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March 15, 2009

UNDER FIRE:How and why the global meetings and events industry is fighting back

With decisions being made in the US over whether to regulate and restrict meetings and events within those financial institutions that have received government bail outs, Pete Roythorne looks at why this will have a dramatic effect around the world.

Fall out from the AIG and Wells Fargo meetings debacle in the US continues to rattle around the meetings and events industry as it faces being demonised in a populist witch hunt spurred on by the banking sector bailout.

The main focus of attention has been the US, where travel industry supremos headed to Capitol Hill last week to meet with Barack Obama to put their side of the story as to why meetings and events are important to the success of the US economy.

However, there have been signs of concern spreading around the globe. For example, UK events association Eventia recently felt compelled to take it’s case to the The House of Commons through it’s parliamentary representative John Greenway (read his speech transcript here), and as MPI CEO Bruce MacMillan pointed out when we caught up with him at MPI’s European Meetings and Events Conference in Torino earlier this month: “I read the other day in the Wall Street Journal European edition that the EU is recommending another layer of scrutiny on European banks. Well that’s the thin end of the wedge. Who knows what’s next?”


Under attack: The meetings industry needs to show how
it is critical to the growth of our struggling economies


What’s going on in the US is the tip of the iceberg, and MacMillan believes the US meetings industry needs to take a lead role in the international community to ensure other governments don’t make the same mistakes.

“We have to take the learning we’ve made in the US and make sure it doesn’t happen elsewhere,” he told MEETINGS:review. “The media has been stalking media professionals saying they’re spending money recklessly. This is a perception we have to manage really quickly and why we’ve formed a coalition across the meetings and events industry in the states and internationally called Keep America Meeting.”

Regulation looks a real threat at the moment, and to combat that the industry has pulled together to put forward a set of policies that prudent companies have been using already and saying to the Government: “Don’t use regulation, use these.”

Standards not regulation
Roger Dow, president and chief executive of the US Travel Assocation, explains how this works for the travel industry. “To ward off any efforts by our government regulators to specify actual travel policy, and as way of helping provide sound rationale to companies doing legitimate business travel, the US travel industry recently introduced new model standards for company travel related to meetings, events and incentive/recognition programmes," he says.

“These new standards are part of a comprehensive communications and government relations strategy, US Travel, engaged in to protect and promote corporate travel. This strategy includes groundbreaking research, including a study of employees’ perceptions of business travel’s value, and is allied to an aggressive outreach to Capitol Hill and the Obama Administration; as well as extensive efforts to help the media better understand the impact reduced travel will have on American workers and local communities.”

MacMillan is also concerned about a seeming set of double standards. “When president Obama wanted to unveil his vision to the world he gathered together millions of people in an inauguration that cost the American tax payer $150 million and shared his vision with them. Why can’t corporations or organisations do this? This seems to be a contradiction,” he says.

MacMillan adds that while Americans expect Congress and the Obama Administration to responsibly and effectively oversee the use of taxpayer dollars to companies receiving emergency government lending, they also expect the business community and elected leaders to protect jobs and help the country rebound as quickly as possible from the current economic crisis.

“Attacking meetings and events is not the way forward. All our research shows this,” he explains. “We need to look at meetings as part of the solution and not part of the problem.”

Meetings have been demonised
Christine Duffy, chief executive of Maritz Travel, warns that the industry has already been demonised as a result of this and she also gives an insight into why this is so dangerous to the US economy.

“We've already seen significant layoffs in the group travel industry,” she says. “This segment employs 2.4 million people and these jobs are in major cities. There are resort communities, whose primary employer relies on this segment of the industry for the majority of their business. In the short term, this crisis is dealing yet another blow to an already struggling industry and economy. In the long term, companies that can’t have meetings, events or performance incentive programmes are going to see their performance lagging behind those that do. It’s going to take much longer for them to recover and it will put them at a competitive disadvantage.”

Dow believes that by highlighting the travel decisions of companies that have received federal bailout money in the US, the media and government regulators have created a fear-based environment for all businesses.

“If this mindset takes hold, the implications are huge,” he adds. “Business travel injects more than $240 billion into the US economy annually, creates 2.4 million jobs and generates $39 billion in federal, state and local tax revenue. It accounts for 15% of all travel in the US. You can see even a 10% decline would have major ramifications for our economy.”

But why is this a global problem?

“Because of the global economy and negative perception in and outside of the US that these programmes are costly, it is affecting the rest of the world's meetings industry,” says Duffy. “The world watches us closely, and our business culture – the way we conduct business here – makes a huge impression globally. I think it’s very important for us to show the world that our businesses are strong and making the right decisions. It’s important for the meetings industry, and for all business and industry in our global economy.”

Ripples around the world
Dow agrees the impact will be global.

“Because what happens in the US has a ripple effect throughout the world economy, our industry cannot afford for travel to become seen as a symbol of excess to the point that businesses make temporary changes in travel policy permanent," he says. "Should they become permanent, these shifts would have a long-term impact not only for meetings, conventions and incentives, but for every sector of the travel industry – carriers, hotels, resorts, attractions, rental car companies, travel agents, online bookers and many others.

The meetings and events industry is suffering an unprecedented crisis of perception in the US, mainly lead by the media. If government and people believe the blinkered tabloid sensationalism being bandied around in some quarters then they are set to simply worsen the problem creating more unemployment, therefore greater national debt and disquiet than the automotive sector could attempt to muster.

Duffy believes the tide may be on the turn.

“Many of us, myself included, are conducting news interviews to get our side of the story out there,” she says. “We’re starting to see more news coverage about how companies legitimately use meetings, events and performance incentives to strengthen their business. So, I’m hopeful we’ll see more balanced stories in the future.”

Certainly there seems to be some back tracking in Congress, as comments from Senator John Kerry at the end of last week show. Kerry has rejected claims that his bill will end up hurting the meetings an events industry as an “exaggeration”.

“All we said was that if you have (bailout) money you shouldn’t be spending it on a lavish excessive party or lavish gifts and trinkets,” he says. “We never said, nor did we suggest, that you shouldn’t travel or go to a convention, or shouldn’t do normal marketing or normal course of business.”

While there are green shoots, make no mistake this industry is under attack and facing its sternest test since it stepped out of the business backwaters to become a truly powerful business and marketing medium. If we want our economies to start growing again then meetings and events will need to play a key role in this. By taking action now to reinforce the value of meetings and events, we can solidify in the minds of leaders everywhere the critical role these activities play to improving business’ bottom line and keeping our economies strong.

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