What’s the Economic Impact of the Meetings Industry?

Author: David McMillin       

In terms of jobs, the meetings and events industry creates more direct jobs than large manufacturing sectors such as automotive, chemicals, and food. The industry also employs more workers than the telecommunications sector or oil and gas. These are among the takeaways of “The Economic Significance of Meetings to the US Economy” report, which updates the 2009 report by the same name, from Oxford Economics, the Events Industry Council, and the Meetings Mean Business Coalition, released in February.

Adam Sacks, founder and president of Tourism Economics, an Oxford Economics company, said in a press briefing on Feb. 21 that the study calculated three levels of impact: direct, indirect, and induced spending. Indirect spending includes revenue streams such as the utility bills from a trade show, and the induced category relates to the trickle-down spending from employees who earn wages due to events-industry-related activities. “For every dollar spent on face-to-face meetings and business events in 2016, it generated an additional $1.60 in benefits to the U.S. economy,” Sacks said in the briefing about the findings. “It’s a 160-percent return on investment.”

That return added up to some very large numbers. Sacks said that meetings supported $845 billion in business sales, $104 billion in federal, state, and local taxes, and $446 billion of the country’s GDP. In addition to spending, the industry supported nearly six million individual jobs. “These are large numbers,” Sacks said, but they are even more meaningful “in relation to other industries in the U.S.”

“The services provided by the meetings industry often go unnoticed,” said Paul Van Deventer, president and CEO of Meeting Professionals International and co-chair of the Meetings Mean Business Coalition, who participated in the briefing. “But the impact is unmistakable.”

THE IMPORTANCE OF INTERNATIONAL ATTENDANCE
The findings underscore that in order to expand that impact in 2018 and beyond, the events industry will need assistance from the government to make sure that attendees from outside the U.S. can enter the country with ease. In 2016, six million international attendees came to the U.S. for events and conferences. While that audience only comprises approximately 2 percent of the 251 million attendees at U.S. events, they represented nearly 12 percent of direct spending, due to the fact that they typically stay longer and spend more money. “This has important implications for visa policiesand the Open Skies agreements,” Sacks said.

“On the international front, in the past, we have seen some visa policies that have not always been conducive to [assisting] international participants,” Van Deventer said. “This research creates the foundation to advocate for visa policies that are set up in such a way to make sure that international participants can come.”

GROWING AND GROWING
The 2016 numbers look even more dramatic when the industry looks in the rearview mirror. Sacks compared the 2016 findings with data from 2009 when the report was first conducted. “The industry’s economic value has grown by 23 percent,” Sacks said. “If we go back in time to 2009, there were experts that were foretelling the death of the meetings industry. There was a lot of negative sentiment and questions about whether companies were being responsible with [their event budgets]. There were a lot of questions about the viability of this industry. The new report shows that the meetings industry is as strong as ever, and it continues to grow.”

AMPLIFY THE IMPACT OF YOUR EVENT
Christine “Shimo” Shimasaki, president of CVB consultancy 2Synergize Inc., said that she hoped the report’s “impressive results will inspire us to understand and articulate the impact of our own events.” First, she encouraged events-industry professionals to continue to “drive a consistent drumbeat of messages designed to educate our local politcos and residents of the value of meetings to our local economies. Both audiences need to understand that when the destination invests in attracting and hosting events, how many jobs, taxes, and sales remain in the destination long after the event occurs.”

Shimasaki also took note of how Oxford Economics quantified the total room demand of meetings of 300 million room nights, “which includes both the contracted room block and rooms booked outside the organizer’s room block. This finding is significant for the industry to recognize,” she said, “that the room demand of our events is far greater than what is being captured in the traditional room block.”

Shimasaki encouraged planners to take advantage of their relationships with CVBs who have access to Destinations International’s Event Impact Calculator and Overnight Room Demand Analyzer to help them further understand and articulate the impact of their events.

Read the full report at here.