Meeting Buyers Show Caution, Optimism For 2001
<B>Meeting Buyers Show Caution, Optimism For 2001</B>
By Chris Davis
Reflecting concerns over a possible domestic economic slowdown in the face of a spate of lackluster corporate earnings reports of late, fewer corporate meeting buyers than at the onset of 2000 believe their companies' meeting expenses will rise this year. But fewer buyers this year also believe such expenses will be cut.
According to a Meetings Monitor survey of 133 corporate meeting buyers, 54 percent of respondents said their corporate meeting expenditure will increase in 2001, particularly in the area of training meetings, compared with 61 percent who said so in a Monitor poll in the beginning of 2000. But only 11 percent of respondents said expenditures will drop, compared with 16 percent last year. Consequently, the percentage of buyers who said spending will hold steady increased to 35 percent, from 23 percent.
"We'll spend about the same amount; if anything, it will be a little less," said Barbara Griswold, director of meetings and special events for the Reader's Digest Association of Pleasantville, N.Y. "The company has gone through some changes and we're ahead of our goals, so management has focused on new business development. There's been a lot of training meetings we have never done before, affecting all managers in the company."
Despite the increase in management training expenses, there will be other cutbacks to even the bottomline. "There will be fewer global meetings because we're doing some things on a more local basis," Griswold said. "We still watch dollars very carefully."
Like Reader's Digest, many corporations will increase the amount of money they'll spend on training meetings. About 37 percent of respondents said they would, equaling the total from last year, and a scant 2 percent of those surveyed said such expenses would be cut.
With many corporations implementing new technological systems, or integrating new employees as a result of mergers and acquisitions, it's not surprising that the bulk of increased meeting spend would lie in this area. About 29 percent of respondents said they'll increase spending on small meetings, though there's likely some overlap in categories with training meetings.
Other reasons Monitor respondents gave for changes in planned spending reflected the uncertainty about future economic conditions. Many respondents whose corporations will spend more credited that decision to an improving economy, while those who will cut spending overwhelmingly blamed a lack of improvement in the economy. Increasing domestic and international business and the opening of new sites also were key drivers of higher expenses.
"We plan to increase expenditure this year and hold more meetings," said Eileen Leddy, manager of travel and meeting services for New York-based Venator Group. "We had cutbacks in those areas previously, and management felt we needed to reinstate them because of their motivating factor and their necessity for training."
Leddy said Venator will focus on incentive and executive meetings to rein in expenses.
"We have cut some categories of meeting expense over a gradual period of time. Some seminars that we used to have at resorts we now have in-house," Leddy said. "We have cut some high-end meetings too, but we feel it's still necessary to get in front of people."
The majority of companies that lower spending are in the same boat: Executive and board meetings and incentive trips were the most common targets for cutbacks, followed closely by large conferences and conventions. But far more companies said they will increase training meetings than reduce any other type.
"We'll hold about the same number of meetings and probably spend about 10 percent more due to general increases in rates," said Dan Lauterwasser, travel and meeting manager at Muscatine, Iowa-based Hon Co. "We plan on monitoring our expenses in that area closely, but we have major, national meetings that will always be there and are a natural cost. We're always looking for methods to cut costs."
The overall cautious yet optimistic attitudes in the survey are good news for suppliers, some of whom have been anxiously monitoring signs of economy-related meeting cutbacks.
"2000 was a good year for corporate meetings and group travel and we think this may be a great year," said Angela Lawrence, Nikko Hotels International manager of worldwide sales. "We don't see any decline anytime soon, so we're trying to take advantage of that while we can. San Francisco, where Nikko's American property is located, is a very tight market, tighter than many places. Barring unforeseen circumstances, we don't see ourselves taking a knock despite the economy.