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The meetings industry successfully weathered the
period in which the global economy teetered on the
brink. Just a few big events were cancelled, and only
very few associations had to contend with marginal
declines in membership or with budget cuts.
But of course meetings, incentives, congresses and
events (MICE) are also directly dependent on global
economic sustenance.
We don’t need a safety
net,” Michael Kirnberger,
the then president of
the VDR Business Travel Association
of Germany, said
back at the beginning of
2009 – at a time when the
economic world was trembling
on the brink, banks
were collapsing, people
World Trade
Heading for the
next crash
went in fear of losing their
savings and financial execs
were suddenly crying out for
government support. Total
global economic collapse
was averted only by nationalising
the debt of practically
all big financial institutions.
The costs of the bailout add
up meanwhile to an astrono-
mical 9,000 billion dollars –
and that is only the price for
propping up western banks.
Economic meltdown did not
in fact occur, but the real
economy is still faced with
the threat of countless insolvencies
and thousands of
jobs are at stake. Economic
output in many countries has
contracted by five percent.
Since the financial sector almost
tipped over the edge,
reporting now distinguishes
between the real economy
and the financial industry.
Meeting planners have also
seen their budgets shrink.
2,740 meeting, incentive,
congress and event (MICE)
professionals were interviewed
the world over for
the FutureWatch 2009
study. The tenor of the findings
was clear: for the first
time in many years the biggest
survey of its kind forecast
not only a drop in the
number of meetings (by nine
percent), but also shrinking
budgets (down by six percent).
“Individual corporate
events are being cancelled,
budgets cut,” Jacquie Rogers,
general manager of the
Convention Centre Liverpool,
stated last year. “We
are registering around 30
percent fewer bookings by
corporate clients,” Greg
O’Dell, CEO of the Washington
Convention Center, similarly
summarised for 2009.
However, association business
continues to have a stabilising
effect in the meetings
industry, as international
association meetings have
a very long planning horizon
and are almost never called
off. At the same time the
public authorities rolled out
monumental economic stimulus
packages, so that companies
are now ramping up
their earnings again, share
indices are climbing and dividend
streams flowing once
more
At first sight the economy
appears to be bouncing back
surprisingly quickly from the
mega crisis at the end of the
last decade. At least, that’s
what the stock markets suggest.
The major share indices
– Dow Jones, Nikkei and
Dax – have soared since mid-
March by 50 to 60 percent
each. And the prices of crude
The costs
of the bailout
oil, copper and other raw materials
have likewise more
than doubled. However, this
monumental increase is not
underpinned by any corresponding
economic development.
“Prices are rising because all
this money has to go somewhere,
not because shares
as such are attractively
priced,” the German business
magazine Wirtschaftswoche
writes in an analysis
of the current stock market
boom. The magazine reports
that the price-earnings ratio,
a valuation ratio of a company’s
current share price compared
to its per-share earnings
over the previous
twelve months, has hit a historic
high of 133. As from 14,
shares are considered overpriced.
The 500 biggest exchange-listed
US companies
are thus trading at almost ten
times their real value.
This price surge stems solely
from the massive amounts
of liquidity that governments
and central banks have
pumped into the economy.
Banks are able to borrow unlimited
sums of money from
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