SECTOR ANALYSIS: How the recession has hit meetings planners across the board

The recession has had a wide-ranging effect on the meetings and events industry, but different sectors have had t face up to different challenges. We look at how some of the key sectors have faired and how the they have had to adapt the way they run their meetings and events.


Throughout this year meetings buyers have faced a number of challenges. Although some issues are sector specific, others affect everyone: reduced budgets and headcount; better use of internal meeting space; whether to invest in meeting alternatives.

Not every sector has struggled in the face of the recession either. A 2009 survey by the International Congress and Convention Association (ICCA) shows that the international associations sector plans to keep both its large and small meeting programmes going, and that few events are being cancelled.

But what are the pressures facing buyers simply because of the industries in which they work? Is meetings procurement any more complex in the automotive industry than in professional services? And what impact is compliance having on how the healthcare sector uses events as a sales tool? Here we look at four sectors and compare their individual challenges.

Challenging times: what are the pressures facing meeting planners

Automotive
In any business-to-consumer market, brand and product positioning play a significant role on the types and formats of events staged for the benefit of dealers and customers, whether commercial or training-based.

Every motor manufacturer has to differentiate its brands in the marketplace, delivering clear messages to its target audiences with substantially reduced budgets; stimulating interest in specific models to match unsold stock or over-capacity.

Consolidation among manufacturers now sees Volkswagen building Lamborghinis, BMW making Rolls Royces and Ford creating Aston Martins. This convergence has brought centralisation of technology, production values, components and even marketing expertise across brands, without removing marquee differentiation.

Customer acquisition is another key driver in this sector. Generating more and better-qualified leads, increasing footfall to dealerships and managing leads through the conversion process. The British Government’s scrappage scheme helped mass-production manufacturers in 2009, but how will that gap be filled when such deals are no longer available? The challenge to event planners in the automotive sector is to find new solutions to old challenges that will maximise return on investment (ROI) on marketing spend.

“Customer events normally involve experiencing the product and are quite intimate affairs,” says Victoria Bennett, manager, launch events and partnerships for Rolls-Royce Motor Cars. “For example, we might bring a handful of customers or prospects to our Goodwood base in Sussex, get them into a car and drive out into Hampshire before enjoying a light lunch with a board director. This simple formula seems to work for us.

“We look for locations that make the most sense financially at that time. So the US was an attractive option in 2009 due to both the euro exchange rate and that fact that 40% of the dealer network is based there. Newport Beach in California will be the location of our Ghost international dealer launch and coaching programme, which will touch every level of our global network in just three weeks.

“Past events have taken place in Santa Barbara, Tuscany and the French Alps; there are a similar number of dealers in Europe, so the same logic would apply in terms of flying in dealers," Bennett continues. "We have considered locations such as South Africa very seriously, but it is simply not viable. Although the destination ticks the boxes, almost every dealer would be on a long haul flight, increasing the duration of the programme and flights costs.”

Financial Services
In financial services, every form of marketing activity has come under heavy scrutiny in the media. Consequently, a significant number of corporate events, hospitality and incentives have either been cut back or dropped altogether to protect brand perception and prevent media carnage.

Here a real focus has been placed on ROI from meetings and events to justify the running of face-to-face interactions. The need to concentrate on core functions has prompted the development of outsourcing strategies. Ironically, this means that specialist knowledge of the meetings industry, previously available in house, is no longer there, resulting in the need to rely on external suppliers to fill that knowledge gap. Procurement’s drive to cut costs has led to closer tracking of meetings spend through technology, to the consolidation of meetings activity both national and globally, and to the long-term contracting of event management services.

Professional Services
In professional services, such as finance, there is a fear that brand activities will come under the media microscope, which has already lead to a reduction in corporate hospitality. Companies in this sector are worried about creating a perception among their clients that ‘their’ money is being spent inappropriately.

As a result, events need to have clear value to drive attendance, and are, therefore, more educational in their focus. Reduced budgets for internal meetings and training has caused the consolidation of this sector's meeting and transient programmes, a move away from residential to day meetings, the greater utilisation of internal meeting space and the rise of more corporately responsible meeting options. In keeping with corporate social responsibility policies, this has included video conferencing, webcasts and webex.

Finally, the mitigation of event-related risk has prompted the implementation of standard terms and conditions as part of an overall move to consolidate supply chains.

“The European Bank for Reconstruction and Development (EBRD) is an international financial institution like the World Bank or the International Monetary Fund. Our shareholders are 61 countries, usually represented by their Finance Ministers at our Annual Meeting, and two European organisations,” says Stefania Galbiati-Ball, head of annual meetings at the European Bank for Reconstruction and Development.

“Instead of using an external venue in 2009, the decision was made to use our headquarters to reduce costs and to send a political message that the bank was aware of the new economic situation and reacting to it in an appropriate way.

“The next Annual Meeting is to be hosted in Zagreb, so the bank is trying to cut down the cost to be met by the host country by reducing or reconsidering some of our logistics requirements. For example, the host country is asked to provide chauffeur-driven cars for our heads of delegations and the bank senior management. This may be considerably reduced.”

Healthcare
The healthcare sector is an increasingly regulated environment, the influence of which affects how healthcare organisations can communicate with their audiences. Meeting planners must now deliver product messages to the marketplace through the core tactic of events, within both regulatory and budget constraints.

The regulatory position is complex, not least because there is little commonality, even between European Union member countries and between individual states in US variations. In the UK, meetings must have a clear educational content; venues must be appropriate and not lavish, extravagant or deluxe. Meals and drinks must be secondary to the purpose of the meeting and not out of proportion to the occasion; hospitality cannot be extended to a spouse or similar unless that person qualifies in their own right as an attendee. Furthermore, the cost must not exceed that level which recipients would normally adopt when paying for themselves.

This has affected healthcare providers’ use of social or sporting events and overseas meetings, unless they have “good supporting reasons" for being held abroad. Cost saving is, in itself, not seen as sufficient justification for an overseas meeting.”

The countries with the most stringent regulations in the healthcare sectors are France, Belgium and Italy, the last two of which have their own generic visa bodies – MBBOM in Belgium and Assi Biomedica (Italy) for transient healthcare professionals. However, things will ease in the near future. Both bodies have committed to a single code of conduct to cover invitations to attend healthcare events in their countries and this will hopefully be adopted across Europe to bring a common standard within three years. Yet, implementation of any such code could well take until the next decade.

The result is that healthcare communications must be smarter than ever by harnessing the full potential of live events, e-marketing and virtual meetings. In common with the automotive sector, the right audience must be reached with messaging appropriate to the economic climate. ROI is king! Meeting consolidation is happening on a national, global and glocal basis, and like the financial services sector, the need to concentrate on core functions has developed the outsourcing culture and changed the role of internal specialists in events and procurement.

“Financial limits on hotel rates can restrict destination choice too, although the cities are now aware that if their rates are too high, that city cannot stage a medical congress,” says Anna Frick, president of the International Pharmaceutical Congress Advisory Association.

“Fortunately, cities are now starting to be more flexible; those with strong convention bureaus are winning, because they understand the bigger picture.”

Frick also explains that technology will play a key part in the pharmaceutical congress market in the coming years.

“Virtual meetings are growing very fast in healthcare,” she says. “They are cost-effective and offer a bigger reach, so in the future large parts of healthcare meetings will be delivered in this way. Doctors will be able to stay at home with their families, then log on to get their information. The younger generation of doctors will be more accustomed to this. The industry is already looking at second life as another way to deliver meetings; associations need to look at this because, if they don’t, others will.”

The more things change…
The challenges facing organisations in their respective markets are not as unique as first glances would suggest. Irrespective of the industry, the recession is forcing every buyer and planner to deliver more events, and improved ROI, with less financial resource. While healthcare may be the only regulated sector reviewed in this article, the restrictions on hotel rates faced by healthcare companies are, in reality, having the same net effect as reduced budgets elsewhere. Downtrading may be rife, but in a buyers’ market there are deals to be done and buyers willing to do them.

Despite the availability of meeting alternatives and print and broadcast media waiting to seize upon examples of corporate excess, the overwhelming message emanating from buyers everywhere is that face-to-face meetings are a vital part of doing business, building brand and driving quantifiable results.

This article is an edited excerpt from The Grass Roots Meetings Industry Report. Click here to download the full report.