<B> Mtg. Spend On The Rise</B>
<I>Cos. Banking On Budgets Bouncing Back</I>
By Chris Davis
Unburdened by the shackles the jittery stock market of autumn 1998 had imposed on this year's corporate meeting budgets, many buyers plan to spend a little more money on meeting programs next year, even slightly exceeding the American Express Corporate Services forecast (<I>BTN</I>, Oct. 4) of a 2 to 3 percent business travel price increase.
While many meeting buyers expect little drastic change in the number, size or cost of meetings they plan to hold in 2000, many of them are moving forward with internal meetings technology initiatives that necessitate larger meeting budgets. Last year, concern over financial troubles in Asia and Latin America and a slowed stock market led many companies to rein in meeting budgets for 1999. Some companies were forced to divert funds from meeting and travel to ensure their companies were technologically compliant with Y2K computer requirements.
Now, though, corporate profits and the stock market both are healthier than they were 12 month ago, and there's less pressure to cut meetings budgets.
"We'd like to keep our external meetings expenditures flat, but that's probably unrealistic, so we're looking at about a 3 percent increase," said Eileen Leddy, manager of travel and meeting services for The Venator Group of New York.
Internally, Venator is going to develop an electronic, in-house T&E system to streamline the expense voucher process and is going to re-bid its corporate card. While the process will cost Venator some money up front, the exact amount is difficult to predict while the company still is tackling the RFP process. However, Leddy expects to recoup the added expenditure through savings three to six months after implementation.
Dan Lauterwasser, travel and meeting manager for Muscatine, Iowa-based office furniture manufacturer The Hon Co., also sees external meetings expenditures rising 3 to 5 percent in 2000, due to an overall increase in cost and some additional meetings travel.
Like many other companies, The Hon Co. will be upping the influence of technology in its meetings program next year and Lauterwasser expects some subsequent charges in 2000.
"We're looking at several software packages," Lauterwasser said. "One will concern meetings administration. There are others that will address proficiency in the travel program, including a T&E reporting package. We're not quite at the bid process yet, but we do expect some additional expenditures on the meetings and travel technology side."
Even companies that are scaling back their meetings programs, or realizing savings through meetings consolidation or improved supplier negotiations, aren't necessarily applying those savings directly to the bottom line, said Kaye Mulkeen, COO of Atlanta-based WorldTravel Partners-BTI Americas' meetings and incentives division.
"We're seeing many companies use savings in their meetings program to improve and upgrade the value of the program," Mulkeen said. "Basically, they're finding smarter ways to spend their meetings money on some sort of management strategy, be it technology or consolidation."
There are companies still not in a position to determine year-to-year variations in their meetings spending, particularly those with decentralized programs. Mulkeen, though, said this is changing: "There's definitely an increase in companies identifying their meeting spend, more so than I've ever seen," Mulkeen said.
Dan Baillie, travel manager for Block Drug Co. of Jersey City, N.J., said his company didn't plan to increase its meeting staff, add any more meetings or make any significant internal changes, but that still adds up to a meetings budget of about 5 percent in 2000. "It's simply because prices are going up," he said. "We'll do about 100 meetings a year, and that number won't change much next year." The 5 percent increase, he added, is comparable to annual price increases in the past two or so years.
Keane Inc. of Boston also doesn't forecast any major increase in the number or size of its corporate meetings next year. "We're probably going to end up pretty flat in the number of incentives and employee training meetings, roughly what we did this year," said travel manager Marianne Goodman. "But that still translates to about 5 percent in cost-of-living increases," (<I>Meetings Today</I>, Feb. 22). Goodman added that Keane already has an integrated software package for intranet meetings registration, so no increase in spending will be required for that line item.