In tough economic times, offhand comments by politicians and media pundits can have a profound impact on important segments of our economy. The meetings industry is one such segment that has experienced the sting of recent generalizations regarding meeting excesses. Read on to understand why you should care and whether there is turnaround on the way!
The U.S. trade show and event planning industry is a highly fragmented service industry comprised of meeting planners and suppliers who organize, design, promote, manage business and consumer trade shows, conferences, and meetings. The meetings industry has a direct impact on the airlines and the hotels, restaurants, sightseeing tours and economies in the cities that host meetings.
Unfortunately, in addition to facing a persistent recession, negative political and media comments have impacted the industry. One event planning company reported losing 90% of their scheduled events for 2009 after President Obama commented on Las Vegas meeting excesses. In response, associations have merged, meetings moved from resorts to less “lavish” properties, and meetings were consolidated or scheduled for fewer days.
According to the CEIR Index published by the Center for Exhibition Industry Research, the exhibition industry suffered big declines in the first quarter of 2009, dropping 11.6 percent compared to the first quarter of 2008. In the first quarter, revenues were hardest hit, dropping 19.7 percent for the quarter, net square footage of exhibit space used fell 14.8 percent, and the number of exhibiting companies was down 10.4 percent.
With companies limiting convention attendance and tightening travel budgets, hotel revenue has declined 18.7 percent, occupancy dropped 10.9 percent and the average daily rate fell 8.7 percent for the first half of 2009 vs. the same period in 2008, according to data released by Smith Travel Research (STR). Senior STR VP Bobby Bowers said, "The first half of 2009 was, without question, one of the most challenging the U.S. lodging industry has experienced." STR is currently forecasting a total industry revenue decline of about 17 percent for full-year 2009."