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Government planners expect tough times ahead

This is a rough year to plan government meetings and events. So were 2013, 2009 and every other year following presidential elections. But 2017 is harder than most transition years. A new president and a new party control Washington, D.C., and both came to power on a firmly anti-government agenda.

Candidate Trump promised to “drain the swamp.” President Trump promptly froze hiring, imposed inbound travel restrictions and proposed a budget that would eliminate some agencies, reduce most and expand a few.

More telling was the “Presidential Executive Order on a Comprehensive Plan for Reorganizing the Executive Branch.” The March 13, 2017, order is focused on reducing the size and scope of government. As presidential advisor Stephen K. Bannon put it, the Trump administration is attempting the “deconstruction of the administrative state.”
That means fewer regulations, fewer agencies, fewer workers and fewer meetings.

“The new administration not only proposes cuts, which every new president does, it proposes elimination of entire agencies,” said Bret Sterenson, president of Washington, D.C.-based site selection firm Hotel Lobbyists. “There is reason to be alarmed. There will be some degree of cuts, and travel is the first category to be cut. It is a reasonable expectation to see meetings from a number of agencies go away.”

Uncertain Times

What that might mean for suppliers isn’t clear, Sterenson added.

The administration proposes to slash budgets at the Environmental Protection Agency, the Department of Health and Human Services, the Department of Housing and Urban Development and other cabinet offices.  The National Endowment for the Humanities and the Institute of Museum and Library Services, among other agencies, would be defunded entirely. The Department of Defense and related agencies are up for substantial budget increases.

“That will immediately mean more meetings by DOD,” he said. “Hotels that service both defense and non-defense agencies may break even or even do better depending on their customer base. I am intensely concerned for friends and colleges in a number of agencies, but for government meetings in general, my hunch is that the sector will hold relatively constant.”

Planners are similarly optimistic about the future. Unless they plan government events.

The latest MPI survey of planner attitudes found that while 58 percent of respondents expect positive conditions over the next year, 49.9 percent of planners involved in government events expect conditions to deteriorate. Only 22 percent of government planners predicted improvement.

The MPI survey was conducted in late 2016 and published in February 2017.

“There are specific market segments that are expected to be disadvantaged by the incoming administration,” MPI Georgia Chapter President Bill Voegeli told Association Insights, the company that conducted the survey. “There appears to be greater pessimism expressed about the near-term outlook for international corporate and association markets as well as the government market.”

Government planner pessimism is no surprise to consultant Garland Preddy, CGMP, Education and Training Director for the Society of Government Meeting Professionals (SGMP) in Washington, D.C. She spent decades planning meetings for a federal law enforcement agency.

“We were impacted every four years because our top people were political appointees,” Preddy said. “But it usually took time to make changes. The current administration is making immediate wholesale changes that have not been well thought out. Planners are pessimistic because they see not having the ability to do their jobs even if their agency survives.”


State and Local Impact

New presidents typically impose a hiring freeze as the first step in reordering priorities, Preddy continued. But the freeze usually lasts only as long as it takes to fill out key political appointee slots. The Trump administration has left hundreds of upper-level political offices empty.

The new administration has also attempted to ban inbound travel from a short list of Muslim-majority countries and successfully banned most hand-held electronics from flights originating in Muslim-majority countries in North Africa and the Middle East.

“Travel bans don’t help the meetings industry, including government meetings,” Preddy said. “The Global Business Travel Association has already documented a decrease in events planned by European groups for the United States. The ban on flying with electronics bigger than a cell phone further discourages meetings travel. At the state level, North Carolina has lost huge amounts of business because of its bathroom bill. Planners are afraid to do their jobs out of fear of violating some rule that hasn’t even been put into place yet. We saw it after the GSA scandal in 2012 and we are seeing it now.”

Look no further than the Centers for Disease Control and Prevention. Based in Atlanta, the CDC is the lead federal public health agency. CDC was also the first federal agency to cancel planned events because of the change in administrations.

In early January, the agency abruptly canceled its Climate and Heath Summit, scheduled for February. The CDC has not discussed the cancellation, but Georges Benjamin, executive director of the American Public Health Association, said the event was called off because agency officials feared upsetting a new administration that has called climate change a hoax. CDC also halted planning for an LGBT youth health summit scheduled for January, apparently out of political concerns.

CVBs seem unfazed. Amanda Toy, associate director of sales for the Greater Lansing (Mich.) CVB said while planners are concerned, advance bookings for government meetings remain strong. The biggest shift is shorter planning windows.

“There is fear that there will be extreme cuts in government spending and services,” she said. “Planners are not contracting out as far as they usually do, thinking that if the cuts happen, there will be no need for education and training meetings in mental health, education and other programs because the programs won’t be there. They may be planning closer in, but they are still planning based on current funding levels. That won’t change until budgets change.”

New Budget Priorities

Destination DC isn’t talking about warning signs, either. Government meetings only account for 6 percent of the destination’s market mix.

“Having access to the federal government is one of the greatest benefits of meeting in D.C. in terms of enhancing programming content, access to speakers and access to influencers,” said Melissa Riley, Destination DC’s vice president of convention sales and services. “We go through this every four to eight years. There will be changes, but they do not necessarily affect us specifically.”

Planners are still planning government events, she continued. Booking windows are shorter and room blocks are smaller as planners focus on regional drive-in meetings rather than national fly-in events, but meetings are still happening.

Uncertainty is the biggest bugaboo under the new administration.  

“What planners know is that budget cuts are being discussed and training is the first thing to go,” said Michelle A. Milligan, national president of SGMP. “That’s where so much of the negative concern by government planners is coming from. The reality is that the budget that has been proposed is not the budget that will be passed. Once Congress passes a budget, federal departments will have a better idea of the kind of money they will have for meetings. Or not. Everyone is waiting for the shoe to drop.” 

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About the author
Fred Gebhart