To
the consternation of most of its chapters, the Global Business Travel
Association is in the midst of imposing a new financial and organizational model
on its 40 U.S. local affiliates through an initiative that, among other things,
will require them beginning next year to share 20 percent of total revenues and
in the meantime pony up some one-time fees. In exchange, GBTA contends that
local chapters will benefit from a suite of centralized services and support, new
revenue opportunities, membership growth and a more consistent identity.
The
program, dubbed the "Chapter of the Future," aims to establish
"a more unified organization through consistency and
standardization," according to GBTA documents obtained by Business Travel News. Those documents,
one of which is structured as a FAQ for local chapters and dated March 2012,
have been circulating among GBTA executives and chapter leaders.
Also
in circulation is an email formulated by 10 GBTA chapters seeking buy-in from
others to forestall some of the proposed changes. So far, 31 chapters,
including the Baltimore Washington, Chicago, Dallas Fort Worth, New York City, North
Carolina, Rocky Mountain and Silicon Valley business travel associations, have
supported the stance that GBTA's "proposed 20 percent rate on gross
revenues is unacceptable," that the implementation timeline is too hasty
and that the return on investment is unsubstantiated, according to an email
shared with BTN and confirmed by
several chapter officials. Additional chapters have registered partial agreement
with those concerns.
Chapter
officials this week in an email to Chapter Presidents' Council president and
St. Jude Medical global travel manager Denise Truso wrote, "The chapters
support the ideas of increasing membership and revenues, and helping keep all
chapters viable as described in the CoF initiative. However, additional
information is required in order for the chapters to support the costs for the
initiative, and several questions need to be answered before the boards will
authorize any payments."
Chapters
plan to formally voice their "list of concerns" to GBTA officials next
week at the Chapter Presidents' Council Meeting in Chicago. Also looming, GBTA
on May 1 expects to begin collecting from chapters a one-time $70 per-member
fee to fund the transition to the new program. Chapters also are expected to
sign an agreement that details their financial and operational obligations to GBTA.
In return, some chapters have requested that GBTA sign service-level
agreements. Sources said GBTA has thus far refused.
Chapters
that decline to participate in the Chapter of the Future initiative risk
becoming a thing of the past, or at least losing their affiliation with GBTA. However,
they "may opt to operate as an independent organization" if they
decline the program, according to GBTA documents. Instead of affiliate
attrition, GBTA "is expecting full participation from all chapters,"
according to its FAQ.
GBTA
on Friday through a spokesman declined comment on all aspects of the
initiative.
New Operating Requirements
Chapters
must agree to a variety of new operating requirements, transition to a single
technology platform and in some cases change their names, logos or websites to
align under GBTA branding standards. "For example, 'Rocky Mountain BTA'
will become 'GBTA Rocky Mountain Chapter,' " according to GBTA's FAQ.
GBTA
selected StarChapter as its online chapter management software provider to
allow "board members to manage meeting registrations, payments, membership
records, public and private communications [and] reporting," according to
GBTA documents.
Thirteen
chapters, including Baltimore Washington, Central Florida, Connecticut
Westchester, Michigan, New England, Ohio Valley, Pittsburgh, St. Louis, San
Diego and Silicon Valley, already operate on StarChapter, according to GBTA
documents, and at least 10 more are in the process of migrating.
As
envisaged by the program, the remaining chapters will be required "to move
from their existing platform to StarChapter at the time their current
technology contracts expire, no later than December 31, 2012," according
to GBTA's FAQ. "For those chapters whose current contracts expire after
December 31st, GBTA will work with them on a case-by-case basis."
New Benefits, New Costs
The
revised financial relationship between GBTA and its chapters is among the most
contentious aspects of the new program, especially since chapters, as Christopherson
Business Travel president and Utah Business Travel Association past president
Mike Cameron wrote in an email to BTN,
"fund the cost of the initiative, in advance, with the hope that GBTA will
create an ROI in 2-3 years."
GBTA
plans to charge chapters $70 per member in one-time fees to become a Chapter of
the Future. Estimating a total of 5,000 chapter members, GBTA plans to raise $350,000
from those fees, dedicating $200,000 for branding and marketing and $150,000
for "technology implementation," which includes the transition to
StarChapter.
"Chapters
are encouraged to pay the one-time payment lump sum by May 1, 2012,"
according to GBTA correspondence with chapters. "However, chapters can opt
to pay in monthly installments for 12 months, effective May 1, 2012."
Another
key pricing element in dispute is the requirement that chapters "provide a
20 percent share of total chapter revenues effective January 1, 2013, to help
offset the recurring GBTA Chapter of the Future expenses," according to
GBTA.
In
a presentation obtained by BTN, GBTA
estimated it currently spends $530,000 annually in chapter support, including
funding for two dedicated GBTA staff members, the Chapter Leadership Summit,
Chapter Chat events and "other chapter supporting expenses," which
the association will "continue to absorb."
Meanwhile,
the annual recurring salary, technology, marketing, travel and entertainment
and operating costs of the Chapter of the Future program, estimated to total
$551,500 next year, would be shared by chapters and GBTA.
In
return, GBTA has told chapters they would benefit from increased membership,
better marketing, a more consistent brand, continued use of its speakers bureau
and increased advertising opportunities, including access to national sponsors,
among other resources.
A
more consolidated approach, GBTA noted, would enable chapters to capture more
revenue. As an example, GBTA noted that "100 percent of all national
sponsorship revenue raised in support of all chapters will be given back to the
chapters and will be a part of the revenue share calculation."
As
chapters seek further demonstrations from GBTA of the return on their
investment in the program, GBTA in its FAQ noted, "The ROI will begin and
be evaluated throughout 2013. At this point, the program will have launched and
be underway. Both GBTA and chapters will understand there will be a ramp-up
period before which any ROI can be reflected upon."
Cameron
noted, "It would make more business sense for the funding to start in
2013, when the new program starts. This would create a 'shared risk model,'
which would put us both in the position of making it successful together."
Cameron
noted that he is "supportive of the concept. It makes sense for us to better align the local
chapters with the national organization and have a more tightly aligned mission
statement, brand, technology and have the chapters truly be chapters of GBTA
and not freestanding organizations with different business missions." But to
meet the new financial obligations, he added, chapters would "reduce line
items for GBTA scholarships, GBTA Legislative Summits, GBTA Leadership Summits
and GBTA CPC meetings. I’m not sure if GBTA thought about the negative impact
which this budget transfer may have upon the lost synergism between GBTA and
their chapters."
Mounting Resistance
Following
GBTA board approval in November 2011, the new program in late January was
revealed to chapters at the Chapter Presidents' Council meeting in Minneapolis,
according to sources and a GBTA timeline obtained by BTN.
As
the program began to take shape, however, so did resistance sparked by seven of
GBTA's largest chapters, which "conducted a conference call shortly after
the initial CoF presentations to discuss our thoughts and make sure we were on
the same page," according to an email sent to chapter leaders.
"We
had a great exchange of ideas and began to develop a list of concerns regarding
the CoF costs," according to the email. "Around the same time, we had
discussions with three other chapters, and shared the drafts with them as well.
Although we initiated this list from a large chapter perspective, we concluded
that the basic concerns are similar for all chapters."
As the
resistance has grown, GBTA has continued to seek buy-in for the program. GBTA
leadership this month and last has been meeting individually with each chapter
ahead of next week's Chapter Presidents' Council Meeting, according to a
timeline obtained by BTN.
New Member Pricing Imminent
Another
proposed change in its relationship with chapters relates to GBTA member
pricing. At its July annual convention in Boston, GBTA plans to announce a new
member pricing structure, including the "GBTA All Access" tier, which
for $450 includes GBTA membership and a designated "home" chapter.
GBTA will remit $100 to the designated chapter for each member who selects that
tier.
Member
cultivation and retention is a stated goal of the program, and GBTA sees an
opportunity for chapters to increase direct membership levels. While only a
quarter of the 5,000 members affiliated with chapters are buyers, according to
documents, GBTA has identified an additional 1,275 buyers who are association
members with no chapter affiliation.
— With reporting by Mary Ann
McNulty and Jay Campbell