The United States' meetings market

ht. J. Hospitality Management Printed in Great Britain

Vol. 10 No. 2. pp. 111-118.

02764319/91 $3.00 + 0.00 Pergamon Press plc

1991

The United States’ meetings market E. Thorvald Falk and Abraham Pizam University of Central F&da,

Orlando, FL 32816, U.S.A.

The signifitance of the Udetl States’ meetings market is often overlooked when one considers the hospitality indtstry. This article argues the importance of the meetings murket by citing its past ad projected growth in terms of revenue, occurrence, ad attendunce. Sub-segments of the meetings market are also identified, tlejined. and discussed. Finally, those vcrriables critical to obtaining meetirlgs mctrket btcsiuess are explored. congress convention Key words: association conference meeting planners meeting corporate meeting group business

Introduction To pilriIphr>isc an old saying and make it suitahlc to the U.S. of today: ‘two is company ilnd three is a confcrcncc.’ Americans arc cnamored with confsrcnces, conventions. congrcsscs ibnd alI other forms of gatherings that enable them to meet euch other socially and discuss common topics of intcrcst. Thcsc meetings ilrc not ncccssarily rostrictcd to business pcoplc and professionals,

but include hundreds of thousibnds of individuals

gather periodically in groups as small as twenty or thirty and discuss and exchange ideas on politicid.

religious.

literary.

who

large ;Is ten thousand, to

as

recreational :lnd every other

conceivable topic. A large proportion of these assemblages arc originated and facilitated by iI network of thousands of associations the majority of whom have by-laws that require them to hold il mcmbcrship meeting at least once iI year. This love ilffilir with associations is not a new phenomenon. It hiIs ii long and distinguished democratic tradition going back to the pilgrims and their religious meetings, and was noted by the French author Alexis de Toqcueville in his 1835 book Democrctcy in Americtt who wrote: ‘Americans

of all ages. all conditions

, and all dispositionsconstantly

not only commercial anal manufacturing thousand diminutive.

other The

kinds,

religious,

Americans

companies.

moral,

serious.

make associations

form associations. They have

in which all take part. but associations of a futile,

gcncral

or

tc> give cntrrtainmcnts,

build inns. to construct churchcs, to diffuse books, to send missionaries proposal

tO inculcate some truth

or to foster

cxamplc, they form 3 society.’ (VOW,

some fding

restricted,

enormous

or

to found seminaries,

to

to the

nntipodcs . . . If it is

by the cncouragcmcnt

of ;I great

I%#)

TO fully understand the nature of thcsc meetings OIIC hils to rcalizc that they fulfill

III

more

112

E. Thorvald Falk and Abraham Pizam

than a professional

need to exchange ideas and information.

Above ail these meetings

enable people of common interests to meetface-lo-face and satisfy a truly social function. Had it not been so, the meetings and conventions been supplanted by teie-conferencing

business of today would have already

which can perform ail the diffusion

of information

functions but none of the social functions.

Meetings, conventions,

congresses and conferences

The terms conventions,

conferences. congresses are alike and unfortunately

used inter-

changeably even though in most cases they have specific meanings that vary by type of meeting. membership, size, frequency, etc. Fred Lawson, a Professor at the University following detinitions

of Surrey

in England

has put forward the

for these types of gatherings:

‘A congress, convention,

or cnnfcrcncc is a regular formalized

meeting of an association, or body,

or ;I meeting sponsored by an association or body on a rcgulilr or cctlIrnc basis ‘Congrcsscs

;trc usualfy general sessions.

fr~Iditi~~n~il form of full-mcml~crship

mostly information

meeting.

Meetings

formal and the word “congress” carries a connotation ‘Asscmblics

arc mainly

rcprcscnfxtivcs

policy-making

or rcprcscntativc

or lcgislatory

giving and the commonly itcccptcd

(in congresses)

are usually

of a serious working meetings

groups who may formally

. . .’

purpose

attcndcd

large and

. . .*

by large number

of

speak and VOW on the subjects of the

~Q?,~ittlii . . .’ ‘Convcntictn total-meeting convention

is a term wirlcly used in North mcmbcrship

primarily

itrc usually

America and ths Pacific region to dcscribc major or

Over HO’% of Rmcricnn

for their total mcmbcrship.

their staff to meet. formally ‘Confercnccs

mcotings.

associ:ttions

and many COmpilIlics provide

problems.

associ;ltion.

or profession.

collcctivc participation

opportunities

for

as well IIS sociidly, in nttractivc surroundings.’ general sessions

and fact-to-face

groups

concerned with pkmning. obtaining blcts and information,

opcriltionill

hold a major annual

similar

Confcrcnccs Meetings

are mainly

confined

with

a high p~rticj~ltion,

or solving organizational

to mcmbcrs

(in confcrcnccs) arc less formally

in reaching stetcd ohjcctivcs or goals. Number

organized

but cncouragc

of delegates attending a

confcrcncc may range up to 1% or more but 30-50 is more typical.’ (Lawson,

Hoyle, Dorf and Jones divide the meetings market in a different

and

of the same company,

log

manner and prefer the

following catcgorics: corporate meetings, association meetings, and conventions (Hoyle, Dorf and Jones, 1989).

The meetings market and the hospitality industry hospitality industry, images of ftisurc activities hospitality industry could scarcely survive without the patronage of lcisurc travelers and one shouldn’t ever lose sight of the importance of this market but the significance of another market has been increasing and accelerating in rcccnt ycors. This mark& involvcrf over IO0 million patrons and was c@lracterizcd by Ail

too often, when one thinks of the U.S.

wmc to mind. Surely, the U.S.

Staks’ mcctinps market

The Unit4

II3

spending of nearly $44 billion in IYtlY. This is the meetings market and it warrants attention like never before. While the meetings market of the U.S.

hospitality

industry was once only thought of as

‘filler’ business that carried hotel properties through their slow seasons. it now represents a major market that must be treated by the industry

as a primary concern.

The figures mentioned above came from a report prepared in March of IYYO by Market Probe International. Inc. for b!eeriqs & Corrveflfions magazine. The report was based on a survey of Meetings & Conventions magazine subscribers who arc estimated to account for 70% of the corporate meetings business and virtually IOO% of the association meetings business. Therefore. the data from that report are projected to rcprcsent 70% of corporate and 100% of the association meetings markets. In the past two years. changes in the meetings market have been impressive. Corporate meetings attendance increased by I I million. convention attcndancc increased by almost 3 million,

and association meetings attendance increased by over 5 million resulting in a total

incrcasc in meetings attendance of approximately IY million over the two year period (Mccrings & Cor~~wrtiot~s, IYYO). This net incrcasc is eclual to the cntirc populations of New York City. combincd (.U.S. i~ttClld:lnCe

riiillion

Los Angeles, Chicago. Houston, Detroit. Phil~~dclphi~~. and San Diego S~~rfisticwl Ahs~crct, IYYO). These incrcascs rcsultcd in total meetings

of approximntcly

Y-l million

SpOllSCS iltlllCCl 113thC il1XIVC.

th!

pcoplc in IYSY. With at1 estimatctl ildditioll~ll IS U.S. niccting ilttClldilllCC in 1Y8Y rcachcd IOY

tOtill

million piltrOnS. il Cl~ll~sS~lltigurc by all iICC~~lllltS. While theSC staggering. they pale when conlparcd to cxpcntliturcs. From

ilttCilll~lllCC

IY7Y-IYSY,

liprcs ilrc‘ quite cspcnditurcs by

Meerin,q.s& Convcrrriom subscribers soar4 from %I I .8 billion to $30.6 billion. an incrcasc 273%. Mrchgs (/rat1Corr~wr~iorrs m;\gilZinc is not the 011ly source reporting 011t IIC magnitude of

of

the: meetings market. While

the numbers do not alwilys corrcspontl

across sources. one

thing holds true. Meetings attcndancc is increasing and the meetings market is becoming more and more important to the U.S. hospitality industry. ‘I’hc International Association of Convention & Visitor Bureaus (IACVB) annua11> projects the number of meetings to take

plats

over the course of the next year. In IYSS. the

IACVB projected that thcrc would bc 2X2.831 meetings in IYSY. They also project4 that the meetings in IYSY would bc attcndcd by almost 6Y million pcoplc. After examining the actual number ofmectings and attcndccs in IYXY, the IACVB GIIW to the conclusion that the year W;IS CVCII better than expcctcd. -rhc IACVB cstimatcd that iI total of 31S.613 meetings were held in IYXY. This tigurc rcprcsentcd an increase of 12.7% over their projections for IYSY and an incrcasc of 17.6% over 198X. All in all. the IACVB cstimatcd that over 74.6 million pCopk attended meetings in IYXY. This figure is an increase ofX..3’%, over the projections for lY8Y and an increase of I I .5’S over the attcndancc in IYSS. Rcvcrsing this trend sonlcwhat, the IACVB projected a dccrcasc of 11.2% in the number of meetings in IYYO. coupled with a 5% incrcasc in attcndancc. In other words. while the number of meetings arc expcctcd to dcclinc in IYYO. OvcralI attcntlancc is expcctcd to increase. This means that the avcragc meeting will incrcasc in six. Thcrcforc. competition for meetings business should get more licrcc as the stakes for each cvcnt will bc grcatcr (International Association of Convention cY Visitors Bureaus. 1900). Another organization which publishes cstimatcs on the U.S. meeting market is the International Confcrcncc Resorts of America (ICRA). According to this organization.

the meetings market in the U.S. almost one half of the Idsing espenditures

has more than tripled in the past ten years and accounts for

industry’s

took a 17% leap from

total revenue. The ICRA IY87.s

$31.9

billion

estimates that meetings

to 1989’s $43.7

billion.

represents the largest increase the industry hasever seen. Meetingsattendance

This

in 19x9 was

estimated to be over IO0 niilli~~n attendees, an increase of 26% over IY87’s attendance. According to the ICRA’s chrtirman. Gene Kduche. the meetings business should exceed the %SObillion mark by IYY-4 (Fkwich Hotel LY’Motel Jwrmd. IYYO). Last. but not least. the U.S. Travel Data Center in their IYSY Nutional Travel estim;ites that convention trilvel accounted for approxim;ttely

4%

ofall

Survey

person/trips taken

in the United States and IY-)-9-l’%of all business p~rs~~n/trips. This figure translatrs to 30.3 million person/trips for the spring. summer md fall of IYXY (U.S. Travel Data Center, 19s’). 1990).

III their book :\lorrqqir~ Cou~wrtiorrs ~tui Grotrp h’lrsitrrw, Hoyle. Dorf and Jones ( I YSY) tlcfinc cq>tlt-;rtc mcctingr; as those meetings hclrf by corporations outside the org;mization itself. In other words. those corporate meetings that (itlie place in locations other than the

org;mi,atioii. ‘I‘hcrc are many types t)f corporutc meetings but most fill1 within the following bilSiC ;lI’CiIS: tllail;lgcillCilt iiicctings. tritiilillg scmiil;irs. rC~i~~ilill/ililtil~il~ll SllcS meetings. iicw product intrductioiis. stockhi&l~r meetings. fzurthcr. ~hcy tfcfint

corpor’;ttc

~~iilililiilg ;llld ct~ortliiiation tllc)

IlilVC

po~itioiis

atlriiiiiistr~itic~i~.

ill

I)iiring

mcctirlg

of Ci)rp)rittC il VilriCty

ililVcrlisii1~,

ing ;ind ~i~~~i~)~~lil~i~t. ai4

~\ktittp

@itttilcrs

nlcctiiys.

01’ iIWiIS

I~uldic relations,

ot htrs.

as

tltclsc iil~livi~l1i;lls WOO h~~Ilc

Witlliil

including:

meetings. iiicciitivc trips. and

tllc Orgilili~;ltil~il SillCS

riicctin~/csliiI~its

~lild

the

(c~upratioil)

itlil~liCtiilg,

curpor:~to

planning. pcrsoiincl train-

Many of thcsc plilnners subscribe to ~~lll~iie~lti~)nssuch

tF (‘(ttt~,i‘trt;~ttt.~iii:igilziilc tllc t\vcIvc illc~iillls of the

nicctirigs tO1Ik

~~rol’cssioii;il/te~litli~;il

wliicli

as

c~ll~_~ts tflL’ arl~tu;~~ d:ItiI for their survey.

MrcVitrgs CC~‘otirWi~icttrs study. 0vcr ti66.000 eorporilte

avcragctl out to hc 13.8 meetings per planner. Tlicrc were iltillOSt 5S.5 iitilliotl ;Ittcil&xs at tllosc iiicctiilgs. or ill1 avcragc Of’67 ~tteiltlccs per meeting. Spous’ iitt~ii&!eS I~lIiill~~re~ nearly 6.7 million or un ~IWrilgC of S spouses per niccting. Thcrclorc. meetings

f7liiW.

‘I’hiS

the average niceting was attcnclcd by 75 people. ‘I’hc total cxpeiiciiturc on thcsc cstiin;itcd to IX $9.64 billion. ‘I‘his results in an LlVCrilgC expcnditurc 01

\v;i?;

%I l,I!(lO per niccting. ‘l’hc ni;k,jority of the meetings were tr:tiiiing seminars (25%) f0ll0wccl by: iiinnapcntcnt niectings (23%). j~r~~fcssii~ii;il/t~~l~iiical meetings (I3’%), regional SillCS meetings (13%). incentive trips (W). new product introductions (6%). n~itional SiltCS niectings (5%). or stockholtlcr iiicctings (2%). Attcnclancc \\‘itsgrcatcst ilt I~r1~ftssion;~l/technicul meetings ( I2 million) followed by training scmimirs (IO ~i~illi(~ll). Illil~l~I~~~l~i~t meetings (S.3 it~illioil), incentive trips (7.0 niilli0n). n;ltioil;il sA3 incctiiigs (5.6 million), rtZgiOili~l salts incctiiigs (5.5 million). new mtl stockholder meetings ( I .fi million). pr0dt1cI iiitrcxlucfions (3.2 million). The highest proportion doff-prcmiscs m02tiitgs were liclcl in the spring (33%) followed by fall (17%). The rem;lintlcr wcrc split bctwcen summer (20%) amI winter (20%).

Iii

The United States’ mecringsmarket California.

Illinois,

Florida.

Texas. and New York were mentioned iIS the most popular

U.S. locations used for corporate meetings. Three quarters of the planners did not consider having their corporate meetings outside the U.S.A.

Of those who did. the largest proportion

(-6%)

held them in Europe followed

by the Caribbean (40%). Canada (25%) and the Far East (19%). When selecting the location. corporate planners mentioned considering avnilubility hotels or other facilities

suitable

for meetings first.

followed

of

by ease of transporting

attendees. transportation costs. distance from individual attendees. and climate. Corporate planners used urban/midtown hotels most often followed by resort hotels. suburban hotels. privately owned conference centers. suite hotels. condominium resorts. university owned conference centers, and cruise ships. Finally. when selecting iI meeting facility or hotel. corporate planners mentioned the following criteria (in descending order): quillity of food service; number. size. and quality of meeting rooms; number. size and qunlity of sleeping rooms; meeting support services and equipment:

and negotiable food. beverage, and room rates.

The association meetings market Hoyle, Dorf and Jones (1989) defined iin ilssociirtion ilS an orpilniziltion of persons having iI common interest. The common interest can relate to i\ variety of intcrcsts such its vocibtioni\l. recreiltioni~l. or political. Associations must meet from time to time for iI variety of reasons such i\s offering educntion to members. planning the ilctivitics of the ilSSOCiiltiOn, electing officers or ICildt2l3. disseminnting information. illld giltllCri~lg iiiformation. The

U.S.

ilSSOciiltiOnS,

hns various

nlediCill

types of organizations

ilnd scientific

ations, chi~riti~ble organizations,

trade and professional edllCiltiOnill organizIitbor unions, business Ieiigues. avocittional associations, societies.

religious

including

orgilniZi\tiOns.

and govcrnmcnt ilSSOCiiltiOllS. Meerbzgs

&

Cur~verr~ions

( IWO)

reports

that

over

IX6 thousand

itSs(>ciihtion

meetings

were held in IOSO. Those

meetings were attended by almost 22 million pcoplc. 2.7 million of whom brought spouses.

Expenditures nt association meetings bear noting as well. Total expenditures were almost $15 billion in 1980. Attendees spent over 13.7 billion and associations spent over $1. I billion. This ilverilges to $632 per attendee per meeting and $1 12.000 per association. The highest proportion of association meetings were cduci~tionill (39%). follobved by board meetings (21%). professional/technical meetings (17%). regional/local chapter meetings (IS%), and others (S’X,). Attendance wils largest iIt educ:\tionill seminars (X.7 million) followed by rcgionnl/local chapter meetings (3. I million), profcssionul/technical meetings (4 million) and board meetings (1.4 million). As was the case with corpornte meetings. the majority of ussociation meetings were held in the spring (31%) followed by the fill1 (20%). the summer (21%) and finally the winter (9%). California, Illinois. Florida, Texas, nnd New York wcrc mentioned most by association planners as the most popular destinations within the United States for association

E.

116

Thorvald

Falk and Abraham

Pizum

meetings. Outside the United States. Europe captured half of the association meetings followed by Canada (33%). Caribbean (27%). Mexico (16%) and Asia (15%).

The conventions Hoyle.

Dorf

market

and Jones (lY8Y)

defined a convention

as one type of association meeting.

Traditionally. it is a meeting that is held on an annual basis because of tradition or by-law requirement. Typically. conventions involve large numbers of participants and can occur for a variety of reasons including but not limited to educating members, disseminating information. uniting members. perpetuating the organization. and entertainment. According to the Meetings Market ‘YO report (1YYO) the total expenditure for major conventions in IYSY was over $15 billion. This expenditure was composed of $1.6 billion of association espenditures and close to $13.5 billion of delegate expenditures. The average spending per dclcgate per convention was $YXY. The average association expenditure per convention was over $ I ;! I .OOO. The report stated further that in IYSY. 12,600 major conventions took place. They were attcndctl by 13.6 million dclcgatcs with an avcragc of I.07S dclcgatcs per convention. Nearly 5.6 million dclcgatcs brought their spouse with them. The highest proportion (73%) of thcsc conventions took place in the South Atlantic region (DE.

DC. FL.

GA.

MD,

NC. SC, VA.

and WV)

of the United

States. The next

largest proportion (12%) took place in the Pacific region (AK. CA, HI. OR, and WA). The East North C’cntral (IL. IN. Ml, OH. and WI) and the West South Central (AR, LA, OK. and TX) each accoulltcd for IO% of the conventions held. No one particular state d~)min;ltcJ the conventions

market. Californiil

claimctl the highest proportion

t:lorid;l i~ltdl’cxils wcrc not far bchintl with 7% eaclt. Massachusetts.

Missouri.

(Y’X) but New York,

~llltl WilShillgt~~ll 0.C.

CilCh claimed 5% of thC corivcntions pk. of 1lotClS iId/r)r other facilitks for the meeting WhCll }~lilllllillg conventions . ilv;liliihility apl>cilred to bc the most important factor. Ease of transporting attendees to and from the lOCilti~lll, trilllSl~~~rtiltil~ll COStS. diStilllCC Of travel for ilttL!lldCCS , illld ClinliltC LIISO ilppCilrCd 11)bC illlp~~rtilllt CcUlsitlCriltic~lls WhCll sClcCtiiig 11lOCiltiOl1. l‘hc nlost illlp0rtilllt I’ilCtOr when sclccting thC pilrtiClllilr propCrty for il convention WiIS the number and size of the meeting rooms. Also important were whether food, beverage.

illld room rates were negotiable. the number and size ofslccping food service.

rooms. and the quality of

Conclusion The U.S.

meeting milrkct is without

doubt the fastest growing segment of the hospitality

industry. With iIn avcragc annual rate of growth of 27% in meetings cxpcnditurcs, the meeting market is quickly becoming one of the most important busincsscs to medium and large cities illikC. ~vitlcnw to this phciiomcnon is the rapid growth of convention hiircaiis and convention ccntcrs. Of the 245 convention bureaus in the U.S.A. fully half have been cstablishcd in the last dccadc (Waters, IYSY). Furthcrmorc. many medium and large cities cithcr building IICW Convention ccntcrs ix CXpillldill, (9 their csisting mm. In the nCXt

ill%2

I17

The United States’ meetings market

five years twelve new centers will be erected in Columbus,

Denver,

Ft. Lauderdale.

India

(CA), Minneapolis, Philadelphia. Portland, Providence. San Diego, San Jose. Tampa and Waikiki. These centers will have a total combined exhibit space of 2.779 million square feet. In addition to these, the following fourteen cities have already expanded or will expand their existing centers in the next three years: Albuquerque,

Atlanta (two centers),

Detroit, Dallas. Las Vegas. Lexington, Los Angeles. Louisville, Miami Beach. New Orleans, Orlando. St. Louis. and Tucson (Crystal. 1989). The growth in the meetings market brings revenue to the destinations that are most effective in luring its trade. This is not just a matter of providing the most ‘deluxe’ property but rather providing the ideal destination. A destination with plenty of hotels. meeting accommodations, convenient transportation arrangcmcnts. and a comfortable climate will fare the best. Those

properties

that provide quality food scrvicc. an adequate number

of sleeping rooms of quality, ample meeting support services illld equipment. and negotiable rates will have the best chance of capturing meetings planned in their rcspcctivc regions. It is important to note that further research to dctcrmine what support scrviccs arc lacking in the more popular meetings destinations could be very bcncficial. The identification of thcsc dcficicncics COLII~ lcad to the cnhanccmcnt of those destinations. crcatc opportunities for less popular destinations to diffcrcntiatc thcmsclves, and provide opportunities for the cntreprcncurs who seek to fill those dcficicncics.

IIX

E. Thor\lrld Falk and Abraham Pizam

Vow.

M.

( lW0) T/w ~btr~wmtt~

Lexington. Waters.

Massachusetts.

New York.

Phrtwr’s

Hutulbook.

p. 1. Lexington

Itrtlusrry Hutrclbook: The Big Picntrr-IY8Y.

S. R. (1YXY) Trurel

Waters,

curd Mreritrp

Books.

U.S.A. Vol.

33. p. 21. Child

&

U.S.A.

About the Authors E. Thorvald

manager

Management Central Abraham

Falk receitcd his LlBA

dcprce from the University

for the Dick Pope Sr. Institute Department

and the

for Tourism

Hospitality

of Central

Florida.

He is the project

Studies and is an adjunct lecturer

Xlanagement

Department

for both the

at the University

of

Florida. Pizam is internationally

known in the tourism field. He has extensive background

teaching and research. Hc is Professor and Chairman the University

of Central Florida and the Director

c>fthe Hospitality

Management

in both

Department

at

of the Dick Pope Sr. Institute for Tourism Studies.