financial excesses

SPOTLIGHT
hunt for discounts on corporate
meetings will continue,
he says, and western economies
are basically still at the
recovery stage, but the
emerging markets are already
very dynamic. Besides
which: “Association business
the world over is still
quite stable,” the industry
expert comments.
Internationally, the industry
can therefore look forward to
a relatively benign, stable situation
overall. Most meeting
planners are anticipating a
return to substantial growth
this year, so Martin Sirk, CEO
of the International Congress
and Convention Association
(ICCA), also believes.
This is due to ever greater
demand for meetings in information
societies and ongoing
globalisation, explains
the man at the helm of the
global association.
On the other hand, the Global
Business Travel Forecast
2010 by American Express
finds that business travel is
still being closely scrutinised.
“Even if the first
‘green shoots’ do suggest
that the period of economic
recession will soon be over,
every business trip in 2010
will continue to be judged by
the value it adds in achieving
the company’s targets,” is
how Kaveh Atrak, General
Manager Central Europe at
American Express, summarises
the current trend.
Companies practically everywhere
are tightening up their
travel guidelines to cut costs
in this area. Roughly a third of
German companies, for example,
are currently travelling
less, according to the latest
representative analysis
by the Business Travel Association
of Germany (VDR),
for which 800 corporate and
organisation travel managers
were surveyed
mid-2009. “Business travel
patterns are an early indicator
of economic trends,”
was VDR President Dirk Gerdom’s
comment on the results.
Besides which, “the
substitution of business
trips by video, web and telephone
conferences increased
significantly” and
upwards of EUR 1.1 billion
had already been saved in
the previous year on catering
and hospitality. Internationally,
too, meeting planners are
seeing their budgets contract.
1,832 meeting, incentive,
congress and event
(MICE) professionals worldwide
were surveyed for the
FutureWatch 2010 report. In
2009 the most comprehensive
survey of its kind had
already forecast both a decline
in the number of meetings
for the first time in many
years and shrinking budgets.
This year the research hardened
this trend. Both the 967
planners interviewed and
the 813 suppliers are expecting
price competition to get
even tougher for the time being,
accompanied by falling
participant numbers and
budget cuts. According to
the ITB World Travel Trends
Report commissioned by the
ITB Berlin and prepared by
the consultancy IPK International,
in the last eight
months of 2009 global business
travel dipped by seven
percent. At the same time,
the majority of MICE professionals
are convinced that
business in the industry will
regain steam in the second
half of the year. The biggest
danger for the global economy,
on which the meetings
industry depends at least indirectly,
now lies in new
speculative bubbles on the
financial markets and public
debt. An all-out global economic
collapse was prevented
only by nationalising the
debts run up by practically all
big financial institutions. The
costs of the bailout have
mounted meanwhile to an
astronomical USD 9,000 billion
– and that is only to shore
up western banks.
Greece is currently facing
the prospect of national
bankruptcy, other EU countries
such as Portugal, Spain,
Ireland and Italy are hopelessly
mired in debt, and the
euro has come under massive
pressure. “We are having
to contend with the aftermath
of the deepest recession
for 80 years,” the chief
economist of the European
Central Bank says. “All advanced
economies are facing
problems at present. The
UK’s budget deficit has similar
dimensions to that of
Greece. And the US deficit is
also equivalent to more than
ten percent of gross domestic
product,” Jürgen Stark
adds.
The more countries that find
themselves in dire financial
straits, the louder the cry becomes
for help from the central
banks – in other words
laxer monetary policy. Economists
the world over are
now calling for higher rates
of inflation to rid governments
surreptitiously of
their debt. So far, annual consumer
price rises of 1.5 to
three percent have been
considered tolerable, but
now, with a sovereign debt
crisis looming, the bench-
20 2/2010