A new survey conducted by the Association of Corporate Travel Executives (ACTE) indicates fear of perceived corporate excess is forcing corporations to pass up on great deals for meeting facilities with easy access to air transportation – while spending more to meet in locations not generally associated with entertainment. The association’s leadership has described this move as a radical departure from the basic principles of purchasing and procurement, substituting political correctness for good business sense….
A new survey conducted by the Association of Corporate Travel Executives (ACTE) indicates fear of perceived corporate excess is forcing corporations to pass up on great deals for meeting facilities with easy access to air transportation – while spending more to meet in locations not generally associated with entertainment. The association’s leadership has described this move as a radical departure from the basic principles of purchasing and procurement, substituting political correctness for good business sense.
“Paying higher rates and spending more time getting to a business location when less expensive and more easily accessible alternative locations are available will quickly deplete a corporate meetings budget, thus wasting funds that could provide someone with a job,” Susan Gurley, ACTE Executive Director, said. “Not only is this bad business from the standpoint of a corporate balance sheet, but it is also bad business for the travel and hospitality industry.”
In response to the question, “Would your company avoid a perceived resort location (like Las Vegas) for a corporate conference or meeting in favor of a less leisure-oriented location (even if rates were better in the resort city) to avoid any external negative perceptions,” 60 percent of the survey’s 110 U.S. respondents replied, “Yes.”
ACTE leaders believe that millions or billions of dollars in the U.S. meetings market could be lost as the unintended result of an unwarranted sense of public awareness regarding corporate excess, which is gaining acceptance as a site-selection parameter. While 58 percent of the survey’s respondents cited suitability and price as the key factors in choosing a meeting site, 38 percent added public and media perception to the mix. Only four percent indicated that perceived corporate propriety was a primary factor in choosing a meetings site.
The business travel and meetings sectors have been seeking government assistance on some level to help stop the dramatic drop in corporate meetings and conferences. ACTE brought the issue directly to its constituents, asking the question: “Assuming your company has reduced its number of internal meetings and corporate conferences, what would it take to resume conducting them?”
Sixty-two percent of respondents answered, “A dramatic increase in our business, or an increase in projects that required meetings (an improvement in the overall economy).”
“There does not appear to be a legislative response that will satisfy this issue,” said Gurley. “The answer will lie in promoting the kind of business travel management techniques and controls that assist in growing business under difficult economic constraints. The sooner we deal with this, the better off the industry will be.”
Gurley claims that there is a danger that the vast business travel and meetings network can be damaged through delay in addressing the issue. Fifty-eight percent of business travel managers, surveyed by ACTE, believe that the current economic crisis will have a long-term and fundamental impact on the way their companies conduct business. Only 36 percent thought their companies’ approach to conducting meetings and conferences would return to “normal” with economic recovery. Six percent reported no change in their companies’ approach to meetings.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
