Competition for meetings business
between destinations and hotels has never been more fierce. And winning hinges more than ever on collaborating and partnering with the growing number of third-party planners who are guiding decisions for the elusive meeting client.
It's an evolutionary shift that the San Diego Convention & Visitors Bureau (aka ConVis), which booked 1.6 million group room nights in 2011, not only acknowledges, but actively embraces as part of its new marketing strategy. "All the fights in days gone by about who gets credit for a lead no longer matter, as long as the destination wins," says Margie Sitton, senior vice president, sales and marketing, for the CVB. "We are not asking for a 10 percent commission. We are not asking for any money. All that matters at the end of the day is that we stepped in, helped them sell the destination and won the business."
Destination marketers who might have privately grumbled at the growing influence of third parties gradually have come to the same conclusion. According to a study released in July 2012 by Washington, D.C.-based Destination Marketing Association International, bureaus that are actively involved in group sales (such as the marketing arm of ConVis) influence 19 percent of group room demand booked to their destinations. That report, which is based on the collective data of nearly 100 destination marketing organizations representing three-quarters of the U.S. market, gives a nod to the important role DMOs play in securing group business for their cities. It also, however, begs this question: Who is influencing the other 81 percent of group room demand?
Sources agree that a large chunk of business is coming from third-party planning firms. Eager for their attention and the room volume they wield, many DMOs -- including Greater Phoenix, San Antonio and Orlando -- have overhauled their marketing strategies accordingly. A host of DMOs have rolled out preferred partnership agreements and educational and marketing programs for these new partners, hosted annual events for their associates and even forced member suppliers to be judged by third-party standards.
In mid-2010, after analyzing and measuring where its group business leads were coming from, the Orlando/Orange County Convention & Visitors Bureau realized a seismic change was underfoot. Meetings business generated by third-party firms, like Los Angeles-based ConferenceDirect and Scottsdale, Ariz.-based HelmsBriscoe, had increased so dramatically for the destination, says Fred Shea, vice president, strategic partnerships for the OOCCVB, that his bureau had to acknowledge the rules of the game had changed.
Shea implemented an aggressive new business plan. Instead of continuing to focus on having the sales team chase down potential group leads coming through third-party generators, the bureau set about developing key long-term partnerships directly with third parties by offering them destination education, targeted familiarization tours and marketing support. By October 2012, the effort was paying off, with the number of third-party bookings tracked by bureau reps up by double digits.
"Third parties are sourcing agents who like to work directly with hotels in a destination. It just did not make any sense for us to ask them to send us their leads so we could send those along to our hotels," says Shea. "They want the hotel to know up front that they are the ones sourcing the business, and if their lead comes through the CVB, they might not get the commission. Now that we understand their rules, and they trust us, the number of leads they copy us on has actually increased."
ConVis, the San Diego CVB, has won Los Angeles-based third-party firm ConfrenceDirect's bureau of the year award six times, more than any other CVB. They have done it, says Margie Sitton, via strategies that target and support third-party-generated business. Sitton, a former hotel executive, established an accountability program for hotel members based on third-party evaluations. At the time, it was viewed as a controversial move that would alienate members.
After hosted site visits, third-party customers are asked to evaluate the hotels they have inspected in five key areas, including the sales team's use of their time during the visit, their approachability and how eager they seemed to secure business. The feedback, whether good or bad, is immediately relayed to each hotel's general manager. "Everyone told me I would be run out of town when I started this accountability practice. Well, it hasn't happened yet," says Sitton. "It's a leap of faith for third parties to entrust their customers to us. We can only take them to a certain point, and at the end of the day I can't afford for the hotel's salesperson to blow it for us."
The Scottsdale Convention & Visitors Bureau, which has no convention center to market and is primarily a resort destination, faces some unique challenges, particularly when it comes to attracting corporate group business in tough economic times. In 2008, the bureau decided it would meet the challenge head-on by harnessing the power of the growing third-party segment. It's first action was to form a partnership with HelmsBriscoe, which included hosting a reception for the company's new associates when they came to town for three days of mandatory training at nearby headquarters.
Kelli Blubaum, CMP, vice president of convention sales for the Scottsdale CVB, says the investment was an obvious move. "HelmsBriscoe is a large meetings player, based right in our backyard," she notes. "It gave us the unique opportunity to have face time with them and get Scottsdale on their radar right off the bat." Blubaum estimates the group market represents 60 percent of Scottsdale's tourism business.
Next, the bureau rolled out a series of seminars for its members on the role third parties play in the group market and how to work with them to leverage business. For speakers, they tapped local HelmsBriscoe executives. Then, in November 2011, Scottsdale launched its "Site See, Fly Free" initiative, a series of hosted site inspections for third-party associates. According to Blubaum, the program, which hosts at least one HelmsBriscoe associate or client each week, has been wildly successful. In its first year, more than 46 percent of clients taking part have generated confirmed group business.
"It has been a mutual shift to embrace what we each do and come together," says Blubaum. "For us, the most important thing is establishing that we are not competitors with the third parties, so we get a chance to bid on their business."