Though some financial services companies are holding more meetings this year, spending restraints on many large incentive events will remain in place, even as the national economy improves, according to buyers and industry analysts. Some financial firms are replacing national conferences with multiple, regional events. In many cases, those firms are limiting the use of luxury resorts, as meetings are shifted to less expensive properties.
New York-based Merrill Lynch & Co. will cut back the number of incentive meetings it holds this year by as much as 5 percent, said vice president of travel services Kevin Brady. The majority of meetings at Merrill Lynch are incentive events typically held at resorts, he said.
"This year, we won't cut back as much as last year, but if anything volume will be flat to slightly down," Brady said, adding that his firm has targeted incentive meetings for cutbacks more so than smaller meetings at local offices or training events. Corporate transient travel spending is expected to rise slightly in 2005, compared with last year, he said, but Merrill Lynch will continue to tighten meeting budgets.
"Most of the incentive meetings we do are at resorts. That is the type of thing we're cutting back on," Brady said.
Merrill Lynch has a decentralized meetings management program, but Brady estimated the company holds hundreds of meetings each year.
As is the case in a variety of industry sectors, other financial companies in the past four years also have cut back incentive meeting expenditures, said Shimon Avish, director of professional services for corporate meeting solutions at American Express Business Travel.
"We're seeing cuts across a variety of sectors," according to Avish. "It's largely the result of the post-Sept. 11, 2001, environment, the economic downturn and the sense that we need to start restraining ourselves."
Even as the economy improves and financial companies begin to hold more events, companies will continue to establish tight budgetary allowances for incentive events, Avish said.
"Incentive events are starting to come back, but they're more restrained," Avish said. For example, incentive events may be shortened from five days to four days, and such amenities as open bars and entertainment may be more limited, he said.
"The focus is less on the entertainment aspects of the meeting and more on the business reasons," Avish said.
Small, regional events sometimes have replaced large gatherings, he said, and financial companies generally are spending as much on meetings as they did before Sept. 11, 2001, because they are holding more of those smaller events.
"We are seeing a rebound in meetings, but we're not seeing a rebound in large events," Avish said.
In a survey of 108 planners at the annual meeting of the Association of Insurance and Financial Services Conference Planners in Maui in November 2004, approximately 40 percent of corporate meeting planners said they would be responsible for managing more meetings this year. According to the ICPA survey—the group changed its name from Insurance Conference Planners Association in 2003, but kept the old acronym—only 26 percent of respondents said their available meeting budgets had increased as well.
John Touchette, president of ICPA
(Meetings Today, Nov. 8, 2004) and assistant vice president of meeting management for Boston-based John Hancock Financial Services, said financial corporate meeting buyers definitely are having to "do more with less" this year.
"At John Hancock, we're doing as many meetings as before, but they are of a smaller scale, and with lower budgets. They are more regional, more focused on business and training and less on incentives," Touchette said.
John Hancock adopted a decentralized meetings management strategy after a merger with Canada-based Manulife Financial one year ago. Touchette said that during the past several years, some large national meetings have been divided into shorter regional programs.
"We're definitely trying to get room rates for the meetings I'm booking now for 2007 that are better than what we've gotten in 2005 and 2006. It's challenging because you want to maintain the quality but the budgets are definitely cut," according to Touchette.
To adapt, Touchette said his department has widened the scope of destinations and properties the firm will consider as meeting sites. John Hancock also is looking for ways to increase value without sacrificing quality—such as reconsidering the use of luxury resorts for incentive meetings.
"For incentives, we are looking at cities that we may not have looked at in the past and hoping that it might be a little cheaper. We are not sacrificing the resort experience, but just trying to get it at a rate that's a little less," according to Touchette.
Touchette said the restraints on meeting spend adopted by John Hancock in the past several years will continue, and that other ICPA members have adopted similar strategies.
"In many cases, we've become public, stock-traded companies, so the bottom line is being scrutinized more. It's all about profitability," Touchette said. "We are working with less staff and reducing budgets to improve the bottom line."
Insurance and financial services giant Nationwide also has a non-mandated, decentralized meetings management program
(Meetings Today, May 12, 2003). Last year, the company adopted Philadelphia-based StarCite Inc.'s electronic meetings management tools, according to Nationwide contract specialist Christy Corey, who also manages the StarCite applications.
Corey estimated that half of Nationwide's requests for meetings are requested through the StarCite application, and added the number of Nationwide meetings definitely has increased this year. "There was a period of time where meetings just weren't happening as frequently or they were doing things in the home offices and steering clear of destinations," Corey said. This year, however, Nationwide is holding more regional meetings, she said.
Corey said Nationwide has not yet cut incentives back, as most of this year's resort events were booked in 2003, before the StarCite tool was adopted. Many incentive events are outsourced to meeting management companies she said, but Nationwide is working to pull sourcing for those events back to the StarCite tool. "Only 20 percent of my meetings right now are at resorts," Corey said.
Meeting spend at Nationwide also is decentralized, Corey said, but the company has become very conscious of cost saving. "Budgets became a little tighter in the last couple years," she said.