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May 8, 2008

MISSION CRITICAL:ICCA survey suggests events could weather economic storm

Events industry body ICCA conducted a survey of its global membership one week prior to global meetings and events show IMEX, which took place this month in Frankfurt, to obtain an overview of industry confidence in the light of the constantly publicised crisis sweeping through financial markets. The outcome of this survey was discussed at a breakfast seminar hosted jointly by ICCA and AIPC during IMEX, called Storm Clouds or Silver Linings.

Over a quarter of ICCA’s 850 member companies and organisations responded to the survey, providing the most current overview of how the meetings industry is coping, and how industry leaders predict they will be affected in future.

Fewer than 6% of respondents have suffered a significant downturn as a result of the economic environment, while 60% report no impact whatsoever. However, ICCA members were more cautious about the prospects for the rest of the year, with only 44% believing there will be no negative impact because of these factors.

Nevertheless, a surprisingly large figure of 42% expect their company’s 2008 performance to be better than 2007, a year that previous ICCA surveys have indicated was a record breaker in all regions of the world. Less than a third think this year will be weaker than 2007.

Few plan to slash marketing budgets

Revealing the rise in importance of strategic marketing and the bullish nature of the industry, only 12% of respondents to the ICCA survey said they were planning to reduce their marketing budgets during the rest of 2008, while more than three-quarters indicated they will definitely not be making cuts. This is, obviously, good news for the media and trade show organisers everywhere, and is in marked contrast to the big cuts that were witnessed during previous economic downturns.

However, the final question of the survey delivered results that call this optimism into question. Asked what impact the current financial crisis will have on the meetings industry in general, only 6% felt there would be no significant impact at all. Just over half felt there will be significant negative impact, that it will but restricted to certain regions, over one third predicted there would be a marked short-term global impact, while 7% believed that there is likely to be major global impact lasting longer than 18 months.

“It would seem that optimism about personal business performance is balanced by a far more pessimistic perception of how others in the industry are likely to be affected,” said ICCA chief executive Martin Sirk. “There is still a great deal of uncertainty in the marketplace, but it is clear that the financial turmoil has not yet been translated into any noticeable cutbacks among clients. This reinforces other anecdotal feedback we are obtaining from meeting planners, which indicates that international meetings are becoming ever more important to companies and associations alike, and they are more reluctant to cut events, which have become ‘mission critical’ to achieve their business objectives. If this is so, it will help our industry to weather any future economic downturn.”

The experts’ views
The current stability and strength of the international meetings industry was underlined by the ICCA breakfast seminar hosted jointly by the association and AIPC during IMEX. Moderated by Sirk and Rod Cameron on behalf of AIPC, and featuring a heavyweight panel including MPI chief executive and president Bruce MacMillan, PCMA chief executive and president Debra Sexton, AIPC vice president Geoff Donaghy and ICCA board member Jurriaen Sleijster, the session attracted a full house.

The panel supported the general findings of the recent ICCA member survey.

Very few in the industry have been seriously affected up to now by the financial turmoil and economic uncertainty, with many predicting yet another record year.

Surveys among MPI and PCMA members were in line with these results, but the panellists were suggesting caution, since there is a possibility of a downturn in 2009 or 2010.

In general, compared with previous economic downturns, the industry is in a significantly stronger position. First, it has become a genuinely global industry, with massive investment in Eastern Europe, the Middle East, and especially Asia with China and Macau showing exceptional development, and with India poised to join them in the rush to win more business.

The panel also agreed that one of the biggest challenges facing the industry is going to be the fight to recruit and retain the most capable young executives. If anything, this is going to be a bigger challenge than facing up to the increasing level of competition that all of us are going to be facing.

Those companies that align themselves to their customers’ needs, that instigate strong human resources development programmes, and that constantly reinvest in their infrastructure will be in the driving seat, the panel concluded.

It remains to be seen whether the generally upbeat and optimistic feeling pervading IMEX will still be present next year. But what is certain is that the events industry is up for the fight, and that companies and associations globally are reaping the rewards of well organised meetings and events to help them differentiate themselves in an increasingly competitive marketing place through effective promotion and engaging communication, reward, recognition and training programmes.

You can download the full results of the ICCA survey here.

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