Limited Attendance: How Government Cuts Are Affecting the Meetings Industry

Meetings By: Katie Bascuas

With federal agencies under orders to scale back spending on conferences and travel, government employee attendance at association meetings is dwindling in 2013. Here's how associations and convention destinations are adapting to the age of scandal and sequester.

A stroke of luck helped mitigate the effects of lower government attendance at the recent annual meeting of the International Public Management Association for Human Resources.

Three months before its September conference, IPMA-HR received a memo from the Office of Personnel Management (OPM) stating that the Joint IPMA-HR/IPMA-Canada International Training Conference would be open to all federal employees.

"Beforehand, everyone was being told, 'You have to pay for everything, and you have to take vacation time, and you can't use your title,' and all those sorts of things," says Heather Corbin, professional development manager at IPMA-HR. "But with the OPM approval, then the agency [was] able to pay for the conference and people [were] able to use regular time to travel to the conference."

The memo was a move in the right direction, Corbin says, because it not only allowed federal employees to attend but also set a precedent for all government employees, including at the state and local levels.

"Even though we don't have a large federal [membership] base, all of our members are government employees, and they look to the federal government for guidance," she says. "They sort of follow their rules. So even though OPM wouldn't necessarily be paying for registration for someone from the city of Alexandria to attend the meeting, if they see that someone from OPM has approved it, it might lend more credence to the conference and more people would be able to register."

Travel Log

April 2012: Inspector general's report on 2010 GSA conference details the roughly $800,000 the agency spent in Las Vegas.

May 2012: OMB calls on federal agencies to reduce FY 2013 travel expenses by at least 30 percent from FY 2010 levels through FY 2016.

March 2013: Sequester goes into effect.

May 2013: OMB issues new guidance on agency conference spending, stressing that agencies should not consider the earlier OMB guidance to cut back on spending as a moratorium on travel or conference attendance.

June 2013: IRS falls under congressional scrutiny after release of an inspector general's report detailing $4 million the agency spent on a 2010 conference.

Most conferences with substantial attendance by federal employees have not had a similar reprieve. Dwindling government attendance at meetings has been a mounting concern for many associations over the past 18 months, beginning with the fallout from several conference scandals.

  • In April 2012, an inspector general's report found the U.S. General Services Administration spent roughly $800,000 of taxpayer money on its 2010 Western Regions Conference in Las Vegas. Detailing expenses such as $44 breakfasts, tuxedo rentals, and $6,325 spent on commemorative coins, the report called GSA spending "excessive, wasteful, and in some cases impermissible."
  • Last fall, the Department of Veterans Affairs [PDF] was cited for improper spending [PDF] at two human resources conferences it held in Orlando, Florida, in 2011. An inspector general's report detailed $762,000 in expenses, including a parody of Gen. George S. Patton.
  • And in June this year, representatives from the Internal Revenue Service were summoned to testify before the House Oversight and Government Reform Committee after a report revealed that it spent $4 million, including $50,000 for two infamous training videos, on a 2010 conference.

Congressional scrutiny led to new restrictions on federal travel and conference spending. A 2012 memo from the Office of Management and Budget [PDF] (OMB) directed agencies to reduce travel expenses in fiscal year 2013 by at least 30 percent from FY 2010 levels through FY 2016. The memo also initiated a senior-level review among agency deputy secretaries of conferences costing more than $100,000.

While these policies have been successful in cutting back excessive spending—testifying before a House Oversight and Government Reform subcommittee in March this year, then-OMB Controller Daniel Werfel said travel spending among federal agencies had dropped by $2 billion from 2010 to 2012—they have also led to a decline in government presence at conferences and meetings.

Amplifying the effects of the conference scandals was sequestration—the automatic across-the-board spending cuts that hit federal agencies in late March. In anticipation of tightening budgets, a number of federal agencies began cutting travel and conference spending, some even before the sequester took effect:

For associations with federally employed members, fewer attendees at their events is affecting not only their bottom lines but also the value they provide as facilitators of face-to-face networking and collaboration.

Paying Their Own Way

The Society for the Advancement of Material and Process Engineering took a $100,000 hit on its annual conference in May due to government travel restrictions. Registration numbers were down a little less than 20 percent, says SAMPE Executive Director Gregg Balko, FASAE, CAE, but what was more uncomfortable was the fact the association's president, a government employee, had to privately fund the trip in order to attend.

Empty Rooms

Virginia Beach CVB reports a dramatic decrease in government business:

2011 room nights:


2012 room nights:


2013 room nights (5,000):


A number of other government employees also had to pay their own way to SAMPE's meeting, including a NASA employee who was receiving a fellowship from the association.

"I think we did the dance probably four times, whether he was coming funded or not funded," Balko says. "There still are some misinterpretations going on with some government agencies as to whether or not they're going to support travel. But, in this particular case, NASA was interpreting [the restrictions] that rigidly, and even though they changed their interpretation several times, the final decision was, 'No, I'm sorry, we're not going to fund this travel.'"

Normally, about 10 percent to 20 percent of the attendees at the Wireless Innovation Forum's U.S. annual meeting are representatives from the DoD, but for the first time in the meeting's history, no DoD employees attended the event in January.

"We had one person [from DoD] who came because he took vacation and basically came on his own nickel," says Lee Pucker, CAE, executive director of the Forum, a standards development organization for the wireless communications industry with heavy DoD representation among its members.

"He paid for his own plane trip and came using vacation time, so he wasn't an official," Pucker says. "He was representing himself at the event."

The Forum got its first indication that its meetings business could suffer last fall, nearly a month after the deputy secretary of defense issued a memo outlining stricter guidance on conference and travel spending for DoD representatives than had been outlined by OMB [PDF] in May 2012.

In October, Defense employees, who were already in Orlando for a military communications conference, were told they could not attend one of the Forum's working meetings in nearby Melbourne.

"It was already paid for; they were already in town, but because of this new ban they weren't allowed to attend," Pucker says. "I tried to point out to them at the time that it wasn't a conference, it was a working meeting for a standards development group, and they said it didn't matter. The government had designated any working meeting that charges a fee as a conference."

Face to Face

While it's difficult to quantify the cumulative financial impact these restrictions are having on the meetings industry as a whole, the Virginia Beach Convention and Visitors Bureau can point to a 25 percent loss in meetings business in the region stemming from reduced government attendance.

To Discount or Not?

Faced with declining registration numbers, many associations are considering offering reduced registration fees for government attendees. Are discounts the right way to go?

No: "I'm really uncomfortable reducing the price of the registration ticket, because that means that has less value. … I think the best thing for us to do is to offer some scholarships for people who couldn't make it otherwise, and then that might help them get the necessary approvals to travel." —Gregg Balko, FASAE, CAE, executive director, Society for the Advancement of Material and Process Engineering

Yes: "You have to try new and unique ways to market to people, and make them feel like they're missing out if they don't go. It's better to have someone there at a lower cost than not have anyone there at all." —Heather Corbin, professional development manager, International Public Management Association for Human Resources

"We're really feeling the brunt of it because we've been the Pentagon of the South," says Al Hutchinson, vice president of convention sales and marketing at the CVB. "In FY 11 we did 59,000 room nights in government business. In FY 12 that number went down to 37,000 room nights, and in FY 13 that number was 5,000."

Hutchinson doesn't think the government meetings business will bounce back to pre-2009 levels—the point at which it started scaling back in Virginia Beach—but he's hopeful it will come around again, especially through dedicated advocacy efforts educating legislators about the value of face-to-face meetings.

"Advocacy is huge," Hutchinson says. "It works hand in hand with what's going on in the whole government meetings market—the lack of understanding of the importance of meetings."

Advocacy efforts paid off last spring when a coalition of associations, including ASAE, worked with OMB to develop a protocol for conference planners to use when putting together meetings attended by federal employees. Guidelines included keeping hotel costs within government per-diem rates and avoiding lavish social events.

In a May memo, OMB acknowledged the value of federal employee attendance at mission-related conferences and stressed that federal agencies should not interpret the administration's guidance curtailing conference spending as a moratorium on travel or conference attendance.

"As each agency reviews its travel and conference-related activities, it is critical for each agency to continue to recognize the important role that mission-related travel and conferences can often play in government operations," OMB said. "Given the unique travel and conference needs of each agency, there are circumstances in which physical collocation is necessary to complete the mission."

Going Virtual

With government meeting attendance likely to remain unpredictable in the foreseeable future, some associations have implemented more web-based components to their conferences, offering webinars or virtual meetings.

It's a potential solution that some lawmakers also have their eye on. A bill introduced in July, the Stay in Place, Cut the Waste Act, called on OMB to use videoconferencing to reduce federal agencies' travel spending by 50 percent from 2013 levels or as much as the office deemed feasible by 2017.

But a virtual format is not an option for every organization or event.

Take SAMPE, for example. The association often hosts politically sensitive presentations on International Traffic in Arms Regulations (ITAR) at its meetings. The closed-door, high-security sessions cannot be conducted over a web cam, Balko says. "People who have the government's permission to have a conversation inside the meeting room with closed doors is one thing, but once it goes digital, that's another thing."

Pucker of the Wireless Innovation Forum says his organization is looking into adding more virtual participation options for some of the organization's working meetings and conferences, but without the face-to-face interaction, it's difficult to get the same networking and collaboration value from an event.

"Finding a way to make that work is a challenge, especially for a small association, but we're talking with some of our government representative members about ways that we can make [a virtual alternative] work and be useful to them for events coming up this year," Pucker says.

The travel restrictions have proven frustrating for many members, he adds.

"They feel like their hands are tied, and they feel like their leadership is giving the impression that they're not really interested in collaborating on or contributing to the development of voluntary standards," he says. "One specific government representative I was talking to said he understood all the issues that they've had with the GSA conference scandal and things like that, but they're throwing the baby out with the bathwater."

Katie Bascuas is associate editor at Associations Now. Email: [email protected]

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[This article was originally published in the Associations Now print edition, titled "The Year the Feds Stayed Home."]

Katie Bascuas

Katie Bascuas is an associate editor at Associations Now in Washington, DC.