MPI Spotlights Tracking Of ROI - Business Travel News

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MPI Spotlights Tracking Of ROI

February 07, 2005 - 12:00 AM ET

By Corrie Dosh

Meeting Professionals International members, during a special "Influencing Senior Executives" track at its Professional Education Conference North America, held January 23 to 25 in San Diego, shared methods of identifying and articulating their value to senior executives and procurement departments, as well as approaches of measuring return on investment.

"If you want job security, you better understand the ROI process," said Lynn Ridzon, director of global meeting management for Bristol Myers Squibb and a panelist at a session on the influence of procurement and consolidation initiatives on the meetings industry led by Christine Duffy, CEO of Maritz Travel.

Panelist Kari Knoll Kesler, global manager of meetings and events for Honeywell International, said the growing convergence of transient and group travel management and the development of technology to better track ROI makes the time ripe to convince senior executives of the value of meetings management.

"If you can tell senior executives your value now, I promise they'll start listening," Kesler told meeting planners.

According to FutureWatch 2005, a joint annual survey of 960 meeting planners and 891 suppliers conducted by MPI and American Express (Meetings Today, Jan. 17), 67 percent of planner respondents always or frequently measure the returns on their meeting investments. However "planners still predominantly rely on tactical event measures, rather than those that underscore the broader strategic impact of meetings on their organizations' business goals and objectives," according to the survey.

"Our members like the fact that we're working on return on investment. They realize that they will more often be in a position where they're going to have to justify their value and understand that they need strategic skills as opposed to the technical skills of how to put on a meeting," said MPI president and CEO Colin Rorrie.

Rorrie said the MPI Foundation has entered the second phase of a project to develop return on investment measurement systems and tools for the meetings industry. MPI held an ROI summit in July 2004, at the organization's World Education Congress in Denver, to wrap up the first phase of the project.

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The executive committees of MPI and the National Business Travel Association met during the conference to renew their partnership and discuss future cooperation on industry-related position papers and participation in each group's educational conferences.

"It was the first time in history our two executive committees met," said MPI chairman Hugh Lee. "We both realize that all organizations are looking to get faster, better and cheaper, and certainly part of strategic meetings management processes is being able to deliver the same value while figuring out ways to do it with less expense and quicker."

Kevin Iwamoto, past president and current chairman of NBTA and a Hewlett-Packard travel buyer, said the partnership between the two organizations makes "perfect sense" because of the growing convergence of meetings and travel management. "We're very excited about continuing and expanding our relationship with MPI," Iwamoto said. "We're both committed to our members and to creating and maintaining value for our members—especially with what's going on in the industry. There's a lot of joint synergies that we can take advantage of."

MPI also recently launched joint projects with the World Tourism Association, the Professional Convention Management Association and the Convention Industry Council, Lee said. MPI and the WTO are working together for the first time to track the impact that meetings and events have on the global economy.

MPI also has begun the second phase of a project to offer personalized Web site resources to its members. The project, which will be tested in July at the MPI World Education Congress in Miami, offers members customized suggestions on educational courses to take—both at MPI conferences and outside the organization—based on the member's skill level, Lee said.

"It's the most significant professional development project ever launched in our industry," Lee said. The project is part of MPI's strategic plan of career development and will be launched formally in January 2006. MPI already has invested more than $1 million in the career pathways plan and it continues to be a central focus in the future, he said.

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Joshua Grimes, an attorney who specializes in the hospitality and meetings industry, addressed MPI members on the ramifications of the Sarbanes-Oxley Act in the meetings industry. The regulations, adopted to increase financial accountability in public companies, are affecting the private sector and associations, he said. Disclosure requirements may force hotel suppliers to reveal commission payments to outside planners, he said, and buyers may be prohibited from accepting complimentary hotel stays, meals and other incentives traditionally used by vendors for marketing.

"This industry is built on relationships," Grimes said. "SOX has not been discussed like it needs to be discussed."

Companies and associations also need to adopt conflict-of-interest policies, Grimes said, and track relationships between buyers and suppliers to make sure those with insider connections do not get preferential treatment in contracting.

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Scott Graf, president of WorldTravel Meetings & Incentives, told MPI attendees that the evolution of a meetings management program could be broken into three stages, from discovery and gaining support from senior management in the first phase to the development of a truly streamlined process with strategic management in the third. Graf claimed only about five major corporations are considered to be in the third stage. A number of companies are in the second phase, in which "the majority of work is done" with leveraging transient and group travel spend, driving new deals with preferred vendors and the adoption of a purchasing card, Graf said.

Graf also projected estimated cost savings for each phase of strategic meetings management. He estimated 10 percent savings for the first phase, another 5 percent savings for the second phase and another 5 percent savings in the third stage, for a total of 20 percent savings of a company's meeting spend. Each phase takes about a year to complete, Graf said.

"The evolution of meetings programs is here to stay," Graf said. "It's about planners becoming strategic assets to their companies."

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The 2005 PEC North America was the largest winter conference in MPI's history with 2,733 registered attendees, including 881 planners, and 350 exhibiting companies at the trade show.

"We have a goal of 485 new members per month and we're close to that," Rorrie said. Member retention is stronger, he said, from 68 percent membership renewal last year to 74 percent this year.
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