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Meetings in Canada: An Economic Portrait

By Kenneth Ross

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Kenneth Ross has been a market researcher and consultant for over twenty years. While at Maritz Research he managed the Canadian Economic Impact Study for Meeting Professionals International (2007- 2008) and the 2009 Update, and was the lead author of the final reports.

As an independent consultant Kenneth drafted the study guidelines for the 2014 CEIS.

Kenneth presented the CEIS, and discussed Meetings Sector initiatives, at numerous international conferences, and private briefings, including a special briefing of the Washington D.C. based Convention Industry Council (C.I.C.), as well as directly to Mexican government officials. These talks contributed to the development and execution of both a C.I.C. (in the U.S.A.) and a SECTUR (Mexican Tourism Secretariat) study (both released in 2011).

 

 

Imagining the “Meetings Sector” (introduction and background)

It is difficult to imagine not having any idea of the economic importance of tourism to a country. Whenever unfortunate events occur nearly anywhere in the World one of the first news stories, and concerns of government, is the impact that it will have on the country’s tourism trade.

Tourism is recognized as a very important contributor to many national economies.

Without tourism many industries would suffer, jobs would be lost, and government revenues would be cut.

Tourism – as an economic activity – was not always measured by governments, nor was its economic contribution understood. We talk of the “Tourism Sector” today as if it always existed – yet it has only existed officially since the year 2000.

The Meetings Sector does not yet exist.

Of course everyone knows that meetings occur, that many industries and businesses benefit from meetings occurring – but there is no official measurement of the “Meetings Sector”. Meetings industries remain where tourism industries were before 2000 – unofficially discussed as important and officially overlooked.

The Economic Contribution of Meetings Activity in Canada study (also referred to as the “Canadian Economic Impact Study” or “CEIS”) was a ground-breaking undertaking that paved the way for many other studies seeking to reveal the importance of meetings to a national economy.

The CEIS remains a “living” study also – the only one of its kind that continues to this day: The first study was released in 2008, an Update to this study was released in 2009, and in 2014 a new study will be released.  http://www.mpiweb.org/Portal/Research/ceis30

The 2008 Canadian study was the first to use the approach laid out by the World Tourism Organization (UNWTO) in their 2006 report on how best to identify and measure an activity that did not (and still does not) even have an agreed upon name! The activity has been referred to as: conventions, conferences, congresses, business events, incentive travel, and by the acronym “MICE”; the UNWTO report set the activity name, for its report, and as a recommended international definition as “meetings”.

http://statistics.unwto.org/en/publication/measuring-economic-importance-meetings-industry-developing-tourism-satellite-account

The Canadian study set out using the UNWTO definitions and approach to first identify what industries were the core “meetings industries” (together comprising the “Meetings Sector”)  and secondly to identify the other industries that benefitted from meetings taking place.

The goal of the UNWTO report was to establish guidelines by which national statistical agencies – government agencies – could measure the Meetings Sector and report on the contribution to the overall economy that meetings activity made. The recommended approach was to extend (or build upon) an industrial aggregation in the System of National Accounts (SNA) called the “Tourism Satellite Account” (TSA).

In short the best way to officially recognize meetings industries and the economic activity of “holding meetings” is to expand tourism reporting to include a separate “Meetings Sector”.

The UNWTO project was created and supported by three organizations that were, and remain, at the heart of what has become a truly global undertaking: ICCA (International Congress and Convention Association), Reed Travel Exhibitions (RTE) and Meeting Professionals International (MPI).  The stated goal was to establish a foundation that governments could build upon to measure and report on meetings activity, just as they have done with tourism. http://www.iccaworld.com/cdps/cditem.cfm?nid=5173

Yet in the seven years since the UNWTO report was published no government has yet proceeded to expand TSA reporting to include a meetings extension.

In the seven years since the report was published privately funded studies have appeared emulating this goal – the Canadian study, the first, was an undertaking by the far-sighted leadership of the Meeting Professionals International, Canadian Foundation.

The Canadian study final report extensively details (in a greater depth than is possible here) the history behind the study, the technical background of how industries are measured, the challenges in identifying meetings industries, and both the overlap of tourism industries and meetings industries – and where they are separate.

A well-known graphic representation of the theory is found in the 2008 CEIS final report:

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[Figure 1] The UNWTO goal – Reporting on “Meetings” and Tourism

 

A “Meetings Activities Extension” would detail the overlap with the Canadian Tourism Satellite Account (CTSA) in a shared area of economic activity and expand to include unique economic contributions of the Meetings Sector.

This is the core of the UNWTO approach, the heart of the Canadian study, and the legacy that other national studies have built upon.

 

CEIS 2008: The Approach

The Canadian study is comprised of two components: measuring meetings activity for a base year (2006) and then conducting an economic contribution analysis of the reported activity.

The scope of meetings activity was determined by original survey research with members of the meetings industries (the economic “supply side” of meetings activity) and those attending meetings (the economic “demand side”) to capture the expenditures associated with meetings.

Non-economic data was also collected from survey respondents to allow for classification of meetings activity by type of meeting, type of venue, and type of meeting attendee (local, domestic traveller, international traveller).

In plain terms: meetings activity covers the “who, what, where and how much”; in the CEIS these figures were projected from the weighted survey data.

Economic contribution analysis (Often referred to as “economic impact” analysis) places meetings activity into the larger economic picture, through contextualizing the activity as a direct contribution to the GDP, employment supported by the activity, and the tax revenue generated.

In the CEIS this was presented in the context of the Accounting Framework of the CTSA and through “Input-Output” (I-O) Impact modeling for Indirect & Induced contributions.

 

CEIS 2008: The Results

The survey research and projections defined the scope of meetings activity in Canada (in 2006) and provide answers to the following questions: How many meetings? What type of meetings were they? Where were the meetings held? (venue types) Who attended the meetings? (participant types and origin) How many attended the meetings? How much was spent by participants?

The detailed, and by their nature, complex tables presented in the final report were numerous – offering many different breakouts to ensure that a complete as possible “portrait” was made available. (All figures are from the CEIS 2008 final report, prepared for Meeting Professionals International, prepared by Maritz Research and the Conference Board of Canada.)

For instance the finding that there were over seventy million participants at meetings in Canada in 2006 was further broken down by the type of meetings, the type of venues and the participants’ place of origin. (As shown in table 1.)

 

[Table 1]

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Detailed breakouts of participant expenditures were also shown in numerous different presentations – for example the twenty-three billion dollars that meeting participants spent in Canada was presented with separate totals by the type of meeting participant and by the type of meeting. (As shown in table 2.)

 

[Table 2]

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The richness and amount of data available for reporting also allowed for valuable estimated expenditures on a per-delegate basis – the average spending by meeting delegate based on their place of origin and the type of meeting attended. (As shown in table 3.)

This average expenditure provided the starting point for the development of a model for projecting expenditures for future meetings in Canada – developed by a Canadian tourism bureau, independent of the CEIS study reporting.

 

[Table 3]

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Once the scope of meetings activity was established the economic modeling set out to estimate how this activity contributed to the Canada economy in 2006. The economic analysis identified: “Demand” for commodities by industries; “Supply” of commodities by industries; Share of “Supply” (of Tourism Commodities) accounted for by Meetings Demand; Employment generated; Contribution to the GDP; Effect on taxes (all levels of Government); and Industry Output (“Total value of shipments”).

The key figures – in the most basic sense – are those that speak to the “place” in the overall economy that the economic activity of “holding meetings” generates for both meetings industries and other industries (such as the tourism identified industries: transportation and accommodation). The most important measure in this regard is the direct contribution to the Canadian Gross Domestic Product (GDP) for the year 2006.

With meetings activity generating over eleven billion dollars in estimated contribution to the 2006 GDP, the meetings industries and the portion of other industries dependent on meetings activity, can be compared favourably to other industries which are officially reported on by the government – such as automobile manufacturing and forestry.

Specifically the benefit to tourism industries is shown to be substantial – without meetings occurring in Canada in 2006 it could be said that nearly five billion dollars of tourism industries contribution to the Canadian economy (in terms of direct GDP) would have disappeared. (As shown in table 4.)

 

[Table 4]

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Along with direct GDP contribution the significance of the direct employment generated by meetings activity in 2006 was illustrated. Over two-hundred and thirty-five thousand jobs – over one-hundred and forty thousand in the tourism sector alone – were determined to be dependent on meetings activity in Canada. The story is quite clear: meetings support considerable employment across a variety of industries and businesses. (As shown in table 5.)

[Table 5]

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The CEIS explored the contributions of meetings activity further – economic benefits are derived from not only the direct effects of meetings expenditures but also the “spin-off” – indirect and induced effects of the original expenditures. When looking at this expanded picture of the impact of spending associated with meetings occurring in 2006 it was reported that over five-hundred and eighty-three thousand (full-year) jobs were supported by meetings activity. (As shown in table 6.)

 

[Table 6]

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CEIS 2008: Conclusion

The Canadian study went beyond reporting only on tourist expenditures at meetings, and looked at local demand for meetings activity for the first time. The study was also the first to measure the “supply-side” of meetings activities – the industries themselves that organized meetings and provided the venue space for them. It was the first study to use the UNWTO definition of a “meeting”. It was also the first study to reveal the economic benefits received by tourism industries due to meetings occurring.

In short the CEIS created a model of what was at the heart of the UNWTO recommended approach: a Meetings Extension of the Tourism Satellite Account.

While this brief review overview of the some of the key findings from the first Canadian study to address the meeting sector’s contribution to the economy is, by necessity, a story told mostly by the numbers, the main message of the study remains quite simple: meetings are important to the Canadian economy.

 

CEIS 2009: The Update

A feature of the Canadian study was that the economic modelling created had multiple linkages to official government reported tourism, economic, and industrial statistics. Combined with secondary data sources directly relating to meetings activity a methodology was developed to “move forward” the benchmark results of the CEIS findings, without conducting the extensive and costly survey research of the first study.

As official statistics were released for the years 2007 and 2008 the CEIS 2009 Update project utilized the data linkages allowing for the CEIS base year 2006 survey data to be projected to report on meetings activity for the years 2007 and 2008.

The results showed that meetings activity levels did fluctuate over the three years covered by the CEIS and the 2009 Update.

The projection tracked the overall growth between 2006 and 2007 and the 2008 decline in the number of meetings, a decline in participants attending meetings in Canada and the decline in expenditures by these participants. Worthy of note is that a decline in meeting participants travelling the furthest to attend a meeting started in 2007. (As shown in table 7.)

 

[Table 7]

Meetings Activities

Base Year

2007

Growth: 2006 to 2007

2008

Growth: 2007 to 2008

All Meetings 671,500 697,400 3.9% 673,400 -3.4%
Total Participants 70,255,500 71,732,800 2.1% 69,749,600 -2.8%
By Origin
Local 40,360,900 41,625,100 3.1% 40,696,400 -2.2%
Other Intra-Province 16,574,000 17,036,000 2.8% 16,278,800 -4.4%
Other Canada 10,882,100 10,778,900 -0.9% 10,595,500 -1.7%
International 2,438,500 2,292,800 -6.0% 2,178,900 -5.0%
Total Expenditures $23,264,754,000 $23,839,782,800 2.5% $23,827,643,100 -0.1%

 

The Update reported that economic contribution reporting followed the year-over-year pattern seen in the activity levels – except in the employment figures – these were already in decline in 2007. The Update report showed that in 2008 the decreases in Meetings activity lead to an accelerated loss of employment, tax revenue and contribution to the Gross Domestic Product.

The main economic contribution figures reveal that changes in the direct contribution were mirrored by the “spin-off” indirect and induced impacts. (As shown in table 8.)

 

[Table 8]

Total GDP($ millions) generated Base Year 2007 Growth: 2006 to 2007 2008 Growth: 2007 to 2008
Direct Effects $11,281 $11,469 1.7% $11,330 -1.2%
Indirect Effects $12,851 $13,066 1.7% $12,908 -1.2%
Induced Effects $9,563 $9,722 1.7% $9,605 -1.2%
Total $33,695 $34,257 1.7% $33,843 -1.2%
Total Employment(Thousands of full-year jobs) Base Year 2007 Growth: 2006 to 2007 2008 Growth: 2007 to 2008
Direct Effects 235.5 231.7 -1.6% 222.9 -3.8%
Indirect Effects 195.8 192.7 -1.6% 185.4 -3.8%
Induced Effects 152.2 149.7 -1.6% 144 -3.8%
Total 583.5 574.1 -1.6% 552.3 -3.8%
Total Effects on Taxes($ millions) Base Year 2007 Growth: 2006 to 2007 2008 Growth: 2007 to 2008
Direct Effects 5,685 5,703 0.3% 5,482 -3.9%
Indirect Effects 4,769 4,817 1.0% 4,698 -2.5%
Induced Effects 4,120 4,148 0.7% 4,017 -3.2%
Total 14,574 14,668 0.6% 14,196 -3.2%

 

The unique design of the CEIS, with linkages to official statistics, allowed for it to be a “living” study, tracking the changes in meetings activity and the economic contribution of the sector over a three-year period.

It is hoped that this brief review of the Update extension of the original Canadian study illustrates, as much today as it did when it was released in 2009, that the meetings sector drives a considerable economic activity. And while not yet officially measured or reported in the National Accounts it is possible to combine the Meetings Sector with the Tourism Sector and create an Accounting Framework representing a TSA Meetings Extension. The modeling of the interaction of industry activity can place the contribution of Meetings Activities into a national economic context which can be tracked year-after-year.

 

CEIS 2014: An Evolution

One of the first questions asked about the CEIS when the report was released in 2008 was whether or not Provincial and city level data could be released. The need for “local” economic contribution data was a pressing one for many involved in the meetings related and destination promotion businesses.

The question of reporting meetings activity and economic contribution on “sub-national” levels persisted; the request for “local” data reoccurred as national studies were released in other countries.

It became clear that the evolution of the UNWTO inspired studies would extend the economic analysis to the local level. A key recommendation from a 2011 international Joint Meetings Industry Council (JMIC) conference on valuing meetings was: “To encourage the development of local applications for economic impact models in order to generate better data for use in individual communities.”

http://www.themeetingsindustry.org/storage/media-releases/Conference%20on%20Evaluating%20Meetings%2011.5.pdf

Throughout 2011 the MPI Canadian Foundation once again took the lead in developing the basis for another ground-breaking study of the Canadian meetings landscape – this time addressing the need for regional level data. By the spring of 2012 the study guidelines had been developed and potential suppliers were contacted.

The new study is being conducted now (2013) and in 2014 the next generation of Canadian economic impact study, of meetings activity, will be released.

 

Postscript: The future

The ultimate goal for the future, spelled out over seven years ago in the first UNWTO report, is for meetings activity to be formally recognized by governments, statistical agencies and for the measurement and reporting of the contribution it makes to national economies to be officially conducted.

The CEIS demonstrated that the meetings sector could be identified and that a reporting framework was possible; the ultimate long-term goal of the Canadian study will be realized if and when the Government of Canada reports on the “National Meetings Sector annual economic performance”.

The individual national studies – such as the CEIS – serve an immediate purpose: to begin the quantification of meetings activity. As a practical data tool the results of these studies can inform decisions and assist in planning.

As they evolve and as more studies are conducted to reveal the impact that meetings activity has on economies (national, regional, and local) greater recognition of the economic importance of meetings will occur.

This recognition, however, will remain “informal”.

The body of research and academic level work being prepared today must be used for more than public relations “supporting documents”, impact calculation models for destinations, or defensive lobbying efforts. While these are important undertakings in their own right the work that has been done and continues to evolve must also inform a coordinated effort on the part of the international “meetings community” to literally create a formally recognized economic sector.

The UNWTO report was the start of a journey, the CEIS and other studies have been the first steps – the destination has not yet been reached.

 

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