Reverse Sequestration – Lessons for Government Departments on Alternative Approaches to Cost Containment Reply

This post written by Doug Ducate, CEM, CMP
President and CEO
CEIR

As major exhibitions grow and prosper and generate more and more revenue, it is only natural for organizers to find new ways to spend money. Often these include improving the temporary environment of the convention center and the quality of life of the staff with things like more rental cars, single occupancy hotel rooms, etc. When a downturn hits and there is a need for savings, organizers must react just like the U.S. government departments had to respond to sequestration. The difference is the government didn’t follow our methodology.

When I was General Manger of the Offshore Technology Conference (OTC) which at one time was the largest annual meeting and exhibition in the U.S., we experienced both the joy of growth and the agony of shrinkage. But we were prepared having produced what we called a three-phase cost reduction plan.

Phase one was eliminating all the excesses no one outside of staff would probably notice. This included staff doubling up in hotel rooms, car pooling to the convention center, reducing the cost of the four- color, pop-up brochures and other fancy promotional tools.

Phase two involved cost-saving steps that those close to the event such as exhibition stand coordinators and organization executives and board members would likely notice. Office furnishings like couches, end tables and lamps and fancy desks and chairs were replaced with draped tables and convention center or contractor chairs. Continuous food service to certain areas was reduced or eliminated. Staff per diems were reduced, entertainment budgets cut and only necessary signs were ordered.

Phase three included items all would notice such as elimination of four language signs, no more draped stages in meeting rooms, elimination of a closed-circuit television program broadcasts to hotels and the hall, and possibly aisle carpet elimination. Fortunately we never got to stage three but we did get to stage two, and our exhibiting companies told us they appreciated the cost reductions they could see being implemented.

If only government departments would have reacted the same way to sequestration. Wouldn’t you have looked at reducing your $28 million travel budget before cutting air traffic controllers? And is furloughing park rangers and closing national parks to the public really the best they can do to reduce park department costs?

But if you were a department head what would you have done? Used the OTC approach and reduced costs on items no one else would even know? Or would you want to send a harsh message to the American people that it costs what it costs, and if you aren’t willing to pay you are going to suffer?

As our nation and the Congress struggle with the consequences of sequestration as it is being practiced, be honest – what would you do if you were in charge? I know what I would do, but I’d rather hear from you first.

For a comprehensive look at the current state of the exhibition industry, with forecasts through 2015 and an alternative scenario should sequestration be eased and/or a grand bargain struck, go to the CEIR Index Report.

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