Some will 'do it tough' but for many it's business as usual

The conference, incentive and exhibition industries are all closely watching the economic fallout from the ongoing global financial crisis, but most operators in the sector say that difficulties will be overcome by working smarter, being flexible and providing top service.

Paul Walker, the head of the Conventions and Incentives New Zealand (CINZ) professional conference organiser group says he has talked to some PCOs who say they are ‘doing it tough’.

And his own company, Convention Management Services (CMS), has noticed a reduction in numbers at a recent event it organised.

‘The drop off was mainly from the United States - we actually had more New Zealanders than we expected.’

Despite impact on delegate numbers, Walker is retaining a positive outlook.

‘As a business owner, I am not worried about my business. There is enough business next year, so we are certainly not panicking and we have business booked for 2010 and 11 and even 2014.

‘If you are involved in association, medical, national and local government, that’s not going away. They will still hold conferences.’

Walker adds that 2008 was the strongest year CMS has had and that the work CINZ and various bureaux are doing in the international market is really paying off.

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He says particularly with government sector business the challenge for the industry is ‘to do it smarter’ and to look at ways costs can be reduced.

Walker says an article in the New Zealand Herald in June this year, criticising the New Zealand Housing Corporation for meeting at Tongariro Lodge has had more impact on the government sector than the economic downturn.

‘That article comes up every time we have a meeting with a government agency (planing a conference).’

Jan Tonkin, managing director of The Conference Company, says she has not noticed any repercussions (from the financial crisis). ‘Numbers are up to expectation and everything is progressing well.’

Geoff Naumann, InterContinental Hotels Group New Zealand and South Pacific director of sales, says the company is closely monitoring what is happening both here and internationally. However, InterContinental is certainly not battening down the hatches.

‘These things happen at different times and the election was possibly going to effect our end of year business anyway.

‘We are well positioned through the summer period.’

Catering’s Best

InterContinental has just officially launched Catering’s Best, its outcatering brand. Naumann says the service will add choice and flexibility to the group’s offerings, but it was not specifically in response to the current economic climate.

‘When we were planning for the meetings segment we noticed the need to be flexible - clients were asking for catered functions outdoors, on the roof top, by the pool etc.

‘We also noted a number of clients saying that they needed our guest rooms but were using their own board rooms for the meeting. So one thing led to another and we have been trialing Catering’s Best for about six months. Now we are making sure the message is clear in the Wellington region.’

Naumann says InterContinental can offer anything from ‘five star pastries’ or a box of muffins at morning tea time to a catered cocktail function in a private venue or a mammoth offsite dinner.

Requests have come from embassies entertaining out-of-town visitors, through to private citizens who want to impress their guests without the stress or hassle involved in preparing a menu themselves.

‘We believe this is a market with enormous potential, reflecting a trend where many clients choose to individualise their entertainment, offer something a little different but they still want the reassurance that they have the backing of a professional and experienced provider such as InterContinental.’

Drop-off

Peter Zielke, manager convention centre and outcatering with SKYCITY Auckland, says that one major cancellation in October at short notice definitely meant that Auckland missed out on a million dollar boost to the economy.

Despite that, he is reasonably confident about the year ahead.

He cites other occasions when business was a ‘disaster’ - such as the Gulf War.

‘But we picked up again. There will be a drop off now, but we will find new markets and new ways to fill our venue and our hotel rooms.’

Zielke says people in leading positions in the hospitality industry tend to agree with him, but he understands why smaller businesses could be more fearful of the immediate future.

‘Future events are not pushing the social side as much as they may have been in the past. They are getting down to business and deciding what they need to do in the future.

‘We are not having any unusual wash-down in the lead up to Christmas. We are getting some people who are deciding not to go ahead with a function, but that happens anyway. For us, at this stage, Christmas is looking ok.’

From the corporate festive season point of view, he feels the test will be what happens in SKYCITY’s bars and restaurants. ‘It will be interesting to see what happens with those smaller groups of 30 or 50 who would normally come in for a lunch or dinner.’

Zielke feels that some of the impact on the conference industry will be about image - companies not wanting to appear to spend money at this time.

‘Overall , I am optimistic that things will be at least steady and that we will pick ourselves up. We’re all watching our dollars at the moment and keeping an eye on what’s happening.’

He says SKYCITY is looking at running its own shows and events, and finding partners to do that with.

‘We’ll be holding a motor show in January and it will be something that Auckland has never seen before. Watch this space.’

He says Auckland has to really be on its guard next year.

‘We have a lot of opportunities to really promote Auckland in 2009 - TRENZ (Tourism Rendezvous), Convene Auckland and MEETINGS. We really need to get our act together and present Auckland as an option.’

Lead times

Zielke says that according to SKYCITY statistics the number of leads has actually gone up since October.

‘We don’t see any reduction in the enquiry level. But what we are noticing is a much tighter lead time.’

He says the average lead time for events which were enquired about in October was 108 days.

‘Usually it is just under 200 days. That shows people are waiting and holding back before making their decisions. They still book but not as far out as we would like them to. It just means we need to shift our attention - we need to be faster and more aggressive.’

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