Frequently when employees travel, they do so to attend a meeting or event. To this end, more companies are seeing the potential benefits of a combined approach that allows transient travel and events travel to be managed as a joint venture.
Organizations that hold regular events and, at the same time, manage robust travel programs tend to funnel endless resources into ensuring each program runs smoothly and efficiently. Both sectors share many of the same strategic goals: policy compliance, cost savings and supplier management among them.
However, these programs often operate separately, leaving openings for unnecessary risk and additional costs. Increased efficiencies and savings are in the offing for programs that can find ways to integrate meetings and events with travel programs into a better coordinated effort.
“Travel managers need to come to the realization that the attendee and the traveler are the same person,” says Kari Wendel, vice president, Global SMM Strategy at CWT Meetings & Events. “Thus, they need to plan for the experience of the traveler and the experience of attendee in a way that is streamlined and optimized. So combining strategies is not just about leverage, but about ensuring a happy and more productive traveler, too.”
Wendel maintains creating a consolidated strategy that can be leveraged can save companies and organizations between 10 and 24 percent in their outlay. As meetings alone generated some $325 billion in direct spending in 2016, according to a February 2018 report by the Events Industry Council, those savings can be quite significant.
Divided Silos
According to a 2015 study entitled Meetings, Events and Travel Programs: Consolidation Drivers and Barriers, generated through GBTA and Lanyon (now part of Cvent), 23 percent of respondents had created a consolidated program between travel and meetings and events, and another 27 percent were in the process of doing so. However at 20 percent, respondents who reported having no plans to consolidate almost matched the number who said they have a fully-consolidated program.
The results of the 2015 study led the authors to project by 2025, nearly two-thirds of meetings, events and/or travel programs will be consolidated or in the process of consolidating. However, that assumes a strong focus on communication.
“We have commonly experienced a situation where the meeting person and/or event person does not even know who the travel manager is. Even if they want to consolidate that spend – half do not even know who their counterparts are because they are decentralized and working in silos without disruption,” says Kevin Iwamoto, senior consultant at GoldSpring Consulting, who commissioned the study during his time at Lanyon.
“In the past, what made it more challenging is that you had different technologies serving different functions and not taking into account other programs,” Iwamoto explains. While the travel manager would rely on data gathered from the GDS, online booking tools and other sources, “on the meeting side, where the focus is on the venue sourcing and not the travel piece, you have different companies helping to plan and book hotel group space,” he says.
“Travel may be the lynchpin but it’s a totally different game. And there is no technology linking the two sides together other than online booking tools – used primarily to book air – and in some cases the corporate expense platform,” Iwamoto concludes.
Iwamoto notes that in addition to the difference in tools, the two disciplines also have a different focus on how spend data is evaluated. “On the travel side, travel managers are able to use their consolidated data to determine the TCOT or total cost of trip. On the meetings side, you really don’t have that. But a big chunk of unreported meetings spend is in travel expenses – air, occasionally hotel and ground transportation.” Although Iwamoto says there’s been some progress using technology get more transparency into meetings-related travel expenses, it still remains a challenge. “So, for the time being it is still a case of apples and oranges,” he cautions.
Piecing the Puzzle Together
Improvement of visibility and transparency into the overall travel, meetings and events spend is the top driver of the consolidation trend, according to the 2015 study. Other motivations cited included better leveraging of spend and obtaining better negotiated rates and dynamic pricing.
And while no one would disagree that a process of consolidation should be written into a successful SMM strategy, there are still plenty of roadblocks on this otherwise logical path. “One result is that technology providers have equipped suppliers and buyers with solutions that work for either, but not both transient and group,” says Chris McAndrews, vice president of marketing for Cvent’s Hospitality Cloud. “That in turn has made it difficult for organizations to consolidate a list of technology suppliers to support their needs across the segments.”
Another obstacle, fragmentation and lack of leadership, may be the easiest to identify. According to the report, non-consolidated buyers say meetings and travel teams report to different departments and data comes from multiple sources in varying formats. Lack of program consolidation is one issue; lack of centralization is another.
Second, those buyers that did have consolidated programs find securing leadership and stakeholder buy-in is an essential, but difficult piece of the successful consolidated program pie. Non-consolidated buyers report this as a most challenging barrier to consolidation.
“We are in the early stages of addressing this fragmentation, but especially in light of the increased role of procurement with corporate travel programs, there is definite interest among buyers in playing the strongest spend hand they can when negotiating with larger and larger suppliers,” says McAndrews.
“Notwithstanding SMM progress, meetings and events have long been the largest category of unmanaged spend,” he notes. “So there remains low-hanging fruit within meetings and events alone. Perhaps nowhere is this more apparent than with small or simple meetings that often take place beyond the purview of the SMM program. With that said, clearly there is value in having a view of combined transient and group spend, even if there are holes in either bucket when it comes to tracking.”
Other barriers to success include lack of resources – both in staff and time – as well as pushback from existing teams resistant to relinquish autonomy. Plus there is discouragement from some suppliers who are unable or unwilling to adapt to a consolidated program. And, although the trend toward consolidation and leveraged buys may be written on the wall, hotels still own much of the conversation.
Reviewing Relationships
“Hotels are not getting built fast enough and what is built is often not suitable for larger meetings,” says Betsy Bondurant, president of Bondurant Consulting. “But the meetings column continues to increase and that is where preferred relationships can really mean a lot. Corporate planners and travel managers need to have solid relationships and should not be adversarial. Hoteliers should be educating their buyer partners who might not understand the things affecting costs of food and beverage and other things.”
She sees one clear area for improvement right from that start – limiting the number of requests for proposal an organization is sending to a particular hotel or chain. As properties are deluged with requests, often from managers of small meetings, a coordinated system of communication among departments at a company or organization could smooth the efficiencies for all involved.
“If you truly want to leverage a preferred supplier set across both travel and meetings, you need to marry the data for both programs to ensure you are selecting the right supplier partners and can make appropriate commitments to these supplier partners,” says Shauna Whitehead, VP, global account management at BCD Meetings & Events.
“You should have the ability to bring your data together and normalize it in a way that you can analyze the spend and travel patterns before walking into any negotiation,” she advises. “You will be able to negotiate a better deal if you can show your ability to influence spend and shift market share to show results.”
Getting Serious
About SMM Putting a solid strategic meetings management policy in place is the first and the most salient ongoing step toward leveraging the entire travel spend. That means getting the stakeholders involved, creating leadership, adapting the right technology and the right mindset – a mighty task from any vantage point.
“Are you ready to collaborate?” asks Wendel. “Do you have the internal structure to support a consolidated strategy? There are not many who do this and it marks a change in the paradigm from how suppliers used to work.”
However, she goes on to warn, “Not every company is ready for consolidation. A foundation must be laid across travel, procurement and meetings management to drive the right level of collaboration.”
Wendel, who discusses this topic in a panel at the October ACTE forum in Paris, recommends steps organizations can take to move closer to consolidated and leveraged negotiations with suppliers:
• Get an overview of business travel and meetings spend using analytics, then take advantage of that purchase power based on travel patterns and markets.
• Gain visibility across meetings spend with a consistent payment process that
also simplifies managing expenses for travelers and attendees. Detailed data on suppliers can also leverage spending.• Use current reporting to make the case for the value of travel and meetings to senior stakeholders through focus on return on investment and objectives, b
enchmarks and growth opportunities.• Tailor your digital dashboard with all your venue history, plus year-on-year market hotel comparisons. Benchmark rates and look at seasonal fluctuations with real-time data to bolster your bargaining power.
• Create an approach to negotiations and management that has been vetted by your legal team. Eliminate repetitive contracting, reduce risk and bypass legal in the majority of agreements – plus meet your individual business needs.
• Align stakeholders. This is the No. 1 secret to success – stakeholder support drive the program’s sustainability and help it advance. Marketing and communication is key.
• Take a project management-based approach that ensures ongoing buy-in from all stakeholders. Focus on joint goals, not just cost savings. A strong, well-designed policy is crucial.• Make the most of in-house and external assets. Cooperation and collaboration between departments is a key. Use meeting technology tools to capture better quality data.
