Thursday, February 21, 2008

Bulls, Bears and Greed

As a regular telecommunications conference attendee I marvel at the ability of the hospitality industry to calibrate prices right to the brink of “what the market will bear.” Economists, such as Ramsey, have come up with supporting rationale for linking price with elasticity of demand, so of course what occurs couldn’t be deemed gouging. Or could it?
I wonder how my economist friends would react, when a “just say no” consumer revolt occurs. Outlandish greed on the part of the Geneva, Switzerland hospitality industry resulted in a one time relocation of the International Telecommunication Union’s major trade show and policy conference that occurs once every four years. An apparent miscalculated attempt to extract (extort?) more sponsorship and meeting fees for the Global Traffic Meeting by Intelsat has triggered major attendees, such as AT&T, British Telecom, Tata Group and Deutsche Telekom, to support a separate event scheduled for the same time at a hotel conveniently located two kilometers from the GTM conference hotel.
Conference attendance triggers a difficult cost/benefit analysis, because of high and increasing costs—regardless of the greed factor—with benefits sometimes not easily quantifiable. Some conference stimulate interest simply because a firm might be “conspicuous in its absence” suggesting all sorts of questions about financial or creative wellbeing.
On the other hand conference organizers need to find ways to extract income from hosting a must attend forum, particularly from attendees who find ways to exploit access to existing and prospective customers and partners without registering for the conference. For example, the annual conference of the Pacific Telecommunications Council, which occurs in January, attracts far more “free riders” than conference attendees. But if PTC were to overplay its hand—as Intelsat apparently has—thousands of visitors to Honolulu would change their travel plans perhaps irrevocably.