Are Twin Cities meeting and event professionals glad 2009 is over?

“Are you kidding?” asks Kimberly Zoulek, director of sales and marketing at the Hilton Minneapolis, laughing incredulously. “It’s like a cause for celebration every day.”

Last year didn’t have much to recommend it. In the wake of the 2008 bank bailouts, the American public was incensed at highly compensated financial executives who still indulged in incentive travel. That anger had a chilling effect on meetings and conventions, as executives in a variety of industries trimmed all kinds of business travel in order to avoid appearing decadent to their shareholders and customers.

Not that they had much money in the travel budget anyway, of course. Zoulek describes the situation a year ago: “We’ve got a staff of eight managers here, and every one of them had customers that were having financial troubles or were buckling down for what was to come.”

Jaimie Mattes, director of global accounts at site selection and meeting services company HelmsBriscoe, is also glad 2009 is in the past. “I had a couple of cancellations, but not too many,” he says. “Instead, we’d source locations for meetings on behalf of our clients, and then they’d end up not doing the program in the first place. As the year went on, people started to get a little more confident. But they were obviously waiting until January 1, 2010, before they started to book any more business.”

Mattes, who is the current president of the Minnesota chapter of Meeting Professionals International, says the anti-travel zeitgeist of 2009 had unintended consequences for an already ailing economy. “Some companies got very cost conscious, which meant we started to push properties to make rate concessions,” he says. “A few [clients] said, ‘You know what? We can’t do this meeting, because it doesn’t look good for the company.’ But they weren’t thinking about the way not having the meeting would affect the housekeepers, the hotel staff, the restaurants, the taxi cab drivers.”

Now, both the economy and public opinion have started to turn around. But the hardships of 2009 will continue to affect the Twin Cities corporate event industry in the future. When the recession hit, the market was still in the process of adjusting to the construction of several new hotels in the downtowns and first-ring suburbs. As a result, the market is still diluted, and room rates have not rebounded to their previous levels.

Event negotiations are still extremely competitive, and companies are far likelier to wait until the last minute before making decisions. Event designer Ryan Hanson of Minneapolis-based BeEvents says that phenomenon is the result of an insidious feedback loop: During 2009, companies couldn’t confirm their reservations until they knew how much money they’d have. At the same time, both they and event-industry firms had to let employees go. Now businesses have gotten used to booking at the last minute, and everyone on both sides is stretched so thin that they wouldn’t be able to catch back up if they wanted to.

“My meetings and events are back,” he says. “But clients have no staff and no money to provide the resources and help I need. So I’m drowning. And I get the same message from clients—that they are absolutely overwhelmed.”

While most events are back on, some of them may take years to rebound to their pre-2008 sizes. Karolyn Kirchgesler, president and CEO of the St. Paul Convention & Visitors Authority, says companies that previously might have sent four or five people to a conference have found that they can get by with sending only one or two. It’s possible that the entire culture of meetings has been impacted by one really lousy year.

Sparking a Recovery

In the face of these developments, the meetings and events industry took swift action. In May 2009, an organization called Keep America Meeting delivered a petition, signed by 22,000 industry professionals, to the U.S. Senate. The letter expressed concern about the criticism of meeting expenditures and highlighted the importance of companies meeting in person to transact business.

Meanwhile, local convention and visitors bureaus launched incentives to try to encourage businesses to book meetings in the Twin Cities. Meet Minneapolis, the city’s convention and visitors association, started a campaign called Meet in Minneapolis that offered up to 20 percent off rates at the Minneapolis Convention Center and surrounding hotels for meetings booked and held through March 31, 2010. The campaign has been extended for some facilities through March 2011. Zoulek says the incentives are designed to increase with the size of the events being booked. Additional discounts are available at venues ranging from Nicollet Island Pavilion to the Minnesota History Center to the Bryant-Lake Bowl.

“The hospitality industry supports a big segment of the population here,” says Kristen Montag, communications manager at Meet Minneapolis. “We have a lot of people employed through the restaurants, hotels, and the different service components of Minneapolis. So it really is important for the economic vitality of the area to keep supporting the meeting industry.”

While Minneapolis is trying to attract some very large long-range events, such as the 2012 Democratic National Convention and the 2020 Summer Olympics, the Meet in Minneapolis promotion is geared toward filling rooms and venues over the short term. An additional aim was to court Minnesota companies.

“Part of the goal that we started with this program last year was to get corporations in Minnesota to consider having meetings here, rather than just canceling them because they couldn’t travel,” Montag explains. “That has actually been a part of what we’re promoting. But now it’s not just for local businesses, and not just corporations. We’ve really opened this up to anyone who wants to plan short-term business here.”

St. Paul has pursued a similar strategy. “We’ve done a little bit more regional marketing,” says Jane Lewis, vice president of convention sales at the St. Paul Convention & Visitors Authority. “I think a lot of the CVBs are getting a little bit closer to home in some of their marketing. We’re looking for national groups that might be [headquartered] in the Midwest area, so that their attendees can maybe drive in instead of fly. And I think a lot of CVBs, us included, are asking local corporations in town to keep their meetings in Minnesota instead of going out of state.”

Kirchgesler says St. Paul has become much more assertive in its marketing, spending more time with potential clients and trying to build relationships. If discounts will make the difference between filling the meeting space and leaving it empty, they’re prepared to negotiate them on a case-by-case basis.

“There are so many sites going after the same clients,” she says. “A lot of groups are in trouble, and whether they pay for meeting space may make the difference between whether they meet or not. So we’re prepared to work with them.”

An Ace in The Hole

The Twin Cities have many advantages for meeting planners. But ever since public sentiment turned against lavish corporate get-togethers, the metro area has had one additional advantage that helped mitigate the slowdown in the local hospitality industry: a friendly but businesslike image. Despite its high-end hotels, restaurants, and attractions, there’s something about Minnesota that never reads as frivolous or decadent.

Maybe it’s the reputation of the weather, Mattes says. Conference-goers think nothing of convening in Chicago or New York in the winter, but mention a June meeting in St. Paul, and their teeth start to chatter. It’s a visceral reaction that has little to do with reality. But it might work in Minnesota’s favor now.

“We feel like we’ve always been a great destination, but this [recession] is giving us an opportunity to stand out to some people who are maybe avoiding some of the destinations that sound like they are extravagant,” Montag says. “People are trying not to go to destinations that might appear to be a vacation spot. Of course, people realize once they get here that there are a lot of great things to do and see. They find out what a gem it is, and they always want to come back again. But [image-wise], it’s just a great place to hold a meeting, because we’ve got all the things planners are looking for.”

Lewis feels that a friendly, accessible image is also helpful when it comes to attracting attendees from the Upper Midwest. “I think sometimes people from greater Minnesota have a better level of comfort coming to St. Paul, because they feel like maybe it’s a little bit more navigable and a little bit smaller than some other cities with similar amenities,” she says. “But that can be a detriment with other groups as well, so it goes both ways.”

Zoulek is particularly proud of the fact that the Minneapolis Convention Center, with which the Hilton routinely partners, is state-of-the-art. “The Minneapolis Convention Center is a beautiful facility,” she says. “The auditorium, in particular, is really one of a kind.”

Both Minneapolis and St. Paul are proud of the fact that their convention centers are adjacent to walkable downtowns. “We think that we have a lot to offer as a national and international destination,” Montag says. “The downtown scene is really vibrant, and that’s something that we’re proud of. There are a lot of cities where their convention center is in an area that shuts down at night.”

Here’s to Future Days

What goes down must go up. At least, that’s the feeling in the Twin Cities hospitality industry. All signs seem to point to a recovery in 2010 and beyond.

“Business must go on,” Zoulek says. “Companies know they can’t stop meeting forever. So we’re not dealing with cancellations and attrition anymore. But we’re still scrambling, because the competition is fierce now. It’s overwhelming. I’ve never seen anything like it.”

Kirchgesler says it’ll definitely be a few years before St. Paul’s convention and meeting economy gets back to its pre-recession prosperity. The convention industry lags a little bit behind the rest of the economy, she says, so the rebound will be slow. And then there’s the persistent worry that companies might have gotten used to traveling less often and sending fewer attendees when they do. That might mean the recovery is more protracted.

“Once something is taken out of a budget, it’s always more difficult to get it added back into a budget,” she points out.

Some companies have started to rely more on Web meetings and videoconferences during the slump. Kirchgesler says it would probably have happened with or without the recession, since younger workers have a tendency to communicate virtually even when they’re only separated by a cubicle wall. That trend makes it all the more imperative for CVBs, planners, and suppliers to communicate the importance of meeting face to face.

Hanson, for one, is not worried about that. He believes clients understand that the two types of meeting are complementary. “Web meetings have a function,” he says. “Virtual has a purpose. It’s a way to connect people. And it shouldn’t be something meeting planners and suppliers are afraid of. It should become an enhancement, not a replacement. There are still times when you need to put a hundred people together in a room. I think some companies probably tested the waters of virtual and realized it didn’t work as well [for large-scale meeting purposes] as they wanted it to work, so now they are going to bring back some of the meetings.”

Montag says Meet Minneapolis was able to meet its 2009 goals in both short-term and long-term business bookings. So even though the recovery is slow, both in the economy at large and in the event industry in particular, she is confident.

“This year, we have a pretty aggressive goal,” she says. “Business is not where it was a couple of years ago, but it’s been picking up a little here and there. Some industries are doing better than others. We do expect this year to continue to be a little more challenging than past years. People were being really conservative with in-person meetings, but they are starting to realize that they’ve got to get back to having them. It’s just important for business.”