Volcano shackles meeting planners

By Don Sadler

Many European airports finally reopened this week after a bizarre five-day stretch of flight cancellations due to heavy atmospheric ash from the Iceland volcano eruption, which made air travel unsafe. Stranded travelers are relieved airports are open again, but a lot of damage has already been done and will continue to occur in coming weeks. Meeting and business travelers have been particularly impaired by the disaster.

“The effects of all of this have been as disruptive to meetings and conventions as they have been to the airlines,” says Carl Schneider, founder of GuestRights Corporate, a hotel and customer satisfaction organization, in Hermosa Beach, Calif. “Small meetings, both in Europe and the U.S., have been postponed or cancelled, while large conventions have seen a falloff of attendees.”

Phelps R. Hope, CMP, vice president of meetings and expositions for Kellen Meetings, scrambled to deal with the effects the crisis had on a large international corporate real estate conference he planned for this week in New Orleans. “We’ve had lots of exhibitor and sponsor cancellations,” he says. “There are a lot of empty tables here.”

Andrea Gold, president of Gold Star Speakers Bureau in Tuscon, Ariz., planned to travel to New York City this week for an International Association of Speakers Bureau meeting with a number of European attendees. “I’m sure some of them won’t make it due to the overextended volume of passengers needing to get home or to their destinations,” she says. “One speaker from Germany, who’s normally a very upbeat person, was getting very dismayed at trying to get flights into New York.

“Nobody knows when they’ll be able to fly. All air travel right now is on a moment-to-moment basis,” says Gold, who’s worried a speaker from the U.K., scheduled to speak May 1 in Arizona, won’t make it. “I suspect there will still be a large backlog of international travelers even then.”

Interconnected World

This situation reveals how interconnected worldwide travel has become and how the effects of the disrupted European air travel ripples around the globe.

Karen Moul, a communications officer for Baltimore-based Catholic Relief Services, was scheduled to fly out of Newark, N.J., last Friday for a conference in Tanzania for a U.S. government-sponsored AIDSRelief project. Nineteen Americans planned to attend the conference, she says, but only one got out ahead of the volcano.

“About a dozen just had to cancel their trip because there was no way they could get here in any way that made sense,” Moul says after arriving two days late. “It’s a six-day meeting, and if you can’t get here until day three or four, there’s no point in flying halfway around the world only to miss most of it.”

Six people from the U.S. finally made it to the event, but not without delays and anxiety. Moul’s travel agent rescheduled her flight out of Newark within two days, “but the final leg into Tanzania was ugly,” she says. “It’s not great for the meeting planner to be among the last to arrive.”

Planners across the world are struggling to deal with similar situations. “Many meeting and event planners are facing tremendous pressure right now,” says Schneider. “This has been a nightmare scenario for them — an external catastrophe that renders their carefully crafted plans moot.”

Safety Measures

In the face of a crisis, a planner’s first priority may be to make a go or no-go decision for a meeting or event, but the decision can have a long-lasting impact on the organization’s finances. “For many associations, much of their revenue comes from meetings and events, so canceling them could severely impact their annual budget,” says Hope.

Canceling events can also be very costly. “Situations like this are classic examples of force majeure, so the first thing the planner and facility will do is go to the contract and look at the force majeure language,” says Barbara F. Dunn, Esq., a partner at Howe & Hutton law firm in Ballwin, Mo.

Most contracts include standard force majeure (or acts of God) language, but Dunn advises clients to negotiate a clause that lowers the standard that must be met for force majeure to apply. Standard contract language often states that force majeure only applies if it is “impossible” for the meeting or event to be held, a standard that’s difficult to meet. Dunn recommends rewording the clause to read “commercially impracticable,” meaning contract fulfillment is not practical due to the extent of the disruption.

“I think all meeting planners hope they will never find it necessary to invoke such a clause,” adds Moul, “and most of us never will. It’s easy to skip, but this event has shown why it’s so important.”

“When I was obsessing over all the things that could go wrong at this meeting in Tanzania, I certainly never thought about a volcano,” she says.

Hope with Kellen Meetings points out an important gray area: when normal air travel resumes, some people will be reluctant to fly because of safety concerns. “So if you’re going to cancel an event, you should do it soon while force majeure still may apply,” he says.

One final safety net for planners is cancellation insurance. Dunn says policies cover total or partial cancellations, as well as the lost revenue from a cancelled event (in addition to event cancellation fees). For example, if an event normally generates $300,000 in revenue but drops to $150,000 due to a covered catastrophe, the policy covers the difference. Policies can be expensive, but Dunn suggests them to clients for major revenue-generating events. “Even if you don’t buy this kind of insurance, be sure to negotiate a good contract to at least limit your liability for paying cancellation fees.”

Working Together

The volcano isn’t the first disaster to cause major international travel disruptions. The Asian tsumani, 9/11, SARS outbreak in Toronto and the H1N1 virus in Mexico have affected meetings travel throughout the past decade. “As an industry, we generally try to take care of each other when events like this happen,” says Hope. “But of course, some hotels and facilities are more flexible than others when it comes to rebooking and charging cancellation fees.”

Schneider believes facilities can do more harm than good when capitalizing on the crisis. “The best way for everyone to cope is to be as flexible as possible,” he says. Working with clients to reschedule, he notes, is the best way facilities can start to recoup some of the business they lost.

Moul stresses the critical role corporate travel agents play during unexpected crises. “All I can say is thank God for our corporate travel agent. I can’t imagine what I would have done if I’d had to rebook my itinerary to Tanzania on my own,” she says.

If there is any silver lining in the past week for the meeting and events industry, Schneider may have spotted it. “If anything, this crisis has anecdotally reinforced the importance of face-to-face meetings in the business world.”

Moul hopes she can make it home to Baltimore from Tanzania Monday. She’s still booked on her original KLM flight that travels through Amsterdam. “I think I’ll send a message to the travel agent right now to ask about alternatives.”