Will Companies Clamp Down on Corporate Travel and Meetings in the Face of U.S. Recession?

In times of economic uncertainty, recession fears can become self-fulfilling prophesies: cautious strategies edge over from prudence into phobia, and the capitalist conga line slows to a crawl.

As broadcast media and the internet act as echo chambers for this phenomenon, playing on the deep concerns of managers and businesses and magnifying market ebbs into tidal waves, it falls to the managers on the ground to increase revenues even as their budgets are scrutinized and shrunk.

Particularly as pertains to sales incentive programs, which are often spared the budgetary axe due to their inherent link to revenue generation, finding the destination that is both motivational and cost effective is especially critical during the current slowdown.

As businesses across the United States prepare for another economic scramble, marketing managers and meeting planners will join CFO’s and corporate travel executives –in fact, anyone with a say in their company’s financial wellbeing- in tightening the purse strings a little more.

But while the knee-jerk reaction of cutting back (suddenly unnecessary) expenditures might seem to alleviate immediate financial woes and concerns, in the many industries that are fueled by employee performance and sales teams, aggressive revenue targets and a push to increase market share and customer affinity, cutting back on the very drivers that move these markers can be detrimental to a company’s longevity and financial health.

In a survey conducted by Meetings & Conventions magazine, 65 percent of meeting planners need enticing venues for group incentive programs and sales meetings –which can be critical to motivating a sales force, especially in hard times. Cruise ships are not only ideally attractive venues, but are also an antidote to high priced meetings because of their all-inclusive cost structure.

More than 38 percent of the average meeting spend is on food & beverage, entertainment, and A/V –all of which can be significantly reduced on a ship, where these items do not cost extra. In fact, using a cruise ship is one of the only ways that a meeting planner can still provide high level service, quality cuisine to suite everyone’s tastes, and an abundance of activities –without breaking the budget.

While some meetings can be eliminated or conducted virtually, incentive meetings and incentive travel is different. When the economy is challenging, companies feel it is more important than ever to motivate sales people with “incentive” programs; if staff are accustomed to an incentive trip, using a plasma TV as the proverbial carrot-and-stick becomes highly ineffective.

So while the jury is still out on what the future holds for the U.S. economy, for businesses, several factors will not change; the need to attract and retain top performers, the need to provide new ways to engage key audiences and clients, and importantly, a cost-efficient way to conduct meetings and seminars to large groups of people.