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Business Travel

Business travel swoons alongside economy  Sep 15, 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, 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 United States, 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.

"I think the wild card to watch is the reductions in airline capacity," MacMillan says. "One of the reasons people don't attend a meeting or event is the amount of time away from home or time out of the office."

Most business people won't miss industry gatherings because they represent the chance not only to see old friends but to network and drum up business deals. Yet, travelers are changing their routine this year by:

Staying home. Mitch Fong of San Francisco scrapped plans to attend the Center for Due Diligence's annual conference for retirement plan advisers next month in Phoenix because of economic reasons. Other people from his company were already attending. His company has been encouraging employees to evaluate spending priorities.

"The last time I canceled such trips was just after 9/11," Fong says.

Going but having to spend more time away. Phil Dubs of Fort Lauderdale still plans to attend at least one trade exhibit show in New York and a symposium in Los Angeles next month -- but at a price. Flight cutbacks mean he'll have to either fly out a day earlier or stay a day later than he'd like.

"It's getting harder to get to a destination and return without moving around appointments or meetings to accommodate air [cutbacks]," he says.

Going but for less time. Randall Blinn, a graphic computer consultant from Louisville, still plans to attend an annual printing convention in Chicago, but he plans to shrink his stay. He expects to be able to get through exhibits faster this year, because some vendors he knows won't be there, he says. He's already trying to save money by staying in a hotel 20 miles away rather than near the convention center downtown, he says.

Kim Reynolds, president of Strategic Meetings Solutions, a Dallas-based planning firm that works with clients in the marketing and credit card industries, says her clients are looking for new levels of justification before approving employee travel to outside functions or agreeing to invite clients to company-sponsored functions.

"My clients are ... asking the hard questions in terms of, 'Do you really need to attend? And what is your purpose for attending?' "

Business travel swoons alongside economy

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