Going to Battle for Face-to-Face Meetings

Generally, the business of planning meetings has been pretty low profile. Not that it’s not big business—think of the logistics and ripple-down economic impact of President Obama’s inauguration celebration earlier this year. But, in the wake of several high-profile, high-flying corporate events, the meetings’ industry suddenly found itself in the midst of a media frenzy at the end of 2008 and the beginning of the new year.

Wells Fargo placed a full-page ad in The Washington Post and The New York Times February 8 defending the importance of its annual “recognition events” yet announcing that it had canceled all such events this year. Earlier in the week, Cisco Systems’ chief executive, John Chambers, took advantage of the media spotlight on meetings by delivering a cost-cutting advertorial during a conference call report on Cisco’s second-quarter results. Cuts in travel and face-to-face meetings had saved his company a lot of money, he reported. Cisco, which sells WebEx software, has been using its technology to hold more videoconferences.

In response, Meeting Professionals International (MPI), the U.S. Travel Association and several other meeting industry groups issued guidelines on acceptable business travel practices for companies receiving emergency government lending. The move was a joint effort to curb the negative perceptions about corporate incentive trips and other meetings perceived as lavish.

MPI President Bruce MacMillan urged planners attending the trade organization’s MeetDifferent conference in Atlanta February 7-10 to contact their congressional representatives and pass along industry statistics on the economic impact of meetings in the destinations where they are held. Addressing media reports, he also said they should work to ban the use of the words “junket” and “boondoggle.”

Referring to the government’s 2008 bank asset recovery program as “BARF,” financial analyst Don Reynolds, a former chairman of the board on Pension & Investment Committees responsible for $120 billion, drew a huge laugh from an audience of about 2,000 planners and industry suppliers at the Opening General Session of the annual conference.

“The hospitality industry has more jobs than the automobile industry,” Reynolds said, encouraging those in the industry to “push back” within their organizations and the business community about the importance of face-to-face meetings.

Meetings and events are responsible for 15 percent of all travel-related spending, create nearly $40 billion in tax revenue at the federal, state and local level, and generate more than 1 million jobs, according to MPI. Industry experts project that without the jobs generated by meetings, events and incentive travel, the current unemployment rate of 7.6 percent would rise to 8.2 percent and cost the average American household an additional $136 in taxes annually.

Roger Dow, president and CEO of the U.S. Travel Association, and Christine Duffy, CEO of Maritz Travel, also addressed the proposed federal government restrictions on travel and meeting spending for companies accepting federal aid at the opening session.

Referring to the announcement three days earlier that Primerica Financial Services had pulled out of its June meeting in Atlanta because of the recession, Duffy asked the audience, “Who loses? The airlines, the hotel workers, the cab drivers—America needs to meet, needs to do business, needs to talk.”

Primerica, part of Citigroup Inc., is one of Atlanta’s biggest convention customers, and the biennial convention was expected to bring between 40,000 and 55,000 people to the city, with an economic impact estimated at $55 million.

“Washington hasn’t connected the dots,” said Dow, who pointed to the new guidelines as a way to measure meetings. “We’ve got to define the issues. We’ve got to take charge of what’s going on.”

Meetings are intended to motivate and train employees, Duffy pointed out, and curtailing them would hurt commerce rather than help it. Both said face-to-face meetings bring the highest return on investment of any other marketing method.

“If you think about it, what was the inauguration?” she said. “That was a $150-million meeting where the president stood up before his people around the world and communicated a vision and talked about his strategy for how he’s going to turn the country around. And he asked for people’s help to align with that vision. How is that any different than a business company’s CEO or head of sales needing to do the same thing for their employees and their customers right now?”

To educate Congress on the economic impact of meetings and events, Dow and Duffy have organized a collaborative group of industry leaders for a 12-month campaign designed to spread the word on the business impact of meetings on organizations, the economic impact of meetings on local communities, and the personal impact of meetings on individual hospitality workers. ”We have to make it safe to go back in the water, just like after Sept. 11,” said Dow.

He and Duffy, along with other industry leaders who spoke during the presentation, also gave the planners in the audience their marching orders. To elevate the meeting planning profession to the executive level, planners need to acquire news skills, align with best business practices, understand strategy, drive results, and build relationships internally and externally.

Guidelines reflect industry standards, claim organizations

Highlights from the travel and meeting industry guidelines include the following:

• Conferences or events with a cost exceeding $75,000 must be supported by a written business case identifying a specific business purpose and positive return on objective and investment metrics.

• At least 90 percent of incentive program attendees must be other than senior executives (as defined by Treasury Department guidelines) from the host organization.

• Total annual expenses for meetings, events and incentive/recognition travel should not exceed 15 percent of the company’s total sales and marketing spend.

The standards support President Obama’s recent call for the boards of directors of companies that have received emergency government lending to develop guidelines on conferences, events and employee recognition programs. In releasing the standards, the organizations said the list is firmly based on existing industry best practices. Participants in the creation of the guidelines included the American Hotel and Lodging Association, Destination Marketing Association International, the International Association of Exhibitions and Events, MPI, the National Business Travel Association, the Professional Convention Management Association, the Society of Incentive & Travel Executives and the U.S. Travel Association.