A big event, leery of frills? Let's do Philly

Being "nonglamorous" may work to Philadelphia's advantage when it comes to corporate travel this year.

Remember when all those AIG executives were partying at a swanky resort while the troubled insurance company was getting bailed out? That has led to a new term in the hotel industry: "the AIG effect."

Hospitality experts say the AIG effect is making its mark at companies, prompting them to prohibit events at over-the-top or lavish locales such as Las Vegas, Orlando or San Diego - any place with a beach or a fancy golf course.

"All corporations are concerned about the image of taking their events or meetings to high-profile cities or properties because of the bad press recently with some companies," said Michael Lyons, president and chief executive officer of Global Events Partners in Center City, which manages corporate events and meetings. "Philly is not perceived as a glamour city.

"My favorite saying is, 'No one is going to get fired for bringing their meeting here,' " he said.

The Philadelphia Convention and Visitors Bureau - the city's chief tourism-promotion agency and primary sales and marketing vehicle for the Convention Center - will try to cash in on this phenomenon with a $150,000 advertising campaign starting next week. Its slogan: "Philadelphia - Serious Value for Serious Times."

"We're not sure if any meetings have decided to move here yet because of the AIG effect," said visitors bureau spokeswoman Danielle Cohn, "but our sales team has been out trying to capture that business, if it does in fact exist."

The meetings business generated about $1 billion for the city last year, filling 40 percent of Center City hotels, according to the bureau. It is the largest segment of business for the city's hotels.

About two-thirds of the new campaign's budget will target corporate planners and businesspeople in the region, Cohn said. The remainder is geared toward the affluent New York and North Jersey business market.

Hospitality experts and corporate planners say Philadelphia exudes "affordability" and "seriousness" - and nowadays, perception is everything.

"Meetings could be held here without anyone's perception of the meeting being an extravagance or 'party time,' " said Peter Tyson, vice president of PKF Consulting, who focuses on the region's hospitality industry.

The AIG effect "is really more about managing perception and mitigating risk, especially if you've had workforce reductions," Christine Duffy, head of St. Louis-based Maritz Travel, a major corporate meeting organizer, told members of the visitors bureau board at their December monthly meeting. "You don't want to do something extravagant as if you're celebrating."

MeetingsNet, an industry trade publication, conducted an online reader survey in late October and early November to find out how companies were reacting to difficult economic times. It found that this economic downturn had created a wave of cancellations, and that companies were choosing more affordable destinations.

The reason, in addition to the financial realities: Meeting planners were running scared. The outrage over American International Group Inc.'s employee-reward trip to a luxury resort on the heels of the company's government bailout in the fall put public perception on the front burner.

Among those to scale back the most were the automotive and financial-services sectors.

"Our budgets are limited now," said Jane Myer, who heads conference services at Vanguard Group Inc. of Malvern. "Philadelphia is more a business destination with limited distractions.

"There's a lot of variety among [hotel] venues, and you have a lot of educational venues to build a balanced program," she said.

Corporate planners say Philadelphia was also considered much more economical than New York. It's a smaller city, yet it has all the amenities of New York: a large convention center, fine restaurants, and shopping. It's also a major hub for U.S. airlines with direct routes into and out of the city, and is easy to get around in.

"In New York, $600 to $800 a night gets you in an upscale hotel brand," said Jack Ferguson, executive vice president of the visitors bureau. "You get the same meeting space at the same level of quality, but it could cost $200 to $400 in Philly."

Duffy said clients were looking to travel closer to home, which could further play to Philadelphia's advantage since it draws people from throughout the East Coast by car and train, not just by air.

She said other not-so-glam cities that stood to benefit included Baltimore, Dallas and Atlanta - all regional hubs accessible to large populations.

"It's easier to name any of those," Duffy said. "It's not the same perception as if someone were to say, 'We're going to Hawaii.' "

In the same way that cities perceived to be glamorous were getting snubbed because of the economy and the AIG effect, luxury and deluxe hotels, such as the Four Seasons and Ritz-Carlton, have been hurt more than lower-priced hotels, consultant Tyson said.

"Corporate budgets are tightened," he said, "and some companies are instructing their employees and meeting planners to reduce travel and/or 'trade down' by booking at less expensive hotels."

The city's hotels are coordinating with the visitors bureau to get the message out on Philly's value. Several have already put together complete meeting packages to be sold to planners.

"Pretty much all of the hotels have signed up behind it," said Ed Grose, executive director of the Greater Philadelphia Hotel Association. "This economy is making everybody work harder to get new business."