How successfully are TMCs broadening their remit in the MICE marketplace? Catherine Chetwynd investigates
SIince business travel agents redesigned themselves as travel management companies (TMCs), they have broadened their brief to be consultants on a wide range of travel-related subjects – and with notable success. However, one area where TMCs have traditionally received mixed reviews is meetings, incentives, conferences and exhibitions (MICE) management.
Given the areas of expertise MICE requires – management skills, travel nous, local knowledge and so on – you would imagine it would fit seamlessly into a TMC’s portfolio of services. However, there are elements that do not tend to sit so well, such as creative and communications requirements.
BUYING IN EXPERTISE
Perhaps this is why the most successful TMC participants in the MICE arena are those that have bought in the expertise. This is historical: HRG’s entry into the sector in 1998 with Global Event Solutions (GES) was headed up by Ian Sanderson, who had sold his motivational company Powerwaves to HRG three years earlier (GES was eventually merged into HRG’s groups division in 2002, in the aftermath of 9/11).
Nearly 15 years later, the business model prevails – BCD created BCD M&I by acquiring and merging Talking Point, TQ3 Events and World Travel Meetings & Incentives in 2006; ATPI brought in head of events at Grass Roots Neil Pace to create ATP Event Experts; and most recently, Capita bought Expotel and withthat Venues Event Management.
“Having a wholly-owned, independently managed meetings company sets us apart,” says BCD M&I vice-president Matthew Wall. “It is deliberate that it is run as a separate entity: travel can be commoditised, a product-based sale, whereas ours is a more service-led industry.”
And of buying the expertise, he says: “I think that is the only sensible way of doing it. Meetings can be an emotive subject, whether it is a sales kick-off, a client-based event or product launch, and the skills required are communication, planning, sales and back-up service.”
BCD’s travel and meeting customers are not all one and the same. “In the last year, we have worked more closely with BCD Travel,” says Wall. “In the past, there was a sense that people sourcing travel and meetings
were thinking about them in different ways but, more recently, customers have wanted to see us align our services to consolidate management information and therefore, hopefully, spend.”
Pharmaceuticals company Sanofi Pasteur MSD uses BCD Travel and BCD M&I. Business travel use ismandated from head office and is part of a corporate agreement with 19 of Sanofi Pasteur’s affiliates worldwide.
Sanofi’s senior congress, events and travel executive Sandra Fontaine says: “I worked with Talking Point more than ten years ago and have been working with BCD M&I since then and there has been no drop in service levels. In fact, quite the reverse because they have taken onboard the ABPI [Association of the British Pharmaceutical Industry] Code of Practice and staff have been trained with regard to that.”
DIFFERING ATTITUDES
The possibilities of consolidating meeting and transient spend to create savings has been well documented but not so well practised. However, according to Inform Logistics managing director Ian Flint, this is beginning to percolate through to companies, some of whose tenders reflect this – but the drawback is the involvement of marketing departments.
“Marketing has a different attitude from procurement,” says Flint. “Procurement wants the best price for the event; marketing wants the best event and believes there is a price to pay for that. I know of one company where the travel manager has no say over events, yet it shares a budget with transient travel.”
Another inhibiting factor is the maturity of a company’s meetings and events programme. “I don’t use our TMC for our event and meeting procurement, I use a separate agency for venue finding and am about to appoint event production companies,” says European category manager for KPMG, Sarah Makings. “I manage them separately because there are separate stakeholders in the firm. I did include a couple of TMCs in the tender process, but it is not their expertise.
“We have probably only had a venue finding company in place for four years: we have used a mixture of agencies and people did it for themselves. It is a less mature area of spend than travel.”
However, the pharmaceuticals industry is increasingly moving towards one supplier worldwide. The procurement specialist for one such company feels the boundaries are increasingly blurred. He says: “I think the terminology that suggests a choice of supplier type is increasingly irrelevant. A TMC’s event division can be expected to provide the same services as a meetings and events specialist.
“Large corporates are seeking to consolidate and better manage their meeting spend, often including initiatives that align business travel programmes with a meeting strategy. In this evaluation, not all meetings and events work can be managed by a hub, resulting in the need for a local presence. If the corporate wants process, data and control, plus synergies consistent with transient travel, then only meetings and events divisions of TMCs have the geographical scope and ability to tie in travel.”
He adds: “TMCs also have greater ability to respond to lengthy requests for proposal and, if successful, are able to increase resources to meet needs. However, they must ensure they deliver with expertise and to the standards set by meetings and events specialists.”
LOCAL REQUIREMENTS
Getting a consistent service worldwide can prove trying, and the advantage of consolidating information and pend has to be balanced against the downside of having all your eggs in one basket: a central point of success can also be a central point of failure. The over-used mantra ‘think global, act local’ applies here, and understanding local requirements is never more important than when organising meetings and events outside home territory – which is where TMCs are most likely to have the presence but may or may not have theknow-how.
“Over the past few years, we have seen a number of corporates looking to centralise meetings and events spend on a global basis and some have tried to go to the model of one agency to get economies of scale. We have seen some of those relationships fail because, while they require the same expertise, the agency has not supplied a consistent service in every market,” says Fay Sharpe, sales and marketing managing director of venue finding and events agency Zibrant.
“And when the model does not work in a local market, the corporate has to go to a local company for a solution in that country. I have two clients who have done that,” says Sharpe. “Some TMCs do have abilities in different areas and usually provide a good service where they have bought meetings expertise or spent along time building it up.”
Zibrant was bought by business services group Motivcom in 2007, but Sharpe is adamant that Zibrant has lost none of its heart and soul, because she and fellow director, Chris Parnham, have stayed with the company. But she says that with acquisition there can be the risk that the founding talent will be lost. She also points out that she is board sponsor for all Zibrant’s clients, “and I don’t think many TMCs could say that board level personnel and expertise sits with their clients on a regular basis”.
SKILLS AND KNOWLEDGE
Realism is all, and comments – positive and otherwise – about consistency are taken onboard by HRG. “Travel, production and logistics are a major part of an event and I think TMCs are generally good at that, especially in the US and Europe,” says managing director of HRG Nordics, Christer Nordlund.
“At HRG we know we have those skills and knowledge but what we don’t haveeverywhere is the look and feel, the creative side – traditionally, TMCs have struggled to be associated with that. We have it in some areas but we don’t offer it worldwide. In some countries we work with creative agencies and in others, we compete with them. It depends on the skills we have in the local market.”
Ensuring that the business objective of the client company is reflected in all its activities is an increasing requirement, particularly given the pressure companies are under to show duty of care. Nordlund points out that TMCs have a long history in cost and risk control. “We keep budget reports on a wide range of events and our people-tracking technology ensures we know where people are,” he says.
So, are TMCs fit for purpose when it comes to meetings and events? Largely, yes: the skills required to pull together logistics, production and group travel, and to provide consultation, are inherent in the services they offer. And the creative element? As director and co-founder of Corporate Travel Partners, Robert Daykin, says: “Understand your requirements, and research and test the market.” Many will come up to scratch.
CORPORATE BUYER’S VIEW
“Historically, Lilly, like many pharmaceutical companies, has employed pharma-orientated organisations, but we do have a strategy for using one TMC worldwide – CWT [Carlson Wagonlit Travel] – and increasingly for meetings-related travel,” says Richard Darley, EMEA travel and meetings manager for multinational pharma giant Lilly.
“In some areas, such as Scandinavia and Belgium, CWT does all our meetings and all our travel. I think they are capable of doing that,” he says. “They have clearly focused on developing this capability in the last five or six years.”
And of the creative element, Darley says: “CWT is reasonably innovative with things like virtual meetings and e-meetings but,when it comes to creativity around a performance-reward programme, we have not really tested them – we still use specialist meetings planning companies for that, although that is not because I think [they are] not capable.”
Lilly used to have an internal meetings team buthas now outsourced logistics, vendor and procurement management. “CWT got the global contract for Lilly and that includes facilities management, deploying technologies such as training people how to use Starcite, advising Lilly on its meetings management programme and scheduling supplier performance reviews. It is the same with the travel agency services – CWT manages our travel strategy globally with about three Lilly people,” says Darley.
Running a global programme has brought in Asia-Pacific, the Middle East and North Africa for the first time.
“And you start to see synergies between travel and meetings. That is why we picked a TMC to act for us because we wanted to leverage data reporting on hotel and air,” says Darley. “We have only been deploying that strategy for two years but for the first time we have got really good visibility of the number of meetings in Europe and the spend per day. Three years ago, we could not even tell you how many meetings we had in France, but delegating the task of aggregating data has allowed us to consolidate statistics.”