We’ve collected the questions posed by attendees of our recent webinar on risk management for global meetings, and posted them here with answers from our panel of experts: Kim Hester, senior account executive, sales, JNR Incorporated; Diane Williams, director, meetings and events, International Association of Amusement Parks and Attractions; and James Goldberg Esq., Corporate Meetings & Incentives columnist.
View the webinar free and on demand here.
Q: What are the challenges of assessing a destination’s risk today?
Diane Williams: Checking on a destination’s financial and political situation is a very hot topic right now, when globally things can change daily, even hourly. Know what the U.S. State Department is saying with regard to travel warnings. Your attendees are going to know this. They are well read and they may wonder why you’re planning to take them to a country where they don’t feel safe. You’re going to have to talk to them about that.
Q: Are site inspections a must when working overseas?
Diane Williams: It’s invaluable to be on the ground to see how the infrastructure actually works. You need to know if your attendees are safe taking a taxis from the airport, or walking in the city. What is the technology infrastructure? I strongly recommend, if you go outside the U.S., that you have an advance team that can go and experience the destination. As much as we love Google and the internet, there is nothing like going there so you can come back and talk about it personally, and how you see it from a risk assessment perspective.
Q: How accommodating are hotels outside the U.S. regarding concessions?
Kim Hester: This varies widely from country to country, so it is best to do a lot of homework first or to get an expert to negotiate on your behalf. For example, we routinely get complimentary meeting space in the U.S. within certain parameters, but that is rarely the case in most European countries. Getting comp space is the exception and the parameters are much more stringent.
As in mostsituations, it’s wise to start out asking for all the items on your checklist, highlighting the concessions that are most important to you, and then seeing how the hotel responds. You will get a good sense early on as to whether or not they are flexible and what items they can provide.
Q: Some vendors or even hotels that I work with in other countries sometimes agree to things outside of our
James Goldberg: It’s always better to try to get the language into a document signed by both parties. But if hotels or vendors do not like that approach, an exchange of e-mails is fine, provided that they reference the underlying contract and state that this is an additional (or different) term.
Q. How important is it to be bilingual when dealing with international meetings?
Kim Hester: Not very important, unless you are in a remote location where English is not commonly spoken. Then it is best to get an interpreter. However, in most cities and properties that routinely deal with international business, English is usually spoken by the sales, conference services, and guest contact individuals.
Working with Partners
Q: Where do I find a list of global DMCs?
Kim Hester: There are a number of companies that rep multiple DMCs worldwide. They make sure that each is financially sound, responsive, and meets industry standards. These companies offer a nice extra layer of protection and assistance, and they all have reps located in the U.S. Two that I use frequently are Global Events Partners and Hosts Global Alliance.
Editor’s Note: Other global DMC consortia or companies include AlliedPRA Destination Management, Ovation Global, Kuoni Destination Management, Pacific World, and another resource for searching for international DMCs is the Association of Destination Management Executives International.
Q: What are some of the essential items to consider when contracting with a third-party international meeting planner?
Kim Hester: First and foremost, be sure they are experienced in the destination(s) you are considering. There is no substitute for the hard lessons that come with experience in the customs, culture, what can be negotiated and to what degree, what is customary, pitfalls, etc. You are going to count on them to be your guides through all the landmines, so make sure they have “been there, done that” already.
Also check that the company is financially sound and get references. Beyond that, be sure you simply feel comfortable with the people who will be assigned to work with you. I always equate it to dating—make sure you have good chemistry, your expectations are realistic, and you have similar work ethics/styles.
Q: Do you think it’s better to try to negotiate a flat conversion rate or payment in U.S. dollars at a set rate?
Diane Williams: I believe both can be good. Which one depends on a variety of factors in your organization. Above all else, I recommend talking to your accounting department first, and also getting the advice of other accountants who have dealt with international currency conversion.
With that being said, here are some questions to consider:
1. What country are you going to? Where does the exchange rate typically fall when dealing with U.S. dollars?
2. Does the rate fluctuate a lot in a typical year?
3. Will you be paying more out by using U.S. dollars than if you use their currency?
If you answer, “yes” to all three questions, you may want to consider a flat rate conversion to get the most bang for your U.S. “buck.”
Q: What are the implications of negotiating payment in U.S. dollars to eliminate currency uncertainty?
Diane Williams: That is certainly an option that many organizations take. Most of the world will happily take U.S. dollars since it is such a popular and stable currency. It is also much easier for the organization to plan out their final costs with certainty.
The only downside to this could be that in many First World countries, and particularly in the European Union, you will end up paying more than if you paid with Euros, due to the lackluster U.S. exchange rate. But for many, it is worth it to lock it in U.S. dollars in order to have the stability of knowing what the costs will be up front.
Q: Can you make adjustments if already purchased on a fixed rate?
Diane Williams: It has to do with the wording in the contract that was agreed upon. Most international venues have very specific language regarding purchasing services and exchange rate values—and how, once you’ve signed and agreed upon a certain rate, you can’t get it back if the rate changes! I would suggest speaking to a lawyer with international contract experience to interpret the wording of your contract on this subject, and whether there is room to negotiate.
Q: Where do you do your currency research?
Kim Hester: I use the Forex Directory
Q: No matter what country our event is going to be in, we collect registration fees in U.S. dollars. We pay 75 percent of our expenses in that local currency of the country we are going to. Does anyone ever collect their registration fees in the local currency of the country to minimize currency exchange risk?
Diane Williams: Honestly, I do not know of any organizations that strictly deal in local currency. But that’s not to say they don’t exist. But to do so is a risk, for you would not be able to plan out what your exact final costs would be. You would need to consider the stability of the country’s exchange rate versus the dollar, plus how far out you can agree to a flat rate. Without a crystal ball, you can’t know what political or environmental factors may affect the exchange rate, which will affect your final costs. It may pay off in your favor—or not.
Q: What is another option for managing exchange rates?
Diane Williams: Many organizations use a hybrid situation, where registration is paid out in U.S. dollars, but local services are paid in local currency. For many, this is the best of both worlds. You get to collect the majority of the money in your own currency—no fuss—and then you pay out services at the lowest cost possible.
Q: What are some of the best resources to explain VAT?
Kim Hester: I use Currency Exchange International, Clark and Nancy Eide. They do an excellent job of explaining VAT and walking you through the process for your particular country.
Q: How successful have you been in reclaiming your VAT?
Kim Hester: Very successful, because I make sure I do the research during the budget and planning process—not after the program is done. Each country has different rules pertaining to what items and services are subject to reclaim, what documentation is required on the claim, and how the documentation must be presented. It is critical to know that before you sign contracts with your vendors so they can do their accounting in a way that will expedite your claim. You also have to be very patient with claims and know that some countries take up to a year to process them—but when the money shows up, it’s like Christmas!
Q: Is there a benefit to paying all bills with company credit cards and letting the credit-card company negotiate the currency rate?
Yes, the benefits are convenience and a fair rate. For the most part, credit-card companies are known for negotiating lower exchange rates than average, so many groups use credit cards so they don’t have to worry about it. On the other hand, a good negotiator who has studied the rates and the fluctuation history could also get a great rate that may be a little lower. It just depends on how much time and knowledge a group has to focus on it.
Q: Can you pay with American Express at most venues in Europe?
Diane Williams: The majority of the larger venues and companies that regularly deal with the United States do take AmEx. But because AmEx charges vendors a larger percentage of cost to provide service (larger than MasterCard and Visa), many smaller companies are no longer taking AmEx since it is more expensive for them to offer. Ask each vendor what credit cards they can take before agreeing to services.
Staff and Attendees
Q: We are an association. All of our members and our staff book their own flights. We don't typically collect travel or emergency information. Should we make it mandatory?
Diane Wiliams: As an association, I’m sure you are always keeping one eye on the budget. Tracking travel information can help you see whether the “staff travel” budget line is another place you can save money for your group. When are the staff booking their travel? Are they doing it two weeks in advance (if possible) or at the last minute? Are they choosing times that are most convenient for them, or ones best for the group’s bottom line? Are they going coach, or business class? Factors such as these can make a huge difference in airline costs, especially when traveling overseas.
One way to get this information and control costs is to have your staff work with a travel agent, and for you as the meeting planner to have final approval of the flights. This way staff continues to make their arrangements, but you can see the information and costs before booking. While a travel agent will cost you a small fee, you may be saving enough by using one to make a big difference in your budget.
Mandatory sharing of flight information and personal cell phone numbers before an event is very typical, and not usually met with a lot of pushback. Most staffers understand that this information is for emergency purposes, not to check up on their whereabouts.
Q: What can I tell attendees to do to keep their passports safe?
James Goldberg: In addition to keeping them in a safe place, suggest that attendees make photocopies of their passports and keep them in a separate place. So if a passport does get lost or stolen, they can take the photocopy to the U.S. embassy or consulate and it will expedite getting a replacement.