Is 2005 a Comeback Year?

The meetings industry's slow climb from the trenches of recession and war should continue into next year, as suppliers and planners alike report a relatively lively holiday market along with a mixed but generally positive outlook for 2005.

More specifically, for planners working in healthy industrial sectors, like pharmaceuticals and financial services, or selected major urban areas, like New York and Chicago, the future looks bright. Further, Successful Meetings' biannual State of the Industry survey, which garnered responses from 1,517 planners in the third quarter of 2004, indicates that more meeting planners are seeing larger budgets for next year, especially for training events, sales meetings, and managerial gatherings.

Meanwhile, an informal SM poll of special-event planners in late October found that some are seeing an increase in the number, and the budget, of corporate holiday events this season, perhaps a harbinger of a better 2005. "We've seen a 40-percent increase in [the number of] corporate holiday parties this year over 2003," says Patrick Sullivan, owner/operator for PRA Destination Management in New York City, who also reports an increase in future bookings for 2005 incentive programs. Meanwhile, at the Chicago Marriott Downtown, a popular spot for big corporate shindigs, demand this year has tripled, says Susana Hogan, senior catering sales manager: "It's a very, very good year."

Then again, requests for corporate holiday parties come mostly from firms in economic sectors that are performing well. These include construction, real estate, automobile, insurance, security, and medical firms, as well as smaller, privately held businesses that don't receive the post-Enron scrutiny of shareholders and regulators that household-name firms often do.

In some industries and cities, however, the meeting events market looks less rosy. Harith Wickrema of Harith Productions, in Oreland, PA, outside Philadelphia, reports fewer holiday parties this year, with slightly smaller budgets, although he adds that 2005's overall outlook is "upbeat." And on the West Coast, "My clients are rewarding employees more with bonuses and time off, not parties," reports Andrea Michaels, president of Extraordinary Events in Sherman Oaks, CA. Local hotels and restaurants that in past years would have had waiting lists have been calling to tell her they have space free in December, she notes.

Other planners say that some companies are pushing holiday parties into the first quarter of 2005. "My clients are waiting to see end-of-year sales figures, plus they want to make the party more of an employee-appreciation event," notes Pamela Patsavas, president of Distinctive Event Productions in Oak Brook, IL.

Some longtime event planners lament that the industry will never return to its 1980s heyday, when, for instance, it wasn't uncommon for holiday parties to include midnight brunches for hard-partying employees. Others are just relieved to see an end to post-9/11 trends: "Holiday events are still budget conscious, but people are putting more fun into them," says Kellie Mathas, director of special events for USA Hosts in New Orleans. "It's nice to see that passion back again."

Suppliers are relieved, too. Just as much as meetings have taken a beating in the last several years, so too have hoteliers and the airlines, as well as a host of ancillary suppliers like decorators and caterers. As business comes back, vendors are thankful, but they're just as determined to bring their prices back up. "We listened to our clients when they needed to control their costs. We held steady and did not increase our rates," explains Tom Hubler, vice president of sales for North America at Four Seasons Hotels and Resorts in Chicago. "Now demand is starting to shift and the pendulum is starting to swing back [to a seller's market], just as our labor and operational costs are increasing," But are planners willing to pay higher rates just yet? "People are responding well," says Hubler. "We understand that it's important to watch costs, but it's time for fair rate increases due to demand."