AIPC President Edgar Hirt on the impacts of the economic crisis, priorities for the activities of AIPC and the current climate for international meetings and conferences.
TW: Where do you see the actual priorities for the work of AIPC?
Hirt: I think that more than ever, our priorities are defined by the global conditions we are dealing with. This is a time of great transition for the industry, and there are many changes taking place, not only because of current economic conditions but because of underlying changes that are if anything being accelerated by the global recession. As a result, we will emerge from this recession as a somewhat different industry rather than simply going back to "normal".
TW: So what are the major challenges at the moment?
Hirt: Again, our challenges are driven by circumstance. I want to make sure AIPC does everything possible to support members during the recession but also develop the programs and activities that will ensure they are ready to take full advantage of a recovery when it comes. That means looking beyond the immediate challenges – not always an easy thing to do when you are facing them on a day to day basis – and anticipating what we will be dealing with next year and the year after that. In my view, this is the only way we can serve our members properly.
TW: What are the impacts of the crisis for international convention centres?
Hirt: We have seen a wide variety of impacts based largely on what different regions and sectors are involved. For example, the corporate market has been hit a lot harder in most areas than the association sector, so centres with a lot of dependency in that market are hurting the most. Similarly, there are regional variations, as is the case with the "image" issue that has had a disproportionate impact in the US. In the end, it is centres with a well diversified business base that have fared best as they have been able to shift their business priorities from one area to another. Having said that, there are very few that have not had significant impacts, in areas like revenue and attendance if not in terms of actual event cancellations.
TW: And how do you judge the current climate for international meetings and conferences?
Hirt: Many of our member centres have seen significant impacts on their corporate meetings as well as trade and consumer shows that rely on either corporations or general public attendance. Most association meetings have remained stable in the sense that they remain on the books, but as some of these will take place years in the future, there may yet be cancellations. With all events, the big question is what attendance will be once the meeting or exhibition actually takes place, and this will of course depend on the state of the economy at that time. We believe that there are more reasons than ever to hold international meetings when the global economy is in recession. In particular, they stimulate new research and product development, which stimulates the economy; at the same time, they encourage networks and exchanges that counter the tendency toward protectionism that often accompanies recessions like the one we are now experiencing.
TW: What is AIPC doing to confront the economic crisis?
Hirt: We have been doing a number of things. First, we have been using our conferences, seminars and sector meetings to full advantage by bringing in outside expertise to help clarify the issues and solutions to current conditions. At the same time, we have been doing ongoing research on impacts and what members are doing to address them. We have also shifted the emphasis of our programming to create new and better opportunities for the exchange of experiences and ideas amongst members themselves, as this is generally where the best ideas come from. We have also accelerated our interactions with other industry organizations in order to make sure we are all working as effectively as possible in areas of common concern. Finally, we have been holding the line on any changes associated with member participation in AIPC training, networking and educational programs in recognition that budgets in many centres are tighter than previously.
TW: Which do you consider the best model for convention center management?
Hirt: Public ownership and management is still by far the typical model, with over 70% of centres world wide taking this approach. Having said that, the model that best serves any particular centre or destination is a product of many different factors, including the level of expertise that is available to manage facilities and how funding is provided. The only universal fact is that centres with good management, service excellence and a strong service orientation will do best, and this combination can be developed under any management model.
TW: Do you think there are too many convention centres on the market?
Hirt: That is a question that only the market can answer, and it will do so over the long term, as centres that cannot compete will simply be eliminated from the equation. However, there can be some real problems in the interim. For example, if a centre is not competitive, it may resort to predatory marketing – offering deep discounts and "buying" business, for example – in order to survive, and that harms everyone in the long term. We continue to emphasise that a centre should only be built where there is a strong and demonstrable business case, and where all the other parts of the congress business equation – things like air access and good hotel accommodation, for example – are in proportional supply. It is far better to make the correct development decision in the first place than to have to deal with it once a building is already completed and entering the market.
TW: Sustainability is one of the big issues at the moment. How important do you consider it for your industry?
Hirt: This is an area that often moves to a lower priority when business concerns are highest, but that has not happened with centres, for a number of reasons. First, sustainable practices may actually be cost effective, particularly when building expenses are a critical factor. Secondly, many centres see a market advantage to being able to demonstrate sustainable practices, and that is of increasing interest when the market is more competitive. Finally, centres have many different stakeholders – including the local community and what may be government owners – who want to see good environmental practices. For these reason, our surveys show that over 90% of centres now have significant sustainability programs and policies in place and interest remains high.
Edgar Hirt is the President of the International Association of Congress Centres (AIPC); and Managing Director of CCH, Congress Center Hamburg For further information please contact marianne.de.raay(at)aipc.org or visit www.aipc.org
