Following is a list of the largest DMC groups. In addition to member criteria and service standards, all offer national and international sales offices. For specific information on destinations covered, office locations, and standards and practices, contact these organizations directly.
U.S. headquarters: San Diego; (800) 797-9471; alliedpra.com
Number of offices: 27
Number of destinations served: 60
Model: four DMC offices owned by PRA; the rest are franchises
The DMC Network
U.S. headquarters: San Ramon, Calif.; (925) 498-2450; dmcnetwork.com
Number of offices: 94
Number of destinations served: 94
Model: individually owned DMCs
U.S. headquarters: Chicago; (312) 845-9734; euromic.com
Number of offices: 29
Number of destinations served: 36
Model: individually owned DMCs
Global Events Partners (GEP)
U.S. headquarters: Washington, D.C.; (800) 206-9055; globaleventspartners.com
Number of offices: 65
Number of destinations served: 92
Model: individually owned DMCs
Hosts Global Alliance (formerly USA Hosts)
U.S. headquarters: Las Vegas; (800) 634-6133; usahosts.com
Number of offices: 40
Number of destinations served: 57
Model: four offices owned; the are individually owned
U.S headquarters: New York City; (212) 596-1089; kuoni-dmc.com
Number of offices: 27
Number of destinations served: 90
Model: all DMC offices owned by Kuoni
Today, few segments of the meetings industry look and function as they did prior to 2008, and destination management companies are no exception. These firms, which traditionally have served as local experts and providers of services such as tours, transfers, airport meet-and-greet and venue recommendations, have felt the sting of canceled events and decimated budgets.
The upshot, according to Fran Rickenbach, executive vice president of the Dayton, Ohio-based Association of Destination Management Executives, is that most DMCs have had to trim their staff or, in the most dire circumstances (as in the case of LSO, a DMC that served several destinations in France), have gone out of business altogether.
Yet, for those firms that have survived -- or even thrived -- factors such as the expansion of international DMC consortiums and networks, and the new roles firms are assuming for clients, are proving crucial.
Following is a look at the key issues and trends shaping the DMC industry today.
New roles for firms
A recent study, The Site Index: Focus on Destination Management Companies, sheds a spotlight on one of the most critical issues affecting DMCs today: More than half of the firms queried (a mix of 121 DMCs, third-party planners and corporate end-users) said that to make it in today's market, they now feel it necessary to act as a one-stop shop by booking air transportation and hotels, organizing meeting logistics and providing on-site staff, in addition to their local Aation services. As a result, many find themselves in direct competition with third-party meeting and incentive planners, a group that traditionally hired or recommended DMCs to handle the local and ground logistics for their clients' events.
"Back in the day, we worked together in distinct, complementary roles to create and deliver the customer's dream," says Padraic Gilligan, vice president of Dublin, Ireland-based Ovation Global DMC. "The incentive house knew the customer and his business, the DMC knew the destination and its secrets, and it was the perfect marriage."
The change has come about, according to Gilligan and other experts, mainly because end-users are bypassing third parties to save money and working directly with DMCs. In fact, 59 percent of the clients surveyed in the Site study agreed that DMCs need to be one-stop shops.
Interestingly, many destination management firms are uncomfortable with this new dynamic. "We value our relationships with third parties," says Joe Lustenberger, director of marketing, North America, for international DMC consortium Euromic, "and we want to stay in good standing with them; we don't want to be like the airlines [who cut travel agents]; we will not steal clients."
Paul Miller, managing director of London-based Spectra, is among the DMC insiders who told M&C that several corporate clients approached him and booked their business directly with his firm. "They may have reasons for leaving out the incentive house, but that only works if they realize we can't replace some of the services they provide, such as communications with participants." Overall, he says, "It's better when all three [DMC, third party, corporate end-user] are playing together."
Miller is not alone in voicing concerns over DMCs' abilities to deliver a full range of meeting or incentive planning services to clients; according the Site survey, less than 40 percent of the firms said they were equipped to venture into the realm of traditional third-party planning services.
But others see a window of opportunity for DMCs to elevate their role from tour operator to strategic partner. "When a client asks you to do something you are capable of providing, you should do it," says Susan Gray, DMCP, president of St. Louis-based MAC Meetings and Events and president of the Association of Destination Management Executives. "Clients used to tell us, 'If I need a bus and tour guide, I'll come to you,' but we are way beyond that now."
DMCs as consultants
Another nontraditional role that DMCs are taking on is that of a hired consultant, rather than as a service provider. Susan Grey, for example, has one client whose event she's organized in St. Louis for several years. "Since they a have comfort level with us and know we know everything about their meeting, they want us to go to Atlanta, where the event will be held next, to help them organize it," she says. "We then find and hire a local DMC in Atlanta to do tours, transfers and provide the local expertise for the event."
Ovation's Padraic Gilligan says a growing number of DMCs are being hired by third-party planners strictly for their recommendations on say, the best venue for an off-site dinner, rather than for performing or outsourcing the services themselves. The reasons are not just economic -- consulting fees net DMCs a fraction of what they would get if they directly performed the services. In some cases the business stems from a client's procurement mandates. "It may be that their corporate client won't let them use two third parties, such as an incentive house and a DMC, but the incentive house can still hire us for a fee to recommend best transportation," Gilligan says.
Strength in numbers
Another key finding from the Site survey is that 62 percent of third-party planners and 59 percent of end-users are more likely to use a DMC affiliated with other DMCs through a company, network or consortium they have used before.
The statistic is not surprising to ADME's Fran Rickenbach. "If a DMC does a good job in one destination, the client is likely to use an affiliated firm when they hold an event in a different place," she says. As a result, more firms are joining DMC networks and consortiums.
These groups, chiefly comprised of individually owned companies, give DMCs a single sales and marketing presence. For example, Allied PRA has a centralized online request for proposal function on its website. Most importantly, networks offer clients a certain amount of assurance: These groups have stringent member service and operation standards similar to those established by ADME (adme.org/dmp/admc-program/default.asp). For example, the 92 members of the DMC Network must meet the following standards:
• Five years of business as a DMC and a member in good standing with the local CVB;
• Professional affiliation with the Association of Destination Management Executives;
• A minimum of two management- level staff members who carry a DMCP or CMP professional certification;
• ADME accreditation (which will be mandatory for all DMC Network members by 2009);
• Five client references and two vendor references;
• A minimum of $2 million of liability insurance;
• Active membership in at least two nationally established professional organizations, and
• Two bank references.
Among the DMC consortiums (see "A Directory of DMC Networks" accompanying this article) aggressively expanding are Hosts Global Alliance and Kuoni. HGA was formed in January, when destination management firm USA Hosts was acquired by new owners. Since May, the new company has tripled its membership and now represents 57DMC members worldwide.
Kuoni Destination Management, a division of the Zurich, Switzerland-based travel firm and tour operator, began to grow its global portfolio of DMCs in 2008 with major acquisitions in Europe, Asia and the Middle East. Last year, the company established a stronghold in the United States when it purchased the 12-office DMC division of TBA Global.