CHAPTER 4:  OVERVIEW OF THE MEETINGS INDUSTRY

P1, S1, T2

Introduction

            The meetings industry is of specific interest to hospitality salespeople because this is the primary market which all subcategories of the hospitality industry attempt to sell to.  The Convention Liaison Council (CLC) is a voluntary association of hospitality industry leaders which estimates that the meetings industry generates about $83 billion dollars annually (1995 estimate and most current). The meetings business has been steadily increasing for decades and appears that it will continue to do so.  Note:  For some resorts, 65% to 70% of their business comes from meetings.

            Supply in the hospitality industry are the organizations who do the selling.  Some of the subindustries of the umbrella hospitality industry are:  (a) hotels, (b) food and beverage establishments (both restaurants and catering firms), (c) transportation companies, (d) convention and visitor’s bureaus- CVBs that sell the destination, and many others. 

            Note:  Individual City CVBs  belong to an association called the International Association of Convention and Visitors Bureaus (IACVB).  CVBs represent cities of varying size and meeting “attraction-power.”  Thus, there is an informal “pecking-order” within all CVBs. Large cities like San Francisco and New York are “First-Tier” Cities in the CVB world.  Smaller Cities such a Phoenix are “Second-Tier” trying to become “First-Tier.”  Some cities with CVBs don’t even appear on the meeting radar screen.  This is important because association meeting must attract their attendees with the attractiveness of the city itself.  Thus, there is wide competition.

            Demand comes from the Meeting Planners, who represent the organizations that hold meetings.  Today, Meeting Planners are becoming increasingly sophisticated and seeking professional credentials such as the Certified Meeting Professional (CLP) awarded by the Convention Liaison Council.  Other organizations are also awarding professional certification credentials.

Organizational meetings are a large ticket item and generally very complex in their requirements. This demand is primarily a “business-to-business” market as opposed to selling to the individual leisure market (which is sold through advertising except in the case of tour sales).  This article concentrates on selling “business-to-business.”

Business oriented meetings fall into three major categories:

1.            Corporate Meetings

2.            Association Meetings

3.            S.M.E.R.F Meetings (Social, military/government, education, religious, and fraternal).

Each of these three major categories have several different types of meetings within each category ranging from large to small.

Types of Meeting Planners

Generally, there are three categories of "Meeting Planners:"

1. Organizational Employee - Meeting Planners

These organizations are the "primary" groups of people who actually meet. The meeting planners work full or part-time for one of the following types of organizations. People who work for these organizations and plan meetings can be formally titled "Meeting Planner" or their main jobs may be in management or assistant to management and only periodically become involved in planning meetings.

a. Corporations

b. Associations

c. SMERF

2. "Intermediary" Employee - Meeting Planners

Intermediaries are companies that are not the primary meeting organization (as listed above) but are firms in the business of helping those primary organizations to plan meetings. In effect, intermediaries are firms "in between" Supply and Demand. They "link" supply and demand. These intermediaries employ "meeting planners." Some examples"

a. Travel Agencies

b. Incentive Travel Houses

c. Destination Management Companies (DMCs)

3. Independent or Owner/Operator - Meeting Planners.

These are independent firms who have as clients various organizations (as listed in #1 above). Generally, these meeting planners are entrepreneurs who in the past had gained meeting planning experience "working for someone else" (in either #1 or #2). They decided to go in business for themselves.

It's important for salespeople to understand that the primary meeting organization is the customer, but they have the choice of "planning" their meetings using different types of "meeting planners."

Bringing Supply and Demand Together

            Hospitality salespeople (representing supply) sell to meeting planners (representing demand) in two major ways:

1.         They sell directly to the meeting planner.  That is they contact directly and make a presentation directly to the meeting planner.

2.         They sell indirectly to the meeting planner.  They sell through an intermediary (middle-person or firm) such as a travel agent or other third party who takes a commission or mark-up in the transaction. 

Types of Organizational Meetings and Main Characteristics

            Corporate Meetings.  Are generally the most desired because of the following characteristics:

1.         One master bill for the entire meeting.

2.            Attendance is mandatory, thus contracted rooms will “pick-up” as contracted.

3.         Smaller number of decision-makers, thus the salesperson needs only to influence a few key people.

4.         High tendency to repeat the meeting at the same facility if satisfied.

5.            Meeting planners are very sophisticated.

           Some types of meetings include:

1.            National Sales Meeting – ranges to about 250 people and is generally the largest of the corporate meetings.

2.         Training Meetings- around 30 people but have a lot of these.

3.            Executive Meetings- 10 to 30 and usually at higher end properties

            Associations. Are the second most desired.  However, associations range from the American Medical Association to the Society of Poodle Groomers and almost any other type of association of people with common interests.  Some characteristics:

1.         Small Master Bill and many individual “folios”

2.            Attendance is voluntary, thus a wide variation in contracted numbers and those that show up (some associations are very good at predicting their numbers)

3.            Decisions are made by committee:  The paid executive director seeks out the city and hotels and then asks the board of directors to vote on the final selection.

4.         Pattern of meetings are a rotational basis around the country. Usually, East coast one year, mid US next year, and then West coast. Thus, repeat business doesn’t occur as readily as with corporations.

5.            Sophistication of meeting planners ranges widely.

Some types of meetings include:

1.         Largest Meeting is the National Convention – this can be as large as 20,000 people and for small association under 100. 

            Trade Shows are most often associated with the National Convention.  A Trade Show is often confused with:

Consumer Shows - Open to the public are not the trade shows associated with national conventions. Example: the Boat Show or Recreational Vehicle Show.

A Trade Show – is closed to the public and represents suppliers who sell to the members of the association holding the national convention.  For example, at the American Medical Association (AMA) national convention, there will be a trade show set up with medical and pharmaceutical suppliers at booths hoping to sell to or gain attention of the doctor members of the AMA.  Trade shows are just that, limited to the trade (the specific business represented by the national association, in this example, the AMA).

Where do the Delegates at National Conventions Spend Money ? Out of Each dollar spent:

a.            Hotels Rooms and Incidentals – 50.7%

b.            Restaurants Other than Hotel Restaurants – 11.6%

c.            Hotel Restaurants – 10.9%

d.            Retail Stores – 8.2%

e.            Hotel Hospitality Suites – 5.2%

f.            Entertainment – 5.2%

g.            Local Transportation – 4.3%

h.            Other Items – 3.9%

2.            Associations also hold many other types of meetings.  For example:

            a.            Educational Meetings for its members

            b.            Board of Director Meetings

            c.            Local, State, and Regional Association Meetings

            SMERF Meetings. This is a term that has some unfortunate derogatory connotations however is widely used in the hospitality industry to describe a catch-all category of meetings.  SMERF stands for social, military/government, educational, religious, and fraternal meetings.  Characteristics include:

1.         Price-Sensitivity – thus, this makes for “off-season” filler business.

2.         Similar characteristics as associations yet, not as organized or with as sophisticated meeting planners. But these characteristics can vary widely.

Types of meeting include:

1.         Most of the same as association meetings.

Some Meeting Terminology

            All meetings are not the same as noted above.  They vary widely and by type depending on the sponsoring organization as well as the purpose.  The following are some meeting terms (names of various meeting types that all hospitality salespeople should be familiar with):

1.            Convention – this generally refers to the national convention held by associations.  However, terminology is not consistent.

2.            Conference – is a near synonym for convention but usually refers to a large corporate meeting.

3.            Congress – is commonly used internationally to mean an international “convention.”

4.            Symposium – similar to a “forum except that conduct seems to be more formal. There may be a panel or individual presentation with less give-and-take as in a forum.

5.         Lecture – is more formal than a symposium and is characterized by one speaker presenting then followed by questions and answers.

6.         Forum – A meeting featuring much back-and-forth discussion, generally led by panelists or presenters.  Much audience participation is expected.

7.            Seminar – Tries to get away from idea of a presenter addressing from a platform. Usually facilitated discussion among all attendees.

8.            Workshop – calls for a format involving only small groups that deal with specific problems or assignments. Commonly used for training.

9.         Clinic – similar to workshop and only another name.

10.       Retreat – usually a small meeting, typically in a remote location, for the purpose of bonding, intensive planning sessions, or simply to “get-away.”

11.       Institute – A meeting usually sponsored by a professional trade or organization to offer extended educational and training opportunities.  It suggests that the training is ongoing an sessions will be held periodically through the year or “series” of sessions.

12.       Panel – calls for two or more speakers offering viewpoints or areas of expertise. Open for discussion with the audience and always guided by a moderator.