Conference conundrum

Choosing an appropriate venue in these economic times is a fine art. Jonathan Hart talks to the experts

Barack Obama recently blew a fuse for the first time as US president. Not over a recalcitrant Iran or Israel but on seeing fat cat bankers just bailed out to the tune of public billions enjoying an expensive corporate jolly at an exclusive golf resort.

Result: a universal slap on the wrist for the self-serving masters of the universe, plus negative publicity for the tainted-by-association venue.

If similar jaunts, equally disguised as essential, took place in the UK, they appear to have escaped mass media attention and probable public approbation for the complicit venues.

Possibly because the likes of Sir Fred Goodwin, not to mention allowance happy MPs, were busy sticking the finger up to taxpayers and grabbing outraged consumer headlines.

Unlike hapless banks or grasping MPs and despite sometimes grandiose commitments to corporate social responsibility (CSR) or environmental issues, most corporations may not be morally responsible to a hostile general public for excesses in these strictly utilitarian, egalitarian times.

Yet alongside nose-diving profits, one thing has become abundantly clear to corporate directors as well as their rank and file since last year's meltdown: the days of extravagant spending are well and truly over.

This is particularly true in the staging of corporate meetings or events, a sector that by and large has escaped the procurement, management and return on investment (ROI) control applied to every other element of the travel buying process in recent years.

Chiefly because, despite management information (MI) and self-booking tool (SBT) technology offering tighter general travel and expenses (T&E) control, the efficient governance of transient or differing everyday departmental spend has been deemed a rogue but unfathomable element.

Estimated to account for £22 billion annually in the UK and variously described as 'out of control' or 'the last frontier of unmanaged travel' by specialist booking/venue-finding agencies or travel management companies (TMCs) offering solutions, meetings and events (M&E) spend has finally emerged as a principal must sort on the corporate savings agenda.

The recession, general belt tightening and paying more than lip service to CSR may have been the catalysts rather than the primary reasons for the sector's ultimate migration to tighter management through external aid.

But the net result for venues on the receiving end is a faster-than-expected sea change in the way they are selected and how they respond to a whole new set of criteria. These govern everything from drastically reduced lead-in times, online inventory booking capability or more transparent terms and conditions to precise facility standards and rigid cost, and ROI and ROO ( return on objectives) scrutiny, all within client programme compliance.

"Top of this year's corporate agenda is reducing the volume, frequency and spend on meetings," says Des Mclaughlin, managing director of Grass Roots HBI. "The re-negotiation of supplier deals is paramount.

Corporates are setting the agenda on what's provided and what they're prepared to pay, and suppliers are having to jump or lose the business. Venues need to be more creative, innovative and professional in the way they conduct business." Mclaughlin predicts rate cuts of up to 30 per cent as venues jostle for custom in the short-term while adapting to changed parameters in the longer-term.

"Price is the primary factor right now," adds Simon Thompson, managing director of Conferences- UK. "Venues able to reduce their rates while maintaining service levels are going to win over those who can't." He cites the small, modern, purpose-built, meetings-specific venues as being the most fit for current corporate purpose, alongside hotels with web-search inventory and associated booking and reporting data accessible online.

"Negotiation flexibility is all-important for venues," says Thompson, adding that Conferences- UK operates a real-time corporate log in providing buyers with between five and 50 per cent return on outlay according to volume.

Together with adapting to general accommodation and catering cuts, day delegate bookings sliced to half a day or less, improved product bundling and clarity of charges, venues are facing additional challenges. One of these, along with an either real or perceived shift towards more web-conferencing, is corporate efforts to further cut costs by meeting internally. "We are redoubling our efforts to internally house as many event needs as possible," says Yvette Rudge, procurement manager for Deloitte. "We have some fantastic internal space which, with some thought, can be put to wider use than immediately may be apparent. In cost and time invested, a web-based presentation can actually be more productive and encourage better participation than a face-to-face event."

Given that an organisation has the appropriate internal space, it has previously often not been treated with respect and been a minefield to manage because departmental battles were being fought on other fronts, resulting in no real cost co-ordination, claims Trevor Elswood, group managing director of BSI. As an indicator of a shift towards external management of M&E, he points to a consolidation of formerly accommodation-only clients converging this service with what they regard as their 'chaotic, maverick or uncontrolled' meetings spend.

"Corporates have had a fundamental wake-up call as to how much they spend, and potentially waste, in this area," says Elswood. "They realise that there is professional advice and expertise out there along with the systems to help them optimise their spend. We position ourselves as a cost avoidance company, so we can articulate, quantify and invariably guarantee what savings can be achieved at the end of a calendar year."

Historically the preserve of the company PA or marketing manager, coupled with personal hotel or local booking agency relationships, M&E spend has little option but to bow to professional cost management, he adds.

Personal relationships through the buyer-supplier chain remain important, he insists. But with procurement, technology and contract transparency as drivers, those cosy relationships, along with the individual benefits they might produce, could be taking a back seat on the journey into a more circumspect and less flamboyant era in venue choice.