Most corporate meeting buyers have the authority within their companies to control the location of events, but half have not used it in the past year, according to an exclusive Meetings Monitor survey of 186 corporate meeting buyers.
Control over site selection has proved to be a cost-saving measure, buyers said, especially as hotel rates continue to rise and better deals can be found at second-tier and alternative properties.
Though 62 percent of respondents said they have the authority to override the destination proposed by the meeting sponsor, one-third of those said they have used their override authority for less than 24 percent of the total number of meetings. Only 5 percent of respondents said they overrule the sponsor's destination choice more than half of the time.
Jo Ann Gallardo, Round Rock, Texas-based hotel and meeting coordinator for Dell Inc., said control over site selection is part of a larger project to draft a meetings management policy.
"Unfortunately, we currently don't have those policies or guidelines in place. I'm working on a strategic meetings management project and we're close to a decision on what route we will take," Dell's Gallardo said. "Once we're able to put some policy and guidelines in place and some technology, I think we'll be able to recognize an opportunity to control where we have meetings."
With the right data, Dell easily could see when moving a meeting destination or property might produce significant savings, Gallardo said. "We're hoping to get to that point, but right now we're not there," she said.
Based on the research Gallardo has conducted in preparation for implementing a meeting policy, she said an online meetings tool might be the best way to control destination and costs. As long as administrative assistants continue to sign contracts for meetings, controlling site selection is nearly impossible.
The process of implementing a strategic meetings management program may be slow, but Gallardo said she wants the company to have a successful program from the start. Meetings can be a contentious issue, and planning events can be considered a perk for administrative assistants. Site selection can be one of those hot-button issues, and if a company mandates control over where an event can be held without stakeholder buy-in, the whole program can be threatened.
However, the potential savings of controlling site selection are hard to ignore, consultants said.
"People are definitely looking at secondary cities," said Bill Briscoe, chief industry relations officer for independent meetings management provider HelmsBriscoe of Scottsdale, Ariz., adding that availability has become very tight in the most popular destinations.
Customers have increasingly asked to see more site selection options, said Greg Malark, executive vice president for HelmsBriscoe, showing that companies are looking to save money on their events by changing location.
"As far as who actually has the final decision on site selection, it still varies by organization. Ultimately, it usually comes down to the budget holder," Malark said, "but we're seeing a very consultative arrangement between what we do, what the planner does and what the ultimate meeting sponsor is looking for. It's more of a consultative prescription for success."
HelmsBriscoe initially will try to find an appropriate venue in the city of the client's choice, but if availability is too tight or rates are too high, the company will suggest looking to other cities, Briscoe said. HelmsBriscoe also uses technology to project rates and availability up front, so they can advise a client if they need to look outside their city of choice.
"It's helping them strategically understand what the needs of the meeting truly are, what flexibility does the organization really have, can it go to alternate sites and also the value that's available at alternate sites. It's having a strategic approach to meeting buying as opposed to a tactical approach," Malark said.
Second-tier cities, in addition to the advantage in availability and rates, often want to "roll out the red carpet" for corporate groups, Briscoe said. Value-added services can be easier to negotiate and transportation within the city can be more efficient. The downside to using second-tier markets is that often the air spend is higher and attendees may not be able to get a direct flight.
Terri Carlton, manager of meeting services and corporate travel for Chicago-based BlueCross BlueShield Association, said her department is working toward gaining greater authority over site selection.
With many events scheduled in either Chicago or Washington, D.C., higher rates and tighter availability have been problems for the organization, Carlton said. The meetings department makes recommendations to sponsors about where to find good deals, but many groups still want to go to top-tier cities.
"We're trying to gain more control, and I think by the end of the year we'll have it," Carlton said. "There's still an override where an officer can say they want to be in a certain part of town or city."
Carlton said she wants to move from making "strong recommendations" to having site selection authority written into the organization's policy. In addition, the new meetings policy would require sponsors to get senior management approval in writing when they want to override the meetings department site selection.
Senior management has supported the efforts, especially as policy dictates that meetings must be held in the continental United States and gaming destinations such as Las Vegas must be strictly avoided.
Site selection can be a contentious issue, and Carlton said communication and partnership are keys to success.
"It is a partnership. It's not one person has total control. I'm looking at the requesting department to recommend and give their thoughts on the location," she said.
Kari Knoll Kesler, co-chair of the National Business Travel Association groups and meetings committee and manager of meetings and events for Honeywell Inc., said that according to NBTA research, site selection is not often completely outsourced but a significant number partially outsources the decision. Ultimately, more than half of NBTA members keep the entire site selection process in-house, Kesler said during an online presentation by Santa Clara, Calif.-based meetings technology provider OnVantage Inc.
San Jose, Calif.-based Cisco Systems Inc. has begun to test budget-estimator technology powered by Philadelphia-based StarCite to help compare multiple destinations up front. Michele Snock, manager of global meeting services for Cisco's Americas operations, said the tool is aimed to prevent last-minute cancellations due to sticker shock.
Cisco also has asked its hotel chain partners to advise the company on where marketshare can be moved for better values. By involving the suppliers, Cisco can get a better deal and hotels can drive business to alternate properties.
"We've asked our hotel suppliers to come in and instead of telling us about their hotels give us an education on where they have great values," Snock said.
According to the fourth annual FutureWatch survey, released in January by Meeting Professionals International and American Express, corporate meeting buyers and third-party planners generally consider 10 properties on average for each meeting or event and the number is rising.