September 01, 1998
Meetings & Conventions: Broadcast News - August
1998

August 1998
Do You Need An Agent?Travel agencies are ready to step in and help plan your
meetings. Here's what the major players can do...
By Carla Benini & Maria Lenhart
Every year Digital Equipment Corp. invites
1,500 of its corporate partners to a seminar. Most are CEOs and
CFOs who make decisions about future financial dealings with
Digital, the Littleton, Mass.-based computer company. Needless to
say, Digital wants to keep them happy. Transportation has to be
seamless, registration hassle-free and problems resolved
immediately.
But these duties no longer concern Digital's meeting planning
team. Three years ago, the event was handed over to an agency.
Fifty employees from Philadelphia-based McGettigan Partners
coordinate mailings, facilitate online registration, man phone
lines, book flights and reserve hotel rooms. On site, they manage
food and beverage, run a golf event and much more.
The program used to be handled in-house, says Sue Vezina,
Digital's events and sponsorship manager. Then the company began
downsizing. From 1992 through 1997, the planning staff went from
eight to three. Vezina was forced to hire from the outside, but who
could be trusted with such a high-profile meeting? "We needed
outside people who didn't have to be educated on every little
detail," she says.
Vezina joined a growing wave of planners who outsource meetings
to travel agency meetings departments. Often the client/agency
relationship is nurtured in the corporate travel department, where
planners and employees go for air and hotel reservations. Then, as
planning staffs shrink - and agencies grow their own meetings
departments - the decision to hire agency help seems logical.
For some planners, the thought of a one-stop shop is a dangling
carrot that promises to make their lives easier. Mega agencies like
Maritz, BTI Americas and American Express say they will plan
everything from board meetings to trade shows, and even motivate a
sales team. They tout a global support system and negotiating clout
with suppliers. And these companies are in a buying frenzy, reeling
in smaller incentive companies and planning firms. "Our goal is to
be as major a service provider as we can," says Bill DeRoze, vice
president of St. Louis-based Maritz Travel.
To accomplish this, Maritz and other large agencies are building
business by convincing existing corporate clients to let them
fulfill more - or all - of their meetings-related needs. "The trend
is for corporate customers to want all of their needs handled by a
single source," says DeRoze. "With Ford Motors, we started with
their incentive meetings, then went on to consolidate their
meetings and travel operations. With Sun Microsystems, we first
handled their corporate travel, then moved into meetings
consolidation."
MEETINGS, Á LA CARTE
While a rainbow of services is offered, many clients outsource
only certain tasks - registration, reservations, site selection or
on-site management - and keep the job of program development
in-house. Logistics for Indianapolis-based Eli Lilly and Company,
for instance, are handled by the central meetings management
department, entirely staffed by McGettigan. "If McGettigan can
focus on logistics, Lilly can focus on content," says George Odom,
Eli Lilly's manager of travel and corporate meeting services.
Some companies are more willing to relinquish meeting
responsibilities, albeit slowly. At Diebold, Inc., a Canton,
Ohio-based manufacturing firm, employees are still warming up to
the new BTI Americas-staffed meeting planning department.
Ultimately, the plan is to involve BTI in all aspects of corporate
meetings. "The more comfortable people become using [the
department], the more responsibility BTI will be given," says Jerry
Bryan, Diebold's manager of marketing services.
And agencies don't mind waiting. "Sometimes we have to work with
a client for a year before they give us their meetings business,"
says Jay Roseman, vice president, meetings and incentives with
Mount Laurel, N.J.-based Travel One. "That's the comfort level we
have to earn."
At 3Com Corporation, a computer network company in Santa Clara,
Calif., the transition to having an on-site agency function as the
entire meeting planning department is already complete. BTI
Americas, which was first hired by 3Com in 1995 to serve as a
meetings consultant, quickly expanded its role. The meetings
department now consists of nine BTI employees who handle logistics,
determine return on investment and set program content. "Other
areas of the company may handle a few trade shows, but we are
essentially the meeting planning staff," says Louise Hall Reider,
senior director of meetings and incentive management for BTI
Americas.
AN ANSWER TO DOWNSIZING
While such a scenario may appear to threaten the jobs of in-house
corporate planners, Reider says it's not necessarily so. "In some
cases, a company's internal planner switches from being an employee
of the company to one of the agency," she says. Reider also
maintains that hiring an in-house agency enables some companies to
have a larger meeting planning staff than they could otherwise
afford. "When companies have hiring freezes, this is often a way
around it because they can hire on contract instead."
Both BTI and McGettigan were hired by Diebold and Eli Lilly,
respectively, to engineer what could be the most lucrative job
trend for agencies: meetings consolidation. Corporate America is
waking up to the fact that planning activities are spread out over
a number of departments and employees, some of whom have never
negotiated a hotel rate or signed a contract. Without the manpower
or expertise to track and centralize meetings themselves, companies
are turning to travel agencies for help.
"We have seen a tremendous demand for this," says John Pino,
president/CEO of McGettigan Partners, which reports 220 potential
consolidation contracts in the pipeline. That's triple the amount
of consolidation business the company had one year ago. Agencies
have developed their own consolidation packages, including
software, training programs for clients' employees and supplying
new staff on site.
Small Agencies Carve a
Niche
Despite the powerful
shadow cast by the mega travel companies, meeting and incentive
services are rapidly expanding at small and mid-size travel
agencies. And while the megas primarily service the Fortune 500,
small agencies are carving a niche elsewhere, often in their own
backyards.
In the wake of shrinking airline commissions, more
agencies are looking at meetings and incentives as a new and
potentially lucrative source of business. According to travel
agency consultant Bruce Tepper, vice president of Joselyn, Tepper
& Associates in San Francisco, the trend has intensified since
round two of commission caps last year. "When the first round of
caps hit a few years ago, some agencies began to view meetings as
an interesting sideshow, but with the second round, they're getting
serious."
To help smaller players better market their meetings
services, Tepper's company recently founded the Guild of Meeting
& Incentive Professionals for independent planners and planners
with travel agency meeting and incentive departments. Guild
meetings include seminars on business development, software and
other topics.
Among the 25 companies represented in the guild is
Adventure Travel, a small Tulsa, Okla.-based agency. While most
group travel at the agency is non-meetings-related, the company
views incentive travel as an important growth area. "We're starting
to handle incentive business for some of our corporate clients that
have travel accounts with us," says Terry Hartnett, president of
Adventure's group travel division. "We've learned that we can't
live on airline commissions alone."
Realizing incentive business requires a different set of
skills, Hartnett attends both educational seminars on incentive
topics and trade shows such as The Motivation Show. The next step
will be to hire an experienced incentive planner who can set up
motivational programs for clients. "Right now we're just handling
the travel end of incentive programs, but we want to do entire
programs," says Hartnett.
Undercutting the Megas
Thomson Travel in Tacoma, Wash., has focused on meetings for 18
years and, according to owner Patty Thomson, has managed to thrive
as a minnow in a sea of whales. "Some of our clients are turned off
by the large agencies because of their high costs," she says. "And
those mega agencies don't want their business because it's not
large enough."
Thomson says that while the mega agencies aren't
interested in meetings that cost less than $400,000, she is only
too happy to take a $40,000 piece of business. And, with lower
overhead than her larger competitors, she sometimes wins the bigger
meetings as well. "We can and do undercut the large agencies," she
says.
Thomson, who handles meetings with another full-time
planner on staff, says her clients include both large and small
companies, many of them based outside the Pacific Northwest and
brought to her by referral. While she offers a full range of
meeting and incentive services, they do not include high-tech
audiovisual capability. "If a client needs major media, we steer
them to a specialist," she says.
While Thomson is not worried about the prospect of more
competition from other small agencies, she says she is concerned
that "agencies who jump into this without knowing what they're
doing will hurt the business. Some agencies don't understand
contracts or how to price themselves - there's a lot of
misrepresentation going on."
Jeanne Thompson, vice president of Conference and Travel
Services, a mid-size travel agency with eight offices in
northeastern Indiana, also doesn't expect to feel a direct impact
from increasing competition. "It takes a lot of time to build this
business - we've been handling meetings for 15 years," says
Thompson, co-founder of the agency and a former planner with an
insurance company.
Much like the mega agencies, Conference and Travel
Services has made a concentrated effort to position itself as a
one-stop shop, in many cases handling travel, meetings and
incentives for the same client. Also like the megas, the agency is
increasingly asked to take on the role of an in-house
planner.
"Fewer companies seem to have full-time, internal meeting
planners these days," she says. "Often our main contact is a
novice, and so we handle the whole package." n M.L.
CAN YOU AFFORD IT?
For now, the price tag on a consolidation or any major meetings
contract primarily limits clients to Fortune 500 companies,
although a growing number of regional agencies are contracting with
local corporate clients for meetings business. "On the consolidated
side, all our customers are big companies, where meetings figure
into at least several million dollars a year," says BTI's
Reider.
Licensing consolidation software can be quite costly, too.
McGettigan's Core Discovery, for example, runs $40,000 to $90,000
for various software packages and agreements.
Pricing for meetings services varies widely, with most of the
major agencies offering a variety of options that are negotiated on
a case-by-case basis. Many charge by the hour or by the individual
service. Others prefer a percentage of the overall meeting tab or
charge a flat management fee.
No matter how the bill is tallied, it's likely to be higher than
the in-house tab would be, says Jean Baier Swaffer, who runs
Meeting/Event Management, a travel and meetings management
consulting firm based in Half Moon Bay, Calif. "The agencies have
learned how to price themselves on the work they're asked to do,"
she says. "Employers may be surprised at how much bang for the buck
they're getting from an in-house planner."
The extra revenue comes at a convenient time for agencies, who
are feeling the effects of shrinking commissions and alternate
booking methods such as the Internet. "Their revenue stream is
being diminished," says Swaffer. "They're looking for new ways to
make money."
The question is, do these agencies know the meetings business?
That's still under debate, say planners. "Their concept of a
meeting is from a travel point of view," says a corporate planner
who works with in-house agency employees. "They're very interested
in moving people, but there's more to a meeting than getting
attendees there and in a bed." The planner, who requested
anonymity, called their service "mediocre." As the only corporate
planner left at her location after a merger and restructuring, she
often feels alone in her concern about program content. "When I
bring up educational issues, they agree, but they don't ever think
of it. It's like it's not in their repertoire."
For those considering agency meeting planning services,
following is an overview of what the megas offer.
American Express
Group Travel Management Services
Norcross, Ga.
Overview: American Express, the world's largest
travel company, concentrates all of its meetings services in a
division headquartered near Atlanta in Norcross, Ga., called Group
Travel Management Services. While GTMS has operated as a separate
entity for about 10 years, recently American Express has trained
its sales force to sell meetings services as part of a package with
its corporate credit card, travel management services and other
products. "We know that more customers want one company to handle
all their travel needs, so group services are now tied to the whole
portfolio," says GTMS vice president Susan Vail.
In another recent marketing move, American Express has segmented
its target market into three categories that range from
multinational companies to "middle market" companies with less than
$3 million in annual sales. For large companies, GTMS primarily
serves as a consultant on meetings management issues or handles
travel logistics for large corporate events.
"Our larger clients tend to have their own in-house planners and
usually rely on us for leverage in purchasing land and air," says
Vail. "For smaller clients, many of whom don't have internal
meetings departments, we're more likely to provide a full range of
services."
Client base: A wide range of corporations, from
mid-size to multinational
Types of meetings: Two major areas of
concentration are small and mid-size corporate meetings and
meetings management consulting services. Incentives are not a
focus.
Number of full-time planners: GTMS has about 150 employees,
including 22 meeting planners at the Norcross, Ga., headquarters
and 26 based on site with corporate clients.
Meetings software: MeetingSight
Meetings volume: N/A
Air volume: $8.9 billion
Fee structure: Rather than a flat management fee, GTMS offers a
menu of services that can be purchased Æ la carte.
Contact: Yvonne Long, director of group travel
management services, (770) 368-5444
BTI Americas
Northbrook, Ill.
Overview: When two large corporate travel
agencies, USTravel and IVI Travel, merged in 1995, the result was
BTI Americas. While IVI was best known for serving large corporate
customers who needed consolidated meetings management, USTravel had
a full-service incentive house. Late last year BTI restructured its
Meeting and Incentive Management Group to reflect these different
focuses by creating two distinct divisions within the department:
Consolidated Meetings Management and Customized Meetings and
Incentives.
Based at the BTI headquarters in Northbrook, Ill., Consolidated
Meetings Management offers full-service meetings management for
corporations, with BTI planners on site at client locations. The
division also offers consulting services to companies that have
their own internal meetings departments but need advice on
consolidation, cost management and other areas. Based in Dallas,
Customized Meetings and Incentives handles individual meetings and
incentive programs on a per-project basis. The division is a
veritable full-service incentive house and meeting planning company
that can handle as much or as little as the client requests. For
the most part, the division serves different clients than
Consolidated Meetings, including many that were incentive clients
with USTravel long before the merger with IVI.
Client base: Most clients are U.S. Fortune 500
or Fortune 1,000 companies. Clients of Customized Meetings and
Incentives include Goodyear. Clients of Consolidated Meetings
include DuPont and 3Com Corporation.
Types of meetings: Most meetings and incentives
handled by Customized Meetings and Incentives are large and
complex, with group size ranging from several hundred to several
thousand or more. Consolidated Meetings, which functions as an
in-house meetings department for clients, handles a full range of
corporate meetings.
Number of full-time planners: Sixty at Customized Meetings and
Incentives; 40 at on-site locations
Meetings software: MeetingMax
Meetings volume: $215 million
Air volume: $1.7 billion
Fee structure: Pricing in both the Consolidated and Customized
areas is usually a flat management fee, although pricing methods
can be worked out according to client preference.
Contact: Louise Hall Reider, senior director of
meetings and incentive management, (206) 224-7767
Carlson Marketing Group
Minneapolis, Minn.
Overview: Carlson Marketing Group is part of
Carlson Companies, a travel/hospitality giant that began as a
trading stamp business and grew to encompass hotels, cruise ships,
restaurants, travel agencies and more. Carlson Marketing Group,
which handles the bulk of meetings and incentive programs at
Carlson Companies, has had some growth spurts of its own, including
the acquisition of three incentive/event management companies
within the past year: S&H Citadel, Aegis Marketing and
Incentive Dimensions. Calling itself a "relationship management
company," CMG handles meetings and incentives, as well as as direct
marketing, consumer loyalty programs and corporate participation in
major sports events.
To a far lesser extent, some meetings are also handled by sister
company Carlson Wagonlit Travel, the nation's second-largest travel
agency, for corporate travel clients at on-site locations. But,
according to spokesperson Patrice Vic, meetings are not a focus of
Carlson Wagonlit Travel and the company has no meetings management
division.
Client base: Mostly U.S.-based Fortune 500
companies
Types of meetings: Carlson Marketing Group is
primarily known for incentive programs, but also handles trade
shows, conferences, and sales meetings, training sessions and new
product launches.
Number of full-time planners: More than 3,000 in sales offices
worldwide; about 600 directly involved with meetings and incentives
at the Minneapolis headquarters
Meetings software: PASSAGE
Meetings volume: N/A
Air volume: N/A
Fee structure: No standard procedure; varies according to client
preference
Contact: Doug Yahnke, senior director Ð travel
planning and operations, (612) 550-4181
REGIONALS MUSCLE
IN
While small and mid-size
agencies are finding a niche with meetings, large regional agencies
are also getting a slice of the pie. In some cases, the regionals
have been growing almost as fast as the megas, buying up dozens of
small agencies and expanding their meeting and incentive divisions
to impressive levels.
One such regional is Morris Travel, a fast-growing
corporate agency that now has 70 offices in the Pacific Northwest
and Rocky Mountain states. Also rapidly expanding is Morris
Meetings & Incentives, a division of the company based at
agency headquarters in Salt Lake City. Within the past few years,
the division has grown from three employees to 20, including the
hiring of five full-time planners within the past year. The company
plans to hire three more by the end of this year.
While only a fraction of the overall agency, which has
more than 550 employees, the division is "by far the most
profitable in the company - we set new records each year," says
Tony Swenson, vice president of Morris Meetings & Incentives.
And while MMI once derived most of its business from Morris'
corporate travel clients, that is no longer the case. "While the
corporate travel side is primarily locally driven, our business is
all over the map - New York, Dallas, Atlanta - not just within our
region," says Swenson.
While MMI handles a wide range of meetings and
incentives, they typically involve 1,000 participants or fewer.
Larger groups are usually referred to another division at Morris
headquarters, Convention Services Technology.
While business is growing, Swenson says Morris is not
attempting to compete with the mega agencies. "We take the business
they don't want," he says. "A group of 50 might not appeal to a
mega agency, but we're glad to have them." MMI prefers to position
itself as a company that provides a happy medium - large enough to
draw on the services of a corporate agency with $210 million in
annual air sales, but small enough to be flexible and provide
personal service.
M.L.
Maritz Inc.
St. Louis, Mo.
Overview: Maritz Inc., a St. Louis-based company
that began as a pioneer in the incentive field, divides its
operations into three subsidiaries - Maritz Performance
Improvement, Maritz Travel and Maritz Marketing Research. While
Maritz Performance Improvement handles all major incentive business
for the company, Maritz Travel oversees most meetings business,
running the gamut from small corporate meetings to large sales
meetings to trade shows. Last year Maritz Travel formed a new
division called Meetings & Business Development, taking over
most of the large non-incentive meetings business formally handled
by Performance Improvement. Maritz Travel also includes a division
called Meetings Management that works with corporate clients who
want to consolidate their meetings and travel operations.
However, there is some overlap in responsibilities, according to
Donna Jones, vice president of Meetings & Business Development.
"If an incentive client has a meeting, it might be handled by
Maritz Performance Improvement," she says. "The goal is to provide
seamless service where it makes sense."
Client base: Mostly U.S.-based Fortune 1,000
companies, including Ford Motors, Sun Microsystems and Hallmark
Types of meetings: Maritz Travel provides a
full range of meetings services, including on-site meetings
management and consulting. Its Meetings & Business Development
division primarily handles large, complex meetings, including trade
shows. Maritz Performance Improvement handles full-service
incentive programs.
Number of full-time planners: About 500; 80 percent at
headquarters, 20 percent working at corporate site locations.
Meetings software: Proview; Budget Manager;
Impact (registration)
Meetings volume: $400 million
Air volume: $1.4 billion
Fee structure: Most frequently a cost-plus arrangement where the
client is billed for the labor involved plus a negotiated
management fee on top of that. Other options include a charge per
attendee.
Contact: Bill DeRoze, vice president of
business development, (314) 827-2903
McGettigan Partners
Philadelphia, Pa.
Overview: Founded during the Depression,
McGettigan specialized in steamship travel and eventually made its
name as a charter and group travel company. In the late 1970s the
company changed its focus from serving consumers to companies.
Today, McGettigan is less a travel agency than a project management
company, where revenue from air travel, for example, represents
only 30 percent of overall volume. The rest comes from its various
meetings services, of which consolidation is a growing part. In
1996, McGettigan partnered with Rosenbluth International, a major
corporate travel agency. The relationship enables McGettigan to
pitch its meeting and consolidation services to Rosenbluth clients.
McGettigan employs more than 350 people and has regional offices in
Chicago and San Francisco.
Client base: Mostly U.S.-based Fortune 500
companies
Types of meetings: Seventy percent of meetings
are groups of 60 attendees or fewer, though growth is in
consolidating corporate meetings departments and planning customer
events such as road shows. One-third of the company's business is
in incentives.
Number of full-time planners: 150 in three offices
Meetings software: Core Discovery
Meetings volume: $250 million
Air volume: N/A
Fee structure: Flat rate, based on an estimate of the number of
labor hours required for the meeting
Contacts: Christine Duffy, division president,
eastern customer business unit (CBU), (215) 422-1245; Beth Truett,
senior vice president, midwest CBU (312) 739-2431; Lori Martin,
senior vice president, western CBU, (415) 835-7402
Travel One
Mount Laurel, N.J.
Overview: Since the family-owned company began in
1970, it has remained focused on the corporate market. It comprises
88 percent of the business mix. Meetings and incentives make up 7
percent, up 2 percent over 1997 figures. Travel One has enjoyed
some major growth spurts. Until 1982, total sales hovered around
$10 million; by the end of the decade, the N.J.-based company was
up to $600 million in total sales. This year, Travel One broke $1
billion in total sales. The company employs 1,000 agents nationwide
and has affiliates in 44 countries.
Client base: Mostly U.S.-based Fortune 500
companies
Types of meetings: Sixty-five percent are
corporate meetings; the balance are special events and
incentives.
Number of full-time planners: 20 in headquarters office
Meetings software: Meeting One
Meetings volume: $50 million
Air volume: $676 million
Fee structure: Clients can choose to be charged a management
fee, commission or on an hourly basis.
Contact: Jay Roseman, vice president, meetings
& incentives, (609) 222-3900
What to ASK an
Agency
Can the travel agency
you're considering really offer meeting planning expertise? To help
determine the agency's usefulness, ask the following questions,
compiled with the help of Gail Bayne, vice president of
Chicago-based R.D. Brown Company, a meeting, corporate travel and
expense management consulting firm.
Do you provide a way to register my company's use of
air, hotel and ground suppliers?Can you offer budgeting assistance, including cost
comparisons between cities and meeting facilities within a given
destination?Will you negotiate with air, ground and hotel
suppliers?Will you do site research and selection?How do you charge for your services? Can you price out a
meeting hourly, by line item and by management fee?Is a reporting system in place to track meeting
registration and expenses, as well as savings from
negotiations?Can you recommend ways to cut costs, improve the
registration process and simplify communication
procedures?Can you provide a way for my company to evaluate your
services regularly?Do you provide training for our employees who plan small
meetings?
C .B.
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