Suppliers and event owners across the meeting spectrum continue to deal with an industry in recovery, but for destination management companies the landscape is especially challenging, with staffing shortages, high prices, transportation shortages, and high demand making business difficult.
A recent Incentive Research Foundation study called “Open for Business: Incentive Expectations and Reality in the Hospitality Industry” reports the perspective of hoteliers, convention bureaus, destination management companies, and incentive planners/third-party agencies working in today’s environment. The study found gaps across the supply chain between what groups want and what suppliers can deliver (read the full report here). However, DMCs are especially vulnerable.
Why? “DMCs are dealing with a vendor network, and it’s different and larger than that of hotels or DMOs,” said Rutger Hoorn, vice president, global sales & strategic partnerships, Ovation Global DMC, on an October 19 webinar discussion of the IRF report. DMCs coordinate with all vendors outside of the hotel—transportation, special-event venues, tour operators, restaurants—“and all have been impacted over the last two years and need to be built up again,” Hoorn said. The pressure on that network “is the most common reason why [DMCs are overwhelmed]. But we’re dealing with it.”
Staffing challenges are also taking a toll. At the time of the survey in early summer 2022, only 26 percent of DMCs reported being staffed at pre-Covid levels. Another 30 percent expected to get there in the next six months, while 33 percent said they’d be at pre-Covid staffing levels within a year. Interestingly, 12 percent said they were not planning to staff up to previous levels.
Hoorn said he’s seeing staffing improvements, but with an asterisk. “It's getting better and better. What we see, though, is that the way of hiring is a little bit different, in terms of signing bonuses and the salaries of new people coming in.” And retention is an issue as well, he said, with some employees questioning the long hours expected in the DMC space. In the study, DMC respondents reported that the three top challenges to staffing up were not enough qualified applicants, the time it takes to train new employees, and unreliable hires.
The survey also asked DMCs what they would like to tell their clients—and what clients would like to tell their DMCs. Here are the results.
DMCs want clients to know:
• Staffing is in short supply. Expect longer response times.
• Expect surcharges for fuel.
• Transportation and driver shortages are challenging.
• Stick with the tried and true for now.
Clients want DMCs to know:
• DMCs need to be responsive
• They want better pricing for services and are concerned that DMCs are pricing to “make up for Covid.”
• There’s an opportunity for up-and-comers to “set up” and fill a void.
The webinar, which included hotel, CVB, and third-party representatives as well as Hoorn discussing the full report, is available on demand.
