October 2009
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Meeting the Critical Challenge

Seven months ago, One+ gave you the scoop on the industry’s crisis as government and media made meetings the scapegoat for economic disaster and corporate greed. You’ll be surprised how far we’ve come.

By Jessie States

 
On Aug. 17, the U.S. House energy and commerce committee fired off a letter to the nation’s 52 largest insurers. Among the committee’s demands: a table listing all offsite conferences, retreats and events since Jan. 1, 2007, as well as documentation detailing all expenses therein. It was part of Congress’ most recent scrutiny of U.S. health insurance giants, but it hit a meeting industry still spinning from government and media criticism.

Roger Dow, president and CEO of the influential U.S. Travel Association, dished out a near-immediate response—part of ongoing collaborative efforts with MPI—demanding that lawmakers be mindful that “legitimate business travel throughout the country may suffer another blow due to misinformed demonization.” The letter, co-signed by Joseph McInerney of the American Hotel and Lodging Association, urged lawmakers to avoid compounding the loss of an estimated 516,000 industry jobs this year alone (U.S. Department of Commerce). The response was a far cry from the industry’s near-silence after media and government flak last fall.

Meetings Mean Results
Truly, the meeting industry has redefined itself in the past eight months, initiating new research, carving new alliances and driving new education—all in an effort to convince everyone from CEOs to town councils of the importance of meetings and events to the recovery of the global economy.

Just last month, U.S. Travel revealed the results of its most recent research, that for every dollar invested in business travel, companies realize US$12.50 in incremental revenue. In fact, the average U.S. business would forfeit 17 percent of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover. The results echo what has long been illustrated by the MPI Foundation EventView study, that meetings and events significantly bolster business revenue.

While U.S. Travel concentrated on the numbers, MPI plowed forward with an industry-wide, comprehensive answer to the meeting sector crisis, urging its members to school themselves on the industry’s most recent studies and speak the language of business—explaining to their c-level bosses just how important meetings and events are to corporate bottom lines.

Early this spring, MPI launched its Meeting Industry Crisis Center Web site, which has now evolved into MeetingsMeanResults.org, a resource hub and information center that links to the MPI job bank and industry research repository, dozens of books and white papers, continuing education, videos, event content and blogs.

MPI also introduced two webinars series: the eight-part Meetings Matter, exploring real-life solutions to issues confronting today’s industry professionals, and the four-part Case for Meetings and Events, explaining the industry’s strategic value to the modern business paradigm. The organization created a chapter toolkit with tutorials, model policies and sample letters—all designed to elicit membership support for the groundswell of activism occurring throughout the industry.

In the interim, Dow marched the party line. On March 4, U.S. Travel launched the landmark MeetingsMeanBusiness.com, providing the materials necessary for this industry’s very own grassroots revolution. And Dow himself has spent the last 10 months sitting in Congressional subcommittee hearings and lobbying anyone who would listen on Capitol Hill in favor of the positive economic impact of meetings and events. He even met with U.S. President Barack Obama on March 11, eliciting a public response from the leader’s spokesman.

These combined efforts of MPI and U.S. Travel have proved remarkably effective. Attempts by senators John Kerry (D-Mass.) and Christopher Dodd (D-Conn.) to malign business travel fell largely flat among the media and the public—despite previous criticism of the industry—and many news editorials shifted to a pro-meeting stance. May’s Travel Rally Day (coordinated by U.S. Travel) generated more than 40 gatherings across the country luring an estimated 10,000 industry professionals. In June, the U.S. Treasury issued its final rule for companies that received government funding—with none of the feared restrictions on meetings and events.

Not to say that the worst has passed. On July 22, a Wall Street Journal exclusive revealed that several government agencies had blacklisted meetings in U.S. resort and entertainment cities, despite possible cost advantages. The industry was quick to respond, eliciting support from lawmakers and the media. Senate Majority Leader Harry Reid (D-Nev.) dispatched an irate letter to the president’s cabinet, and Sen. Bill Nelson (D-Fla.) unveiled legislation that would outlaw McCarthy-esque destination blacklists entirely.

In all, the state of the industry is much, much better than it was a year ago, says Geoffrey Freeman, senior vice president of public affairs for U.S. Travel, but the battle is far from over. We have the power of a unified army, he says, but lack the artillery. We changed the face of the problem and rallied the industry, now it’s time to collect the data we need to prove our worth.

“Like it or not, meetings are viewed as frivolous,” Freeman said. “The president didn’t call for less market research or less advertising. That should be eye-popping for us. We have made headway, but there remains a lack of appreciation by employers, so we have to do a better job of proving our value. That’s why we see a blacklist. It speaks to the long-term challenge we see in the value of business travel.”

Seeing Success
Indeed, the surge toward an informed professional community will be multi-faceted. Each sector requires different information. Convincing the c-suite will require hard data on how meetings affect the bottom line; convincing lawmakers will require economic data on jobs and GDP.

“It’s not about marketing our product—which is something this industry is very good at,” Freeman said. “We have to market the content, tell businesses why it is important to send their people to meetings and tell policy makers why meetings matter. Each of our target audiences needs different answers to the same question.”

The Return on Investment of U.S. Business Travel issued just two weeks ago by U.S. Travel (in conjunction with Destination Marketing Association International) is a long-stride first-step in the right direction. Through econometric analysis and corporate surveys, Oxford Economics determined that corporate leaders and travelers estimate a 28 percent drop in current business should they nix in-person meetings. The research proffers data and an audited methodology that will be hard for executives to ignore, because business is about money and meetings are money.

“Not all spending cuts are smart cuts,” said Adam Sacks of Oxford Economics. “When companies reduce their travel budgets, there are negative consequences that we can now quantify, in terms of lost revenue and profit growth, and in terms of giving competitors a distinct advantage.”

The study reinforces other recent research projects, including a business survey by Forbes that showed 84 percent of executives prefer face-to-face meetings over technology-enabled meetings because the former build stronger, more meaningful relationships (85 percent); allow participants to “read” each other (77 percent); and permit greater social interaction (75 percent). The MPI Foundation’s EventView 2009 showed similar results: 53 percent of respondents said event marketing is the best discipline to accelerate and deepen relationships with target audiences.

As for the market value of meetings and events, the Convention Industry Council (CIC) has engaged Y Partnership Inc. to create a messaging campaign to help the industry better articulate the key values of face-to-face interaction in intrinsically human terms. Scheduled for fall delivery, the project will develop five to six key messages for CIC members (including MPI) to use within their respective organizations and external communications.

“The Meetings Mean Business campaign has done an excellent job stating the business case and economic value for business travel and meetings,” said Eric Allen, chairman of the CIC and executive vice president of the Healthcare Convention and Exhibitors Association. “Now, we need to support that with the benefits of face-to-face meetings and the value they bring to the individual as well as to organizations and society.”

Looking Ahead
Rest assured, many companies already know the value of business meetings to the bottom line, and still others are reviving travel policies that were dropped during the onset of crisis last fall. In fact, U.S. Travel has established a running list of CEOs and corporate executives who believe in—and are willing to speak about—the power of meetings and events to sustainable business.

The association has spoken to dozens of these companies from financial institutions to restaurant chains to retail marketplaces. According to U.S. Travel, Catherine Monson, CEO of FASTSIGNS International, attributes a recent 28-city “town hall” tour of franchisees to lower turnover, increased stock value and rising sales, and Citigroup subsidiary Primerica now believes that gutting its meetings agenda ultimately hurt business.

CEO GJ Hart says meetings for his restaurant chain, Texas Roadhouse, are treated like 401Ks—for which workers forge long-term investment strategies in order to receive profitable returns.

“There is no better way to motivate and recognize employees than events,” Hart said. “You can’t put a price tag on the excitement and passion that result from our annual four-day Managing Partner Conference.”

Hart’s sentiment is far from news in an industry that has known the importance of face-to-face meetings for decades, but his willingness to speak to the power of events is landmark. In the coming months, more and more CEOs will lend their voices to the aid of an industry that is responsible for $246 billion in spending and 2.3 million U.S. jobs alone. The industry’s army will be there to help spread the word—that a slow economy calls for more travel, not less. One+

JESSIE STATES is the assistant editor of One+.

MPI has created a repository for meeting industry research from across the globe. Find recent research on the ROI of meetings from the U.S. Travel Association at www.mpiweb.org/Education/Research.aspx.  

Find the latest news and guidelines for the industry at www.meetingsmeanresults.org. Sponsored by MPI, the Web site offers career resources, video and up-to-date information on the meetings and events crisis.

Business ROI of Travel
New research shows a robust and irrefutable relationship between a company’s investment in business travel—including internal meetings, trade shows, conferences, incentives and sales—and its profitability.

According to The Return on Investment of U.S. Business Travel, the real value of business travel relates to its impact on individual company performance and, by extension, the performance of the U.S. economy. The study was conducted by Oxford Economics USA and commissioned by the U.S. Travel Association. For the full report, visit www.mpiweb.or/education/research.aspx.  

Key Research Findings
• Econometric analysis and surveyed executives confirmed a similar magnitude of business travel ROI: for every dollar invested in business travel companies realize US$12.50 in incremental revenue.
• Curbing business travel can reduce a company’s profits for years. The average business in the U.S. would forfeit 17 percent of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover.
• Both executives and business travelers estimate that 28 percent of current business would be lost without in-person meetings. 
• More than half of business travelers stated that 5 percent to 20 percent of their company’s new customers were the result of trade show participation.
• Executives stated that in order to achieve the same effect of incentive travel, an employee’s total base compensation would need to be increased by 8.5 percent.
• An increase in government travel spending of $1 million will increase government worker productivity and therefore output by between $4.6 million and $6.3 million.
• Both executives and business travelers estimate that roughly 40 percent of their prospective customers are converted to new customers with an in-person meeting compared to 16 percent without such a meeting.
• Three-quarters of businesses said that increasing travel, while competitors are reducing it, can build market share and customer relationships. Half (53 percent) said that reducing business travel will give their competition an advantage.
• More than 75 percent of customers either require or prefer in-person meetings, according to business travelers surveyed in April 2009. And an overwhelming majority of corporate executives (81 percent) believe a slow economy calls for more contact with clients, not less. 

Timeline
Feb. 24
Sen. John Kerry (D-Mass.) calls for ban on events for companies that received federal funds. Actual bill just curbs “holiday parties.”

March 4
NYPost.com article announces that Citigroup has canceled all of its events, a huge blow to industry recovery.

March 11
Leaders meet with U.S. President Barack Obama and urge him to consider the economic benefits of meetings and events.

March 21
Ben Stein scribes New York Times op-ed in support of meeting industry, describing meetings as “builders, not saboteurs.”

April 21
MPI launches the four-part Case for Meetings and Events (sponsored by Freeman AV), explaining the industry’s strategic value.

April 29
MPI presents its online Meetings Matter Series sessions (sponsored by Freeman AV) with real-life solutions for industry professionals.

May 12
The U.S. Travel Association organizes Travel Rally Day, which leads to rallies in 42 cities by a total 10,000 people.

May 13
The U.S. Senate holds a hearing featuring testimony by five U.S. Travel Association leaders and a handful of Senate supporters.

May 27
Nevada governor declines to meet with U.S. President Barack Obama because the president had suggested business travel stay away from Las Vegas.

June 10
U.S. Treasury introduces Interim Final Rule for businesses that received government funding with no added restrictions on meetings.

July 14
MPI presents its World Education Congress with keynote Ben Stein, where leaders meet to discuss the state of the industry and its future.

July 22
A Wall Street Journal article claims that government agencies blacklisted meetings at U.S. resort and entertainment cities.

July 31-Aug. 1
U.S. President Barack Obama holds a cabinet retreat for his team, proving his belief in the power of meetings and events.

Sept. 15
The U.S. Travel Association releases the results of its Oxford Economics study, proving the value of meetings on business success.

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