In lean times, some businesses scrap corporate retreats as an unjustifiable expense to shareholders and staff, while others say that employee getaways are as valuable as ever. But all agree, 2010 is looking up.
In 2008 and 2009, retreats and other educational opportunities were dispensable, as companies were under pressure to concentrate budgets on the essentials. As a matter of course, cash-strapped companies in 2009 were still looking to defer costs.
According to the U.S. Travel Association, 44 percent of the $200 billion spent on business travel annually stems from meetings and conferences. But in 2009, convention business in Las Vegas, a hot destination for such events, declined nearly 25 percent from 2008, underscoring the economy.
But in 2010, retreats are bouncing back. Planners say they’re less about frills, more focused and aimed at value — highlighting the changes to business strategies that have taken place through the recession.
“A lot of people don’t want to admit that they’re doing these things,” says David Conner, owner of Conner Consulting in Sacramento. “They’re doing corporate retreats, but when you’ve just laid off 17 people, you have to be more cognitive of the appearance of that to your stakeholders. You really have to communicate to let them know that it’s a working function, and when you go back to the office, there needs to be a unified story of what was accomplished.”
Perceived fiscal irresponsibility was the reason many large corporate retreats were publicized in the media over the past two years. Bad press was the reason Wells Fargo & Co. canceled a trip to Las Vegas after it made headlines for being too extravagant, especially in light of taxpayer bailouts. AIG was lambasted for spending a half-million dollars on a luxury-laden retreat for its team of execs after receiving $85 billion in bailout money. By comparison, TCF Bank unapologetically went ahead with a Colorado ski trip.
In general, most local companies are hanging in there and doing what they’ve always done, according to local planners. Still, others are downsizing the length of their events and activities or opting for no-cost alternatives, such as service projects.
“It’s a relatively new trend,” says Marc Sapoznik, marketing and public relations manager at the Resort at Squaw Creek. “People are looking more toward community service to contribute to the environment. We’ve had people request to be involved in assisting with river cleanup. Green meetings in general are becoming more popular, and we do offer those as well.”
Community service projects tied to corporate events at the Resort at Squaw Creek are not as popular as golf and fishing, but they have been gaining in popularity over the past few years, Sapoznik says.
On the other side of the spending (and environmental) spectrum, corporate cruises are gaining steam. Cruise lines, including those departing from San Francisco and Long Beach, are geared up for the summer months and eager to host corporate meetings. They have made cruises more attractive by offering shorter trips, lowered group prices and increased incentives.
Interest in corporate cruising has steadily increased in the past 10 years because of the value, says Joyce Landry, CEO of Miami-based Landry & Kling Inc., a company focused exclusively on corporate cruises. Per-day prices for cruises are frequently equal to the cost of booking an event at a high-end hotel, but the added benefit to cruising, she says, is that the price is all inclusive, which “really makes the planning carefree.”
“They’re doing corporate retreats, but when you’ve just laid â?¨off 17 people, you have to be more cognitive of the appearance of that to your stakeholders.”
David Conner, owner, Conner Consulting in Sacramento
In addition, the technology and connectivity on today’s cruise ships are as good if not better than the infrastructure found at resorts and hotels. Landry says that most ships have wireless Internet access throughout, including poolside. Plus, there is no charge to use all the equipment needed to produce a great meeting — lighting, sound and projection systems are all included in the cost of the trip.
One of the most popular corporate cruises departing from a California port is the five-night Carnival Spirit from Long Beach to Baja California. The cruise costs $510 to $700 for double occupancy, including taxes and tips, and includes two days in Cabo San Lucas where executives can golf, dine or participate in team-building activities.
For quicker, closer excursions, Hornblower Cruises & Events is the new go-to. Launched in Berkeley in 1980, Hornblower began offering corporate gatherings on the Sacramento River last summer. Quickie packages, such as a two-hour breakfast on a paddleboat, start at $60 per person.
“We are really flexible in being able to do what people want; you can have entertainment, there is a dance floor. We can do just about anything,” says spokesperson Tegan Firth. “We are also seeing people charter the boat and have one deck for their meeting and then they entertain on the second level.”
Exclusive, customized charters cost $3,000 and up, depending on guest list and amenities.
But for most Capital Region companies, the local country club still reigns supreme.
“Most of the companies around here don’t do the big Vegas or Caymans retreat. They have a country club membership, wherein they can have meetings in the morning and golf in the afternoon. They’re extremely inexpensive when you are a member,” Conner says. “The biggest expense is the opportunity costs of having your people away from the office. But still, even that is beneficial. The important thing is turning off the cell phone and focusing on the future.”
For Wyatt Jones, president of marketing for Airco Mechanical Inc. in Sacramento, a day on the greens provides the best value for meetings with his executive team of six. For less than $1,000, he can host a morning meeting and an afternoon of golf at Granite Bay, North Ridge or Serrano country clubs.
“The reason we do it off site is to limit distractions,” he says. “We put cell phones on airplane mode and every hour and a half we’ll take a break to return calls, and so on before we get back to it. It’s not expensive, and it’s valuable.”
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