2010: A Look Ahead

The impact of the Great Recession on meetings and incentives will continue into the year ahead, though how hard you've been hit depends on what industry you're in.

As 2009 comes to a close, the “Great Recession” lingers on. While depressions have a beginning and an end, it's not as clear with recessions, and though there have been significant rises in gross domestic product and monthly economic indicators, unemployment was over 10 percent at press time. The bottom line: You may hear that the recession is over, but you won't feel it anytime soon.

In the meetings space, reports of the effects of the economy in '09—and its potential impact on 2010—vary according to whom you talk to—or even more precisely, what industry they're in. Meeting manager members of the Corporate Meetings & Incentives Advisory Board, as well as to industry suppliers, share their experiences from the past year and predictions for the coming one below.

It's no surprise that industries hardest hit by the financial sector meltdown and housing slowdown have suffered the most in 2009. And of course, one of those is the incentive industry. At health insurer Humana, Green Bay, Wis., Director of Incentive Travel and Public Relations Chuck Lane believes the bad press the incentive industry has suffered in the past year has left us “so shellshocked that we may not snap out of the doldrums soon.” Meanwhile, Todd Zint, CMP, CMM, vice president at National Financial Partners, Austin, Texas, believes the media spotlight has shifted off of incentives for now and onto other concerns. He is seeing some incentive activity return, “however, with a bit more intentional business activity during the execution portion, and with ROI measurement criteria. I believe the 'cleansing' period is transitioning to a renewed outlook for the industry.”

Again, it depends on the company and the industry. Privately held companies have been “totally unaffected by the AIG effect,” reports Bill Boyd CMP, CMM, CITE, founder, president, and CEO of Sunbelt Motivation & Travel Inc. in Irving, Texas, and are proceeding with business as usual, “though their numbers are somewhat reduced.”

The direct-selling industry is booming as the unemployed and underemployed population turns to these companies as a way to supplement or replace income.

Another winner: the green segment. Marge Anderson, associate director of the Energy Center of Wisconsin in Madison, reports that meetings in the clean-energy sector are highly attended. “Our public events are booming with record-high enrollments and waiting lists. Some of this growth is being fueled by ARRA [American Recovery and Reinvestment Act] funding for green jobs and clean energy in the U.S. There are billions of dollars feeding into state government agencies, federal contractors, nonprofits, trade associations, and labor unions for education and training,” she says.

At biotech giant Amgen, Marybeth Roberts reports that she hasn't seen a drop in meetings since 2007, and in fact has been gearing up for an expected FDA approval and the resultant meetings by hiring and training staff. And several other survey respondents pointed to an increase in corporate training and sales meetings, both internal and external.

What's Lead Time?

Where years ago we used to think shorter lead times were a temporary condition, they're now the standard way of doing business for most of the respondents. Lucy Eisele of Integrity Incentives, Big Lake, Minn., half joked that she almost prefers them: “Working under pressure along with the deals that are out there is rather exciting!”

Zint recommends having a scalable strategy in place to manage demand and resources. “Once our budgets are approved, it's like a dam releasing water; every client wants immediate support booking their first- and second-quarter meetings. Based on the type of meetings, we have a hybrid model: We use multiple avenues for sourcing and contracting including departmental FTE [full-time equivalent] resources, direct hotel contacts, global and national account managers, and a site-sourcing company, based on the specific needs, program complexity, location, and requirements of the internal client.”

He recommends that those who can, take advantage of the great deals out there as soon as possible. “This is the time to contract large multiyear deals with the incredible incentives that hotels are offering.” When asked if he thinks the deals of 2009 will carry over, Sunbelt's Boyd predicts that the deals in this hemisphere will remain largely the same, “but Europe is already trying to make up for lost revenue with their rates.” Zint likens it to last year when gas prices were approaching $5 a gallon. “Premium cars with low MPG were heavily ‘incented' to attract buyers. As gas prices significantly declined, these incentives were not so attractive. We will see continued great savings and offers in the first half of 2010. When the booking pipeline begins to fill, all these incentives will slowly minimize.”

Already there are signs that he is correct: The hotel industry saw marginal improvements in the third quarter, with occupancy and revenue per available room improving slightly from second-quarter numbers. According to Smith Travel Research, occupancy climbed to 60.5 percent, up from 58 percent in the second quarter. However, third-quarter occupancy rates are still 8 percent lower than in the third quarter of 2008.

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