Meeting News - February 25, 2008 - (Page 33)

Cover Story Recession continued from cover a large meeting being broken up into which will create a decline in occupansmaller regional gatherings, to not cy,” said Robert Mandelbaum, director have a big meeting too prominent on of research information services for the radar.” PKF Hospitality Research, in Atlanta. Wilkes noted that pressure on But he noted that the credit crunch meetings budgets will continue; Figures from PricewaterhouseCoopers indicate hotel room demand is still plaguing the home market is having no American Express anticipates room strong, thanks to active vacationers and just a slight drop-off from meeting effect on hotels. Further, inflation, rates to rise by 10 percent this year, and incentive groups. Planners may face tough budget decisions. combined with a general shortage of virtually double the PKF prediction. 2007 2008 2009 hotel rooms in desirable markets, will keep room rates from slipping. Withering Attendance? Hotel Occupancy 63.2% 62.9% 62.7% “Of course, that also will increase Fueling the recession talk has been Percentage Change from Prior Year -0.2% -0.5% -0.4% the cost of meetings,” Mandelbaum the collapse of the housing market Average Daily Rate $103.46 $109.24 $114.46 said, which could spell trouble for and the related tightening of credit. meeting planners whose organizations To the extent that people reduce Percentage Change from Prior Year 5.7% 5.6% 4.8% and budgets could suffer from the soft spending—whether for personal Nominal RevPAR $65.38 $68.71 $71.72 economy. In hard times, he said, goods or for attendance at meetPercentage Change from Prior Year 5.5% 5.1% 4.4% groups tend to shrink in attendance. ings—companies and the events Inflation-Adjusted RevPAR $61.65 $63.24 $64.64 PKF forecasts hotel occupancy to they hope to stage could be affected. Percentage Change from Prior Year 2.7% 2.6% 2.2% slip slightly to 62.6 percent this year Then, there’s rising unemploybut room rates to continue to grow by ment. The number of people out of Source: PricewaterhouseCoopers 5.6 percent. Rates have climbed every work rose in December and January year since 2003, and only a small decelto 5 percent, a two-year high. While eration is projected over the coming years by PKF. which accounts for about two-thirds of the U.S. that is relatively low by historical standards, laid-off Despite the prospects of businesses reducing trav- economy—fell in January, its first decline since the employees won’t be attending corporate meetings el budgets,“We haven’t seen much of it,” noted PwC’s terrorist attacks of 2001. and may lack the discretionary funds to attend volHanson. He indicated that even drive-in meetings, Despite rosy predictions from industry analysts, untary association gatherings or trade shows. which might be expected to suffer in attendance meeting planners and suppliers are worried. The “In general, we will likely see slight declines in the from high gas prices, won’t be severely impacted 1,643 meeting and event professionals and suppli- robust growth we have experienced in the last few because prospective attendees have already gotten ers recently surveyed in the FutureWatch study, years for attendance, number of exhibitors, square used to $3-per-gallon and higher prices. conducted by Meeting Professionals International footage, and revenue,” said Skip Cox, president of Hanson anticipates that by the third quarter, the and sponsored by American Express, were general- Exhibit Surveys, a trade show consulting firm in Red economic stimulus package passed by Congress will ly upbeat about increasing attendance and budgets Bank, NJ, of prospects for the exhibition industry. begin to have an effect, gas prices will have stabi- in 2008. But when survey-takers were asked about “I think attendance will be one of the more vullized, and the cost of credit will continue to fall. the most serious concerns among all external fac- nerable areas of growth for trade shows and events,” Further, he and others see little or no impact on tors facing the industry, leading the list was the Cox said. “But as long as the downturn in attenincentive trips, because of the continued impera- economy and recession, followed by the price of gas dance isn’t large and isn’t sustained, it shouldn’t tive to drive sales with rewards amid hard times. and oil and the rising costs of holding meetings. By affect the industry too much long-term, since revAlso, meeting planners themselves, whether in- comparison, last year’s version of FutureWatch had enue primarily comes from space sales and ancilhouse or independent, should be protected to the terrorism and the war in Iraq as the greatest con- lary sources, such as promotional and sponsorship extent that their expertise helps organizations find cerns of planners and suppliers; this year, these opportunities.” economies of scale in their meetings spend, he said. issues ranked just 10th. Even with this caveat, Cox sees strength in the “This could show up for some companies as a expo industry. The importance of exhibitions and Worrisome Signs consolidation of a bunch of small events into a few corporate events as marketing tools will continue The major service-sector index, by the Institute for larger events,” said Christina Wilkes, practice leader to grow, he said, as companies move toward more Supply Management (ISM), which includes restau- for meetings with American Express Business Trav- customer-facing and lead-generating marketing rants, travel, banking, construction, and retail, and el, in New York.“Or, we might even see the reverse: campaigns. r Recession Fears Unfounded for Hospitality Suppliers? Preview the entirely new Williamsburg Lodge at www.meetingnews.com February 25, 2008 MeetingNews 33 http://www.colonialwilliamsburgmeetings.com http://www.meetingnews.com

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