As the MICE industry continues to grow, Catherine Chetwynd asks if buyers should look to meetings specialists or the TMCs for event management
SOME 10 YEARS AGO, when business travel agents started to offer meetings organisation services, there were dark mutterings to the effect of ‘don’t give up your day job’. The service back then was generally originated from group air bookings, and although the efficiencies associated with a transactional facility were there, the expertise necessary to run an events business was not.
Fast forward to 2011 and things have changed. Business travel agents have become travel management companies (TMCs), and inherent in this shift is a modified relationship, one that requires the TMC to understand fully the way the client does business. And today this means understanding and developing the relationship in order to pull off successful meetings and events.
TMC OR SPECIALIST?
So should buyers turn to the specialist meetings suppliers, or their TMC for help? Many of the larger TMCs’ meetings and events divisions are successful, stand-alone businesses, run by experts in their field. But there is still a perception that TMCs are not quite up to the mark in some areas and cannot compete with specialist meetings and venue buyers.
Des McLaughlin, managing director of venue procurement for Grass Roots, says: “It depends on the type of business they are taking on. If a company is looking at implementing a programme around the world, and a TMC has global reach, people will consider them for meetings. That is one of the attractions they hold. But if the business is not transactional and requires knowledge of negotiations and services you associate with a specialist booking agency, TMCs have not managed to penetrate that market.
“Finding an appropriate venue, and negotiating rates in a market where tariffs are constantly fluctuating [depending on the time of year and size of meeting] and where companies often do not have sufficient volume to negotiate a set rate, requires an expertise beyond the ability to book a flight or accommodation on a computer, where a client’s preferred rate is pre-loaded.”
Some travel buyers take the same view. “We have considered using our TMC for meetings management but decided to stay with a specialist HBA [hotel booking agency],” says head of business services for PwC Mark Avery.
“We found TMCs lacked a little of the specialist knowledge we are looking for in meetings. It is venue placement agencies’ core business and what they are best at, in our opinion.”
Inmarsat’s head of events, Shirin Dhala, feels the same. “I used our TMC before and they have not come up with the best rates, and the venue search did not work so well – although that was quite a few years ago,” she says.
FIT FOR PURPOSE?
For TMCs to get into the meetings and events market with any weight and conviction, they need to buy in the expertise. Following that model is ATP Event Experts, a stand-alone business within TMC ATPI, and one with a turnover in Europe, in 2010, of €45 million.
Last year, ATPI re-branded to define the businesses it runs, including events, and although the meetings division has some clients for which it handles events only, 70 per cent of business comes from those who use the company’s’ TMC services.
“I was head of events at Grass Roots and my remit when I joined the business in 2009 was to bring that expertise with me and to grow the team,” says head of events operations at ATP Event Experts, Neil Pace.
Founder and director of travel consultancy service Sirius, Tom Stone, believes the issue of TMC versus specialist is not black and white. “The truth is more granular,” he says. “Within corporates, there is an eternal debate around meetings, incentives and conferences, as to whether they sit within travel or marketing, or whether the budget should be split. But the physical moving of people to where the event is taking place and the accommodation, is peripheral to the conference content.”
Stone says TMCs not able to cope with meetings and events are the ones which try to be all things to all people, without realising meetings and events is a very different market from dealing with transient business.
MAKING IT WORK
“The TMCs that have done extremely well in MICE [meetings, incentives, conferences and exhibitions] tend to be the largest companies, although there is also a number of small niche TMCs that have got good divisions,” Stone says. “The Appointment Group has run the MTV Music Awards for the last few years, which is a massive logistics exercise and subject to changes; and BCD bought sister company Talking Point, which now operates under BCD Events.”
However, for some medium-sized and smaller TMCs, Stone advises checking out the expertise “Get biographies, experience and references of the people working in the division before you entrust MICE to them,” he says.
Carlson Wagonlit Travel (CWT) also recognises the need for dedicated expertise. Alison Smith, senior director, business development, EMEA for CWT, says: “Companies take a leap of trust to give us something as high profile as an event to manage, and we are very aware of that. For some customers we do the whole thing, from planning to the delivery of the event and providing production on site; and sometimes we only provide the logistics, and are working with other agencies and production companies.”
CWT’s events division grew from a group air department 10 years ago into 50 people in London and a small team in Manchester today. “You build up a reputation and expertise,” she says. “In the next three years, we expect the department to have a turnover of $600m in EMEA and we have similar growth targets in North America and Asia Pacific.
Perhaps testimony to the professional status of CWT’s meetings division is that Smith’s second-in-command, Pauline Houston, was recently elected to the board of Eventia the official trade body for the events and live marketing industry. “I believe we are the only TMC on the board,” says Smith. “It may have been a fair criticism that TMCs were not fit for purpose in events a while ago, but not anymore,” she says.
Managing director of SQ Meetings & Incentive Travel, Steve Quinlan, agrees:” I think the majority of TMCs and many of the larger independent TMCs are now getting it right,” he says. “When I started to get involved in event management, TMCs were doing it from within the business travel service. Because it was an unknown area, they were not prepared to invest in it but in the last five years, they have been doing it because it is a separate revenue stream.”
Quinlan has insight from both sides of the fence: he was a director of account management at Ayscough, now ATPI, and then worked with John Fisher at event management company Oxford International, before setting up his own event management business in 2006.
Of TMCs in meetings, he says: “It is a bit of a Catch-22 situation: they need a separate department to get into it seriously but, from my experience in running an account management division for a TMC, they need to be talking to customers about other opportunities, to get an introduction to the right people in the organisation, to establish whether that level of business is there, and whether the TMC is in a position to help the customer with it.”
Divisional managing director for marketing services agency P&MM, Nigel Cooper, adds: “A TMC’s assets are GDS [global distribution system] booking systems and making sure a ticket arrives for the right person at the right time, and that the back-end invoicing is right. I am sure a TMC’s service is about relationships as well, but they are not writing a speech for the CEO or looking at a brand and saying: ‘This is how I need to take that brand to market.’ But we are.”
THE SUPPLIERS’ VIEW
SOME SUPPLIERS have had positive experiences working with TMCs on meetings business. “As a business we’re increasingly working with TMCs in the transient meetings market,” says director of sales for De Vere Venues, Ian Conder.
“The majority of our contacts in this sector attribute genuine value to this market and take the booking and management of meetings incredibly seriously, working with us – as do most of our clients – in a cohesive way to prioritise the outcome of the meeting. On the rare occasions when experience or knowledge is lacking, we work together and offer support where necessary.”
Similarly, the director of revenue development for Radisson Blu UK & Ireland, Mirelle Maunder-Brown, has found TMCs provide a professional meetings service. “We have 13 large meetings hotels in the UK, up to 20 per cent of our business is in conference and banqueting and 40 per cent comes from agencies, including TMCs,” she says.” TMCs absolutely do show knowledge and understanding [of the sector] when booking.”
She says this was partly driven by recession, when customers were reducing spend and required increased cost management, and TMCs needed to be able to provide a service equal to venue finders. “They provide as professional a service as HBAs,” she says. The final word goes to divisional managing director for P&MM, Nigel Cooper.
“Corporates looked at meetings experts and the content, production and logistics, and they saw they needed different skillsets.
When TMCs establish separate meetings divisions, they are a valid competitor like any other agency. It is interesting to see businesses buying a service from a TMC event division but not using them for a TMC.”
That said, he concludes: “Is a TMC fit for purpose to run an event? If the division is staffed and manned by an event specialist then yes, of course it is.”