of corporate meetings management today, affecting just about every aspect of buyers' internal and external approaches and strategies. Though lead times have melted considerably even in the past six months, whether the trend is a scourge to be ameliorated or a blessing to be exploited varies from buyer to buyer.
According to a Meetings Today survey of 109 corporate meetings buyers conducted during the summer, 25 percent of respondents said the average lead time for their companies' meetings of less than 100 attendees was less than one month, a sharp increase from the 14 percent of respondents who indicated as such this spring, the last time Meetings Today conducted such a poll
(Meetings Today, March 25).About 67 percent of respondents said their average small-meeting lead time was 90 days or less, which is the traditional definition of a short-term meeting. That number, too, rose sharply from the last poll, this one conducted in late 2001.
Several factors have conspired to accelerate the trend. Much of the responsibility is assigned to the soft domestic economy and accompanying disappointing financial results posted by many corporations, which has led many to slash meeting expenditures and, in many cases, book meetings only when quarterly finances allow. Also, a persistently weak hotel market has led to widespread availability, leaving buyers with little fear of not being able to find space for their short-term meetings. More recently, a change in major airlines' policies on nonrefundable tickets—restricting their reuse—has led some buyers to wait to ensure meetings will not be canceled before nonrefundable airfares are booked, limiting the chance these tickets will be rendered useless.
Corona, Calif.-based Watson Pharmaceuticals Inc., which annually books about $6.5 million in domestic air volume, is crafting a new policy that will include mandates designed to increase lead time—spurred, in part, by the airlines' decisions on nonrefundable tickets. "We will mandate the agenda well in advance of the meeting so that we can plan appropriately," said Watson's Morristown, N.J.-based manager of meeting and travel services Debbie Ricciardelli. "We have to make changes and we need as many details as we can. There's new rules now. There was a time when it was all right to book in two weeks, but that's all out the window now." Ricciardelli said the new policy, crafted by her department, will be disseminated to internal departmental vice presidents to communicate to their employees, and that the policy will have consequences for noncompliance. "There will be an exception report for those who do not follow the rules," she said. "We will explain the consequences of booking at the last minute and what change fees cost."
Watson is not alone. Within the past two years, 48 percent of respondents' corporations have initiated internal processes to expedite meeting planning, and of those who have not, a quarter expect to do so in the next 12 months.
The structure of these internal processes varies by company, but, in most cases, some sort of internal meeting registration or calendaring process is included. This often takes the form of a policy in which internal meeting sponsors alert meeting planners of the desire to hold a meeting by either an intranet-based functionality or through lower-tech measures.
These measures are important because, in many companies, the pre-meeting communication necessary is not just between internal sponsor and planner, it is between sponsor, planner, sponsor's boss, the legal department and even the procurement department—none of which changes even when lead time is at a premium.
One key to the administration of the internal aspects of a short-term meeting is the development of a strong event management structure, said Evelyn Laxgang, director of strategic programs and events at Schaumburg, Ill.-based Motorola Inc. "One thing we have going for us is that when I get the call, we know exactly who to go to," Laxgang said. "We can set up a meeting between the key internal people two days later, and it's critical to have the ability to do that when you're a large organization."
Motorola requires legal department involvement in any contract signing, and Laxgang has taken steps, including bringing in meetings industry attorneys, to address all involved personnel on the ins and outs of contracts. "They've been pretty good about reacting in the short term," she said. "They've done their homework. It speeds the process. The more understanding of the market and of meeting contracts, the better things will go."
Other companies have looked to suppliers to help better manage short lead times, if not lengthen the process. Many companies have developed some type of standard contractual addenda to attach to proposed contracts, which, if accepted, limit the amount of time-consuming haggling necessary to finalize a deal.
PricewaterhouseCoopers, which has a standard addendum it adds to all meeting contracts, is taking that concept a step further. The firm is developing a standard meeting contract with some of its preferred hotel chains, said Tampa, Fla.-based director of Americas travel and meeting management Mark Williams. "It will minimize the give-and-take over a given meeting."
Though PwC has watched its standard lead time shrink, Williams said the trend is not particularly problematic for his department. There are no policies governing lead time, and all meetings are posted into a Lotus Notes database for tracking purposes. "Depending on how we're staffed, it could cause a scramble for resources," Williams said. "It's not a huge issue. Our lead time is short, and the decision whether to go or not go with a meeting is a lot closer than it used to be. There's a bunch that are within less than 30 days, which is short for us."
Watson's Ricciardelli, too, said her company is negotiating a national meetings contract with a hotel franchisor. "Hotels are still so hungry for business that they're bending over backwards," she said.
There has been a debate among buyers as to whether the lack of lead time is a financial hindrance or benefit when it comes to hotel negotiations, as some feel hotels become more desperate for any business as the event's start time grows nearer and cancellation and attrition clauses are often simpler, while others believe less time means less opportunity to negotiate.
Williams said finding hotel space in most markets usually is not a problem, and some properties' rates grow more favorable as the date of the event nears, blunting the impact of lessened lead time. However, Motorola's Laxgang doubts booking hotel space in the short term translates into financial advantages for the company. "The more lead time you have, the more time there is to negotiate better deals," Laxgang said. "In the short term, we have longtime vendors that do the best they can, but our needs are specific, and if they cost a particular amount with two weeks out, we'll have to pay that particular amount."
Most buyers said a reversal of the trend is improbable, but believe further shortening also is unlikely. About 69 percent of respondents said lead time will remain about the same, while 16 percent believe lead times will be longer or much longer; the rest said short-term meetings will be even more prevalent.
Some buyers believe the trend has peaked, at least for their own companies. "Our corporate meeting side has held steady, between 60 and 90 days at the most," said Julie Steible, events manager for global recognition programs for Dayton, Ohio-based NCR Corp. "But our incentive travel side is back up to three years out, which is wonderful for us because it had decreased to one year for awhile. It's a huge difference for us."
Steible said the additional lead time is less a function of industry trends than a reflection of increased stability and financial performance of her corporation. The additional time allows NCR to better source the limited number of properties available for its incentive travel programs. "It opens up a huge window of opportunity, because our incentive events can include more than 2,000 people," she said. "There are not many properties around the world that can accommodate us because we don't want to be in 10 or 12 hotels. There's risk here, because business is constantly changing and the event or company could change. But I've been pleasantly surprised with the properties' flexibility. They're receptive to continual communication and they understand the environment."