U.S. Government Regulations and the Threat for Travel Industry

Earlier this week, the U.S. Treasury Department announced new regulations for recipients of funds from the Troubled Asset Relief Program (TARP). In addition to executive compensation limits, the department will require the Boards of Directors of those recipient corporations to adopt a company-wide policy on expenditures related to, among other things, conferences and events.

This will have global ramifications on the travel industry and specifically the destination marketing industry. As a long time advocate of Destination Marketing Organizations I am concerned over the numbers of conferences that have cancelled due to fear of the media outcrys of corporate waste and abuse. The fact is that business travel is a necessary occurrance for companies and organizations. So how do we deal with this issue that keeps growing every day?

Companies who are planning conferences or incentive trips must make sure that their goals for the conferences are clearly stated and that these goals become part of the mass communications about the event. Conferences have suffered from the economy already in that participants are very budget constrained. Now companies must also be aware of the media implications of attending an event that is for pleasure and not commercial necessity. As for incentive travel or conferences, we all know that compensation for a job well done comes in many forms, and studies show that rewarding hard work by cash bonus is not as effective as incentive travel. If we start to limit these compensation tools we undermine the commercially reasonable ways that we have always done business.

Excess is wrong. Using taxpayer money to give bonus pay is wrong. But we are in an industry where millions of hard working people are trying to make the best of this economic situation. The DMOs (destination marketing organizations) have to weather this economic storm, and the hotels need to retain group business that they so desparately need. The leaders and CEOs of these destinations are facing some of the most critical times of their careers. As a travel marketing company for more than 25 years offline and 15 years online, what I see is alarming. We need to work together.

Leah