
San Jose CVB chief Dan Fenton
felt a membership-based bureau was a conflict of
interest.
A few years back, the San Jose (Calif.)
Con-vention and Visitors Bureau eliminated its membership
department. Poof, and it was gone. Members-only events went by the
wayside. The bureau’s card-carrying members no longer had
cards.
“We wanted to make sure we recommend to our clients those
businesses that are a match for them, not necessarily those
businesses that pay $300 a year to be a member,” says Dan Fenton,
bureau president and CEO.
Hotels, the primary beneficiaries of the bureau’s marketing,
still pay dues to the SJCVB, above and beyond the hotel tax, but
they’re no longer called members; now they’re “partners.” From the
hotel perspective, it’s a small change, but in San Jose, the hotels
never minded paying membership fees. Besides that, though, all the
other institutions, including restaurants, florists and the auto
repair shop that wanted to join just to display the sign in the
window, have no financial ties to the bureau.
Nobody seems to miss membership. Indeed, discarding the program
has given the bureau far more freedom to be an unbiased source of
information for meeting planners. Take the meeting planner’s guide,
either online or off. Before, it listed every business willing to
pay to land a spot, even those that weren’t ideal for meetings. The
guide might have been missing dozens of great restaurants, and if a
major attraction or fantastic venue didn’t pay dues, it, too, would
have been left out. Now, San Jose’s guide contains only the
businesses that the bureau, with the help of meeting planners,
deems most fit.
Or what happens if a planner wants an honest recommendation
regarding a local vendor? In memberless San Jose, the CVB doesn’t
have to worry about offending businesses that don’t get to see
every lead.
In the past, says Fenton, “Lots of times, members’ feelings
were that the CVB was going to give them some type of advantage or
recommend them. That just created conflict.”
The San Jose CVB is the most dramatic example in an industry
taking a hard look at its membership structure. The current system
is rife with bias: Bureaus that are paid by some businesses and not
others are pressured to direct leads to the paying businesses in a
process that is driving meeting planners elsewhere for information
on a city. A number of bureaus are working to reverse that
trend.
Finding Alternatives
Butch SpyridonNashville, Tenn., and Richmond, Va., went without a membership program for years; now that the bureaus in both cities have begun to cultivate a membership base, each is trying to avoid the worn systems of the past.
The Nashville Convention & Visitors Bureau broke off from the chamber of commerce almost three years ago; just over two years ago, leaders began discussing the best way to bring in membership.
“It’s been an intentionally slow process with a lot of focus groups,” says Butch Spyridon, CVB president. “We want to do it right.”
Nashville offers five membership categories at escalating prices. At the lowest level, members are listed in bureau publications. When businesses pay more, they get enhanced listings, receive leads and can be part of familiarization trips. The more a business pays, the more detailed the convention calendar it receives. Spyridon aimed to attract 100 charter members before the program’s rollout the first of this month.
In Richmond, the current membership system if you want to call it that began three years ago as a marketing partnership among restaurants. Kendal Thompson, development manager at the Richmond Metropolitan Convention & Visitors Bureau, began working on the project both to promote the area’s great restaurants and to create a small revenue source for the bureau. Each paid a fee, and the CVB spent that on marketing. Any leads that came in were sent to all the businesses in the alliance.
It evolved organically from there. Restaurants that caught wind of the program wanted to sign up. When bus companies, improv groups and a rental car company wanted to expand their marketing programs, they, too, were admitted to the alliance. “That’s where our expansion comes in: word of mouth,” says Thompson. -- J.V.
Member-free
The San Jose bureau is the only such entity known to
jettison its membership; however, it’s quite common for others not
to have members in the first place. As it stands, only about half
(51 percent) of all CVBs have supplier members, according to a 2003
survey the most recent at press time of 150 bureaus by the
Washington, D.C.-based Destination Marketing Association
International (then the International Association of Convention and
Visitor Bureaus). Many of these are too small for membership to
make financial sense, but some have made a conscious decision not
to accept dues.
In Irving, Texas, a destination between Dallas and Fort Worth,
the Irving Convention & Visitors Bureau has often considered
implementing a membership program, but Maura Gast, FCDME, executive
director, feels the negatives would outweigh the benefits. “One of
the reasons we have not gone that route is because we believe we
can be a better representative of the city and our industry without
it,” she says.
According to Gast, having a membership could cause any or all
of the following to occur:
"Limit the selection of local vendors the CVB can provide to
planners;
"Draw the CVB’s sales focus away from the hotels, where it’s
most needed;
"Sour the bureau’s relationship with the chamber of commerce,
which maintains an active membership and might see such a move as
competitive;
"Force the CVB to deal in member politics, and
"Not provide enough revenue to offset the cost of maintaining
the group.
Best of all for Gast is the satisfaction of having clean hands
when it comes to connecting planners with suppliers. When a vendor
comes complaining that the bureau hasn’t sent along enough leads,
“we delicately remind them that they do not pay dues,” she
says.
Along those lines, member-based bureaus have to appease both
public officials and, to some extent, every business that pays in.
“We’re already under a magnifying glass with the city
administration,” gripes Elise Rogers, vice president of development
for the Albuquerque (N.M.) Convention & Visitors Bureau. “Then
we have nearly 1,000 members who think they’re our bosses. That’s
just the nature of the beast.”
Most CVBs that have never had membership are charged with
marketing smaller destinations, such as Kissimmee, Fla.; Arlington,
Texas; and Hampton, Va. After all, it’s more likely that membership
will be profitable if there are thousands of vendors in the city.
There is, however, at least one notable exception. The Las Vegas
Convention and Visitors Authority, the largest bureau in the
country, if not the world, has never had a membership base. In
fact, it has never even been discussed in a serious way.
Membership isn’t necessary, explains Terry Jicinsky, senior
vice president of marketing of the LVCVA. Hotel taxes on 135,000
rooms provide the CVA with quite enough of a budget. “If it’s not
broke, don’t fix it,” he says.
Even without members, the LVCVA and even the Irving bureau are
hesitant to recommend one business over another. Planners are
handed a list of every visitor service in the city and are expected
to choose. Jicinsky claims it’s not overwhelming; for example, his
list has about 30 destination management companies grouped
together.
Dan Fenton, who prides himself on the San Jose bureau’s ability
to offer just a manageable few unbiased recommendations, would
respond, “How helpful are you? I’m not sure what people are gaining
by using you.”
Dave Heinl, president and CEO of the Greater Raleigh (N.C.)
Convention and Visitors Bureau, agrees. He has worked at the
nonmembership bureau since founding it in 1987, but prior to that
he worked in Seattle; Hartford, Conn.; and Portland, Ore., all of
which maintained membership rolls.
Heinl says the perception is that not having members allows him
to represent his whole destination equally. For the most part, he
notes, that perception is accurate. But the situation isn’t
perfect. He can’t list every business in the visitors guide, and
because such inclusion is based on a fee, he has little control
over how many fast-food joints get placement or how many unique
restaurants selling points for the destination don’t. Most meeting
planner guides are compiled similarly (San Jose’s being a notable
exception), which ultimately limits their value to planners.
In the end, though, not having members has been a boon for
Raleigh. “Before, I was spending a lot of my time talking to
members,” Heinl says. “Here, we focus our entire time on the reason
we’re here: to bring visitors.”
Getting spammed
According to planners, the most annoying part about working with a
CVB isn’t about bias, but rather the bureau member’s most coveted
tool: the convention calendar. Bureaus are obliged to provide
members with a calendar of upcoming conventions, usually with
contact information for each, six months to a year out.
The stated reason is to allow businesses to staff accordingly,
to give attendees the best customer service possible. The other,
more ignominious reason is to allow members to begin prospecting
for business. When the calendar is released, planners field a glut
of calls from local businesses, especially DMCs, asking whether
their services could be of use. “I get them all the time, and I
hate it,” says Rochelle Colclough, CMP, director of meeting
planning at the Council on Foundations, based in Washington, D.C.
“I always wonder how this information gets out.”
“The number-one reason meeting planners don’t want to use
bureaus is they don’t want their leads distributed to the entire
membership universe,” says Maura Gast, who proudly keeps the Irving
bureau’s calendar under wraps.
But for cities with large conventions, the calendar is
essential to ensure everyone knows who’s coming. Even Las Vegas,
which doesn’t have paying members, dispenses the calendar a few
months in advance. “If a vendor chooses to have a more aggressive
sales approach, there certainly is the opportunity for them to
present their services,” says Terry Jicinsky. “We don’t make it
touch-of-the-finger easy to get the phone number. We also don’t
make it impossible.”
Mike Lyons, CEO of GEP Philly, a Philadelphia DMC, says the
practice is meant to help, not annoy. Meeting planners coming to an
unfamiliar city might be happy to get those calls. “It’s something
to rely on,” he says.
Indeed, not all planners mind unsolicited queries. Cele
Fogarty, a senior director at the Washington, D.C., office of
association management company SmithBucklin, says anyone who calls
before she sends out a request for proposal is given a shot at her
business. “I need organized suppliers,” she says. Her only wish is
that they would call earlier.
In general, planners who don’t want to be cold-called should
request that their names and contact info be omitted from the
convention calendar when their event is advertised. In addition,
they should demand to have “do not contact” printed by their
convention’s name.
“If you say, ‘I’m not fine with you sharing my information,’
they won’t,” says Deborah Sexton, president and CEO of the
Chicago-based Professional Convention Management Association and
former president of the Chicago Convention and Tourism Bureau.
Then there’s the tried-and-true approach that works on most
callers, whether they’re pesky businesses or bad dates. “I don’t
call them back,” says Pam Ballinger, vice president of meetings and
exhibits for Association Headquarters, based in Mount Laurel,
N.J.
Getting an Unbiased Opinion
Arlene Sheff, CMP“Most CVBs won’t tell you who they actually recommend, because they like to treat all their suppliers equally,” says Arlene Sheff, CMP, senior meeting and event planner for The Boeing Co. in Seal Beach, Calif. “They’re just a resource for data, not for recommendations.”
Sheff and other savvy meeting planners have learned to dig past the CVB to find trustworthy opinions. Here are some places to turn to find the very best vendors.
Canvass planners. Collect at least a few recommendations on each supplier, from industry association meetings or even the bureau. The Greater Boston CVB compiles postconvention reports from meeting planners, which provide information about many of the city’s businesses.
Ask the hotel. Sometimes it doesn’t matter if a supplier is good, if that company has never worked with the hotel you’re using. For security companies especially, solicit feedback from the hotel. When the issue is finding a hotel rather than finding a local vendor, planners often use a preferred hotel chain’s national sales office.
Hire a site-selection firm. To save time, Arlene Sheff uses Meeting Sites Resource, a site-selection company. The company sends out requests for proposal and organizes the results on a spreadsheet, then leverages its buying power to secure a deal. The group might be slightly more biased than a CVB that makes no recommendations, but then again, that can be a plus for the planner sorting through proposals.
“Out of an entire destination, we might pick three hotels,” says Tim Brown, partner of Meeting Sites Resource, based in Irvine, Calif. “A CVB would be hard-pressed to incorporate just three hotels.”
Consult bridal books. For finding off-site venues, Sheff recommends pulling out a bridal magazine, which will list hundreds of restaurants with private dining rooms, event facilities and other services.
Scout out reviews. For new restaurants that might not be members, read a local publication online. It will bring you up to date on the restaurant scene. -- J.V.
Reasons for membership
The vast majority of bureaus with members have been extremely
hesitant to follow the San Jose CVB’s lead. After all, membership
might have its limitations, but it also has its privileges. In some
cases, explains Maura Gast, membership can simplify matters. For
example, mailings to members are a great way for a CVB to maintain
contact with the destination, and such contact would help the
community understand that the bureau is charged to market more than
just hotels, but also restaurants, florists and local speakers.
Without mailings, “You’re not actively seen representing all the
entities you represent,” says Gast.
Bureaus with membership agree the system is only partly about
the dues. The 2003 DMAI report showed that, on average, just 3
percent of total CVB funding comes from membership dues. “From our
standpoint, it’s really about a partnership,” says Betsy Guetta,
director of membership sales and services at the Valley Forge (Pa.)
Convention and Visitors Bureau. “The only way we can prove that it
is a good decision to come here is by showcasing our
membership.”
Also, the funds brought in through membership are private and
therefore can be spent on gifts and alcohol, whereas in many
jurisdictions, public funds from hotel taxes cannot, explains Elise
Rogers. Without membership, CVBs couldn’t entertain clients the way
they do.
The St. Louis Convention and Visitors Commission has taken a
hard look at its structure several times over the years, and each
time, according to Bev Totten, vice president of services, the
bureau realizes it’s better to have than to have not. Membership
dues bring in a small (maybe 6 or 7 percent) but important slice of
the CVC’s revenue, and it creates a point of contact between the
CVC and local businesses. Plus, says Totten, “When you don’t have
any members, everyone complains like they are a member.”
It’s not necessary to have a dues-paying membership in order to
get the most of the benefits, though. Even without a membership,
the Irving CVB occasionally acts like it has one. A few months ago,
the bureau held its first-ever “membership luncheon,” in which
elected officials, patrons of the arts and community businesses
were invited to discuss future opportunities to help promote the
destination. This type of activity accomplishes the public
relations of a membership program without having to deal with
member complaints. The notion of a community roundtable has worked
in Raleigh as well, where four times per year, representatives from
the community meet with CVB executives to keep abreast of bureau
happenings.
The question is, do the dues diminish the quality of the
bureau? Is membership good for meeting planners? The fact that the
vast majority of large bureaus continue to have membership programs
suggests that the model for the most part works. “Overall, I think
meeting planners know that if they go to a bureau, they’re going to
get the most accurate information on the destination,” says Michael
Gehrisch, president and CEO of DMAI. As to the bias that membership
creates, Gehrisch doesn’t think it gets in the way of honesty. “Of
course they’re going to promote their members,” he says, “but if
someone wants information on a nonmember, I think they would give
it to them.”
In almost all cases, that’s true. Yet, member-driven bureaus
seem far more hesitant to discuss nonmembers with planners. For
example, in Bucks County, Pa., tour operators often want to bring a
group to the Bucks County Playhouse, a renowned venue that is not a
member of the bureau. The bureau is obligated to steer the tour
operator to a different theater unless the client puts his foot
down.
“Had we not been a membership bureau, it would have been easy
to simply provide what the customer wanted at the start,” says
Keith Toler, executive director of the Bucks County Conference
& Visitors Bureau, based in Bensalem, Pa.
The membership department of the St. Louis CVC has perhaps a
little more leeway. If a planner asked Bev Totten about a
nonmember, she would explain that it’s not a member but also give
her opinion. But she wouldn’t suggest it to begin with. “We’re
supporting people who support us,” she says.
John Hendrie, CEO of Hospitality Performance Inc., a Merrimac,
Mass.-based consulting firm that has worked with CVBs to set
standards for members, considers the issue not limited to bureaus.
“When you go to anyone who has an affiliation with other
businesses, you expect them to refer those businesses first,” says
Hendrie. “You’re basically promoting your buddies.”
A better model
Even CVBs with membership, however, have found ways to be
fair when sending out leads for meeting planners. Years ago,
bureaus would send out a planner’s lead to every member business,
requiring those businesses to sift through RFPs that were a bad fit
for them, and forcing planners on the other end to attempt to
separate the wheat from the chaff. Since then, bureaus have begun
refining leads, often with the help of software, so that just a few
qualified members receive them. Some CVBs will then arrange the
responses in a spreadsheet for quick perusal.
“The old way, customers unfortunately would hear from people
they wanted nothing, nothing to do with!” says Deborah Sexton.
“It’s been many years since that model has been in existence for a
sophisticated bureau.”
In Indianapolis, for example, a relatively new system called
Jupiter refines the leads, and as a precaution, an executive of the
Indianapolis Convention & Visitors Association must sign off on
any leads sent out. Even the members are happy about the change.
“They feel better that they are getting leads that are well
qualified,” says Susie Townsend, director of sales and services for
the ICVA.
Pay to play
Shortly after the San Jose CVB called off its membership, the
Sacramento CVB took a slightly smaller step that maintained the
revenue stream but erased the bias that a membership can
create.
Leonard Hoops, vice president and chief marketing officer,
converted the bureau’s membership structure, in which local
businesses pay an annual fee to get a bevy of benefits, to a
“partner-marketing” arrangement, in which the CVB offers buy-in
opportunities for specific programs. The difference, says Hoops, is
that now the bureau has stopped chasing members to join or renew.
The extra members previously brought in by coercion weren’t
supplying much revenue, anyway; once the costs of running a
membership department were considered, the revenues came out to a
wash. The new department, on the other hand, has increased total
revenues by 20 percent, money that is funneled into sales and
marketing efforts, rather than back toward membership programs.
The basic partner-marketing structure isn’t all that different
from the old membership structure. Local businesses that want to
become basic partners are given a listing in bureau publications, a
link on the website and invitations to partner functions. One key
difference is, partner businesses are not promised any leads
whatsoever, which frees up the bureau to recommend the best
businesses, not the most loyal.
The real money comes from strategic partnerships. The
partner-marketing department, made up of the two former membership
directors, works to provide revenue in terms of cash or goods and
services, not through dues but through sponsorships. The department
recruits local businesses to participate in marketing efforts; as
an example, the bureau partnered with a minor-league baseball team
that was aiming to promote a concert series at its stadium.
“In the past, they’d be trying to get money out of us, and we’d
be trying to get money out of them,” says Hoops. “Instead, we gave
them publicity, and they gave us free tickets for their concerts.”
Another example: A local coffee company, Java City, agreed to
supply the bureau with its coffee in return for a small
sponsorship. Not only did the office’s coffee improve, but the
money saved on coffee jazzed up the bureau’s bottom line. These
types of trades are not new, but they are being done much more
commonly and profitably.
“At the end of the day, it’s not a 180-degree turn, more of a
fine-tuning of who does what to be more efficient,” Hoops
explains.
For many bureaus, including the Washington, DC Convention and
Tourism Corp., the San Diego CVB and the Indianapolis CVA,
partnership is the way of the future. For now, these bureaus are
keeping their membership but also realizing funds from such types
of partnerships. The ICVA, for instance, has members the
Indianapolis Power & Light Co., for example that join up just
to take advantage of the sponsorship opportunities.
“They don’t need leads,” says Susie Townsend. “They want
exposure.”
In Sacramento, and San Jose, that type of arrangement is all
that’s offered.
“Nobody signs up with the idea of getting business anymore,”
says Hoops. “We’re more interested in satisfying the customer, not
the stakeholder.”