Multinational Cos. Weigh Global Mtgs. Initiatives
As U.S. corporations increasingly expand and consolidate operations overseas, the need for multinational meeting management programs and sourcing initiatives also are extending beyond borders. International meetings present additional challenges and expenses in logistical needs, exchange rates and site selection for buyers, but successful sourcing strategies used domestically can be adopted abroad to find savings.
The latest FutureWatch survey of 1,443 buyers, suppliers and third-party members of Meeting Professionals International and American Express, showed 27 percent of respondents expected the number of countries in which they operate to increase in 2007.
Chris Wilkes, practice leader for Global Advisory Services at American Express Business Travel, said many U.S. clients using Amex for domestic meetings have begun to extend their programs overseas.
"They are covering a scope that's more broad than what was typical in the past," she said. "Europe and Asia are usually the first areas brought under, depending on the company."
Though global strategic policies usually mirror the meetings polices a company has in place domestically, a complete evaluation needs to be made of the program and adjustments made for market specifications, Wilkes said.
"The most successful policies are the ones that take into account the cultural differences and the specific needs of the country," she said. "In Europe, there are fewer chain hotel properties."
In order to meet their objectives, companies have to be willing to look beyond their established chain deals in the United States and consider alternative sites for their events overseas, Wilkes said. Spending areas such as food and beverage service also can yield significant savings, as they do in the United States, she said, but other expenditures such as audiovisual services and meeting space rates are more fixed in Europe than they are domestically.
Buyers can find some of the greatest cost savings if they are flexible on dates and location, said Ping He, director of international market development for Twinsburg, Ohio-based Experient Inc.
"If your client isn't totally fixed on one destination, it may enable you to put forward options that are more cost-effective," He said, adding that sending lead sheets or post-conference reports to several destinations can help in negotiations. "It also creates a competition scenario which helps drive better value."
Being flexible on dates can also mean significant savings. "Many destinations have a low-season periods where rates for venue rental and hotel rates can dramatically vary," He said. "I have experienced up to a 50 percent reduction at some periods, whether it be low season or an event that fills a gap between existing contracts."
Any flexibility can translate into negotiating power, said Wilkes. European destinations even can be more cost-effective than a domestic event, she said, with the right flexibility and negotiations.
"If you have to fix your dates, then consider multiple cities. If you need to be in one city, look at changing the dates," according to Wilkes.
Partnerships also help corporations save money on international events, Experient's He said. Convention and visitors bureaus or destination management companies can help to leverage multiple local partners for discounts and secure complimentary upgrades, tickets or preferred rates.
Partnering with a single global sales contact for a hotel chain is also a good idea, He said. "Your global contact has a strong relationship with you, and has better knowledge of the value of your account than perhaps a venue-based sales manager with whom you have not previously worked. Your salesperson can also help identify other potentially suitable venues within the chain that may offer more competitive rates," He said.
Group airfares are a difficult area for a company to find savings in, He said.
"You don't have a lot of leverage there," he said, adding that increasing fuel costs and limited flights to a destination are a couple of the "many reasons" why air expenditures are inflexible.
However, exchange rates, the bane of U.S.-based companies taking events to Europe, can help lower costs in other markets. "If you select a destination in Asia, the overall exchange rate will definitely work for your meeting favorably," He said.
Chicago-based BCD Meetings & Incentives this year acquired U.K.-based Talking Point, furthering inroads into the European market. Robin Smith, founder and managing director of Talking Point, said the acquisition gives his company greater reach and capability in Europe market.
"The whole world is changing to consolidation," Smith said. "I think I'm in the right place to take this forward."
Consolidating European operations under the BCD brand is a step in anticipation of a greater need for strategic meeting programs for both U.S. companies in their European operations and also for European companies that are expected to begin implementing new policies to manage meetings and events.
"Strategic meeting management business is not really as prevalent in the United Kingdom, but I would say there is high interest there," said Scott Graf, president of BCD M&I.
The world of strategic meetings management definitely is "getting flatter," Graf said. "Many of our clients have already consolidated in the U.S., and the next logical step in a cost-management strategy would be to look toward Europe."
Twelve new offices in Europe under the BCD banner will help to meet the growing demand for consolidation services there, he added. Vendor negotiations can benefit from local expertise. BCD M&I has made consistent product offerings a priority in its expansion, so that customers can access the same services in Berlin as they do in Birmingham. Though some consultants say services need to be tailored to specific market needs, Graf said most strategies apply universally.
"It's not so much market-driven as it is customer-driven. If I had to generalize, I would say that the size of the company dictates their strategy," he said.