Agencies See Rise In Mtgs. Consolidation

Travel management companies have reported an upswing in both requests for proposals and interest among their clients for a consolidated approach to meetings management in the past 12 months, attributing it to an increased sophistication among corporate buyers and a desire to defray costs.

"Have we seen an increase in corporate consolidation activity? You bet we have," said Carlson Wagonlit's director of meeting management, Mari Heavy. "More than 80 percent of the RFPs we receive these days include a request for groups and meetings as part of the initial request."

Although the company has been more proactive in the past year to generate interest from its existing client base, much of that interest has come from prospective clients.

The natural evolution of the industry could be another factor in this increase. Airline commission caps and the tough stance that hotels have taken with their rates are no doubt instigators.

There also is a growing realization that administrative personnel--who, in the words of one agency executive, "aren't authorized to purchase a box of pencils"--are signing contracts with little or no planning experience, said meetings management personnel interviewed for this article.

Whatever the cause, meetings are finally a significant consideration when corporations think of cost management. "Interest in the meetings area used to be very much an afterthought," Heavy said. "In the last year, it's been much more in the foreground of various companies' plans."

Heavy conservatively attributes 25 percent of Carlson's 1996 business to consolidations, although she said the percentage could be higher.

Meetings, with respect to both data management and a unified approach to handling logistics, have traditionally been a tough nut to crack.

"There are issues of job security and issues of control at play," Heavy acknowledged. "In the past, we've had challenges at some corporate cultures because administrative assistants were afraid to reveal their hand and let their employers know how they went about handling an event. Over time, we've developed a real methodology to obtain the information we need, and we have managed to back away from an adversarial role with these employees."

Ninety percent of Carlson Wagonlit's clients have yet to get a complete handle on their volume, as well as who in the organization is spending the money and whether or not they are spending hotel, air and ground transportation dollars efficiently. But what's new, Heavy said, is that there is a newfound willingness to do so.

Joan Heald, regional sales director for BTI Americas' meetings program, pointed out that although her agency trailblazed the consolidation arena in the mid-'80s with the launch of full-service meetings programs for IBM, DuPont and Eli Lilly, widespread corporate interest is a relatively new phenomenon.

"I'd like to think that they're inquiring about a consolidated approach to meetings because we've told them they should, but I'm not naïve enough, nor are any of my colleagues at Amex, Carlson and elsewhere, to suppose that's the case," Heald said.

What she suspects is that networking among the business travel community--particularly among travel managers at industry forums like the National Business Travel Association conference--is helping to put a positive spin on an approach to meetings management that is foreign to many corporate cultures.

"They've seen what can be done with intelligent negotiation on the transient side, and it's logical to use those techniques in meetings management if the corporate culture will support that sort of approach," Heald said.

Victor Macchia, vice president and general manager of Group Travel Management Services, agreed that word of mouth on early successes has made the subject of meetings management more accepted.

"I think our sophisticated clients have already done a superb job consolidating their transient travel business and are finally ready for meetings, which is really the last frontier in many respects," he said.

Macchia said that while mandates are out and "soft sell" of agency-empowered centralized meetings departments is in, that is only the case for the short run. "Over the next five to 10 years, you will see adoption of meetings management practices--including the use of agency vendors to aid that management--that more closely mirror transient travel, despite the differences involved in the two areas," he said. In the meantime, he thinks companies at least will implement software to consolidate the data that lays the groundwork for more intelligent buys.

"I think efforts in travel-related cost management are closely allied with general trends in leadership management, a la management guru Steven Covey," said Beth Truitt, vice president of strategic marketing for McGettigan Corporate Planning Services in Philadelphia.

"Corporations want a team environment, and they want to get a handle on all their resources," she said. "Downsizing is expensive in a sense, so you'll see traditional rivalries perhaps begin to wear down as everyone who's left attempts to work more efficiently."

McGettigan, which just picked up a major piece of meetings business with AT&T and director of conference services James Cutropia to aid in meetings consolidation, has been stepping up its presentations to existing clients and addressing RFPs on the topic.

"McGettigan is also working with a professional education organization to roll out courses that help ad hoc planners get prepared for intelligent negotiation and planning," Truitt said. "We want to encourage corporations that adopt our approach to have these people certified."

Jay Roseman, vice president of groups-retail for Mt. Laurel, N.J.-based Travel One, said that corporations are becoming more savvy regarding the buying power and relationships that agencies can have with air and hotel vendors.

"We also offer proven strategies for purchase--strategies that take a hotel or airline's given yield management approach into account," he said.

Roseman said Travel One has been able to structure deals for clients that provide historical purchasing data and that direct their business to one chain, particularly in the case of meetings that are held in the same property year after year.

"Clients have to be reasonable, though," he cautioned. "They have to know what factors they are willing to concede a bit and what they absolutely refuse to budge on. The economic reality is you're not going to get everything you ask for. But maybe, for example, you can get more forgiving penalty and cancellation clauses or a better complimentary room ratio."

One key question any prospective corporate buyer should ask, according to Roseman, is "how can I save time and gain efficiencies in the reservation process?" This, even more than rate discounts, is where agencies and corporate clients can partner to reduce travel- and meetings-related distribution costs.