Business Meetings Could Get Smaller If Economy Falters

Sept. 10, 2008— -- Meetings, conferences and conventions in the coming months may get smaller and less lavish as airlines slash domestic flights, travel costs rise and the economy drags.

At the Pro Football Hall of Fame in Canton, Ohio, for instance, companies are starting to reduce budgets for everything from management meetings to rallies for sales teams. Fewer guests are expected than last fall, and more companies are replacing steak dinners with chicken entrees and limiting open bars to save money, says Gail McLaughlin, who coordinates private events.

The Hyatt hotel chain is also starting to see attendance decline slightly, despite an "extremely strong" first half of 2008 for business group functions, says Ty Helms, Hyatt Hotels senior vice president, revenue. Companies are also starting to scale back food and beverage expenses, he says.

"The prudent (meeting and event) planner is going to project some lower numbers," says Bonnie Carlson, president of the Promotion Marketing Association, the organization for marketing professionals at Fortune 500 companies and elsewhere.

Fall and spring tend to be the most popular time for conventions, conferences and other industry gatherings.

"It's been a very strong market for the last couple of years," says Bruce MacMillan, CEO of Meeting Professionals International (MPI), the main trade group for meeting planners. But if the economy weakens in the second half of this year, "People are going to be very cautious in making decisions about business travel and meetings and events," he says.

MPI's member planners represent about 770,000 meetings a year. Meetings are a $122 billion industry in the USA, according to the Convention Industry Council.

Besides the economy, the airline industry's troubles are complicating the outlook for meeting planners and the hotels, restaurants, convention centers, floral suppliers and others that rely on these gatherings.

Up until this fall, it's been relatively easy for people -- especially those who live in large cities -- to fly to another city cheaply and quickly, MacMillan says. But schedule reductions taking effect this month will make some of those flights harder to schedule, possibly more time-consuming and more expensive.