IT'S NOT A JUNKET, IT'S AN INVESTMENT

The bad press surrounding AIG's infamous October 2008 sales meeting in Dana Point, Calif.--where employees partied at a lavish resort as AIG got billions in a bailout--helped put a chill on the luxury hotel business. Companies ran scared, canceling meetings or switching them to less opulent venues. Maritz Travel, a meetings company, says between October and December of last year it had $150 million in cancellations for 2009 bookings, a big chunk of its typical $600 million in bookings annually. Spending on U.S. events this year will fall almost 13%, says the U.S. Travel Assn.

Now luxury hotels are trying to rejuvenate junkets--by couching them as wise investments. In September the travel association gave industry salespeople a 50-page study projecting bottom-line benefits for business events and travel. Ritz-Carlton, Hyatt, and Omni have chimed in with ad campaigns. The message: Hotel meetings, with their ballroom dinners, poolside cocktails, and afternoon golf outings, aren't frippery. They're a prudent way to motivate staff and cultivate new business. "It's not extravagant if it produces results," reads a Ritz-Carlton ad appearing recently in The Wall Street Journal. "It's not a bachelor party. This is my sales team," reads the headline of another ad popping up in business publications, this one from the Las Vegas Convention & Visitors Authority. Over the past 12 months, meanwhile, the Four Seasons chain has held roughly 130 events for prospective clients, in part to argue that a Four Seasons vacation is an effective employee incentive.

Meeting planners don't expect an immediate rebound. "There remains an air of caution and conservatism," says Josh McCall, CEO of Jack Morton Worldwide. But they say there has been renewed interest from clients. In October the San Francisco Fed held its Asia Economic Policy Conference at the Bacara Resort & Spa near Santa Barbara, Calif. (Attendees paid their own way.) Evidently, even federal regulators can recognize the benefits of fun in the sun.