CEO Charts Course: One-On-One With StarCite's Michael Boult

Meetings management technology provider StarCite Inc. in 2005 launched an aggressive growth strategy with expansion into Europe, enhanced hotel partnerships and new products. StarCite CEO Michael Boult last month spoke with Meetings Today editor Corrie Dosh about rethinking how corporations negotiate with hotels, the Philadelphia-based company's initiatives for growth and the growing interest of online-originating travel management companies in the meetings industry.



Meetings Today: You've been with StarCite for about eight months. How is the company defining itself for future growth?

Michael Boult: We're interested in creating efficiencies for hotels. Who are the two busiest constituencies in the world? Meeting planners and sales managers at hotels. We're all busy, but those guys are superbusy. They don't have time to chase and find information and it's much more efficient to have the business come to you. Otherwise, you've got all of these e-mails, phone calls and faxes. Obviously, from a self-serving perspective, we believe it's absolutely the right thing to do. We find more and more hotels are completely on board with it, as evidenced by Hyatt Hotels Corp. and Carlson Hotels Worldwide.

MT: Many companies have adopted online registration tools for meetings, but is that enough?

Boult: Companies think that's solving the issue. They think that with registration they have an organized meetings program, when we actually believe it is the least important step of anything that they would do. Clearly, we think most important is the buying, the sourcing and the site selection part of the business. Maybe that meeting is suitable for a virtual meeting. Maybe it's suitable for a hybrid. Then we get to a kind of "good-cholesterol, bad-cholesterol" idea for meetings. Today we have this ubiquitous technology, and you could use it for small meetings, but if it's too much, why would I do that? Should you go through an elaborate request-for-proposals process for 25 people? I don't think that's a smart thing to do. You will see us identify different categories of spend and different types of behavior and we will address those. You're going to see us accommodate the different needs, which is the right thing and the smart thing to do. The small meetings stuff we believe is outside any RFP activity. We think you negotiate the rate—either it's the transient rate that you're recycling or some other prepackaged contract with attrition, cancellation, rates, discounts for food and beverage and audiovisual—and that gets packaged in the beginning of the year.

MT: Will StarCite change its structure to focus on separate services for smaller meetings or companies?

Boult: We could have a different brand for midmarket and small-market companies, or we could be just StarCite. For our existing large companies, we just need a bend in the road. Based on what it is that you want, if it meets specific criteria, it should go into this workflow. It's still StarCite, it's still what you do today, we just take you in a different direction based on what you described to us that you need. The industry has kind of old habits. We've got the old way of negotiating. It doesn't seem to help us in this up-cycle in which hotels can almost name their price. Customers are looking for new ways to leverage and the obvious one to me is that you've got $50 million in transient sitting here and $50 million in meetings sitting there and you're having two different conversations with suppliers. You've got to bring it together. Surely it's one conversation.

MT: Isn't that easier said than done?

Boult: It only makes sense when there is a geographic overlap, but we're finding now that from a capacity perspective, hotels don't want all of your transient business. I was really intrigued to see what they've done here because hotels might not want all that spend. This is a strange cycle that we have in travel. It makes sense on paper, but in the real world it might not make sense. In New York, I guarantee, you could bring me a $2 million meeting and I couldn't accommodate you for the next couple of months because we don't have the supply and I'm surely not going to give it to you at the transient rate. Companies are struggling with that, but they know the old rules don't necessarily work any more. It's still amazing to me that very sophisticated companies don't even know what they spend. From a transient perspective, that's just impossible to understand, but from a meetings perspective, that's typical. They just don't even know the basic information. The good thing about it is that there are some things that feel like 1998 or 1999, but other things that feel like 2010. Some of technology is way in advance from a transient perspective. Some things are quite advanced, but other things are way behind. Globalization is way behind in the meetings space. We are finally getting companies saying to us that they're ready to globalize. That's why we're expanding. The transient programs have been globally consolidated for five years.

MT: What will be your business strategy in 2006?

Boult: I'm interested in growing the business. If I can buy something faster than doing it ourselves, then we're going to be doing that. Among our ongoing initiatives: geography, direct sales, sales via our partners—one thing that we're very proud of is our partner channel network. All the big TMCs and all the big management companies use StarCite and they've basically said: "That's our solution." I don't think that's coincidental, we work those partnerships very well. So, we'll have more partners and more business from partners, new products and acquisitions. There's a lot of ways to get this done.

MT: You've mentioned that Internet travel management companies are looking at opportunities in the meetings industry. Could we see a StarCite-powered tool through one of those companies?

Boult: You may see something like that. I think the ITMCs have looked at this as well and said: "For us to compete, we need to have a legitimate offering in this space and we're not going to build it. We're going to partner with something that already exists." We're very active there as well. We already have a deal in place with one of them, but it has not been announced yet.

MT: What sort of meetings would ITMCs target? What sort of services would they offer?

Boult: I don't think they're going to be big service providers, I don't think that's their model. Their model is about driving the transaction and they want more transaction business. If transient is an element of transaction business, they can also add meetings. The ITMCs are saying that there's a whole area of growth over here with thousands of transactions that are being ignored. Their product is a very transient looking and feeling model. Meetings transactions are very different. Outtask's Cliqbook programs for transient and meetings are very different. They're different for a reason. The ITMCs are looking at the business and saying: "Maybe this is how I get into a company, if I'm very compelling from a meetings perspective."