“SHOW ORGANIZERS CALL us pirates and bandits. That's OK,” says Bruce Peterson, president of Las Vegas-based Events Plus Travel. His destination management company has come under fire recently for allegedly “poaching” attendees and exhibitors away from several meetings' official room blocks by marketing to them directly with offers of cheaper room rates, plus services like transportation and off-site cocktail parties. “They can call us whatever they want. Our clients don't see us that way.”
“It's insidious,” says Steven Hacker, president of the International Association of Exhibition Management, Dallas, explaining that these types of companies use the meeting's name on their Web sites and in their e-mail, fax, and telemarketing efforts. “If you receive an invitation/solicitation from what appears to be someone affiliated with the event, and it offers you a decent rate, you go for it.” While these companies “aren't outright lying, they are skating the thin line between criminal activity and business ethics,” he says.
One such company, Beverly Hills Premiere Tour Operator, based in Beverly Hills, Calif., specifically targets medical meetings. “We contact groups who are going to the meeting — agencies, laboratories, pharmaceutical companies — to provide them hotel rooms and services,” says a company spokeswoman. In an e-mail solicitation received by Medical Meetings in late October, the company was offering housing deals for conferences including the American Society of Hematology, the American College of Cardiology, the American Academy of Orthopedic Surgeons, and the American Psychiatric Association. When printed out, the list of meetings they offer housing for was more than four pages long.
While PITTCON — the annual conference and exposition hosted by the Society for Analytical Chemists of Pittsburgh and the Spectroscopy Society of Pittsburgh, with 25,000 attendees and 3,000 booths, scheduled for Chicago in March 2004 — is listed on the Events Plus Travel Web site, PITTCON's former president and current PITTCON negotiations chairman Richard Danchik, PhD, isn't worried. “[Our official housing company] is aware of it. But we're a full-city show, so they won't have much room to maneuver.” In addition, his housing contracts state that the hotel has to give show organizers the best available rate, “So if another outfit comes in and gets a better rate, they have to drop our rates to match,” he says. “The trickier part is finding out that this is happening so you're able to do something about it.” (See sidebar, page 31, for suggestions.)
The Blame Game
“People who would engage in this practice are wittingly harming the very associations they're drawing attendees from,” says Bruce Harris, president of Twinsburg, Ohio-based Conferon. “They know that attrition is the biggest issue in our industry. To attack the base of attendees and exhibitors for personal gain or profit, knowing full well that there's a likelihood that it's going to damage the association, is terrible. Associations who've had huge attrition bills are just struggling to survive. Meanwhile, these people laugh all the way to the bank.”
Peterson, who markets only to exhibitors, says that show organizers have no one but themselves to blame. “Our clients don't want to go through show management because they get poor customer service. Show organizers used to be able to get away with treating their exhibitors as second-class citizens. Now they can't, and they're blaming me because I can give exhibitors the service they need. If show organizers started treating their exhibitors better, they'd recapture a good amount of their block.” His company gets the low rates by buying blocks from wholesalers, “and negotiating very hard. We have former hotel people, travel agents, and a very aggressive sales force out there negotiating,” says Peterson. He then marks up the rates and sells the rooms to exhibitors.
Planners say these companies join an organization to get the membership directory or purchase an exhibit booth to receive the pre-reg or exhibitor list. Then they cancel their booth after they've finished soliciting, or they just don't show up. So far, it appears that most of these companies are targeting the major convention cities, like Las Vegas, Orlando, Chicago, Atlanta, and New Orleans. But when MM contacted one company about providing low-cost rooms for the Professional Convention Management Association in January in Indianapolis, a spokesperson said, “No problem. We have signed contracts allowing us to beat Expedia in 75 percent of all markets!”
“It's one thing to lose room block because people are afraid to travel, or the cost is too high, or any of the other factors that come into play,” Hacker says. “It something else again to have some poacher come along and suck the lifeblood out of your event.”
“I know I'm portrayed as the bad guy, but we're just one small company,” says Peterson. “They should look at Expedia and the other major room wholesalers — that's where they're really losing their business.” While he admits that the alleged poachers are a relatively small issue now, Phoenix-based David Radcliffe, who headed the Convention Industry Council's Project Attrition, says, “If they're successful at building revenue and generating attendee attention, they can grow exponentially, not unlike the way the other online entities have.”
From Pirate to Partner?
“Given the growth of intermediaries on the Internet, technology is going to have to be part of the solution,” says Radcliffe. “An executive from hotels.com told me that their strategy is to allow the planner to contract a smaller block at their headquarters hotel, then allow the intermediary to contract for the balance of the inventory required on their behalf. Attrition then would become the intermediary's problem.”
The only downside that he sees? “Getting in bed with these guys, and maybe losing some of the perks,” like free room nights for staff.
Peterson's all over this idea. “We're going to change our business model a bit. We've partnered with a large housing reservation company, and we're finalizing software that will allow us to become the official housing agent for smaller shows,” he says. Peterson hopes to roll out the new model by January. “We'll be the official housing agent for the show, but we'll also be the pirate.” His company would give people four or five ways to find housing — some of which won't look like they're going through the show organizer — but the group will get credit for the room block. “Our whole point will be to help them stop attrition penalties. And we'll be able to give the customer service our clients — their exhibitors — want.”
Some Shots to Fire Over the Bow
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Seed your membership and exhibitor directories with false names connected to a staff member's home address or some permutation of the office's address, so you'll know if someone is communicating with your attendees or exhibitors without your knowledge.
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Plug your meeting's name into some search engines. If that event pops up on someone else's Web site and appears to affiliate your organization with that site, you have another trail to follow.
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Send a “cease and desist” letter, and follow up with a threat of taking legal action, if necessary. One way is to claim “tortious interference” of a contractual relationship between your group and the hotel with which you contracted the housing block.
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Register trademarks for show names, conference names, and organization names. To learn more, go to the U.S. Patent and Trademark Office Web site: www.uspto.gov.
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Put an audit clause in your contract. The clause should ensure that the organization gets credit for all group attendees, regardless of the rate they paid.
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Create a value for staying inside the block. Educate attendees and exhibitors about the importance of staying inside the block, then add an incentive, preferably in hard dollars.
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Tie registration and housing together in some way. Take away the option of going outside the block by providing a discount in the meeting registration to those who do the housing through you. Then if the poachers come, who cares? The attendees' housing is already spoken for.
