Recession is taking a big toll on meetings

The Wall Street Journal

The recession, coupled with a post-Sept. 11 fear of flying, is taking a brutal toll on the business of meetings — be they conventions, training seminars or other corporate gatherings.

And any recovery could be muted because companies increasingly are turning to videoconferencing and other new collaboration technology.

In September, when it became clear that attendance at Key3Media Group Inc.’s giant Comdex computer show would be down sharply from the year before, the company hastily bought software from Interwise Corp. of Santa Clara, Calif., to transmit 18 of the hottest courses presented at the November exposition over the Internet.

It is charging $49 a course, well below what it would cost to attend in person. Indeed, Comdex attendance dropped 37 percent to 124,000 from 200,000 a year earlier.

Meetings are a colossal money spinner.

They were responsible for a record $96.4 billion in spending in 2000, including registration fees, logistical support, airline tickets, meals, entertainment and hotel rooms, according to Meeting Professionals International, a Dallas-based trade group. Bjorn Hanson, who heads PricewaterhouseCoopers’ hospitality practice, predicts that level of spending won’t be reached again until 2003 or 2004.

"It’s going to be a traumatic change" for meeting planners, says Joe Alexander, managing director of the International Society of Meeting Planners, a trade group in Alexandria, Minn. Alexander says several hundred of his group’s 3,500 members dropped their memberships and apparently left the business since Sept. 11.

He says individuals who arrange small meetings for corporate clients are having an especially hard time because "instead of flying a lot of people to a central location for a meeting, with budgets tight, companies are doing a lot of teleconferencing and Internet meetings."

Patrick Moscaritolo, president of the Convention and Visitors Bureau in Boston, where hotel-room revenue is down 30 percent in recent months, predicts that large shows will rebound this year. But he says companies will continue to eliminate smaller shows booked into single hotels, "where it’s easiest to find alternative ways to share information" such as over the Web.

For many convention goers, meetings that used to be cheerful junkets have turned into nerve-wracking chores. Spouses of Parametric Technology Corp. employees were so concerned about air travel that the company canceled its annual sales meeting in Florida, where it planned to unveil a new advertising campaign to 700 staffers. Instead, the salespeople were directed to a Web-cast that used Parametric’s own Windchill technology to make three-dimensional presentations over the Internet.

"It gave people a motivation to use a technology they were resistant to before," says Grant Wilson, senior vice president for sales. Previously, he said employees weren’t thrilled by the prospect of online training because it meant "they’d miss the chance to party a little bit."

The Needham, Mass., company estimates it saved $850,000, and gained an extra day or two of sales time because the salespeople weren’t flying back and forth from offices in Europe and the United States. Although Parametric expects to resume some face-to-face sales meetings, Web-casts are becoming the primary way to deliver corporate statements, says Barry Cohen, executive vice president, marketing.

Despite the recent drop in attendance at Comdex, Fred Rosen, chairman of Key3Media, says he sees little long-term impact from either terror or technology, and expects an industry rebound as soon as the economy turns. "Human beings are social and tribal," he says. "Trade shows and conferences aren’t going away."