Mtg./Transient Leverage Eludes Most

Many companies have yet to effectively leverage combined meetings and transient volume with vendors, despite an increasing number of firms bringing their meetings departments under travel management's purview and that many meeting buyers said they use their transient counterparts to source events, according to an exclusive Meetings Monitor survey.

According to the survey of 186 meeting buyers, 50 percent of respondents said their company's travel department helps to source meetings and events and 2 percent said their companies would begin to do so in 2006.

Among those who said their travel departments were involved in meetings, 66 percent said the integration had helped lower meeting costs. However, 30 percent of respondents said meeting costs had remained the same and 5 percent said the involvement of the travel department actually had raised meetings spending.

Julie Upton, director of meetings and corporate travel for Rockville, Md.-based United Communications Group, said her company has combined meetings and travel for 18 years and operates a separate department for conference planning. Planners use Upton's department to arrange travel. "For us, it works. The conferences bring in the travel aspect, so it makes it easy," she said.

Meetings travel dominates at UCG and a combined meetings and transient department helps to leverage the company's spend with suppliers, she said.

"It exists in one area, so there is no sense of one side taking over the other. We have 150 meetings per year, so that would take over anything we do in travel. It really works for us. They do travel for our conferences, but our corporate travel arrangers also do corporate travel for the entire company, which is 1,000 employees across the country," Upton said.

Upton also reviews contracts for the conference department. The company employs separate associate directors who oversee contracts for hotels and airlines. "Those two directors work together," she said.

Even though the combined department handles both meetings and transient negotiations, UCG often does not submit combined requests for proposals to suppliers. "For our transient travel, the volume is about 1,000 nights a year, so it's not enough. We have between 12,000 and 15,000 meeting attendees a year," she said.

Peter Moen, vice president of business development for Minneapolis-based Carlson Marketing Group, said he has seen a growing convergence of meetings and transient management among clients. However, the potential for leveraging the two largely has been untapped when it comes to vendor negotiations and many companies send CMG separate transient and meetings requests for proposals, he said.

"We're still not receiving many travel management RFPs for both corporate and group. Almost 99 percent of the RFPs we get for corporate travel have some questions related to group, but it's not what I would say is an official group and event management RFP. Typically, we get either a parallel RFP for corporate travel and another one for group and event management—two different RFPs with the same timing—or we'll just get a group and event management consolidation RFP," Moen said.

Meetings negotiations and transient negotiations often remain separate because there aren't many suppliers that can accommodate both volumes, he added. However, there is increasing convergence of internal management of travel and meetings. "There are more companies at which the responsibility of meetings and corporate travel is coming under the same department or executive in the organization," Moen said.

One reason for that convergence is that many marketing departments have begun to see benefits from standardization and utilizing a smaller number of suppliers, CMG's Moen said. "There's been a desire in the travel area or the procurement area to see if they couldn't bring the same sort of synergies and leverage to the group area, but they didn't have the participation or the buy-in from the marketing organization to really be successful," CMG's Moen said.

Meetings Monitor survey respondents said their company's travel departments are helping in multiple meetings responsibilities. Eighty percent of respondents said their company's travel departments handled hotel negotiations and 74 percent said the travel department helps with group air booking. In addition, 68 percent said the travel department determined site selection and 54 percent said it handled payment.

Ada, Mich.-based Amway Corp. took an unusual step in 2003 and brought transient travel management under the meetings department. Craig Ardis, Amway director of global special events, said meetings travel volume exceeds transient volume at the company and that his department had the vision to direct both.

Centralizing management of meetings and transient travel results in efficiency, data control and cost savings, Ardis said. By tracking the volumes together, Amway departments located overseas have begun to understand how their purchasing behavior has affected the entire company's bottom line, he said.

"By pushing this and saying we spend hundreds of millions of dollars on travel, both group and corporate, and we're trying to consolidate, leverage and work with preferred suppliers, they see the benefits," he said.

The first task in bringing the two sides under one department was to track the entire travel volume across Amway's global business. The data was compiled into spreadsheets. "That was quite a task only for the fact that people weren't sure what we were asking and we had to clarify, but we did get a lot of it in," Ardis said.

It doesn't matter if a travel department handles both volumes or if a meetings department handles both, Ardis said, as long as the responsible department is effective in leveraging the combined spend. The decision as to who would head a combined meetings and travel department was not made based on skill or experience, but rather long-term goals and initiative, he added. Some of the global spending that Ardis' department discovered for transient travel surprised the travel department, which was focused on domestic volume.

"We have all the data and a process to accumulate that data on an annual basis," Ardis said. "We have all of our counterparts engaged. We're utilizing our domestic operation as a model and trying to give it to our counterparts in our other markets."