RAY SHAW RAVELATIONS

2008 – It was the best of times and the worst of times

My wife called me a Christmas Grinch http://en.wikipedia.org/wiki/The_Grinch and I have to admit I was not exactly in my normal cheerful frame of mind having missed out entirely on Kevin Rudd’s $10.4B Xmas largesse as my kids have grown up, I am well past being a first home buyer and not old enough for the aged pension. In fact I am a business person looking down the double barrels of the worst recession and uncertain times in my life and as much as I sympathise with Kevin Rudd I was not in the mood to spend, spend, spend. However a relaxing holiday at the beach (with the decimated Dollar I couldn’t conscience an OS trip but hey, see Australia instead and preserve a tourism job), enough discount alcohol to numb the pain and the joy of Xmas (sorry Happy Holidays to be politically correct) finally got me out of the grips of the Grinch.

I want to reflect on 2008 and some trends because it was such a roller coaster ride.

First, the good half of the year: Kevin 24/7 (now 747) came to power (and I tacitly admit that we needed a change); Australia 2020 legitimised the face to face meetings industry (which we played a part in); the dollar reached USD.97 (some predicting over parity by July); unemployment had fallen below 4%; and everything was rosy. Let’s face it the past 8 years or so have led to unparalleled prosperity. Returns on superannuation, property, gold, oil, share investments and futures went through the roof. Evidence of this was that entry level homes/units valued at $300,000 in 2001 were selling for $500,000 in early 2008. Technology got faster, cheaper and better and Apple earned more from its iPod music system than it did from computers.

But prolonged good times lead to some very bad habits and virtually overnight in July the great economic house of cards collapsed into the world’s deepest economic abyss. Some say it could be a hole that we can not crawl out of and many respected analysts claim it will eclipse the Great recession of the1920’s. The dollar went south, and is tipped to stay around USD.50, unemployment will hit 9% (from respected source JP Morgan) with some analysts claiming it will be as high as 15% if we take into account those who cannot get a full time job – very bleak. Kevin must be wondering if winning this election was so smart after all (well I feel sorry for Obama – he has even bigger problems).

I do believe that the next two or three years will be tough, very tough and Kevin Rudd will have to ally Australia (in both a political and economic sense) with its pan Asian neighbours if we are to survive. Let’s face it our prosperity (as part of the greater Asia Pacific region) is now more linked to China than the USA. Some say that we need to quickly extract ourselves from the USA economy or risk being taken down with them.

But what many do not understand is that Australia and Asia are poles apart in lifestyle, language, social mores, skin colours, religions, politics, work ethics and perhaps more importantly our wages and production costs are dramatically higher. Our minimum burger flipping wage is about AUD600 per week. China’s minimum wage is about AUD40 per week and up and the up and coming power house India is AUD12 per week. Free trade agreements and closer economic ties will dictate that our wonderful wages, working conditions and generous workers rights (overtime, maternity leave, sick leave etc) will be unsustainable. We can’t rely on mineral exports and live off the sheep’s back for ever as imports move to overtake declining exports.

What does this mean? I am not an economist so I hope I am wrong. But I see a vast and profound readjustment in the Aussie lifestyle. For example houses have fallen in price by as much as 30%, interest rates are a third of what they were, unemployment may double and petrol has halved in price. All this means is that you can be sure there will be no upward wages pressure. In fact there will be a strong downwards wages pressure as more workers compete for fewer jobs.
 
Grinch One - was the extreme difficulty in finding good staff in times of record employment. This led to salary pushes where a meeting manager who earned around $35-45,000 in 2001 could demand nearly double that by mid 2008. What is a realistic salary for a meeting manger? Chinese meeting managers earn about $20-25,000 per annum and are ecstatic at that – expect to see Australian salaries pared back (no I am not being cruel as all other costs are being pared back).

According to noted finance analyst Terry McCran “Now is not the time to get hairy-chested with the boss”. We have seen massive layoffs in government, insurance, recruitment, finance, mining, manufacturing and retail – well everywhere and let me say as a business owner it will be nice to once again have a choice of good candidates at more competitive salaries.

Grinch two - is that this economic explosion was fuelling unprecedented rises in rent, food, beverage, fuel, supplies and just about everything else. But did meeting management companies attain higher rewards? No. Clients still totally undervalued what a meeting manager does and as usual tried to screw management fees even more. All this does is move the declared fee to hidden commissions and this is not good for an industry that is trying to become a profession.

Grinch three – Becoming a profession is the single most important thing the meetings industry can do. It is time we stopped being treated as menial secretariats and showed our true colours as sophisticated meetings managers who are responsible for huge budgets and complex logistics. Meetings and Events Australia (MEA) took some welcome steps by acknowledging that we needed to benchmark the industry and set some standards. But a second PCO group (Professional Conference Organiser - a term I distain) emerged with a zero fee membership and hosted an inaugural conference. Don’t they realise that this simply splits the industry? That it creates duplication of effort? I hope MEA gets the message that we need action now.

Grinch four – I travelled a lot in 2008 and have never been subjected to so many flight cancellations, late departures and poor service. But more important was Qantas’s cancellation of business routes into the Gold Coast and other regional areas. We need a premium airline that flies Australia wide. And let’s not talk about their equipment malfunctions – there is something awfully wrong there but I am sure Qantas will fix it – they have to.

Grinch five – Demand for meetings space outstripped supply. Perhaps the recession will realign this demand but we need to plan for the future and Sydney Convention Centre needs urgent expansion on the Darling Harbour site – not out at Olympic Park or elsewhere. Yes I know the NSW Government has no spare cash but Sydney needs to compete with Melbourne and Brisbane’s (delayed) expansion, not to mention the other first class centres around Australia.

Grinch six – As demand for hotel rooms and meeting space increased venues became greedy, ramped up prices and introduced unconscionable contract conditions (washouts, indemnity) knowing they could fill their beds and space anyway. The industry has long memories and these opportunistic suppliers will have to work doubly hard to get business now. Personally I will stick with those who stuck with us and worked on developing relationships. Let’s get back to the mantra – the client is king.

Grinch seven - Bloody email Xmas cards. I received hundreds of them. I read virtually none for many reasons. Perhaps the most telling was that my spam filter corralled nearly all of them. Spam filters have a tendency to do that when there are links in an email, or hidden tracking devices (to tell the sender you have read it) or where there are large graphics and few words. I really could not be bothered wading through the spam folder either where legitimate Xmas wishes competed with about 1,000 pieces of spam received in the week or so before Xmas. The ones that got through the filter were cursorily glanced at and deleted – my email storage limit is too precious to retain your greetings which means that I really don’t recall who wished me well (I am sure you all did).

Now I am a strong proponent for using email but I think you all need to know that there is no substitute for a printed, hand signed card posted to those you care about. Besides that is what venetian blinds were invented for – to hang the colourful array of cards which provide a hard copy reminder that someone cares and allows me to update my Xmas card list for next time.

Grinch eight - Bloody email in general.  Email has lost its prime benefit as a marketing tool. Last year I made a concerted effort to remove my email address from hundreds of unsolicited and no doubt well meaning meetings industry suppliers. In general most emails I received were not spam compliant (had no easy or automatic opt-out facility and or contained tracking mechanisms which should be illegal) and were for things I had little or no interest in. The experience was frustrating at best taking several attempts with some companies to be removed. If you want to report spam simply go to http://www.acma.gov.au/WEB/STANDARD/pc=PC_310301#pc and the government will take action for you. Tempting, very tempting.

Grinch nine – Depersonalisation. This industry is about face to face meetings and events – building long and sustaining relationships based on trust. In the good old days suppliers would drop in and have a chat and I miss that – emails are so impersonal. Sure I agree that loyalty to suppliers (in tough times) has to be based on price first but relationships, service and fit for purpose are still important. In short its time to put face to face back into the sales process.

Grinch ten – Kevin it is all well and good to ask us to contribute to our retirement by placing 9% in a super fund. But you need to guarantee that this contribution will still be there. All Australian’s were savaged by losses in super and we are still forced to tip into a leaky bucket.

Now that I have that off my chest I hope you all have a wonderful 2009.

Ray Shaw AMM, AFMEA, FPRIA, AJA, B.Bus Com.
Chairman

Event Planners Australia
Adelaide , Brisbane , Melbourne , Perth , Sydney
Australia Wide Phone: 1300 365 976 ext 407
rays@eventplanners.com.au
www.eventplanners.com.au

Designing and delivering spectacularly successful meetings and events