AIPC
Are we ready for
the next downturn?
ALOYSIUS ARLANDO, PRESIDENT OF AIPC, IMPARTS SOME
LESSONS LEARNED DURING THE FINANCIAL CRISIS
s most of the world seems to
teeter on the edge of a
growing expectation of
economic downturn, if not
recession, it is an interesting time to
reflect on what we may have learned
through the last cycle. We would
certainly be coming off a high – recent
industry surveys having shown some of
the highest levels of business
performance and confidence we’ve ever
recorded – and adapting to new
conditions could well be more
demanding this time around!
So, what have we learned over the
course of the last cycle that we can apply
to planning for the next?
First, it is that all things eventually
pass – and that we can be assured that
any downturn will be a transition we
need to bridge, rather than a permanent
new set of operating conditions. Having
said that, we also saw how some things
that change during an economic slump
will never return afterward, at least in
the same way.
As an example, one thing many of us
experienced during the last downturn
was the increasing reliance many event
organisers had for centres to help take up
the slack in service delivery, as their own
cutbacks took hold – and that still holds
in many cases today, where centres find
themselves devoting more and more time
to coming up with ideas on how clients
can get the most out of their facilities. It
was the same case with client
expectations for concessions and
subventions in many parts of the world
– first, a kind of ‘emergency measure’ but
ultimately just an ongoing fact of life that
persists today.
Secondly, we know there will be a shift
in our business mix. The corporate
business that was so strong prior to the
last financial crisis evaporated overnight
in many parts of the world, and took
many years to rebuild to its current
position at the top of the ‘business
potential’ list. In the meantime, we all
learned just how stable association events
were – the general experience being that
they barely skipped a beat, with few
cancellations and only a slight attendance
drop even at the depth of the crisis. It
seems reasonable that this kind of a
pattern would likely repeat in the event of
another downturn. In fact, there’s an
argument to be made that a time of any
kind of crisis is one that is most likely to
actually increase the need for gatherings
to deal with the aftermath and plan for
the future.
Third, we all learned the value of
revenue diversification – of pursuing other
revenue sources to help mitigate the
effects that a loss of traditional streams
could have on everyone’s bottom line, and
that applies as much to organisers and
association executives as to industry
suppliers. The result back then was a
flurry of new and creative revenue ideas in
almost every aspect of event development
and management – and while these slowed
when traditional revenues started to
rebound, they will most certainly be a
factor in any future scenarios that
generate financial challenges.
Any downturn will
be a transition we need
to bridge, rather than a
permanent new set of
operating conditions.”
24 /
CONFERENCE & MEETINGS WORLD
/
ISSUE 105
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Finally, we all – both suppliers and
clients alike – learned the value of good
communication and a partnership
approach to event delivery. Then it was a
matter in at least some cases of survival,
but in general always a good approach to
that critical supplier-client interface. In
fact, while pursuing these kinds of
relationships is a good idea under any
conditions, it can be particularly valuable
when economic conditions are leading to
more constrained budgets and everyone
needs to become a bit more creative in
driving cost-effectiveness.
The big lesson here is that while we
can all still hope that the predicted
economic downturn will not, in fact,
materialise – or if it does, it will be
short-lived – history suggests that a bit
of advance preparation can’t hurt. To
find those lessons – and to think about
what strategies they
might suggest as we
look
to the future – we
need look no further
than the last
downturn.