Getting ‘Inn’ on Discreet Sites for Meetings
Fear of economic espionage is driving more executives to chose secret retreat-style meetings at small, remote or private inns rather than large hotels, because confidentiality is easier to maintain.
Although it is hard to say how many of the requests are based on paranoia, hotels and security experts report increased concern about how easily a competitor’s employee could tape or crash sessions or just hang around lobbies and dining rooms and listen to people talk during a sensitive company confab.
Meeting planners find themselves organizing more discreet off-site sessions, said Joan Welch, a Pennsylvania-based planner. Many clients, she said, don’t discuss the shift for fear of revealing their favorite hideaways and further compromising corporate security.
Indeed, new technologies have made corporate espionage easier to accomplish, turning it into a growth industry in the United States, said Kevin Mellott, president of Erase Enterprises, a Dallas-based corporate security and safety consulting firm.
Moving meetings to small locations may not yet be a trend, but there are indicators that it is happening, Welch said.
The concern is greatest with high-level meetings. “I would say there is substantial interest on the part of people planning meetings for the highest echelon groups, such as boards of directors or in some cases a company’s top research officials,” said Ed Griffin, president of Dallas-based Meeting Planners International.
In response to the surge in business, inn-like properties have been quietly upgrading their security and business services to cater to an elite corporate clientele.
For example, Hermosa Inn, a 35-suite hotel in Paradise Valley, Arizona, between Phoenix and Scottsdale, was a leisure retreat when general manager June Bentley came on board three years ago. “When we took over, business customers were rather minimal,” she said.
But Bentley went after a more corporate clientele, in part by promoting one of the inn’s major assets--its well-separated, private villas capable of hosting groups of 12 to 20 people. She also upgraded the inn’s business services, putting writing desks in rooms and wiring rooms for computers.
Today, largely through word of mouth, the inn is playing host to mostly small corporate meetings and boards of directors. Clients range from groups of physicians to senior executives of Fortune 500 companies.
“If a group like that is going to hold a strategy session, privacy is very important,” Bentley said. The inn does not post the names of firms that are meeting that week and where.
Hermosa Inn client Michael Jorgenson, president of Sundance Broadcasting Inc. in Phoenix, used to hold his meetings at the Biltmore Hotel in Phoenix. “We get lost in a place like that,” he said.
And for Jorgenson, privacy is a concern. “We’ve been in situations where a competitor is staying at the same hotel,” he said. “It doesn’t make you feel quite as relaxed.”
Mellott said that the espionage can be fairly low-tech. In one recent case, competitors arranged to use a room adjoining a company meeting, he said. They were sitting around a table with a tape recorder in the middle, picking up everything that was said on the loud public address system being used in the next room.
Increasing competition has made the value of stolen information skyrocket in the last 10 years, Mellott said. “The going rate for a [stolen] laptop of a vice president-level official of an American company is $30,000.”
Mellott said that in the last year he has caught eight people in the act of stealing laptops at corporate meetings. His company has also swept for, and found, illegal listening devices at meeting sites.
Laptops can contain everything from lists of clients to recent strategy reports, information that can be potentially damaging in the hands of a competitor.
According to a 1993 survey by the American Society for Industrial Security, 32 companies were able to document losses of $1.8 billion dollars due to theft of information. Through the 1980s, the U.S. government estimated that U.S. companies sustained an average annual loss of $1.5 billion from the smuggling of American technology to foreign firms.
That has made corporations take notice, Mellott said. “There is more selectivity [in site selection] being expressed now.” In the past, meeting planners brought in security consultants after meeting decisions had been made, he said. Today, more efforts are made to coordinate the two concerns.
Some companies don’t think they are discussing “proprietary” information, but there are people who will pay money to find out anything that might give them a competitive edge, he said. Even something as nonthreatening as the “beach house phone number of the CEO, who is your best customer,” could potentially be a great loss. Meetings present security problems that companies aren’t used to dealing with, he said. “Off-site events are . . . not the same as securing your own building,” he said. “You don’t own the hotel, so you can’t control access. If someone can come in from a main hallway, they have a right to be there.”
But companies can turn the tables. Taking a chapter from the Cold War counterespionage disinformation efforts, one firm that was burned considered leaving false plans and data for the competition to steal, according to one meeting planner.
Carol Smith is a freelance writer based in Pasadena. If you have experiences to share or suggestions for Executive Travel, please write: Executive Travel Editor, Business Editorial, Los Angeles times, Times Mirror Square, Los Angeles, CA 90053, fax (213) 237-7837 or e-mail to business@latimes.com
