Power Pacts

Meetings & Conventions - Power Pacts - July 2000

July 2000

Power Pacts

Why compete? Leading Web-based planning companies are opting to share their strengths

By Bryant Rousseau

Laurel & Hardy. Lewis & Clark. Cheech & Chong. While going it alone may be more glorious, success as the above examples illustrate often depends on finding the right partner.

Taking this lesson to heart, meetings industry Web companies have begun teaming up at a torrid pace, seeking to create “super sites” that deliver true start-to-finish planning functionality.

The ultimate impact of these alliances could be immense: radically speeding up the pace at which planners adopt online tools; driving out of business those firms both online and off that can’t compete with such comprehensive service offerings; and transforming the surviving sites into the new industry power brokers whose influence exceeds that of any other supplier.

“Turnkey functionality is the name of the game, and that is where online sites are going,” says Corbin Ball, Bellingham, Wash.-based analyst of industry tech trends. “I think we’ll see two or three megasites that will provide everything from site inspection, RFPs [requests for proposal] ticketing and registration to air and car reservations, group housing, meeting logistics and after-meeting follow up.”

Giants join
The most striking example of this trend toward togetherness is the cross-marketing agreement reached in April between the PlanSoft Corp. and Passkey.com Inc. The companies have arguably the two best-known online brand names in the industry and certainly have two of the best-financed and most widely used Web sites. For an analogy from the wider Web world, it’s as if AOL and Amazon.com decided to share services and promote each other.

While there are many facets to this deal, the one that stands out most and is likely to have the greatest long-term consequences is PlanSoft’s decision to license Passkey’s Web-based housing system. On its own, PlanSoft has developed products for two essential components of the planning process. Its Web site (planner.plansoft.com) lets users search a database of more than 14,000 meeting venues and then forward them RFPs. Its Ajenis software facilitates the handling of meeting logistics.

But it has lacked a housing management tool, and the addition of one, via the agreement with Passkey, could go a long way toward helping PlanSoft crack the critical corporate market.

PlanSoft is eager to be designated the official, mandatory-to-use meeting planning tool at Fortune 1,000 companies; in fact, the company is close to signing such contracts with some of the country’s largest corporations, according to Ed Tromczynski, PlanSoft’s president. But every company has insisted on a housing tool as a prerequisite for any deal and now PlanSoft can deliver one.

“What these companies are clamoring for is the ability to take their 3,000 meetings and drop all the expense data related to them into the same bucket,” says Tromczynski. “Then they can generate reports that will help them leverage their relationships with key suppliers. With companies telling us that meetings represent some 45 percent of their T&E budget, you better believe CFOs are eager to consolidate their spending data.

“Imagine the advantages for a company that can have its own private-label, customized search engine that defaults to preferred suppliers and lets users send and receive RFPs electronically and now lets them track all their housing data,” says Tromczynski. “The integration of Passkey’s housing tool makes the PlanSoft solution more attractive to large corporations.”

PlanSoft, which expects to drive a large number of reservations through the Passkey system this year, intends for the housing option to be operational by this summer, according to Tromczynski. Planners are now sending RFPs worth 100,000 room nights a month through PlanSoft, he adds, up from 50,000 to 60,000 in January.

Passkey.com Besides the increased reservation traffic, Passkey also will benefit from the increased exposure of its product, says Rich Westerfield, Passkey’s vice president of marketing. For one, planners will be able to search for Passkey-enabled hotels in the PlanSoft database. And PlanSoft’s 45-person sales force also will be qualifying potential leads for its new partner.

Passkey users get the added convenience of being able to launch a venue search on PlanSoft right from its own site, says Westerfield, who adds that while Passkey users usually go through CVBs to book citywide events, they also plan many single-hotel meetings for which a search service like PlanSoft is valuable.

Both of the new partners, while seemingly delighted with each other’s company, also took care to stress these deals are not exclusive. Tromczynski hinted PlanSoft may be interested in another housing partner more geared than Passkey to handling small meetings.

And Westerfield says a deal with another RFP engine “that focuses on the corporate market” is imminent.

“Each of the major RFP engines serves a specific niche, and each also brings to the table a large user base, brand equity and market reach beyond Passkey’s existing user base and branding,” says Westerfield. “From Passkey’s perspective, by having these agreements we’re providing convenience to users while also generating some additional revenue and more brand awareness.”

Requesting registration
The other key partnership trend among industry Web sites centers on the natural link between online site selection/RFP engines and Web-based attendee invitation management systems.

Once a planner finds and books a hotel, the typical next step is to begin alerting attendees, so the rationale for these alliances seems obvious. And indeed, there have been three such deals in recent months.

The newest major partnership is the deal announced in May between AllMeetings.com and B-There.com. AllMeetings is an online site selection and RFP engine with a patent-pending expense calculator that lets planners compare the costs of holding a meeting at various hotels. Partner B-There offers housing management and registration tools and real-time air and car booking capability for attendees.

Under the partnership, both companies will link their corporate customers who have customized intranet meeting and event planning solutions seamlessly to each other’s Web site.

By linking to AllMeetings.com’s Web site, B-There.com users will be able to use AllMeetings.com’s search engine, meeting cost calculation and RFP tool to select and book a site. AllMeetings.com customers will be able to use B-There.com’s Event Registration/Reservation System (ERS) to schedule event activities, facilitate attendee event and hotel registration and manage their events online.

Perhaps most importantly, by creating a consolidated budget database, the partnership should make it easier for planners to keep historical data to compare budgets and actual spending from one year to the next.

“In the past, AllMeetings.com’s corporate customers could use our service to prepare a budget for a meeting, but they had to wait until all of the attendees turned in their expenses to determine actual expenditures,” says Glenn Bingham, founder and CEO of AllMeetings. “With the added functionality of B-There.com’s ERS engine, including credit card processing, now they can reconcile their budgets as soon as the event is over.”

And in an appeal to the association market, in June B-There inked a pact with iConvention.com, a site that brings traditional trade shows to the Internet.

Meanwhile, EventSource.com and Event411.com have worked a deal of their own.

“Registration falls [next] in line in the sequence of events after choosing a property,” says Brian Langer, EventSource’s founder and vice president of business development. “We listened to our clients’ need for registration tools, and the combined service offering of EventSource and Event411 reaches those needs.”

EventSource, like PlanSoft, lets users search a large database of industry suppliers and forward the RFPs. Event411, which was selected as the attendee management system for the Democratic National Convention, lets planners manage the registration process in an online environment (as well as providing budgeting and other management tools).

“Our goal is to bring together the disparate tools that are out there into one cohesive set,” says Steve Stautzenbach, Event411’s vice president of business development. The key planner benefit of the deal, according to Stautzenbach, is the integration of data between the sites so that a planner who begins building a meeting profile on EventSource as part of the RFP process - inputting dates, approximate number of attendees, a rough outline of the meeting’s schedule, etc. - can transfer that data to Event411 without having to do any rekeying.

“All the information about their events that planners are sharing with EventSource automatically will come with them when they move to our site,” says Stautzenbach.

The venue contract generated from the EventSource RFP process can also be seamlessly imported into Event411, letting planners easily review their attrition clause as they manage the registration process.

Stautzenbach says plans also are in place for the two sites to coordinate on a common post-event reporting structure “to give planners a concise, consolidated overview of their event’s performance.”

Some of the technical work allowing for this data integration will be finished this quarter, with all of it functional by year’s end, according to Stautzenbach.

Agreeing that links between site selection Web sites and registration management provide clear user value, PlanSoft in February partnered with SeeUthere.com, an online attendee communication, registration and ticketing tool. “By combining the complementary technologies of SeeUthere and PlanSoft, planners can now organize, manage and promote events in one location much more successfully while spending less time, energy and money,” says John Chang, SeeUthere’s president.

Build, buy or bond?
This profusion of partnerships begs the question as to why these sites all of which have received many millions of dollars in venture capital have opted for alliances over building the desired functionality on their own.

After all, a site that delivers turnkey functionality all on its own stands to stake out an extremely valuable slice of the country’s or the world’s entire meeting-spend pie, a $100 billion-plus prize.

But the reasons why partnering is preferable are many, according to the site executives. First and perhaps foremost is speed. By leveraging a pre-existing technology, a site can offer a service far more quickly than if it had to develop its own solution. A second motive, not surprisingly, is cost. In most cases, it’s much cheaper to license a technology, or agree to share revenue, than it is to try to create a solution from scratch. Third is the issue of core competency. Why try to create a product on one’s own, the reasoning goes, when another site has already introduced a highly successful product, developed after years of trial and error?

EventSource.com “Building an industrial-strength registration product is not trivial, nor is providing the staff to service it,” says EventSource’s Langer. “Our partner-vs.-build decision was both a time-to-market one our clients say they need registration now and a core-competency one. We felt Event411’s product was the most likely to win in this space.”

“If you can get away with leveraging core competencies, you want to do it,” says PlanSoft’s Tromczynski. “Speaking of our partnerships in general, we hope they can offer a product to us for X amount that would cost us three times X to build ourselves.”

Event411 “It’s a more difficult and expensive path to build a new service outside of your core competency, when there are excellent solutions out there,” says Passkey’s Westerfield. “By not partnering, you will lose market share' by the time you’re ready to introduce your product, the opportunity may be gone and the market may have passed you by.”

Meeting planners, too, should benefit from sites partnering. “A big problem in the events industry is generalized service,” says Langer. “There are lots of full-service companies that do everything, but nothing really well. Compare that to the high-tech industry, where Microsoft makes operating systems, Sun Microsystems makes servers, Dell makes PCs, etc. Because of specialization, high-tech clients get much better product selection and pricing. Partnering will help drive specialization in the events marketplace, which is good for consumers.”

But this parade of partnerships might just be a forerunner of a different kind of linking up: the outright purchasing of one site by another, as the big sites look to become even bigger and as some of the smaller sites feel they can no longer compete on their own.

AllMeetings.com, for example, has been named by more than one industry insider as a highly appealing prospect for purchase. And some have suggested that it would make tremendous sense for two of the largest site selection sites like PlanSoft and StarCite to combine forces in a kind of merger of all mergers.

Buyers might even come from outside the core meetings arena. “I think there will be some gigantic dogs looking at the players in this space,” says Tromczynski. “The largest travel agencies are focusing more and more of their attention on the meetings industry, as are the airlines, which are getting serious about acquiring a solution set for this industry. Big publishing companies might be interested in what we do as well.”

Such consolidation, which many expect to begin happening in earnest this year, could be a mixed blessing for planners.

“A concern I have is that if there are too many players, the field might become too diluted, and the companies might not meet their financial goals,” says Jeff Rasco, an industry technology specialist and the “events guru” at Austin, Texas-based Team Tech International, an Internet solutions firm. “Missed benchmarks could result in lost investors&.The money could go away and the tools along with them.”

Langer, however, while a proponent of partnerships, warned that consolidation can kill competition and lead to higher prices. And these partnerships could significantly raise the barriers to entry for new players and could squeeze out some of the smaller sites.

“As major players enter into agreements with major players, some firms with smaller user bases, less capitalization and less brand recognition will drop by the wayside, re-establish themselves as niche players or be folded into larger companies,” says Passkey’s Westerfield. “In most cases, these companies haven’t been competitive for good reason, so the market likely won’t miss them much.”

Online outlook
The enormous effort being undertaken by Web sites to provide planners with an array of tools under one umbrella is a sign “that planners are really, really awakening to the efficiencies that can be gained by using this technology,” says Tromczynski. “They’re the ones demanding that we provide them with an all-in-one tool.”

Agrees Langer, “The honeymoon period during which technology companies drove consumer interest is behind us. Consumer demand has taken control and is driving the pace of online development.”

In what is probably the first round in a succession of partnerships, most observers have the PlanSoft-Passkey-SeeUthere triumvirate ahead on points so far.

“If these three partners can figure out all the data integration issues, that’s one big gorilla,” says Rasco. “With [a Web-enabled version] of PlanSoft’s Ajenis software coming along, they will be a one-stop planning shop on the Web.”

“Of this current crop of partnerships, the alliance that is likely to have the most significance is Passkey and PlanSoft,” agrees Richmond, Va.-based Doug Fox, who writes about industry technology issues in his EventWeb newsletter. “They are the respective leaders in their categories, and this partnership will undoubtedly drive even more business to each of the two sites.”

In general, most observers were optimistic about the potential benefits of these partnerships, stressing that they should keep down the prices for online tools. And as long as the sites can work out the data-sharing issues, the advantages of being able to have a single, online data source could result in major time savings for planners.

“I think these partnerships are huge for our industry,” says Rasco. “Putting all these tech-heads together, working toward a common goal, could blaze some trails in e-commerce. The turnkey functionality provided by these partnerships will buy planners more time and create less stress.”

RegWeb Others, however, were more skeptical about the value these partnerships will bring. Berkeley, Calif.-based Rod Marymor, whose RegWeb product is a competitor of SeeUthere and Event411, says he believes these partnerships have been undertaken “more to satisfy the investors in these sites than to provide true synergistic value to planners. It’s an attempt to legitimize the brands by saying, ‘Look who’s in the clubhouse with me,’” says Marymor. “I don’t think it provides much in the way of expanded service.”

Fox points out another concern: “While these tools can make it infinitely easier to perform certain functions, they also might usurp a lot of logistic-focused planner skill sets, like site selection, budgeting and even hotel negotiation.”

SeeUthere Planners, for their part, are taking a wait-and-see attitude toward the prospective benefits the partnerships might bring. “Of course they sound attractive, but until I see what they can do, I’ll have to withhold judgment,” says Joan Eisenstodt, president of Eisenstodt & Associates, a planning firm in Washington, D.C. In Eisenstodt’s view, the most useful partnerships will be those that let planners seamlessly handle housing and registration data. “Combining those sets of data is the greatest nightmare of all for planners,” she says.

STRENGTH IN NUMBERS

StarCite.com, one of the leading online site selection/RFP engines, was launched last fall with its own Attendee Manager system, and so has not had to partner with another Web site to offer registration management functionality. But that doesn’t mean StarCite has stayed out of the partnering game.

The company has teamed up with MeetingBroker.com (see “RFP ‘Hub’ Emerges,” page 54), a site that seamlessly transfers RFPs created by planners online directly into the sales and catering management systems of more than 3,000 hotels. Most of StarCite’s partnerships to date, however, have been with traditional companies, including Maritz Travel, Helms-Briscoe and McGettigan Partners (from which StarCite was spun off). StarCite also has a distribution agreement with Networld Inc., a marketer of international planning services.

Tom Flanagan, StarCite’s vice president of marketing, denied that not having a partnership with Passkey.com puts the company at a competitive disadvantage with rival PlanSoft. “However, we are working with a number of parties on solutions that might offer&more effective and cost-efficient products with respect to housing management,” he says.

And the site is actively seeking even more alliances. “We are engaged in active discussions with nearly 30 other potential partners,” says Flanagan. StarCite is even reportedly considering partnering with another registration management site to complement its own.

B.R.

RFP ‘HUB’ EMERGES

Forming partnerships with other industry Web sites isn’t just an option for MeetingBroker.com; it is a critical component of its strategy as the site seeks to become the distribution “hub” for RFPs generated online.

MeetingBroker, a service from Portsmouth, N.H.-based Newmarket International, intends to act as a crucial intermediary between site selection/RFP Web sites and the meeting venues themselves, routing sales leads generated online directly into the sales and catering management systems in place at more than 3,000 hotels, conference centers, and convention and visitor bureaus.

The site already has signed on a number of major players: HotDatesHotRates.com, StarCite.com, I-Sites.com, RFPExpress.com, BusinessMeetings.com, Meetings Travel Online (MTOnline.com) and AllMeetings.com. And the company is in discussions with or has verbal deals with EventSource.com, PlanSoft.com, MADSearch.com and others, according to Sara Richard, MeetingBroker’s sales director.

MeetingBroker works by “translating” a lead generated at any site into a format compatible with Newmarket’s popular sales solutions products, like Delphi, Global SFA and CVBreeze. This lets properties immediately evaluate and accept a piece of business, generate a contract and e-mail a response to the planner. “A hotel or conference center can turn around an inquiry and make it a booking literally in seconds,” says Richard.

B.R.