A Business That's Still Comfy in a Recession

A seatmate on a flight I took described her interesting business to me. She organizes seminars where she speaks to groups of professionals in her field.

INSERT DESCRIPTIONPhoto: suzi q

She rents a meeting room in a hotel (her fixed cost) and incurs the variable costs of her time and travel. I asked her about her business during the recession, since I assume that the demand for her seminars has decreased. Doesn’t she have a lot of empty seats? Isn’t she losing money?

She said no, because her demand is not down much (most attendees are from the public sector, which is less cyclical). More important, her fixed costs aren’t as fixed during the recession, because the hotels are so happy to have her business in these times that she negotiates deals which allow her to use smaller meeting rooms if demand is below expected. Her story shows that it’s good to be less cyclical than other businesses when you are hiring inputs.


James A

It also goes to show that the public sector (aka. government) will still continue to blow money no matter what the economic environment. Glad I could help pay for it all....

cirby

While the woman you mention seems to be doing okay (speaking to public-sector employees), the private-sector side of the conventions and meetings business is in the toilet right now. Everyone's waiting to see how bad things are going to get before meeting to talk about it (and the President didn't help by griping about people having big meetings in places like Las Vegas).

Someone could make a bunch of money by scheduling meetings at a lot of these hotels at reduced rates - most big convention centers would kill for business right now.

Patrick

Wouldn't renting the meeting room be a variable cost as well, as it fluctuates depending on how much business she has? For every new seminar, she'll have to rent a new meeting room.

Sebastian Jaen

In some way is the same issue with the French?s economy. The good thing for having a big state is that mostly of business don?t depend of cycles.

Tzipporah

Things may be down for on-site meetings because of the economy, but it's also more likely that people are getting comfortable with online versions of seminars like Webex. I know our customer demand for these kinds of offerings has gone steadily up over the last 4 years.

John Mayers

Have you ever met anybody in the "show business" admitting they have less business unless it's really obvious to everybody around them? Their future business heavily depend on their image, it would be stupid to acknowledge problems as that would hurt their image again, leading to even less business etc. A good old vicious circle.

People will only tell you the truth about their slow business if they can expect some advantage by doing so. For example by qualifying for a bailout by the government, like it happens for the banks and car industry.

OTOH, the fact that she can mostly count on attendees from the public sector may be an indication that she's telling the truth. Having clients from the public sector is kind of like a bailout these days, sponsored by tax payers's money.

econobiker

#5Tzipporah- another thing is that private companies not longer sponsor boondoggle trips to seminars as they are always searching to cut costs.

"She said no, because her demand is not down much (most attendees are from the public sector, which is less cyclical). "

The public sector, however, requires departments to use it or lose it for their budgets. The government (especially local) is less apt to use high tech meetings due to purchasing and vendor issues of having to put out requests for bids on the service(s), review bids for qualifications, and maintain the contract within government purchasing standards etc. When they can just write down "expenses for employee for training seminar and travel" it makes it easier to justify... waste, all waste...

Crystal

My comments probably won't win any popularity contest here given the gist of other comments, but something struck me about those very comments. Did I miss something in the article that gave any specific information about the seminar topic? I read several comments regarding it as a waste. Do these readers think all seminars on information in their field is a waste?

I worked for the government a very long time ago and attended seminars, but I didn't think they were wasteful. They informed and educated me on how to do my job - to include detection and prevention and ultimately reporting on fraud, waste and abuse, appropriation law, etc. Hardly an afternoon on the golf course!

science minded

went to such a meeting on science and the humanities last night--trouble is- could not stay for the good part where people find out who's there and who's not........learned a few lessons-- wow- where have I been-- it was like--been there, done that every single day-- for the last umpteen years--- working--not sleeping--enuff-----------

Science definately needs a booster shot-- perhaps even a boomerang-- if you are thinking of that false "comfy couch" image-- it is time to wake up.

Alon

Another business that's doing well in recession is... breast augmentation! surprisingly enough, there was a recent surge in cosmetic surgeries in the UK. I wrote a post about it here:

http://thinklikeaneconomist.com/blog/the-best-recession-proof-profession/