AIG’s Seaside “Junket” – The Untold Story
Yes, everyone is shocked and appalled that AIG conducted their “Independent Agent Convention” at the luxurious St. Regis Resort, Monarch Beach less than a week after their colossal failure. The media is missing the full perspective, which is only suggested by the posted hotel charges. It’s surprisingly encouraging that the House Oversight Committee actually obtained this information so quickly.
FACTS:
- A well-designed incentive trip should pay for itself because agents are only rewarded if they meet their increased sales goals.
- This trip was undoubtedly planned well in advance, and AIG faced hundreds of thousands of dollars in contractual obligations even if the event was canceled.
UNANSWERED QUESTIONS:
- AIG contracted for 111 rooms on peak night – actual occupancy was only 68. They paid nearly $53,000 attrition for unused rooms. Was the sales incentive a major failure (like the company) or did sane people actually cancel their trip?
- While the cancellation costs would have been high, the many undisclosed on-site charges and the high-profile spa and golf charges would have been avoided. Who authorized this event to proceed?
- What about the transportation costs? We have no indication of how many attendees were actually ticketed, even if they ultimately did not attend. Each agent is undoubtedly allowed to bring a guest, so airline tickets are well over $100,000.
- Who negotiated a Presidential Suite at 5 nights for $3,200 + tax nightly? With anticipated attendance of over 200 people, a skillful negotiator should have demanded and obtained this suite on a complimentary basis or, at least, for the standard room rate of $425 nightly. Stellar Events has a group of only 140 traveling to Puerto Vallarta next week, and we have a Presidential Suite at the group rate guaranteed in our contract.
My small meeting planning business, Stellar Events, has been profitable and debt-free for our entire nine years of incorporation. It hasn’t been difficult to work hard and focus on integrity. Here’s a really big question: What’s our future in this failing economy, which is being destroyed by giant corporations that couldn’t do the same?