The Real State of the Economy for the Meetings and Events Industry

Meeting and event people crack me up (and yes, I am one of them and yes, I crack myself up). We have the unique ability to stand in the middle of a burning room, inspire confidence, take the lead and talk about how the glow gives the room a more personal feel. We have the innate ability to see the good side in everything or at least make the bad side a little more tolerable. I call this affliction, “Eventeritus”.

I have seen this affliction strike many times and have even been afflicted myself. Whether it is explaining to an attendee why his room does not have a view (but wait! You are 10 steps closer to the bar) or giving an impromptu history lesson when a bus is running late or even smiling while running as the audio portion of a program comes to a crashing halt, most of us just seem to make others feel like everything is going to be OK.

This affliction can actually be a great trait when you are trying to keep attendees calm, moving forward or need to buy an extra ten minutes as you fix that little audio problem, but I am getting the sense that the entire industry is moving into the advanced stages of this affliction. It is fast becoming a case of “delusional eventeritus”, especially when it comes to the current state of the world economy and how it applies to our industry…..perhaps we are simply applying our own happy/fuzzy techniques to ourselves as we delude ourselves that the economy is getting better, the worst is over and that we are all going to be A-OK.

I was sitting and chatting with an industry chum yesterday afternoon and we got to talking about the massive train wreck that is the world economy. This was a somber conversation, to say the least; We discussed how many friends we know that are out of work (17 between us), the companies that have gone out of business and the problems that this man made disaster is creating for the entire meetings and events industry (and every other industry for that matter).

This is not the first time we have had this conversation nor will it be the last I am afraid; It appears that when in groups of two or three, the “delusional eventeritus” virus goes into remission and we are able to talk openly and candidly about what is happening and why we are all scared shitless.

Now, my chum and I are pretty knowledgeable guys, we are not stupid and from everything we can gather, regardless of what we are hearing and reading, there is no economic recovery. Zero… it is simply not happening or if it is, we can see no outward signs. Yes, we understand that some areas are seeing little peaks, some companies are doing OK, but as a whole, the entire industry seems to be wallowing in the valley of death and we are fearing evil because it is knocking on the door and it is really pissed off.

To put it bluntly, this is Chernobyl, this is an economic atomic meltdown and Underdog is not coming to save us and Superman is taking a coffee break. They both know that they need to keep their butts out of this fight; Even the Man of Steel is afraid of getting his ass kicked by this scary monster.

In small groups, behind closed doors, in coffee shops, and after three martinis, while “Eventeritus” is in remission a truth emerges. Everyone my chum and I talk to, from association executives to meeting planners, hoteliers to CVBs, are telling us things that they are not saying when the door is open and the microphone is on. These well placed, industry executives are saying that they have never seen anything like this, it is terrible and there is no end in sight. No end in sight… someone actually used those words. From the top to the bottom, we are hearing stories that are heartbreaking.

Even in good times, companies go out of business, lay off and slash budgets. It happens every day; That,  as they say… “is business”. What we are seeing and hearing now is unprecedented, frightening and causing massive amounts of collateral damage.

The collateral damage is what hurts, it hurts because it happens to real flesh and blood people and it is happening more now than ever before. The people that the economy affects have to make that long journey home to face the spouse, the kids or the mirror and come to the realization that tomorrow, there will be no reason to get up so they might as well get used to sleeping in.

In good times, these individuals would simply go out and get a new gig but the sad fact is, there are simply no new gigs out there and when one comes available, the unemployed pounce on it because they want to be the first to get their resume in, the first to make a good impression. Every last one of them really needs this job, any job, because the mortgage payment is due and heaven forbid little Becky gets sick before the insurance runs out.

I see the job seekers every day. I am getting stacks of unsolicited resumes sent to me. I used to get a couple a week in the good times, now I get so many that I don’t even open them anymore, I simply hit the delete button because I have no good news for anyone. Why get their hopes up that I am going to “keep it on file”, why should I spread a case of Eventeritus to another person.

As my chum and I were talking, we sat and compared notes about what we are hearing from different parts of the meetings and events community and it was eerily similar… let me see if others are hearing the same things. Maybe this will sound oddly familiar to all of you.

Hoteliers, long the bastion of happy times and good vibes are telling us that they are sucking pond water. They are saying that even when they are booking business it is because they have killed themselves with disgusting room rates and contract concessions that would have been unheard of five years ago.The prevalent story is that they are giving away the farm in order to secure any new business that they can put on the books, using the “some business is better than no business” model.

When in public though, the story is radically different. A recent article in the Wall Street Journal from August 11 has the headline “InterContinental Hotels Says Room Rates are Rising” and in the article Bill Marriott is quoted as saying “Business and leisure stays at our hotels are trending up”. I am not sure that I completely agree with him and “things are trending up” after your plane has crashed into the side of a mountain is not necessarily an improvement.

Every leisure traveler I know has cut back on their trips and spending. The hotel contracts I am seeing look like the hotel sales people were worked over with a baseball bat. You would not believe the concessions that are in them. They are getting killed in this economy and they know it. Every day I read about this property or that property being taken over, bought out or simply going under, I post these stories to Twitter, Facebook and PlannerWire all day, yet in public, “things are trending up”.

CVBs? Same story… life on their side of the street is not much greener. I am friends with many, many CVB executives, sales people, and frontline folks. I love them because they always make me so happy to be in their cities. They have a love for their destinations and share that love with everyone. Even those reps from some far-flung backwater can make you truly believe that you have landed in a little piece of heaven when you hear them talk about their destination…. But now, from behind the iron curtain that we all build up, they are telling us, that they are scared, and they have no idea what to do about it. In some secondary markets, this fear can turn to utter panic, especially when they are located next to a big tier one city where the hotels are giving the rooms away. How can some smaller markets compete with that? They can’t, they know it and the cracks are starting to show.

I got a first-hand peak at one of the cracks last week. I was hanging with one of my meeting planner friends who is working on a citywide for 2014 (yes, people are still meeting) and after the winning bid was announced, she received a call and an email from a non-winning CVB rep begging for a second shot to resubmit their bid because she said “they have orders to bring in ANY business they can, that it is critical to win this one and that they really need it”. That to me speaks volumes about the real “boots on the ground” situation. Things are bad when a major city that we all know is making calls and sending emails like that. Destinations are hurting badly, yet we are seeing articles like this on “Today” with the headline “Tourism showing signs of life in the Big Easy.” Perhaps New Orleans sees a little jump, I hope they are because they need it, but that is not what people are saying in other destinations. They are saying that the current state of affairs is Dead on Arrival.

Meeting and event planners may be doing great when it comes to contract negotiations, but we are getting our asses handed to us on the home front. There is a conference planner I know that works for a major pharma company. You would think that she would be as happy as a pig in shit, but her great job title and a business card from a major reputable company hides a terrible secret. What she is experiencing is common throughout the industry. You see, she is one of only two meeting planners left in her department. They used to have a staff of over 14.  Add to this that her budgets have been slashed to the bone and she is working 60-70 hours a week just to keep up and you have a recipe for disaster. Will she quit this awful situation? Not on your life, she said there is no way she is jumping into the job market right now, that would be suicide.

Associations? Not even a smidgen better than the rest. Yes, they are still doing their annual meetings, conferences, and trade shows but they are doing them with fewer attendees, smaller budgets and slashed staffs. One association I know has an annual attendance at their conference that typically hovers around 450. Not this year. They have 83 on the books, and the event is a couple of weeks away. This is a great organization and the program is not lacking… it is also being held in a great location. Attendance is down because of the economy. Plain and simple, companies are slashing the industry events that their employees can attend.

We all see it at the meetings and events industry events we attend. With a few exceptions, attendance is down all across the board; we see the tumbleweeds blowing through the aisles and see the empty seats in sessions. Think about this, we all know that every conference or tradeshow spins their attendance numbers; that is just an ugly truth. When the numbers look this bad, and a full court spin job has been applied, that is a reason for quaking in your boots.

What does this all mean? Who knows, I wish I had some rosy picture to paint for everyone like the headlines that we are reading.

What I do know is that we are not blind, the truth is staring at us and we are gazing back into its eyes like lovers on a first date but “Eventeritus” will keep us all singing a happy tune when we are in public. We will sing about how great things are, what an awesome job we have and those things are “trending up.” This is what meeting and event professionals do, we make the best of the situation we are given, rise to the occasion and plan the best meetings and events we can with the tools that we are given.

Things change at the end of the night however, we all have to walk home and when we do, we are whistling past the graveyard hoping that we will not be the next casualty of an economy that seems to be getting worse, not better.

Keith Johnston

Keith Johnston

Keith is the Managing Partner of i3 Events but is most widely known as the outspoken publisher of the event industry blog PlannerWire. In addition to co-hosting the Bullet List and Event Tech Pull Up Podcasts, he has been featured in Plan Your Meetings, Associations Now, Convene, Event Solutions, and has appeared on the cover of Midwest Meetings Magazine.

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