by By the M&C Staff | March 05, 2009

July 22:

Marriott Profits Plummet
Marriott International released second-quarter financial results on Thursday, revealing a 76 percent drop in reported income. Reported income from continuing operations was $37 million in the second quarter, compared with $153 million in the same quarter last year. Revenue per available room fell 26.1 percent for Marriott's worldwide company-operated properties.

July 15:

Updates From MPI's World Education Congress in Salt Lake City
Meeting Professionals International's June Business Barometer, a survey of 1,000 senior-level meeting professionals released Monday at the organization's World Education Congress in Salt Lake City, shows planners are slightly more optimistic than they were earlier in the year. The number of respondents predicting a decline in future business levels fell to 58 percent from 69 percent in April. Of all factors likely to affect meetings over the next six months, planners said that budget cuts, and poor perceptions and media coverage of meetings will continue to have the largest effects. MPI also announced two new marketing partnerships in Asia, with the Beijing Tourism Administration and Meetings and Exhibitions Hong Kong, part of the Hong Kong Tourism Board. An estimated 2,400 people attended the convention, far fewer than last year's record-setting meeting in Las Vegas, which attracted 4,500.

Social Security Under Fire for Phoenix Meeting

A Social Security Administration conference held last week at the Arizona Biltmore is coming under fire from federal lawmakers who question why the retreat for 675 managers was held. According to the Federal Times, leading members of two House and Ways Committee panels -- Reps. John Tanner, D-Tenn.; Sam Johnson, R-Texas; and John Linder, R-Gal. -- wrote a letter last week to SSA Commissioner Michael Astrue, requesting his response to a number of questions about the program by Friday, July 17. "At a time when millions of Americans are out of work and having to do more with less, and when the SSA has received significant new funding to address near record backlogs after longstanding funding requests made before our subcommittees, it is essential that great care be taken to use administrative funding wisely, in a way that brings the most value to the American people SSA serves," the letter said. The meeting also drew the attention of several local Phoenix news shows; the ABC affiliate station aired video of attendees dancing on their Monday night broadcast.

Maritz Recoups $25.6 million from GM
As a result of General Motors' financial restructuring, Maritz Inc. has been repaid the $25.6 million it was owed by the automaker. The meeting and incentive firm was among GM's top 20 unsecured creditors when the company filed for bankruptcy in April. "As a supplier and general trade creditor of GM whose contracts were assigned to and assumed by the new GM, we have received payment for 100 percent of our pre-petition debt," a Maritz spokesperson said in a statement to M&C. "We intend to continue to provide services, including customer satisfaction research; continuous improvement training; and meetings, events and incentives, to the new GM in the ordinary course.  We look forward to assisting the new GM in its resurgence."

July 8: STR Revises Hotel Forecast
Smith Travel Research has revised its hotel forecast, lowering expectations for the remainder of this year and 2010. STR now expects occupancy to decrease by 8.4 percent, year over year, for both the summer and year-end 2009. The company is calling for a slight decrease (0.3 percent) in occupancy for 2010 as well. A 10.4 percent decrease in average daily rate is projected for the summer months of 2009, with a 9.7 percent decrease for the year and a 3.4 percent drop in 2010. RevPAR is projected to fall by 18.7 percent this summer, 17.1 percent for the year and 3.7 percent in 2010. Smith Travel Research, typically known to be more optimistic than other forecasters, had previously projected the rebound to begin sooner. The company now intends to revise its forecast monthly.

July 1:

Airfare Increases Adopted by Legacy Carriers
Last Wednesday, American Airlines raised fares by $10 and $20 roundtrip on a large number of domestic routes, according to These increases have been matched by all the legacy carriers except Southwest. The new pricing follows a $20 jump June 10 on domestic roundtrip airfares that was instituted by Delta/Northwest and US Airways and were matched by United, Continental and American, as well as Southwest. Rick Seaney, CEO of, remarked on the hikes and what they mean for the industry and for airfare pricing going forward in a blog post on "I have been cautioning consumers for the past month that they procrastinate on purchasing airline tickets at their own risk," Seaney wrote. "And these two airfare price hikes in the past few weeks is the strongest signal I have seen that the bottom is either here -- or very near."

Signs of Recovery in Boston
Although large conventions, particularly consumer shows, have struggled in Boston, business has been picking up and some are reporting that 2010 looks promising, according to this report in the Boston Business Journal.

June 25: Canceled Conference in New Zealand Comes at a Price
Supporters of the government's health conference say the meeting could have resulted in a small loss or a modest profit, but canceling for perception reasons cost taxpayers more than US$70,000, according to Reuters.

June 17: Survey: Small Meetings to Continue, Attract More Scrutiny
The number of small off-site meetings will remain constant or increase in 2010, say 71 percent of respondents to a survey conducted in late May and early June by meetings technology provider Worktopia. The survey, which queried 213 meeting planners and travel managers in the education, finance, government, health, medical and professional services industries, found that only 33 percent of respondents currently have a policy or meetings management program in place for off-site meetings for fewer than 100 attendees. Of the remaining two-thirds, 12 percent are thinking about developing a policy and 6 percent will have one deployed by the end of 2009.

PKF Identifies Lodging Low Point

PKF Hospitality Research predicted last week that revenue per available room will reach its cyclical low point in the third quarter of 2009. The company also revised its forecast, based on May numbers from Moody's PKF now expects RevPAR to fall 17.5 percent in 2009, and another 3.5 percent in 2010. "The good news is that the bottom of the current cycle for the U.S. hotel industry is soon to arrive," said R. Mark Woodworth, president of PKF Hospitality Research, in a statement. "The bad news is that 2009 will be the weakest year on record for the domestic lodging industry, and 2010 is going to be disappointing as well."

Industry Reacts to Treasury Dept. Rules for TARP Firms

Leaders of meeting and incentive associations are pleased that the U.S. Treasury Department's rules issued last Wednesday apply only to firms that are receiving TARP funding from the federal government. One of those rules requires firms to develop a companywide policy for "excessive" expenditures in areas including events. Industry leaders were concerned that the government would extend the rule to all firms, not just those receiving taxpayer dollars. Brenda Anderson, Site's CEO and a member of the coalition that was formed earlier this year in response to the meetings industry crisis, told M&C, "We are very excited because non-TARP companies have not been regulated; that allows us to move forward and have everyone adopt our [the coalition's] MEI guidelines." In a statement issued last week, Roger Dow, president and CEO of the U.S. Travel Association, said, "We are pleased that after months of discussion with the Obama Administration, and our industry's full-court press on the value of meetings, events and incentives, these regulations do not do any further harm to the [non-TARP-related] meetings and events marketplace."

Delta and American Announce Further Capacity Cuts
At investor conferences held last week, both Delta Air Lines and American Airlines announced deepening capacity cuts, citing declining passenger revenues, rising jet fuel prices and fears of the H1N1 flu virus. Delta said it would cut systemwide capacity by 10 percent vs. 2008. The reductions will begin in September, although the affected routes were not announced. Delta also is cutting its international capacity by an additional 5 percent over what previously had been announced, which amounts to 15 percent less service compared with 2008. Nonstop service from Atlanta to Seoul and Shanghai and from Cincinnati to Frankfurt and London's Gatwick Airport will be suspended. Delta also is reducing weekly flights between Atlanta and Detroit and Mexico City, as well as putting on hold some previously planned seasonal service from nonhub cities to Mexican beach destinations, "due to the impact of the H1N1 virus on customers' travel plans." Full details of Delta's capacity cuts (as well as several new routes, such as from Los Angeles to Sydney, Australia, and Salt Lake City to Tokyo) are available here. Meanwhile, American Airlines has increased its capacity cuts from 6.5 to 7.5 percent for 2009; this reduction will be made up by a 1 percent drop in domestic capacity and a 3.5 percent drop in international flights. American did not detail which domestic or international routes would be affected. Read the full American Airlines press release here.

Extended Stay Files for Chapter 11
Extended Stay Hotels has filed for Chapter 11 bankruptcy protection, although the filing should have no impact on the chain's operations, according to HVM, which manages the 684 hotels throughout the U.S. and Canada. No plans are in place to close or sell any of the hotels, a statement from the company says, and employees will continue to be paid as usual. The filing represents a debt restructuring, and the organization also expects to pay vendors without interruption.

STR Data Reveals Steady Hotel Declines for May
Preliminary Smith Travel Research hotel data for May reveals steady drops in average daily rate and revenue per available room. Average daily rate was expected to have fallen between 12 and 14 percent over May of 2008, and RevPAR was expected to have dropped between 20 and 22 percent. The luxury segment's RevPAR was thought to have been hit the hardest, with a decline of 29 to 31 percent. According to the May STR/TWR/Dodge Construction Pipeline Report, development has dropped 22.2 percent from last year, with 4,097 projects (522,778 rooms) in the works.

June 10: Fontainebleau Las Vegas files for Chapter 11
The Fontainebleau Las Vegas filed for Chapter 11 on Tuesday. For details, read the hotel’s statement here.

PCMA Survey Examines Meetings Numbers for 2009-'10
According to a survey of 516 meeting planners conducted by Ypartnership for the Professional Convention Management Association, the PCMA Education Foundation and American Express, 47 percent of planners expect to see no change in the number of off-site meetings they will book in 2009 and 2010 over the previous 12 months, and 9 percent of the respondents will plan more meetings. Forty-four percent of those surveyed expect to book fewer off-site meetings in 2009-'10 vs. the previous 12 months. Nearly all of those who expected to plan fewer meetings agreed on the cause: 90 percent said meetings budgets were being reduced "due to general economic conditions." Also cited by 35 percent of those who expected a decrease were "image/publicity/public policy considerations." PCMA president and CEO Deborah Sexton said, "The insights revealed in this survey confirm what most in the industry have assumed to be true in recent months: The economy is the primary culprit for the challenges now facing the industry. But professional planners are clearly concerned about the image issues and negative rhetoric associated with hosting meetings as well." In a press conference, Peter Yesawich, chairman and CEO of Ypartnership, said, "As soon as the economy takes that turn and improves, I think the industry will be the beneficiary of that and pretty quickly. But it's likely that will be 2011 and beyond." Respondents were drawn from PCMA's database of association planners and American Express's list of corporate planners. To view more results from the survey, click here.

ASAE Study Confirms Expected Declines in Association Revenue
An ASAE & The Center for Association Leadership study confirms that association executives believe the economy will take a serious toll on membership and nondues revenue. Executives at nearly 1,100 associations participated in the study, which was conducted in March. The largest drop in nondues revenue will stem from declining meeting and event revenues and charitable giving, according to the survey. Overall, executives predict revenues will fall more than 15 percent between March 2009 and March 2010. ASAE plans to conduct a follow-up study this month and unveil the results at its annual meeting in Toronto in August.

June 3: PCO Survey Looks at Business 2008-2010
Business generated by members of the International Association of Professional Congress Organizers during 2008 was up 26 percent over 2007 figures, according to a study by the U.K.-based association. The 95 respondents forecast a drop of about 20 percent in 2009, but expect business to increase in 2010. Among the changes they reported seeing from clients were the postponement of decisions, delays in signing contracts and a general reluctance to commit to anything before they had to. Additionally, 65 percent of those polled have seen a drop in sponsorship and exhibition support.