It's Not a Junket, It's an Investment
The bad press surrounding AIG's (AIG) infamous October 2008 sales meeting in Dana Point, Calif.—where employees partied at a lavish resort as AIG got billions in a bailout—helped put a chill on the luxury hotel business. Companies ran scared, canceling meetings or switching them to less opulent venues. Maritz Travel, a meetings company, says between October and December of last year it had $150 million in cancellations for 2009 bookings, a big chunk of its typical $600 million in bookings annually. Spending on U.S. events this year will fall almost 13%, says the U.S. Travel Assn.
Now luxury hotels are trying to rejuvenate junkets—by couching them as wise investments. In September the travel association gave industry salespeople a 50-page study projecting bottom-line benefits for business events and travel. Ritz-Carlton, Hyatt (H), and Omni have chimed in with ad campaigns. The message: Hotel meetings, with their ballroom dinners, poolside cocktails, and afternoon golf outings, aren't frippery. They're a prudent way to motivate staff and cultivate new business. "It's not extravagant if it produces results," reads a Ritz-Carlton ad appearing recently in The Wall Street Journal. "It's not a bachelor party. This is my sales team," reads the headline of another ad popping up in business publications, this one from the Las Vegas Convention & Visitors Authority. Over the past 12 months, meanwhile, the Four Seasons chain has held roughly 130 events for prospective clients, in part to argue that a Four Seasons vacation is an effective employee incentive.
Meeting planners don't expect an immediate rebound. "There remains an air of caution and conservatism," says Josh McCall, CEO of Jack Morton Worldwide. But they say there has been renewed interest from clients. In October the San Francisco Fed held its Asia Economic Policy Conference at the Bacara Resort & Spa near Santa Barbara, Calif. (Attendees paid their own way.) Evidently, even federal regulators can recognize the benefits of fun in the sun.
Asia's MBA Hopefuls Look Homeward
The U.S. is still the most popular destination for business school applicants from Asia, who now make up 29% of all GMAT takers. But more of the region's MBA hopefuls are looking closer to home when picking a program. A study from the Graduate Management Admission Council, which administers the GMAT, shows those taking the test in Asia forwarded a lower percentage of their score reports to U.S. schools in 2008 (71%) than they did in 2004 (77%). The number sent to Indian MBA programs was up 470%. B-schools in Singapore received 305% more, and 112% more scores went to programs in China. One reason for the tilt away from American MBA programs: the move by U.S. lawmakers to restrict the hiring of foreigners on H-1B visas. (Most Asians who study in the U.S. hope to stay.) A second reason, says GMAC President and CEO David Wilson, is that Asian B-schools "are stepping up their game in terms of curriculum, students, and faculty."
Why Hollywood Loves to Repeat Itself
With their built-in fan base, sequels are seen as a safe bet in Hollywood. Now research by two academics—one at Cass Business School in London, the other at Texas Christian University's Neeley School of Business in Fort Worth—shows just how safe. The two studied the take for more than 100 movie sequels released from 1998 to 2006. Comparing those box-office numbers with what was earned by thematically similar standalone films shown around the same time, they found sequels generated an average 27% more revenue. Using their formula, they estimate the upcoming teen vampire film The Twilight Saga: New Moon (the second in the Twilight franchise) should make $34 million more domestically than an upcoming standalone movie about adolescent bloodsuckers. The professors, TCU's Mark Houston and Cass' Thorsten Hennig-Thurau, also studied the "feedback" effect of follow-up flicks, finding that they're responsible for boosting DVD sales of their parent films by 1.3 million copies.