Corporates cut back on travel

Alan Trotter says corporates have reduced spending on non-essentials during the economic downturn. Photo / Kenny Rodger

Business tourism has been hit hard in the past year, but an industry leader sees signs it is starting to pick up again.

Alan Trotter, chief executive of Conventions and Incentives New Zealand, said that while association conferences like those held by the medical profession had been robust during the economic downturn, smaller corporate meetings had dropped off significantly.

Estimates were that corporate meetings were down by 20 per cent this year. "Australian and US corporations are just not jetting off to New Zealand for those board meetings."

New Zealand domestic corporate travel, which makes up 75 per cent of all money spent on business travel in New Zealand, had also been cut back.

"Corporates have had a back-to-basics outlook, cutting back on food and beverages, after-dinner speakers and pre- and post-business entertainment, like golf days."

Trotter blamed some of the drop on a higher sensitivity to corporate social responsibility.

"Even if you do have the money - and many corporates still do - they just don't believe it is appropriate to be spending the money on having a good time when others are toughing it out."

Trotter did not believe that perception would last.

He expected business tourism to pick up in the next six to 12 months but it would depend on sentiment levels.

"That segment mirrors how businesses are doing not only in New Zealand but world wide."

Australia was expected to be a strong market for New Zealand as Australian corporates who wanted to go overseas still saw New Zealand as an acceptable option.

"Looking ahead over the next six to 12 months, both international and domestic conference and incentive bookings are looking reasonably healthy. I think the worst of the trough is over and we are on the way up."

The annual convention and incentive trade fair will be held this week at Auckland's SkyCity hotel. More than 400 buyers are expected to attend the event which showcases 170 conference and incentive suppliers.

Trotter said more than $25 million was usually booked during the event and $160 million was generated from leads stemming from the event.

WHAT IT'S WORTH

* Business tourism brings $1 billion a year to the economy.
* $250 to $270 million earned from international visitors.
* Business visitors spend five times as much as the average visitor.
* Activity peaks in August.