Buying meetings: A new start

Martin Ferguson asks how corporates can better manage internal and external meetings space, and derive maximum value from suppliers

THE EUROPEAN MEETINGS AND EVENTS (M&E) sector is worth some £70 billion annually, according to a meetings expert at Paris-based travel management company (TMC) Carlson Wagonlit Travel (CWT).

Ask the experts about that enormous spend, and they'll tell you that a significant chunk remains largely unmanaged. Accomplished buyers will have had their arms wrapped around transient travel spend for more than a decade, and the progressive among them may already have a handle on meetings. But, in this new era of austerity, a growing number of travel procurement professionals now include M&E within their ever widening area of responsibility. And many are asking: where do I start? You don't have to be an ageing travel manager to recognise the obvious synergies when purchasing products and services from traditional suppliers. Your company may buy 3,000 room-nights from one of the major hotel chains, so you'd be quite right to ask how much is being spent at the same venues on M&E, and whether the two streams can be consolidated - and this would be equally relevant if you bought only 100 rooms. It's a no-brainer.

Trevor Elswood, group managing director at meetings, events and accommodation specialists BSI, is among an elite group of industry leaders that knows the M&E sector inside out. His advice for anyone developing a strategic managed meetings programme (SMMP) is to start with "patient analysis" of a company's internal facilities and external booking habits.

"The bright people take a long, hard look at who [in the business] is booking meetings, where they are booking them, and how much they are spending," he says.

"Then they break it down into bite-sized chunks so they can really understand the dynamic of what is on their plate."

Over on the continent, Hervé Joseph-Antoine, CWT's vice-president for meetings and events in Europe, the Middle East and Africa, agrees. "Everybody wants to harmonise M&E and transient spend - but it's not easy," he warns. "Having the right organisation is paramount. If you don't have the support of sales, marketing and communications departments, then you'll fail after three months.

Joseph-Antoine recounts the tale of a client who wanted to implement an SMMP, and deliver tangible savings to the chief financial officer in only six months. "This was with almost no preparation," he laughs. "We had to tell him that his expectations were totally unrealistic."

Concurring with the Frenchman is Margaret Birse, global director of travel for outsourcing giant Serco. She says before you put anything down on paper, you must engage with the most senior people in the company. "Getting executive stakeholders on board before you implement policy should be a prerequisite for anyone embarking on a meetings spend project. If you don't have total control before you start, you'll run into real problems."

And then there's Ian Jones, director of group sales for De Vere, who says getting your colleagues onside will create a "positive culture".

"When people see your meetings policy working well you can build momentum. It means that when you appoint intermediaries or preferred suppliers, you're more likely to get a positive response because people feel involved. "It always goes wrong when people try and make wholesale changes, and they end up spending most of their time fighting the backlash.

"If you've got one person travelling and it's a disaster, it's only a disaster for them. But if a meeting or event for a large group of people doesn't come together, it can be catastrophic."

So once you have looked at your company's facilities and booking trends, what's next? Elswood advises that internal meetings space be addressed first. For some companies that means a table and four chairs in a kitchen. For others, it's 50 rooms of varying sizes and hi-tech auditoria. No matter what you have available, examine booking processes and make optimal usage your target.

"One of the perennial problems within corporations is rooms that are blocked off, but not used, which pushes people off-site when it's not necessary," says the BSI boss. "You'll often find rooms are block-booked all day for meetings, such as employee training sessions, when only half a day is needed." A strict booking code should solve that issue.

"But once you've identified times of peak demand [that is, when it is exceeding supply], you can decide how meetings can go externally," says Elswood.

"If it is to replace a small internal meetings space, you don't need an all-singing, all-dancing venue. You're going to view it as a commodity purchase and it's probably going to be very close to your premises, and will be treated almost like an internal space thereafter."

Karen Evans, vice-president of strategic managed meetings and business development for BCD Meetings and Incentives in Europe the Middle East and Africa, says the introduction of basic booking technology will help optimise usage of internal space.

"Some antiquated processes still exist," she says. "There has to be a move away from the days when you have to speak to Barbara at reception because she's in charge of the diary."

The next move, says Elswood, is to establish if there is any other type of regular off-site meeting requirement in terms of geographical location.

"High-end meetings tend not to go back to the same place, while small meetings and training sessions often take place in the same venue because of the repeat nature of the requirement," he says. "You have to understand what it is you're buying and the demand driver behind it. Then you can create a strategy, evaluate the potential value and establish whether you're going to get a return on investment."

Birse says that her meetings' policy is designed to encourage internal meetings in the first instance, but pushes staff towards preferred suppliers if they have to go external. "We try to use internal space if we can, but it's often a problem," she adds.

"Our meeting rooms are constantly held as busy for normal everyday stuff. So we end up off-site in venues close to the office.

"But our view is that our preferred transient hotels suppliers have priority for event spend. It's not mandated policy, but we do push staff towards our suppliers during the decision-making process."

Birse explains that it is difficult to measure exactly how much her meetings' programme has saved the company, though she has had success driving down room rates with hotel suppliers by threatening to take her M&E business to competitors.

"One hotel was playing hard-ball with us on a room rate. We were doing between one- and two-thousand room nights per year, and they did not want to budge on the £110 nightly rate until we said we'd take out transient and meetings spend to a rival. They came back with a £95 rate.

"You want a base-line for your transient spend and a maximum rate for M&E, though, and you negotiate each time you host an event."

Elswood, however, is at pains to remind corporates that having an SMMP should not be a 100 per cent cost-driven exercise, insisting that there are other vital concerns to be considered.

"Brand security has become enormously important over recent years," he says. "Banks and financial institutions, for example, do not want to be seen meeting in five-star premises. There are also delegate safety implications, and having a harmonised booking system means you will be able to keep track of employees at all times. It's not just about bottom line, though you will inevitably make savings."

BCD's Evans says the volume of M&E-related enquiries from her TMC's new and existing clients grows exponentially with every passing quarter. "If you look at the average corporation's global travel spend, 60 per cent is directly attributed to meetings," she says.

In an attempt to put things into context, she describes one of her average customers: "We have a large pharmaceutical client in Europe that spends about US$50 million annually on travel, but spends US$200 million on M&E. So consolidating spend is very much on people's radars."

Evans says most companies - SMEs and multinationals - have more than enough cross-over between their meetings and travel spend to justify an aligned policy.

"When you arrive at the implementation stage the change management process within the company is so important. You have to set clear boundaries from the outset."

As a senior representative of a TMC, Evans is duty-bound to say that working with companies such as BCD is crucial to any successful meetings policy. But the M&E expert goes further than that, explaining that policies and processes will only work if you have relationships and open communication with all intermediaries and suppliers.

Taking an existing travel programme and tagging on meetings seems logical, she says, but to roll it out successfully you must keep the TMC in the inner-circle.

Implementing the right technology is vital if you are to maximise potential efficiencies and savings. "By using GDS-connected technology you can have a meeting where all delegates are invited electronically," says Evans.

"It allows you to track and monitor activity for that particular meeting, so at the end of a quarter or financial year you can look at where the money was spent and work out how you can best leverage your supplier deals."

The progressive buyers, such as Margaret Birse, have already developed mature meetings programmes, and you'll normally find them extolling the benefits at industry forums. But perhaps novices out there may want to add the SMMP to their list of New Year resolutions.