A growing number of U.S.-based multinational buyers are set to roll out meetings consolidation and management initiatives across worldwide operations, and management companies have begun to restructure their products accordingly. Some are standardizing a selection of meetings services throughout the world, while still offering local variations in other services and pricing.
World Travel Meetings & Incentives last week announced it has changed its brand to BCD Meetings & Incentives—to reflect the brand change of its parent BCD Travel—and incorporate two U.K.-based partners: TQ3 Events and Talking Point Ltd.
Former WTMI president Scott Graf, who now serves as head of the new company, headquartered in Chicago, said the group would have a "strong presence" in 21 countries, including wholly owned locations in 13 countries.
Customers can expect greater leveraging power with their existing accounts, BCD Meetings & Incentives' Graf said. "We'll look at our supplier base and I think the sum of our parts will be greater than we even know," he said. "Buying power will increase for multinational customers and that should cascade down to even local customers. We'll deploy global meetings technology fairly aggressively."
WTMI had a preferred vendor relationship with Philadelphia-based meetings technology company StarCite Inc., which will continue under the new brand, Graf said. However, corporate customers will be able to use their own preferred technology solution.
The company's pricing for multinational services will also change, Graf said. Previously, those rates were determined on an individual basis and the services available to customers were not offered at every location. Going forward, BCD Meetings & Incentives will determine base rates tied to local market conditions—such as labor costs—and then work with companies individually to build a package of services. The services available, however, will be standard across all the company's multinational offices.
"Global is important these days to many customers, but frankly it's unimportant to others," Graf said. "We want to be sure that we're going to be an organization that acts globally, aligns regionally, but really the key is that we service locally. If a customer is happy with the service being provided to them in Belgium, we're not going to try and move that service model to the U.K. or anywhere else in an effort to centralize."
Each of the three previous companies had separate, yet compatible markets, Graf said. WTMI focused on the U.S. meetings management market. TQ3 Events focused on European event management and incentive travel—particularly sports programs—and Talking Point was focused on European high-touch event production.
"It made sense to form a new company that was separate and distinct from BCD Travel. Our core business is meetings and events. We've taken the legacies of WTMI, TQ3 Events and Talking Point and put those companies together," Graf said.
An "incredibly high amount" of customers are looking to roll out multinational services, Graf said. Such companies as New-York based Pfizer Inc.
(see story, page 62) have rolled out strategic meetings management programs overseas.
Peter Moen, vice president of business development for Minneapolis-based Carlson Marketing, said the majority of current clients have group and meeting needs outside of the United States. In 2006, Carlson has seen growing customer demand for multinational services and the company is promoting localized services overseas. "It's definitely something that we've focused on over the past nine months," Moen said.
Though Carlson has offered services in Europe and other parts of the globe before, the company now is helping customers consolidate their global data and meetings management, he said. Many customers are just now beginning to consolidate their separate meetings management programs in several countries into one database, he said.
"It's a business change for us," Moen said. "They're performing their meeting management activities in their country but now it's following a standard process so they're asking us to use that resource in a consistent way."
Meetings consolidation trends in Europe are relatively new, Moen said, and so few companies have been able to successfully leverage their group and transient business there.
There are also unique market conditions in Europe. For example, Moen said, group airfares in the United States are rarely lower than a negotiated corporate rate. In Europe, buyers can more effectively negotiate for lower group rates.
"In Europe, it's the exact opposite. It's very important to do an in-country group negotiated air buy because most of the time that's going to be lower than their corporate deal," Moen said.
Euro Hotel Rates RiseA survey of average daily rates for 2005 at European hotels showed a tougher negotiating environment for buyers
(BTN, Feb. 6).In the survey of over 300,000 rooms worldwide in the three-star, four-star and five-star segments conducted by research marketing firm The Bench, the area near Gatwick Airport, England led the growth in ADR with rates 11 percent higher than in 2004. Rates in Paris were 9.4 percent higher and London reported a 3.7 percent increase. The only European city in the survey where average rates were lower was Munich with a decrease of 2.2 percent.
Peter Klebanow, president and CEO of New York-based Ultramar Travel Management, said he has seen U.S.-based corporate group travel to Europe growing quickly and volume has exceeded levels seen before the terrorist attacks of Sept. 11, 2001.
"We're definitely seeing a lot of meetings in Europe," Klebanow said.
Though rates may be rising, the increase has not been as dramatic in Europe as in the U.S. and buyers can still find good deals, he said.
"I still see quite an ability to negotiate, the problem is that the dollar is weaker so you're definitely talking about bigger numbers. The expense of having a meeting in Europe is definitely going up very significantly," Klebanow said.