Making Sense of Today’s Meetings Industry:

Impacts and Outlook

Presentation to AOCA Congress

Buenos Aires, August 2009

Today’s Presentation: How have we been impacted?

• The convention centre perspective• The planner perspective• The exhibition perspective

The longer term view:• What’s the business outlook?• What have we learned?• How is the industry evolving?• Four issues to watch

Impacts and Outlook:

The Facility Perspective: AIPC Member Survey

2009

Has your business increased or decreased over the past year ?

16%

52%

84%

48%

0% 20% 40% 60% 80% 100%

2008

2009

Increase Decreased

More or less confident of business prospects in 2009 than 2008 at this time?

12.00%

46.00%

42.00%

58.00%

7.00%

35.00%

0% 20% 40% 60% 80%

Less

More

Same

2008 2009

Changes in business attributed to the global economic crisis?

18.90%

19.20%

16.80%

16.10%

15.20%

13.80%

Delays in booking / contracting

Tougher negotiations with clients

Reduced spending by clients

Changes in food and beveragerevenues

Reduced attendance

Event cancellations

Types of business expected to increase / decrease:

17%

27%

8%

15%

20%

9%

31%

49%

36%

29%

12%

43%

39%

26%

27%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Entertainment / sports

Consumer events

Trade exhibitions

Associationconventions

Corporate meetings

Increase Decrease Same

Impacts and Outlook:

The Client Perspective:

PCMA Planner Survey: Impacts Revenue lost from cancelled/ postponed

meetings in 2009/2010:• $781,000,000 in room revenue• $2,500,000,000 in total revenue

Reasons:• negative media coverage : 41%• current economic conditions: 37%• corporate downsizing: 22%

Meetings “Image” a Major New Factor in the US:

50% of US corporations surveyed by Maritz said they saw “significant non-financial risks” to holding events in current economic / political climate

Meetings cancelled, downscaled in response to media attention

Devastating to those with luxury or non- business image (i.e. Las Vegas)

PCMA Planner Survey: Outlook 56% expect attendance in 2009/10 to fall

below comparable levels recorded in 2008 67% expect total 2009 meetings budget to

decrease compared to 2008 (average cut 23%)

41% will postpone, cancel or rebook meetings already booked in 2009/2010

PCMA Planner Survey: Outlook Upscale and luxury accommodations likely

to see 50% reduction in use in 2009/2010 Planners intend to make greater use of

alternative meeting methods, including webinars, teleconferencing

53% of surveyed planners expect impacts to carry over into 2010

Impacts and Outlook:

The Exhibitor Perspective

Tradeshow Week Survey:Exhibitors are negative: 81% have cut events from their 2009 show

schedule 55% anticipate continuing to cut events

over the next two years 74% would reduce exhibit space to

conserve costs 65% have trimmed costs in the last year

But Attendees are Still Positive……

Source: Tradeshow Week Research Attendee Survey June 2009 (309 responses)

Same, 67%

Fewer, 16%

More, 17%

Survey Question: “Do you expect to participate in more, fewer or the same number of conventions, tradeshows and conferences in the next two years?”

Outlook: 84% of Attendees will Participate in More or the Same Number of Events Over the Next Two Years

Source: Tradeshow Week Research Attendee Survey June 2009 (319 responses)

No, 12%

Yes, 88%

Survey Question: “Do you agree that conventions, tradeshows and conferences will continue to be a critical part of the business-to-business product sourcing and buying process over the next five years?”

Outlook: 88% of Attendees and Buyers Believe Events will Continue to Be Critical for Product Sourcing and Buying Over the Next Five Years

Impacts and Outlook:

The Government Perspective

Government Reactions Typically Counterproductive:

“Politics of fear” instead of logic Few understand the role of meetings in

economic development / recovery Meeting cancellations, travel restrictions

imposed in many areas Promotional budgets cut at worst time Capital projects cancelled although the

time is right for construction

The Good News:

Significant impacts – but coming from “best years ever”

Signs of economic recovery already appearing in many areas

Few association meetings cancelled Majority of delegates expect their

attendance to be stable or increase No real momentum for “virtual

meetings”

The Good News: Exhibitors still see meetings and

exhibitions as key tactic Meetings, exhibitions will play key role

in economic growth and restructuring Government policy changes could have

a big impact We have an opportunity to

demonstrate the value of the industry

The Longer Term View:

What Have We Learned? There are important regional and sector

differences Business diversity is the best defence We're resilient – but vulnerable Our owners and communities don’t really

understand what we do Need greater understanding, support for

the economic role of meetings, but…. We don’t have ability to measure value

Meetings are Evolving Anyway:

Increasing complexity Structural changes (reduced length,

attendance etc.) Increasing need to demonstrate value;

growing emphasis on measurement Growing role for Internet; technology More professional approach to meeting

management

Looking Ahead:

Four issues to keep an eye on: The attendance factor The client relations imperative Evolving destination roles Our new “image problem”

The Attendance Factor:

Attendance threatened by economic, time, sustainability factors

Obscures the real impact of downturn A shared concern / opportunity with

clients Calls for action, including:

• Attendance building• More pre / post promo / packaging• Enhanced content and perceived value• Measurability of meeting outcomes

The Industry Relations Imperative:

Organizers are challenged by attendance, financial, resource issues

Tougher negotiations, renegotiations Price, contract, payment issues at stake A new “partnership attitude” needed Opportunity to build stronger

relationships for the future Flexibility, transparency are key

Destination Relations are Evolving:

Hotel equation has shifted Centre owner’s expectations need

adjustment Need to emphasize industry’s broad

economic impacts, role in recovery CVB relations need re-examination May have to distance centres from

leisure messaging

The Image Issue:

Pharma-codes started the process Bailout funding accelerated it Negative image resonated with public We contributed by using leisure

messaging 70% of planners concerned about “current

image of meetings” (PCMA) Need to re-image meetings Also requires enhanced content, better

value , measurable outcomes

In Conclusion:

We’ve seen lots of recessions – this one was different in some key areas:• Government policy played a big role

(bailout regulations, travel restrictions)• Meetings image called into question,

creating a new issue• The industry was already evolving in a

number of ways• Better technological alternatives were

available

How Will Next 12 Months Look? A lot depends on recovery – but

many budgets are already set Association events will outperform

corporate; provide stability Attendance will be the big issue Exhibition, services spending down Booking, contracting likely delayed There will be a lot of renegotiation! New opportunities will emerge

How Can the Industry Respond?

Diversify business Work together on attendance building Take a more flexible approach to

negotiations Innovate; create value – added

services Help delegates document value Support your industry organizations

Making Sense of Today’s Meetings Industry:

Impacts and Outlook

Presentation to AOCA Congress

Buenos Aires, August 2009