March 8, 2009 / 5:48 PM / 9 years ago

US meetings industry fights back against critics

ORLANDO, Fla., March 8 (Reuters) - The $175 billion U.S. corporate meetings industry is fighting back against a torrent of negative publicity and cancellations that has cost it billions of dollars, industry leaders said on Sunday.

The U.S. Travel Association has launched a campaign to reverse setbacks to the industry caused in part by a perception that expensive meetings are decadent given the worst U.S. recession in decades.

The campaign will focus on explaining the impact on employment in the hotel and leisure sector of decline in the industry and resisting any attempt by government to regulate where and when companies can hold meetings.

Criticism by government officials and journalists of lavish meetings for top executives at top-dollar destinations has triggered a drastic overall reduction in demand for meetings.

Insurance giant AIG ran into a storm of negative publicity in October when it flew top independent brokers and some of its executives to California for a lavish week-long retreat shortly after it received an $85 billion government bailout.

Brokers had earned the trip based on their sales before the bailout.

Since then, thousands of companies have canceled conferences doing particular damage to leading destinations such as Las Vegas and Orlando, Florida.

Business in Orlando would be 25 percent down this year, said the Orange County/Orlando Convention and Visitors Bureau.

“Corrosive rhetoric ... coming from some of our elected officials in Washington will continue to lead the ... meetings market to a point where we as hospitality CEOs will be forced to lay off hundreds of thousands of ... workers,” said Jonathan Tisch, chairman and chief executive of New York-based Loews Hotels.

Those jobs “are integral to the communities they live in,” said Tisch, whose company operates 18 hotels in the United States and two in Canada.

In one example, Tisch said, meeting business was down 40 percent so far in 2009 from the similar period in 2008 at his Loews Lake Las Vegas Resort, one of the premier meeting hotels in the country.

Meetings represent 60 percent of the hotel’s revenues and the hotel is expecting to conduct a second round of layoffs.

U.S. President Barack Obama piled pressure on the sector when he said last month companies getting government bailout money “shouldn’t be going off to Las Vegas or the Super Bowl” on taxpayer dollars, Tisch said.

“After he made that comment, you saw a cascading effect with the cancellations of meetings,” Tisch said.


The industry employs 1 million people, and indirectly employs 2.4 million, according to USTA.

The criticism has put particular pressure on venues viewed as decadent, said Bob Gilbert, chief executive of the Hospitality Sales & Marketing Association International, which represents the interests of hotels and other vendors to the travel industry.

“Never before have we seen as much concern in the corporate world about the perception of the venue or location where the organization is holding a meeting,” Gilbert said.

Roger Dow, president of USTA, a coalition of eight meeting-and-convention industry organizations, said, “The situation is worse than 9/11.”

Some 52 percent of meeting planners at companies that have not received government bailout money have reduced meeting budgets for this year because of “bailout backlash”, according to industry trade magazine Meetings & Conventions.

One in five said they had canceled meetings, the report said. (Editing by Matthew Bigg and Mohammad Zargham)

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