Technology Enhances Agencies' Mtg. Consolidation Role

<B> Technology Enhances Agencies' Mtg. Consolidation Role</B>

By Chris Davis

As travel agencies develop technology better equipped to capture and warehouse meeting expenditure data, many are finding the barriers to further corporate acceptance of outsourced meetings program consolidation are being knocked down.

New technology that enables spending data to be captured through corporate intranets or a stand-alone Web site has enabled travel agencies to pitch their meetings consolidation wares as a form of consultancy or data warehousing function. As a result, corporate travel and meeting managers, many of whom have seen transient travel at their own companies consolidated, are looking anew at the group travel consolidation process.

"I'd like to believe it's due to our efforts alone, but the truth is it's a combination of our efforts and those of other agencies to show this is an overall solution and the natural progression of materials and supplies with relation to procurement and strategic sourcing," said John Pino, president and CEO of Philadelphia-based McGettigan Partners.

McGettigan's overall revenues are projected to increase 20 to 25 percent, Pino said, not including revenues from its meetings software spin-off, Star-Cite Technologies (<I>Meetings Today</I>, Jan. 25).

"Intranets are playing a big role, because intranets and certain Internet sites can do things without a software-client-server relationship," Pino said. "The solution of capturing and consolidating data is easier."

If technological advances are the grease that slides meetings consolidation along, the impetus behind further corporate interest often comes from outside the meetings and travel program itself.

"Corporate objectives are including consolidation, freezing head count and a focus on cutting costs, which leads to meetings outsourcing," said Andi Hall, director of meetings management at St. Louis-based Maritz Travel Co. "The talent and the understanding needed to accomplish meetings consolidation has always been there, but the technology wasn't. Enterprise databases, where the technology provides actual consolidation, are available or under development."

Companies also look to successful, cost-saving consolidation efforts in their transient travel programs as a blueprint to attack meetings consolidation. While transient consolidation may not entail the same complexities that group consolidation does, it nevertheless offers interested corporations a starting point.

"Corporate travel is becoming more strategic, and consolidation is part of the new strategy," said Laura Wells, director of group travel consolidation for Minneapolis-based Carlson Marketing Group. Ten years ago, people wanted to consolidate transient travel, then looked for other ways to save on their travel spend. But they just didn't have a clue as to how to approach the small-group arena. But simply by looking at all the information from mandated meetings registration can show savings by seeing deviations from corporate policy on meetings," Wells said.

"As more corporate travel managers get more responsibility on the group and meeting side of the program, they bring their corporate travel learnings to the table," said Rigsby Barnes, general manager of the meetings and incentives division of Atlanta-based WorldTravel Partners-BTI Americas. "Also, a number of companies use outside consultants to review their overall cost controls, and those consultants often zoom in on the travel process. Companies have a hard time identifying all their travel expenditures, and all that leads to more consolidation."

The wealth of software that tracks and warehouses meetings expenditures, though, can be a morass for interested planners to wade through, but it does offer them an idea that meetings consolidation is a concept to consider.

"We have a proprietary registration tool, and every time the trade magazines write up some new meetings software, buyers realize they need to start tracking this," Wells said. "Actually, all the suppliers can be overwhelming and very confusing for planners."

"Meetings technology has taken longer to progress than corporate travel technology because the latter is transaction-based, while meetings spending is more fragmented," Barnes said

Even smaller travel agencies, many of which do not offer or only recently are offering meetings consolidation programs, have noticed the upswing in customer demand. McCord Travel Management of Chicago, a new player in the meetings consolidation market, will set up a corporate onsite to deal specifically with group travel issues under a consolidated meetings program, under the right circumstances.

"That is a solution we're offering, and we're confident that its usage will be on the rise," said Scott Graf, vice president and general manager of group travel services for McCord Travel Management. "I'm surprised it hasn't happened yet. Whether it's us or someone else, a company will go that route soon."

Previously, McCord made meetings volume commitments to hotel chains that, if met, would lead to a back-end discount. That, however, occurred only after the meetings were booked.

"We'll let five hotel chains know where a company's group business is going, and if we hit a certain threshold at the end of the year, we'll receive some sort of cost savings on the back end," Graf said. "But the consolidation trend is growing, and more clients want that savings on the front end. It used to be the top 5 to 10 percent (by volume) of corporate meeting programs, now it's the top 25 to 35 percent. It will continue to grow at a smashing pace, and we have to take the steps to find those larger chunks of business."

Those larger chunks of business, Graf said, aren't the strict domain of the mega agencies anymore.

"Just 12 months ago, only 15 percent of our client base wanted us to deal with some form of group travel," Graf said. "In 2000, we project we'll be handling some form of group travel for 80 percent of our clients."

Some companies that already have consolidated their meetings programs are testing the waters to see how far they can take the concept.

"We're even starting to see group incentive consolidation," Barnes said. "Only a few companies are doing it, but they'll bid on 10 or 12 incentive programs instead of doing so on an ad hoc basis."

Opinions differed, however, on the level of corporate interest in consolidating their meetings and transient travel programs into a single unit.

"I don't see much in the way of convergence of meetings and transient travel," Barnes said, "It's very difficult, and I'm not sure people want to co-mingle. Look at what American Express did this year, outsourcing their large-meeting management function to Maritz (<I>Meetings Today</I>, Aug. 2) We just don't get many bids where meetings are bundled into corporate travel."

Maritz's Hall agreed: "Meetings consolidation has the highest potential for growth; it's busting out at the seams. But I don't see many companies looking to combine their meetings and travel programs. Most companies seem more concerned with the end result, and they'll let different groups manage different pieces of the business."

McGettigan's Pino, though, said the walls between meeting and travel programs are eroding. "As a general statement, major companies look at distribution of meetings and transient travel as separate issues," Pino said. "But they are beginning to combine them, because the solutions are out there. Some companies approach the consolidation of meetings as the beginning of a larger trend.