Let the numbers do the talking: The member companies of Financial & Insurance Conference Planners alone spend $600 million on meetings. And a typical FICP member company's largest meeting brings $500,000 of pure revenue to a hotel.
“We're a niche player, but we represent big business — and it's growing,” says Patricia Kerr, CMP, director, distribution sales support, Manulife Financial in Waterloo, Ontario. Kerr is president-elect of FICP and was one of the architects of FICP's first economic impact survey, conducted last summer.
The survey results are evidence that as we head into 2007, planners are emerging from a long era of cost cutting to embrace a new era of cost management. They're spending, but they're spending smarter.
Michael Key, CMP, is a case in point. “My budget has not been cut, but I am challenged to spend my dollars wisely,” says Key, assistant vice president, sales support, at Monumental Life Insurance Co. in Durham, N.C. The regulatory environment has also had an impact. “We still have incentive meetings, but they must include a business purpose as well,” Key says. “We allot ample time for business sessions along with recognition at all of our meetings.”
Gary Pearson, director, meetings and events, Aon Service Corp. in Chicago, says his company has lately been “scrutinizing” attendee lists. For example, the company's Worldwide Leadership Meeting, which brings together top executives from around the world, had attendance of 190 in 2006 but will be trimmed to 150 in 2007. The reduction does represent cost savings, but Pearson explains that the issue is not so much cutting budgets as making strategic decisions about where meeting dollars are allocated.
“My budget per meeting is staying steady, but we are doing fewer, larger meetings and targeting different clients,” says Linda Rayner, director, conference planning, Pacific Life, in Newport Beach, Calif. “And we are looking closer at how we spend the budget, trying to get more bang for the buck.”
Package Deals
For many planners, the biggest bang for the buck comes from negotiating package deals. Whether it be multiple programs at a single property, a year's worth of incentives at a single brand, or multi-year deals with hotel companies, insurance and financial services meeting planners are beefing up their room blocks to make their business more attractive to hotels. And with the seller's market sticking around, that's critical.
“We have had much success in negotiating favorable deals for the company by ‘packaging’ our events and negotiating well with partners that support these meetings,” says Jeff Calmus, Boston-based assistant vice president, operations, conference and event planning, for MetLife. “By leveraging our spend, we have been able to maintain relatively flat budgets while getting more value for our internal clients.”
At National Life Group in Montpelier, Vt., Lynn Averill, second vice president, travel and conferences, booked four sales programs, ranging in size from 80 to 600 attendees, into El Conquistador Resort and Golden Door Spa in Las Croabas, Puerto Rico, in spring 2008. Booking four programs got her “significant negotiating leverage for concessions and rates,” Averill says. She decided to try a package deal after she had already started to investigate bringing one program to El Conquistador. Then management asked her to scrutinize her budget (“the fourth time in my career,” she notes). “It seemed obvious that placing more than one meeting would put National Life in the driver's seat,” she says. “Of course, I needed to show the value of the savings and concessions (by booking four meetings versus one meeting), and then we brought [Puerto Rico-based DMC] GSI and the Puerto Rico Convention Bureau into the mix. It really was an incredible experience to have all of us working on the same goal.”
From the resort's perspective, says Michael Crist, associate director, sales and marketing, LXR Luxury Resorts, “the size of each group, plus their length of stay, made it possible for the El Conquistador to achieve a desired level of occupancy over a long stretch of dates. We mixed and matched Lynn's groups according to our availability and what was most convenient for National Life Group executives to be present for their respective programs.
“Instead of just one nice program which would fit well into a number of open dates,” Crist continues, “we were able to accommodate four groups, more than double the amount of realized business from a room-night standpoint, and provide National Life Group with an overall package that combined economy of scale with a highly marketable resort destination.”
Averill booked the meetings essentially back to back throughout April and May, making travel more efficient for executives and giving her a stronger negotiating position with speakers and entertainment. She will buy room gifts in bulk, and all promo materials will be the same except for text changes.
Also working in her favor was timing: El Conquistador Resort joined the Luxury Resorts portfolio in August 2005, and now is undergoing a $100 million overhaul to be complete by year's end. “The new product is going to be sensational,” Averill says. “LXR's reputation for bringing properties back to life, together with the relationship I have established with Michael Crist and Laura Burke [Northeast sales representative, LXR] over the years had everything to do with sealing this deal. This involved a lot of trust by both parties, and I must say it was one of the most rewarding experiences in all my years as a meeting planner.”
Crist echoes the sentiment. “Earning Lynn's confidence and trust over the years is an honor for me. Her professionalism, humor, and knowledge make her a joy to work with, and all of us at the El Conquistador cannot wait to welcome her back with several hundred of her colleagues.”
Averill says she will try more multi-meeting deals in the future. “Like many companies, we are looking at negotiating two-year contracts for our 2009-2010 incentives with similar goals of cost savings and efficiency.” She acknowledges, though, that sometimes the pieces just need to fall into place. “I believe I was working with El Conquistador at the right time,” she explains. “LXR had just announced its involvement. The planned enhancements to the property will be phenomenal. It truly will be a brand-new resort. If I may be so bold: I needed the El Conquistador and it needed National Life.”
Relationships Get the Deal Done
“Multiple-program deals and multiple-year deals are becoming more common,” says Isabel Mahon, director of global sales for Fairmont Hotels & Resorts. “What is also more common is clients who have three or four divisions looking at the same hotel for those programs, and this can create great value for the clients. As the market has turned around in the last 12 months and rates have increased, multiple-program deals and multiple-year deals are ways that clients can still show savings to management. It also gives a base on the books for the owners of the properties. It is a win-win situation.”
It was a win-win for Brett Barrowman, vice president, conference and travel management, American Fidelity Group, Oklahoma City, Okla., when he booked a series of six incentive programs, ranging from 18 attendees to 450 attendees, into Fairmont properties between 2007 and 2010. The meetings will take place at hotels in Canada, the Caribbean, Mexico, and Monte Carlo, Monaco.
Working with one brand, Barrowman says, gave the company “better rate considerations and the ability to show loyalty to a brand.” As well, he adds, “It was almost like one-stop shopping. We signed a single contract, and we had comfort with the service levels, even though we are in four countries. Once we finalized the properties, we were able to use a single source and let Isabel work on our behalf.”
Explains Mahon, “Brett signed with each hotel, but I was able to use our corporate contract so all the legal was the same, and we just negotiated the rates, dates, and concessions for each of the properties. I was the point person to collect all that information and negotiated with Brett.”
It sounds great, but such multi-meeting deals often work best after a relationship is established between planner and hotelier. “All the individuals I am working with on multiple-program or multiple-year deals have operated successful programs with us in the past,” Mahon says. “If I can make it easier for them to book Fairmont, they will reward us with additional business, and that is great for both the hotel and the company.” As well, the deal has to make sense for both sides — and for all the properties involved. “My hotel sales people are very supportive,” Mahon adds. “When a client has a corporate contract, they do not have to worry about the legalese, and these days that can be the part that holds up the signing. Each hotel is still giving me rates for the time-frame the client is looking at, but as they do not have to spend as much time negotiating one piece, that is worth something, and I can pass that on in the rate and concessions. Don't get me wrong, sometimes I need to do a little education on the hotel side, but that is part of my job in global sales. I need to make sure it is good business for the hotel, the company, and the client. Sometimes you still have to say no.”
Barrowman says he will look at similar package deals in the future, “as long as the brand is present in the destinations we are targeting. Budget has a lot to do with it also. Does the destination fit the budget and does the brand?” He also may repeat another type of package deal he has done in the past: booking back-to-back programs into a single property. In 2004, American Fidelity held three meetings back to back at the JW Marriott Ihilani on Oahu. “The programs are not huge on their own,” Barrowman says, “but combined, there were 1,200 total room nights.”
Heading Offshore: International Meetings Trend Upward
In 2006 as compared to 2005, the number of international meetings stayed the same or increased for 80 percent of survey respondents. More impressive, 94 percent of companies said the number of international meetings would stay the same or increase this year as compared to 2006.
For Paul Eder, vice president, meetings and incentives, Protective Life Insurance Co., in Birmingham, Ala., international incentive trips are a cornerstone of his company's reward and recognition strategy. “Our group of top producers is savvy and well-traveled,” Eder says. “They find international trips motivating and exciting. They work hard to go on these programs.” And Eder has led some incredible trips, including a program in Paris in the summer of 2001 that included a black-tie gala in the Palace of Versailles. “It was a once-in-a-lifetime experience,” says Eder, who points out that using unique venues for individual events is a great benefit of holding meetings overseas and is what really makes it special for the participant. “You can do things they can't do on their own.”
He acknowledges that international meetings present challenges, such as trying to predict exchange rates. “But I like the challenge. I think you raise your game to the level of the challenge,” he says. “But it's crucial to work with a good DMC!” In the past 10 years, Protective's top producers also have attended programs in Rome/Florence, London, Sydney, and Dublin. Barcelona is booked for July 2008. “International meetings have been very successful for us,” says Eder. “The challenges have been well worth our while.”
Third Parties Help Solo Planners
Just under half of the survey respondents said they use third-party meeting planners for some services, a figure that doesn't look to be changing (88 percent of respondents said their use of third parties would stay the same in the next 12 months).
Gay Grizzell, corporate meeting planner, Fort Dearborn Life Insurance, in Cleveland, is one who will continue to use the third party she's worked with for 14 years. “Some meetings I book direct,” she says. “Since I am the only meeting planner at my company, it depends on the size and complexity of the group. The third party provides assistance with site inspections, hotel rate negotiations, air bookings, airport meet-and-greet, and on-site logistics.”
Having used the same company for more than a decade, Grizzell has a high level of confidence in their performance and says that they have come to know her attendees as well as she does. However, she notes, when a third party does the negotiating, it can prevent the planner/supplier relationship from developing, and Grizzell sometimes finds herself pointing out that she is a repeat customer. “The one disadvantage is that in terms of relationship-building, when I go direct, many hotels are not aware that my company has been a past client or, in some cases, a current client. What the hotelier knows is that my third party is bringing them additional business. What they should also realize is that there is another entity that is driving the business to the third-party planner. If we are not placing business with them, they are not placing business with the hotels.”
Budget Builder: Creativity
Survey respondents were offered space to list their biggest current challenge and nearly all took the time to do so. The buzzword of the survey: creativity, in everything from planning the “wow” factor, to improving incentive events year over year, to making a bare-bones budget go farther.
Sometimes creativity means questioning things that are usually taken for granted. Centerpieces, for example. Dick Adler, sales promotion director, American Family Insurance Group, in Madison, Wis., surveyed his attendees recently, asking them to rate elements of the meeting that affected their experience. Centerpieces ranked dead last. At $100 a table, that's a significant line item and a chunk of cash that might work harder for you elsewhere.
“Now we use the votive candles on mirrors that every hotel has,” Adler says, “and we use that money for something else.” And Adler has long been on a bottled-water crusade: “Hotels charge you more for bottled water than for Coke!” he says. So, order up those pitchers of tap water for an easy budget boost.
Survey Methodology
Last August, e-mail with a link to the Web-based FICP Economic Impact Survey was sent to the most senior meeting planner on record at each FICP member company. A total of 216 e-mails were successfully delivered and 112 completed surveys were returned, for a response rate of 52 percent, a higher-than-average rate for professional associations. The Market Research & Statistics Group within SmithBucklin Corp. coordinated and tabulated the survey.
