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MICE: Making ends meet

The notion to align transient travel with corporate meetings spend is nearly a decade old. Martin Ferguson looks at the challenges still facing buyers and travel managers

Meetings and events (M&E) appeared for the first time as a session topic at corporate travel conferences and forums back in the early noughties.

A small group of forward-looking buyers identified it as an area that had synergies with the managed travel programme and, more importantly, realised that potential savings would help endear them to their chief financial officers. It was a no-brainer.

By 2009 the subject had picked up considerable momentum. members of the then Institute of Travel management voted to change the group's name to the Institute of Travel & meetings (ITM), believing it better reflected the role of the modern travel manager. At the same time, the Business Travel Show, held annually at Earls Court in London, became the Business Travel & Meetings Show (BTMS) for the same reasons. It was a pivotal moment for the business travel industry. every segment of the supply chain had to accept that procurement of products and services related to M&E was evolving fast.

It was something of a surprise, therefore, to learn at a recent business travel conference, that the majority of buyers have still not taken steps to harmonise transient spend with meetings expenditure.

There was standing room only in both the M&E sessions at the recent Association of corporate Travel executives (ACTE) conference in Berlin, so the importance buyers place on the subject is not in question.

At one of those sessions Frederic Dimanche, a French professor from the SKEMA business School in Sophia Antipolis, near Nice, revealed the results of a European travel buyer survey. He asked 194 corporates about their travel and meetings spend and found just under a fifth had successfully implemented a strategic managed meetings programme (SMMP).

Another quarter said it was "work in progress". but Dimanche's poll revealed that more than 50 per cent had nothing in place at all. Some considered it, but found it all too challenging. others deemed the benefits "too limited", while the rest said they'd mulled it over but hadn't got round to doing anything yet.

Fay Sharpe, managing director of meetings and events specialist Zibrant, says the importance of aligning travel and entertainment (T&E) and meetings spend is still moving up the corporate agenda, but she was not surprised by the findings. "In general, larger corporates have tackled the issue," she says. "one would expect them to have a programme in place by now. but companies that spend less on meetings don't necessarily have it on their list of priorities."

Sam van Leeuwen, head of UK hotels and venues for PricewaterhouseCoopers (PwC), was one of the industry's pioneers when it came to the convergence of transient and M&E spend. "The evolution has been really slow," she says. "I've been asked to speak at various conferences since 2003 on SMMPs. I always explained what we had been doing in terms of analysis of spending, dealing with suppliers and getting stakeholder buy-in, yet there are still so many people who don't have a plan. It's incredible."

But if the alignment of T&E and M&E spend is such a no-brainer, where are buyers hitting brick walls? For starters, Dimanche's research found that most buyers couldn't get support from senior management. Stephanie Smook, travel manager for sportswear company Nike in Europe, the middle east and Africa, says this is, perhaps, the single most important commodity. "If you don't have buy-in from the board, then you're left with nothing except a good idea," she says.

Fay Sharpe adds: "You really need a sponsor, such as the financial director or chief financial officer."

Other stumbling blocks cited by the euro buyers included investment in the necessary technology, implementing a global policy, making a joint policy efficient, and convincing people within the company to sign-up to a SMMP.

Sharpe, therefore, advises corporates daunted by the thought of devising such a strategy to start off with "bite-sized chunks".

"There is a lack of expertise at some levels of business, and often people don't know where to start or how to approach the beginning of a strategic meetings programme," she says. "You have to take a phased and structured approach. Going for the big bang effect is difficult to achieve. Try and make it work in one location, for example, before rolling it out to other areas."

Sharpe recommends buyers talk to key people within the business before trying to implement any joint travel and meetings policy.

"Look internally at who the key stakeholders are in terms of meetings spend. That might be the learning and development team, the sales director or the chief executive's PA. Whoever it is, talk to them about how much they spend and where they spend it. If you make them feel engaged in what you are trying to achieve, it means you probably won't have to fight them for compliance further down the line. because, don't forget, almost everyone in the business thinks they are a meetings planner."

Morag Alabaster, director of MWB Venues, offers advice to buyers having difficulty winning over executives to sell the SMMP in relation to the company's legal obligations.

"It's not just about making savings. There is a health and safety issue. Since the introduction of the corporate manslaughter Act [2007] companies have a duty of care to employees. They must be sure they are safe and looked after while travelling on business, and M&E is very much a feature of that.

"And then there's the issue of contracting. Do bosses really want people from across the business signing into a whole manner of unknown terms and conditions? Talk to the board about this and you'll have their ear."

But has the momentum of two years ago faltered already? Perhaps. van Leeuwen, however, says she has noticed a resurgence of interest in the last six months, but was surprised that more people did not act at the height of the recession.

"I don't know why [M&E] is suddenly back on the radar, maybe it's the influence of buyers' groups, like the ITM.

"The downturn might not have triggered the merger of travel and meetings spend, but it has obviously helped some people focus their ideas and efforts"

PwC boasts one of the most mature SMMPs in the EMEA region. It claims to be one of the first corporates to have ever leveraged transient and meetings spend. Van Leeuwen says she is now well into the next stage of the programme's development.

"We've had a meetings programme since 2002," she says. "We went to tender 18 months ago and are now well into what I would call the second phase of the programme.

"I took our transient spend and lumped it into our meetings spend, and then we told our hotel suppliers we expected accommodation rates and meetings rates based on the total. We asked for deals from hotels where we didn't necessarily have any spend, because one of the challenges with meetings is that people sometimes go further afield. So while transient hotels are in key city locations, meetings in some instances are in the areas where clients are based, often in the middle of nowhere. It was all new for the suppliers at the time, but they've come on board."

One travel consultant at the ACTE Conference said some hoteliers still had to be dragged kicking and screaming to negotiate packages, including both room nights and meetings. "They've always regarded them as two separate revenue streams, and now one is being slightly eroded," they said.

However, Starwood's head of global sales, Viviane de Matteis, told ACTE delegates that her company was "receptive to the idea", while other hoteliers present admitted it was an area that needed more attention.

Nike's Smook, the commander-in-chief of an aggressive and successful euro-wide meetings programme, already has her suppliers toeing the line. The Dutch travel buyer claims to have saved her company - which spends €14 million annually on M&E in the EMEA region - some €1.3m.

"We used to have deals for transient and nothing else," she said. "We were losing money. but we realised the benefits a strategy would bring us in terms of savings, visibility control, reporting, risk mitigation and consolidating volume. We have worked closely with suppliers and stakeholders, and now we have a group RFP [request for proposal] in the top 20 cities so we can drive our business to preferred suppliers."

Smook also revealed she is on the verge of rolling out a new programme making it compulsory for anyone in the business wanting to organise a meeting to apply for budget before the start of the financial year. A tough stance, but the benefits could be exponential.

And as the UK and European economies adapt to a new era of corporate austerity, those savings could be the difference between success and failure. If you've been putting plans to devise an SMMP on hold for any reason, now is the ideal time to get back in front of your stakeholders.

MEETINGS FACTS

The SKEMA Business School in France surveyed 194 European buyers and travel managers

Q. Is your meetings and transient travel spend evolving into a more unified structure?

  • 26% It's work in progress
  • 24% I am considering it, but have not started
  • 19% I have not yet considered it
  • 18% Yes, I have implemented a strategy
  • 7% Considered it, but it is too challenging
  • 6% Considered it, but the benefits are too limited

 

Q. What are the main challenges?

  • 71% Buy-in from suppliers
  • 14% Investment in the right technology
  • 15% Establishing a global policy
  • 16% Obtaining support from stakeholders
  • 18% Process optimisation
  • 30% Change management