Companies’ spending on meetings and events can be hard to track and varies by industry, says a new study from travel-management giant Carlson Wagonlit Travel. But before you stop reading thinking you’ve heard it all before, the study also finds that certain best practices can save companies up to 25 percent on that spending over three years. It comes down to smart sourcing, centralized policies and processes, and senior management support. And if that sounds daunting, the report’s 131 pages also include detailed steps to help companies implement those best practices.
“Meetings and Events: Where Savings Meet Success” is the fifth report in a series of research projects conducted by the CWT Travel Management Institute. The report is based on research, carried out between September 2009 and March 2010, that included a survey of 222 meeting planners and requestors from 15 countries across North America and Europe; an online attendee survey, completed by more than 2,300 respondents from six countries; interviews with more than 40 meeting experts from full-service agencies, hotel chains, trade associations, and corporations; a quantitative analysis of CWT client data; and two comprehensive corporate case studies. CWT’s technology partner in the research project was StarCite, whose “Strategic Value Analysis” tool was used.
CWT created a model to estimate the savings that would be realized when companies put best practices in place in three areas: sourcing, processes, and policy/compliance. Also critical, of course, is full buy-in from senior management. And the report is careful to suggest that a meeting management strategy based solely on price is not the goal. Rather, “in addition to making processes more efficient and achieving savings, organizations must consider how meetings and events can best serve business objectives.” Doing that means involving a wide range of stakeholders in the decision-making process.
Step One: What Are You Spending?
A basic approach to estimating total meeting spending is to use accepted average revenue percentages by industry. For example, CWT estimates that companies overall spend between 0.5 and 1.5 percent of revenue on meetings, while companies in the pharmaceutical, banking/finance, IT, and consulting industries spend up to 4 percent of their revenues on meetings and events. CWT also offers its breakdown of the main line items in meeting budgets:
Accommodations/venues/meeting space: 37.5 percent of total meeting spending
Transportation: 32.5 percent
Food and beverage: 12.5 percent
Other (attendee management, onsite support, design, and communications): 17.5 percent
Design a Policy
Surveyed respondents said that creating a is the single biggest way to improve meeting management. Yet only 13 percent of those same respondents reported having a or regional meeting policy in place. Elements of a successful policy include: use of standardized terms, use of preferred suppliers, centralized meeting registration, and use of an online attendee registration tool.
Strategic Sourcing: What it Means
Survey respondents ranked using preferred suppliers and improving negotiating leverage as the second and third biggest ways to improve meeting management. But while most work with preferred suppliers, the survey found, only 31 percent have worked to pre-negotiate rates with some suppliers at a local, regional, or global level. According to CWT, that’s when sourcing shifts from being ad-hoc to being strategic.
One-third of respondents said their meetings are centrally managed, and these respondents tended to be from industries with the most mature meeting and event programs. Central coordination of meeting planning is a best practice, according to the report, which also acknowledges the barriers to centralization and suggests ways to overcome them: involve a diverse panel of stakeholders in decision-making, implement a continuous change management program, and leverage technology.
Use Your Transient Travel Leverage
The survey puts transient travel spending at roughly twice that of meeting spending on average. Yet only 29 percent of respondents systematically use transient travel volume as leverage when negotiating with airlines and hotels for meeting programs. And most companies (58 percent) reported that they manage meetings and business travel separately.
The report covers many more aspects of meeting management, from the broad, such as environmental responsibility guidelines and an exhaustive guide for choosing a third-party meeting planning company, to the detailed, such as the benefits of online attendee registration and the different ways of using payment cards.
Details of Survey Respondents
Meeting planners’ and requestors’ job functions broke down as follows: 21 percent were in procurement or finance/accounting; 20 percent in meetings departments; 18 percent in travel management; 16 percent in marketing or communications; 6 percent in sales; 4 percent human resources; and 15 percent in other departments. The breakdown by industry is as follows: energy/chemicals (19 percent), pharmaceutical (17 percent), banking/insurance/financial (10 percent), IT/technology/telecommunications (10 percent), automotive (7 percent), consumer goods/retail (5 percent), and other (32 percent). “Other” includes food/beverage, consulting, heavy industry, manufacturing, aerospace/defense, and other sectors.