The economic fallout from the September 11 tragedy continues to make headlines and have ramifications for credit unions. Sharing page one are troubling stories of a depressed stock market, massive layoffs, job losses caused by increased security (the elimination of curbside check-in, etc.), and greatly curtailed leisure and business travel across the board to name but a few. High on the list of bad news stories are those detailing the worsening woes of the airline and hospitality industries. Multitudes have stopped traveling, at least by air. Planes, despite a greatly reduced schedule, are still half empty. The occupancy rate at most hotels has plummeted to unprecedented low levels. One major cause of this dire situation is the fact that so many meetings, seminars, symposiums, conventions, and educational conferences, including those sponsored by CU groups, have been canceled. More may be depending on what happens next and when and where. By canceling credit union events, some of which had been scheduled for years, the impact is felt immediately by the airlines that were going to transport all those credit union attendees. And by the hotels that were going to house them. And by the sponsors of the meetings, too. In the days following the terrorist attacks, at least 10 national credit union meetings were canceled. Credit union trade groups and special interest associations, the sponsors of those canceled meetings, depend heavily on meeting income as part of their overall annual operating budget. Typically, meetings revenue is a large part of an association’s annual budget, actually supporting many other activities. Profits from such meetings also help keep annual membership dues down. Important meetings were scheduled but canceled or postponed by CUNA (Annual Symposium, Boot Camp, and others), NAFCU (Congressional Caucus and possibly others), NASCUS, NACUSO, the Aerospace Group, NACUC, the Combined Automotive Credit Unions Association, and several credit union vendors. Although not anywhere near the dollar amounts impacting the airline and hotel industries, the bottom line impact on credit union associations’ annual operating budgets is significant. Don’t be surprised if a dues increase is already being discussed to make up for the meetings’ income shortfall. Yet, cancellations or postponements seemed to be the only option. First, out of respect to the thousands of victims and families of the heinous terrorism. But there were other reasons. Participants were uncertain of getting a flight. They were also well aware of the thousands stranded in the days immediately following the terrorists attacks. Others stayed away because of the prospect of uncertain, but sure-to-be lengthy delays, caused by heightened security measures at the nation’s airports. Fear of flying was also a major factor. Most everyone can be sympathetic towards the dire straights in which airlines, hotels, and in smaller but still important ways even credit union associations now find themselves. But think back to that time before the tragedy. Prior to September 11, airlines already had major problems. Despite gouging business travelers, often charging upwards of $1,000 for a flight that could be purchased for less than $300 under certain conditions, they were having major financial problems. In-flight service had deteriorated. Employee attitudes (telephone, check-in, and on-board) in far too many instances, were less than customer friendly. Delays were frequent as were last minute cancellations. Many management decisions were suspect. Executive pay was and is high. One CEO of an ailing airline, who is heading up his fourth airline, reportedly earns $12 million annually. On the other hand, no one is blaming the airlines for the tough times caused by the tragedy. Government support is now crucial to the continued survival of many airlines. Those that do survive will never operate the same based on lessons learned from the events of September 11, 2001. Much the same can be said about the hotel industry. Room rates had skyrocketed out of control. A growing list of surcharges became ridiculous. Only travelers on fat expense accounts could afford to stay in the better hotels and resorts. Now these folks are staying away in droves, either deciding the trip wasn’t necessary after all, or finding alternate ways to conduct business. And so it goes with credit union groups. There were too many national credit union meetings scheduled within the same time frame. There was apparently no desire or interest in coordinating meeting schedules. Many of the same program topics and speakers could be found on the agendas. Like the airlines and hotels, many credit union meetings were upping the price on a regular basis despite reducing the frills. The airline and hotel industries will never be the same. Neither will credit union meetings. And that represents at least some good that can be expected to come out of a most difficult time in this country’s history. When things return to some sense of normalcy, and they will, airlines will need to change their policies as will hotels. And on a much smaller scale, credit union groups that expect potential participants to travel long distances and pay high fees for the same old same old may be in for a surprise. Putting it bluntly, those unable to attend a meeting scheduled these past few weeks may discover that they really didn’t miss it. Or need it. Although location will always be important, credit union meeting programs will have to be more in tune with participants’ changing educational needs and be more competitively priced. A greater effort will need to be made to not have so many meeting dates and locations in conflict with each other. And programs will need to be fresh and much more in tune with the changing needs of participants. Things will never be the same. But realistically, we have a long way to go before most of this becomes a high priority. Right now our collective number one goal is to do all we collectively can to get this country and the world back on track as soon as possible. Comments? Call 1-800-345-9936, Ext. 15, or Fax 561-683-8514, or E-mail [email protected].

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Peter Westerman


Credit Union Times

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