As destinations around the world ramp up their infrastructure to attract meetings, the competition for international association congresses has become increasingly intense. But when does aggressive bidding become unethical or unfair? Should there be standards or best practices for associations sending out bids as well as for the cities or countries seeking to host them?
These questions were debated at a session at the 2012 International Congress and Convention Association Congress in San Juan, Puerto Rico, October 20–24. It’s also a topic that ICCA plans to tackle in 2013 as it looks to develop best practices for bidding on international congresses.
A Complex Process
The bidding process for international congresses is typically more complex than for domestic meetings because of the range of cultures and countries involved, explains Gregg Talley, president and CEO of Talley Management Group, Mt. Royal, N.J. Acceptable practices can and do vary from country to country.
“There really isn’t a cookie-cutter approach to international meetings in terms of bidding on them,” says Eric Chou, sales manager, association relations, Metro Toronto Convention Centre. “You really have to do your research and put forward a strategy on each and every one of them.”
While a growing number of international associations use professional staffs and third parties to put together bid packages, many still rely onboards or local members or ambassadors to bring forward a host proposal. In these cases, the proposals may not always be based on a full evaluation of all the various criteria. “Ideally, it would be great to have some well-defined guidelines” for the destination to respond to, adds Chou.
Jean Evans, European director, association relations at MCI Group, Dublin, agrees. International associations have many different ways of doing things, depending on their level of maturity or professionalism, she says. Professional conference organizers can bring value by instituting a formal and structured bid process that makes a business and strategic case for selecting a destination.
Unless associations are explicit and transparent about their processes, qualifications, guidelines, and expectations, challenges related to unfair or unethical bids may arise, adds Talley.
“There is a definite perception that some bidding has become less ethical over recent years, but it is not clear whether this is in fact the case in reality, since there are no objective records of "ethical" and "unethical" bids on a year-by-year basis,” says Juan Jose Garcia, director of marketing and sales at Vibo Congresos, Barcelona, and first vice president at ICCA.
One egregious and very public instance of unethical bidding behavior occurred when members of the International Olympic Committee accepted gifts from the Salt Lake City bid committee, which was working to land the 2002 Winter Olympics. While the IOC scandal was especially visible, it’s not unique. Gift giving as a lure to secure a large event is not common, but does occur in theworld. Talley believes there’s an opportunity for the industry to stand up and address it.
While he doesn’t advocate strict standards, he believes the time is right to create a list of best practices for associations, PCOs, association management companies, and destinations to follow. “It would spark the conversation and that is step one right now.” If questions arise about a particular bid or a bid process, the organizations could consult the best practices. Some destinations may not know lavish gift giving or other practices are inappropriate.
Lucio Vaquero and Mariano Castex from MCI Latin America in Buenos Aires, Argentina, concur. Castex, managing director at MCI Latin America and an ICCA board member, said ICCA is working on publishing bidding guidelines. “It could be a good tool for associations,” says Vaquero, regional director, association relations. “There are some associations that are more mature than others. It could help them see how they can improve their bidding process.”
For example, one best practice might be to not accept or offer gifts, such as free flights for VIPs, says Vaquero. Not only is it ethically questionable, it does not have anything to do with the needs of the conference or its attendees, he adds. These issues have not reached the level where compliance standards are called for, as in the pharmaceutical meetings industry (pertaining to what you can spend on doctors at meetings), he says, but a basic framework would be a good step.
The ICCA Board of Directors recently undertook a total review of the strategic thinking behind the bid process, says Garcia. “ICCA will be returning to this issue to see what practical guidance we can issue for both our members and the international association clients,” he says.
The Subvention Question
Another issue that has emerged in the competition for international congresses is “subvention,” the practice of offering a government subsidy to offset the cost of the meeting. The financial assistance is typically offered by emerging destinations, particularly in Asia, that have built up their meeting infrastructure to compete for international meetings. The subvention funds allow them to boost their exposure in the competitive marketplace. International associations can apply for the subsidies in order to offset the cost of the venue, receptions, marketing, or other meeting expenses.
Subvention is not illegal or even unethical but the practice creates a challenge for destinations without subvention funds, which feel they are at a competitive disadvantage. It might be a good idea to put a framework or best practices around what destinations can offer, suggests Vaquero. The process should be clear and transparent, others say.
“One thing that is certain is that competition has increased dramatically, with more high-quality venues, more destinations actively bidding, greater understanding of the importance of international congresses for a country or city's economic development strategy, and more experienced bidders and marketers, says Garcia. Many of the new entrants are investing heavily to become established—-more infrastructure, bigger marketing budgets, and more financial commitment to attracting events. “Inevitably, some of the established destinations are likely to see this aggressive, competitive behavior as ‘unfair’ or even ‘unethical,’” he adds.
More competition is good because it drives up the value proposition, says Evans. But she and others agree that a full set of variables should be evaluated when considering destinations, not just the amount of subvention. In addition to cost, logistics, facilities, revenue generation, and other factors, planners need to consider the strategic objectives of the association when picking a destination, says Garcia. Is there access to cutting edge research and resources? Is it in an area where the association is hoping to expand membership? Is it in a place where the association can spread an advocacy message?
Resources and More
ICCA has produced a 24-page guide, designed for association planners, on how to choose a destination for international events. It includes the different stages in the bidding process as well as a checklist that can help associations improve their formal rules and regulations. “This is a long way from ‘best practices,’” says Garcia. “And even though ICCA itself had a very comprehensive bidding process, which we had thought was a good example for others to follow, the board of directors recently undertook a total review of the strategic thinking behind this process, which led us to make some fundamental changes,” he adds.
“This demonstrates that this is a complex area that doesn’t lend itself to simple solutions. ICCA will be returning to this issue to see what practical guidance we can issue for both our members and the international association clients.”