Meeting The Challenge: BTN's 2012 Strategic Meetings Management Survey - Business Travel News

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Meeting The Challenge: BTN's 2012 Strategic Meetings Management Survey

June 21, 2012 - 09:35 AM ET

By Chris Davis

About a decade after the phrase "strategic meetings management" entered the parlance of the business travel industry, nearly nine of 10 respondents to a recent Business Travel News survey indicated their companies have policies limiting stakeholder options in meeting planning and sourcing processes. However, far fewer believe their organizations have a strategic meetings management program in the United States.

The new BTN study of 295 corporate travel and meeting professionals, conducted from March to May in conjunction with sibling publication Meetings & Conventions, helps to quantify the current state of strategic meetings management, the multi-pronged approach that blends policy and technology implementation with advanced sourcing practices to govern meetings expenditures throughout an organization or business unit.

[Please click here to view the digital edition of the 2012 Strategic Meetings Management survey, featuring all charted data, downloadable as a pdf.] 

For many years, corporations with varying degrees of success have attempted to establish structured processes around meeting planning, not only to rein in spending and leverage volume from multiple events during supplier negotiations, but also to avoid damages from underattended or canceled events in contracts often negotiated by nonprofessional planners. Up until the late 1990s, this process frequently was termed "meetings consolidation," a phrase more or less supplanted in the past decade by the more comprehensive "strategic meetings management."

Today, the SMM concept has won many adherents—notably in the heavily regulated pharmaceutical industry—who have deployed technology and developed processes to document spending, limit the authority to sign meetings contracts and source with an increasingly procurement-based bent.

Few would argue that the process is simple. Developing and deploying a broad-based SMM initiative hardly is confined to a corporate meetings and travel department; information technology, human resources, training and internal communications departments all likely are involved in the project's creation and rollout, as are sales and marketing departments that often sponsor the lion's share of a corporation's events. There's an inevitable layout of front-end cost, and developing the case for SMM to receive senior management approval is a must.

In late 2008 and early 2009, the concurrent global financial industry meltdown and well-publicized furor over largesse at some financial and insurance industry corporate meetings—most notably an AIG incentive event—triggered a wave of interest in SMM procedures, at least among those companies that did not decimate their meetings programs and expenditures, said StarCite vice president of enterprise strategy Kevin Iwamoto.

Today's industry faces renewed economic uncertainty. Add the new federal meetings regulations triggered in part by a controversially extravagant General Services Administration event, and SMM again is at the forefront of many corporate initiatives, Iwamoto said.

"I see the North American market maturing rather rapidly, and the financial and recessionary situation accelerated that," he explained. "It's a catalyst for [corporations] to hurry up, get their act together and get an SMMP in place so they can have greater visibility around the spend."

A December 2010 PhoCusWright survey of 630 meeting buyers found that 6 percent of represented companies had not implemented any of the seven planks of a strategic meetings management program as defined by the Global Business Travel Association: central registration of meetings, mandated or formal hotel requests for proposals, meetings policy or formal guidelines, preferred suppliers, automated processes, data analysis and reporting, and formal return-on-investment metrics. On the other hand, 28 percent said they had deployed all seven, including 6 percent that had done so enterprisewide for all meetings. (PhoCusWright since has been acquired by BTN parent company Northstar Travel Media.)

Pushing Policies 

Among BTN survey respondents, 36 percent indicated their companies have strategic meetings management programs in the United States. A far higher percentage of represented companies have at least some aspects of an SMM program in place.

Specifically, 88 percent of respondents said their organizations had policies in place that govern aspects of the meetings management process, although no single policy listed in the survey garnered a majority of those respondents. The most frequently chosen response, at 47 percent, was policies that require the use of onsite meeting space, when feasible. Other options chosen by at least two of five respondents included requirements for senior-level approval of individual meetings and limits on contract-signing authority. Many analysts view the latter as a key proviso of any comprehensive SMM strategy, given the risk that a rogue contract can pose, particularly in terms of attrition and cancellation damages.

"You're not going to get around it unless you force people to go through the process and use the addenda created by legal and procurement," said Iwamoto. "That piece, you have to regulate, and it's probably easier to regulate under the guise of needing to have consistency in contract execution ad language to protect the company."

While insurance firm Chubb & Son has a contract-signing authority in place, the company has no other mandates with regard to its strategic meetings management program, said assistant vice president and manager of employee mobility management Sheri Bonsall. The company may explore stronger policy language around meetings, she said, but noted the success of corporate transient policies in driving behavior without mandates.

"We're not a mandatory company," Bonsall said. "On the corporate travel side, we have 95 percent adoption of online booking. We have the credibility to implement a program that has strong compliance and leads to savings. Without mandates, this is what we're getting. With strong leadership support, we should be able to get that kind of strength."

Generally, more BTN survey respondents indicated their companies have policies that govern demand management and internal procedures than do external relationships with suppliers. For example, 38 percent indicated the presence of policies requiring use of videoconferencing when applicable, and 32 percent require all sourcing be conducted by the company's procurement, meetings or travel department. On the other hand, fewer require the use of preferred meeting suppliers (27 percent) or transient suppliers (17 percent), while 20 percent require use of a standard request for proposals and 18 percent require at least three bids for any contract.

Should a planned event reach a size threshold at pharmaceutical firm Novo Nordisk, the use of one of a few approved meetings logistics companies with which the firm maintains master service agreements is required, said associate director of meeting management Tom Torvé. The firm also mandates contract-signing authority. "We're not going to let an administrator with no meetings experience handle the planning of a departmental offsite for 200 people for two nights in Vail," Torvé said, adding that the policy allows him to approve exceptions.

For others, policy mandates are wider. John Touchette, director of meetings and special events at Raytheon, in March during a client conference for meetings technology company Cvent said the defense contractor was on the precipice of issuing a newly mandated policy as part of an existing SMM program.

"In October, our chairman said, 'You've done all this in a non-mandated environment, how do you take it to the next level?' " Touchette conveyed. "He said, 'Let's do an audit and see where we're at and let's put policy in place.' Luckily, we were working on policy and were almost ready to go, and I'm happy to announce we're going to launch in two weeks in a mandated environment."

That said, companies that attempt to install meetings policy mandates may find securing compliance easier if the justification isn't cost savings, Iwamoto said.

Noting a "slight" move toward mandated policies in general, Iwamoto said, "What really drives this is the risk-mitigation piece around duty of care, knowing where your people are and how you can assist them if they're stuck. The cost savings won't get you closer to a mandate, but the duty of care will. Cost savings is not strong or compelling enough, depending on the company, to get people to comply."

Registration Representation 

About two-thirds of those respondents who indicated their companies have strategic meetings management programs said they have implemented meeting attendee registration mechanisms. That leads the list of most frequently applied SMM aspects covered by the survey, along with the presence of cost-reconciliation processes.

"Pretty much everyone is in the registration and attendee management space," Iwamoto said. "When you ask about the procurement piece or meeting logistics or data management or payment, and having the technology to enable, that's when you see the list drop off."

More than half of survey respondents indicated their companies have event registration and/or online meetings booking systems in place, and indicated they analyze and report meetings data. But fewer than half noted their companies track compliance, use meeting cards for payment or have a meetings pre-approval process.

Procurement's Pull 

Iwamoto's point about strategic meetings management programs not necessarily applying procurement philosophies is reflected in BTN survey results.

Less than half of all respondents indicated their companies' procurement departments were "very involved" or "somewhat involved" in meeting management, while three in 10 indicated they weren't involved at all. Additionally, two-thirds of respondents indicated that procurement's level of involvement in meetings management during the past two years has been static, with about 26 percent noting increased involvement.

"We're seeing increasing involvement in procurement globally," Iwamoto said. "When they get involved, that's when the discipline and the process and policies become formalized and ingrained into the DNA of the company. Often, because the spend has been so hidden and so decentralized, they need to be a driving force to consolidate and standardize those things."

One potential benefit of involving procurement in meetings management is the ability for corporations to negotiate more broadly for meetings services, as part of a multi-meeting strategy or tied with transient volume. According to survey results, 24 percent of all respondents indicated their companies have centrally consolidated all meetings purchasing functions. Of those, more than half said they have gained the benefit of leveraged volume, and more than four in five indicated they have a higher degree of budgetary control.

No single response dominated as the rationale for not consolidating meeting expenditures. About 40 percent cited the decentralized nature of their companies, while more than 20 percent cited territoriality issues and/or a lack of senior management backing.

For some buyers, though, senior management can be the impetus behind creating a strategic meetings management program. Bank of New York Mellon strategic meeting program manager Mary Beth Jenson during the Cvent conference said she received a call from the company chairman "right after AIG was dinged, asking us, 'Where are we? Where are events in the next 6 months? I need to know in the next 5 minutes.' Right then I knew we were in trouble and we needed to have more visibility. I couldn't supply information to the chairman when he wanted it. Starting was [about] gaining visibility enterprisewide."

Global Goals 

"Europe is on fire. Companies are grasping every little piece to save money," Iwamoto said. "It takes a major impetus to get those companies to move, and the financial meltdown over there has really forced a lot of discipline around saving every penny. Meetings are no longer a sacred cow."

Globalizing SMM programs has proven challenging to many corporations, but Iwamoto cited an increase in electronic RFPs submitted through StarCite's technology as evidence of a rapidly maturing European market.

Financial firm ING is just embarking on a European SMM effort, said Jeroen van Hek last month during a BTN Group conference in Amsterdam. Beginning this year in his base in the Netherlands, van Hek will roll out a meeting policy to ING offices throughout the continent. "The idea is to roll out the program country by country, because in each country have to look at nature of demand and determine what kind of suppliers you can use," he said.

Speaking at the same conference, Credit Suisse global head of corporate travel and events Bernadette Basterfield called the financial firm's meetings policy "very robust."

"Anything over 5,000 Swiss francs will be tracked, and for any event above 30,000 Swiss francs, my team will actually plan the logistics from end to end," Basterfield said. "So we actually don't engage event management companies as such. We do everything internally at fixed cost to me. As you might imagine, with the challenge of the times, the question is always asked of me, 'With headcount as a fixed cost, how can we better manage that?' However, in terms of the events we deliver and the control we go into around policy, it requires that internal focus."

SIDEBAR: 2012 DEMAND OUTLOOK OPTIMISTIC AFTER SOFTER 2011 

After a year in which nearly as many BTN survey respondents indicated their companies' meetings volume decreased year over year than increased, more than 60 percent this year forecast spending increases. On average, they expect 2012 meeting spending to rise by about a 12 percent, precisely the average percentage decrease forecast by the 33 percent of respondents who anticipate lower spending.

While some of the projected spending increase undoubtedly is due to higher prices, some also appears to be an increase in meetings and attendees per meeting. Most respondents (54 percent) anticipate 2012 per-attendee spending to increase from 2011 levels. About 31 percent expect per-attendee spending to drop, while the remainder sees such spending as static.

Forty percent of respondents reported that their companies spent more on meetings in 2011 than they did in 2010 (with an average increase of about 15 percent), while 36 percent reported a year-over-year decrease (with an average decrease also of about 15 percent).

Cutbacks were most apparent among surveyed companies that spent less than $1 million on meetings last year. Of those, 28 percent reported a year-over-year spending increase while 46 percent reported a decrease. A little more than half of those small-market respondents expect per-attendee volume to increase this year, close to but lower than the overall average.

SIDEBAR: SURVEY SHOWS HOTEL MARKET STEADY 

Several hoteliers this year have called corporate meeting and group demand a pleasant surprise and raised expectations for 2012 group revenues. But the seller's market hasn't meant smaller negotiated discounts for most BTN survey respondents, with the possible exception of some of the smallest spenders.

Among 211 meeting and travel professionals who compared current hotel meeting discounts to those received 12 months prior, about seven in 10 indicated they were about the same. Eleven percent indicated they were smaller, but that increases to 17 percent among those respondents from companies with less than $500,000 in 2011 meetings volume.

Overall, about 14 percent of respondents indicated their discounts this year are better than last. Roughly 4 percent noted that no discounts were available to them.

Marriott International CFO Carl Berquist in April said group bookings both for business during the first quarter and throughout 2012 were higher than expected. He added that attendance at booked meetings also was above Marriott's projections while cancellations were below. As such, CEO Arne Sorenson acknowledged that a few meeting planners have complained of limited availability for larger events.

Meanwhile, respondent companies in 2011 on average booked about 49 percent of their meetings at preferred transient or meeting venues. More than a quarter of respondents reported that their companies booked at least 75 percent at such properties.

While many buyers and analysts reported difficult negotiations with hoteliers for 2012 space, 57 percent of survey respondents at least were able to leverage meetings volume with transient volume in those talks. That figure increases to 75 percent among companies that spent at least $6 million on meetings in 2011.

SURVEY METHODOLOGY 

The BTN Group in conjunction with fellow Northstar Travel Media publication Meetings & Conventions and research firm Equation Research conducted online surveys of travel and meeting professionals from March to May 2012. Invitations to participate were sent to subscribers of several publications produced by The BTN Group (Business Travel News, Travel Management, Travel Procurement and The Transnational), subscribers of Meetings & Conventions, members of The BTN Group Research Council and members of an Equation research panel.

The research was sponsored in part by The Active Network's StarCite and Carlson Wagonlit Travel Meetings & Events.

A total of 295 respondents qualified by indicating that they have decision-making responsibility for at least one of several listed meetings-management functions: selecting a meeting hotel, conference center or other facility; selecting the location of a meeting (city, area, country, etc.); negotiating hotel contracts; approving hotel contracts; selecting ground transportation; planning meeting agendas; selecting meetings technology; deciding to hold meetings either on or off-premises; establishing meeting objectives; establishing/approving meeting budget; selecting agency, destination management company or events company; approving air contracts; and negotiating air contracts.

Equation tabulated all results.

Unless otherwise noted, data displayed in this report have been rounded to the nearest whole number and in some cases may not total 100 percent. Several questions asked respondents to select all applicable answers.

Demographics 

Represented companies in 2011 on average spent $10.7 million on meetings. However, of those respondents who said they knew their company's total 2011 meetings volume, about 63 percent indicated it was less than $5 million.

The most represented industries were financial and insurance (19 percent), manufacturing (18 percent) and technology (14 percent). About 10 percent of respondents worked for pharmaceutical companies. Of the remainder who identified a sector, 8 percent worked in consulting and accounting firms, followed by communications and entertainment (6 percent), aerospace and defense (5 percent) and chemical and petroleum (4 percent).

About half of all respondents indicated their companies had neither a meetings manager nor a meetings department, while 38 percent had no travel manager or travel department.

The report originally appeared in the June 18, 2012, issue of Business Travel News. 

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