Survey Methodology
Business Travel News conducted an online survey of travel and meetings
professionals from June 2016 to July 2016. Invitations to participate
were distributed to subscribers of BTN Group publications and
newsletters, as well as to select subscribers of Meetings &
Conventions, a fellow Northstar Travel Group publication. The research
was sponsored in part by Delta Air Lines. A total of 243 respondents
qualified by indicating they have decision-making responsibility for at
least one critical meetings management function. Not all respondents
answered all questions. Unless otherwise noted, data displayed in this
report has been rounded to the nearest whole number.
The Global Business Travel Association rolled out its
strategic meetings management model 12 years ago. As the organization readies a
third version for debut in the upcoming days to reflect new maturity in the
practice, many companies surveyed in BTN's 2016 Strategic Meetings
Management study are stuck in first or second gear.
Those who start and end strategic meetings management under
the governance of travel management may view the meetings policies and
processes around venue sourcing and contract signing authority as the end game
of the initiative. There's a lot to be said for implementing those facets of
SMM. The risks tend to be lower and the returns are tangible in terms of
savings and efficiencies. Pros are quick to recognize that value.
"The venue sourcing piece is like the second cousin of
travel management," said vice president of Carlson Wagonlit Meetings &
Events Tony Wagner. "It allows [the SMM leader] to show value and exhibit
some data control. Those aspects of SMM are in clear alignment with
procurement, and [they allow] corporate executives to see good financial
control internally. That's a win."
The BTN survey showed many companies leaning heavily
on the venue sourcing and contracting aspects of SMM but not yet digging deeper
to realize additional benefits. It was a sticking point that continued from
last year, when the BTN survey showed a spike in procurement's
involvement in meetings, as well as a significant move among respondents to
lock down contract signing authority to gain visibility into meetings activity
but also to mitigate financial and legal risks. That trend line is holding
fairly steady.
What's missing in BTN's numbers is a clearer
reflection of a more mature trajectory: the deeper dive that the most effective
programs are taking—thinking beyond savings to react intelligently to the
market—to support corporate duty of care and to align programs with revenue
generation. Overall, to step outside of a strictly sourcing mind-set.
One reason for that gap may be buried in the survey
demographics. This year, BTN saw a larger percentage of smaller and
midsize volume meeting buyers responding to our strategic meetings management
survey. That, in itself, however, reflects a trend in the market. As midsize
buyers enter the space, we may be seeing the next wave of meetings management
adoption.
These buyers will start in the same way their peers did:
with sourcing, contract governance and select technology adoption. That said,
maturity may come faster for this new wave than it did for the first- and
second-movers in the space. A level of program maturity that once took six or
eight years to achieve from concerted SMM efforts, may now take just two to
four years, given more complete technology stacks, available integrations and
an evolution toward better business alignment in the meetings management space
overall.
In this report, BTN will explore that shift across
four vectors:
1) The convergence of travel and meetings management
2) Meetings globalization and duty of care
3) Strategic meetings management and marketing
4) Small and midsize programs adopt SMM
All of this, however, is informed by market dynamics.
The Market
BTN's 2016 Strategic Meetings Management study showed
an increase in meetings spend for full-year 2015 over 2014, with 42 percent of
survey respondents reporting higher meetings spend for that year and a 14
percent average increase among that set. Just 14 percent of respondents overall
noted decreased meetings spend for 2015—but with a larger drop, at 17 percent.
Weighting both sides for the trend, the needle swung toward higher spend
volumes for 2015
Respondents projected roughly the same effect for 2016.
Thirty-six percent reported a trajectory toward increased spend over 2015, with
an average increase of 13 percent. Only 10 percent said their company's meeting
spend would drop in 2016, pegging the average decline at 15 percent.
Rising meetings costs in 2016 have not been entirely a
matter of hotel rates, according to the BTN study. Nearly two-thirds of
survey respondents said their group hotel rates were "about the same"
as in 2015. Those rates were nearing peak last year with high demand and
comparatively low inventory in some major markets. One-fifth of survey
respondents reported higher group rates in 2016, while 17 percent managed to
reduce their room rates this year.
If pressure on hotel rates saw even a small reprieve in
2016, it's likely to be short lived.
Hotel Consolidation Motivates Spend
Management
The hotel merger and acquisition environment is looming
large for meetings and travel management. Marriott and Starwood announced their
planned merger last November and finalized the proposal in late March after a
last-minute challenge by Chinese investment consortium Anbang. If consummated
as planned—Chinese regulatory approval has delayed its expected closing this
summer—the Marriott-Starwood deal will create the largest hotel company in the
world with a total of 30 brands.
A Carlson Wagonlit Travel report released in June showed
that in 14 of the 20 cities worldwide where CWT transient travel clients spent
the most, the combined portfolios of Marriott and Starwood would represent 30
percent or more of corporate room nights. In Minneapolis, the worst-case
scenario in the study, that number would rise to 50 percent after the merger.
That type of market dominance has motivated corporates to
look closely at how to improve their volume positions. Plus, it's not just
Marriott-Starwood. Smaller deals like Accor's acquisition of FRHI hotels, which
closed in July, will continue, while the Mar-Star deal has put pressure on
larger brands like Hilton, Hyatt and IHG to go big to compete.
At the end of the day, though, there could be some
interesting opportunities for meetings buyers despite pressures from
consolidation, according to Wagner. "The hotel market is still pretty
fragmented," he said. "Companies may have opportunities to do deals
with hotel management companies and ownership groups in key markets, and there
is often flexibility in where you deploy the meeting and the market that you
choose."
They'll need data and a purchasing strategy to convert those
opportunities. Among BTN's survey respondents, under one-third had brought the
purchasing function under central management; just a quarter were pulling the
data together.
Travel & Meetings Merge
"People are getting nervous because of the
Marriott-Starwood merger," said Jill Huffman, Cardinal Health senior
manager of global travel management and meetings management. Though Huffman
began to merge Cardinal's travel and meetings programs prior to the megamerger
announcement last fall, she gets frequent calls from industry peers to ask how
she did it. "At first they want to talk about travel management, but
almost every time they end up talking to me about meetings," she said.
Consider This: Certified Meetings Partners
Monica Dickenson,
head of meetings and events for global biotech company Shire, implemented a
strategic meetings management program over the course of 12 months at her
former organization Baxalta, which combined with Shire in June. Shire is
looking to Dickenson to clone that SMM program for the newly integrated enterprise.
Dickenson takes a unique approach to her preferred supplier partners,
certifying them through an intensive training program in all things Shire. She
spoke with BTN about why she developed the program.
BTN: What suppliers are targeted for certification?
Dickenson: Currently,
it's designed for third-party meeting organizers. As a combined organization,
we had a lot of third-party suppliers managing our meetings, but for the
centralized [meetings services] group, we only had three preferred third-party
meetings management companies. We wanted to make sure that the market share was
coming through the central program for meeting planning services because we
know these three suppliers are 100 percent dedicated to this type of service.
Not to mention we can guarantee lower pricing. Still, I wanted to figure out
how to elevate our suppliers over those other "preferred" suppliers.
So I [proposed] certifying our third parties and writing it into the meetings
policy to support our efforts in controlling the market share and resources in
this category.
BTN: What
does certification entail?
Dickenson: We
have 30 standard operating procedures, two meetings and compliance technology
tools, service level agreements with key performance indicators and, in addition
to the meetings policy, we have several interdependent policies like transient
travel and expense that intersect with our meetings policy. Our third parties
are trained on the same policies, technologies, processes as our internal
meetings team. Whether the [meeting owner] works with someone internally or a
third party, they get the same level of service. Via the policy, our central
meetings department controls whether the meeting owner will work with an
internal person or a third-party provider, but a lot of the time, they can't
tell the difference.
BTN: Why
would anyone work with a non-certified partner?
Dickenson: Because
we are pharma, meetings include a significant amount of content. There are
companies out there that specialize in content and they say to our meeting
organizers, "Hey, we'll bundle our services and do the content and the
meeting planning services and you can work with one person." From a
customer perspective, that sounds great. In some cases it could be great, and
the meetings department is open to looking at this as a solution, but it has to
be right for the business. We also wanted to work with meeting owners to
educate them on the services already available to them. We can offer them the same service model, so
the meeting owner still has one contact while being more cost effective.
BTN: Would you consider taking this certification
program beyond third-party meeting organizers, say, to hotel partners?
Dickenson:
Absolutely. I've worked very closely with many
of the national sales organizations that we have today, not just with Shire,
but throughout my career. I do appreciate the value of those partnerships. We
want our hotel partners to understand our business and who owns the
relationship. I want to make sure the hotels, down to the property level, have
enough awareness that if a meeting organizer comes to them independently,
before they issue a contract, it is OK to alert us. This is beneficial to both
Shire and the hotels.
According to American Express Meetings & Events senior
vice president and general manager Issa Jouaneh, "The M&A environment
on the supply side is driving companies to [improve] visibility into overall
spend to inform their supplier negotiations. We are certainly seeing more
interest in leveraging transient and meetings spend."
CWT Meetings & Events' Wagner said he sees the same. "How
to leverage [total] meetings and transient volume is the biggest consulting
practice growth that we have."
Gaining that joint visibility relies on execution of the
basics: implementing strategic meetings management and travel management
consistently. Jouaneh said that even those in the implementation process can
reap some rewards, though. "We've seen suppliers open to a partnership
approach with companies that have a clear understanding and the ability
influence business to preferreds."
Wagner cautioned, however, that it doesn't happen overnight.
"You aren't going to launch the SMM in June, have the RFP go out in
October and get results in 2017. You need more data."
Monica Dickenson, head of meetings and events for global
biotech company Shire, started with internal partnerships and new policies when
she implemented her SMM program last year at Baxalta, a program that will be
cloned under Shire since the combination of the two companies was completed
this June.
Policy directs all meeting organizers to initiate business
through Dickenson's centralized meetings group. Should meeting organizers
bypass the centralized group, Dickenson has established check points with
legal, finance, procurement and travel management to identify that business and
pass it back to the central group.
She has partnered closely with travel management not only to
identify purchase orders for noncompliant meetings but also to tap into
transient hotel deals where possible. "We break down the transient program
to identify preferred properties that are appropriate for meetings," she
said. "If we need to bring on a new supplier, we also work closely with
the travel group on combined RFPs."
Still, Dickenson would like to work more effectively with
travel management by creating a "freestanding" group hotel program
and coming together with travel management for joint business reviews with
suppliers to truly leverage the volume of each other's programs. "That's
one of the next items on my road map," she said. She also wants to
integrate registration and booking technologies to increase control of the
booking and data pathways. "I see a lot of potential there," she
said.
Huffman took a different approach when she implemented SMM
at Cardinal Health. With transient data in hand, she's transformed Cardinals'
negotiating position by breaking down the silos between the two programs.
"Especially when we go out to the Marriotts and Hiltons
of the world, the total combined volume has been very effective for the RFP
process," she said. And not just for savings. With visibility into
travelers' needs on both a transient and meetings basis, Huffman has
negotiating some innovative inclusions to avoid unexpected charges.
"We've found that many of our transient travelers
actually have a need for conference space," said Huffman. "So when we
source for transient, we look for a level where our travelers can get up to two
hours of free conference space."
Meetings Globalization: Maturing into Duty
of Care
Huffman's approach to SMM was informed by another factor
that has influenced recent SMM implementations: globalization.
"We see this in a few verticals right now," said
Wagner, who added that many companies need to move quickly with this process. "Pharmaceutical
and healthcare because of the need to regulate, new technology companies
because they want to get that big marketing bang fast and also in the energy
sector because it's [a depressed market] right now and they see an opportunity
to optimize."
The push for globalization at Cardinal Health was initially
a regulatory play. "Cardinal had acquired Cordis, which held a lot of
congresses in Europe, and we needed to ensure that we had the right governance
in place," Huffman said. She had gone to the United States-based meetings
team, which decided to step back from globalization in Phase 1. So Huffman
started the implementation independently with Europe and Asia-Pacific. With
those regions up and running, the United States-based team has seen the
positive effects and has raised a hand to be included in the global program.
Beyond regulatory compliance, a huge part of that positive
effect has been on duty of care.
"With a globalized program that includes both transient
travel and meetings, there are no silos in spend or duty of care," said
Huffman. "I can bring in the [data] feed from transient travel, but I also
have the ability to work with our third-party [meetings company] that we use
for Europe and the Americas and bring that data into our security system. In
Asia we have multiple third-party providers that I pull into our system,"
said Huffman.
"This gives us a lot of visibility around group air or
if we have a program where we need to bring in security detail proactively. We
have access to all of that."
Attaining duty-of-care visibility has become a priority for
many multinational companies, according to Wagner. Controlling the data plays a
big role, here, making a meetings management strategy critical to success.
As an industry, though, Wagner said meetings and events need
to think even bigger. "Managing safety and security used to be [knowing]
who was on airplanes. It's not airplanes anymore. It's not even safety and
security in hotels," he said. "We are seeing great demand for duty of
care in terms of travelers but also for those attending locally. If there are
smaller meetings couched within a bigger event, do we know who's there? We need
to get our arms around that."
Duty of care comes at a cost. An SMM program predicated on
savings as the primary success metric may struggle to come terms with that. "There
is no ROI for companies doing a 25-person meeting to care about safety and
security," said Wagner. "I think there will be some shaking out of
that. Companies have to decide to prioritize."
SMM Meets Marketing
Taking a step back from meetings and looking at how
companies measure results, they don't start with operational savings. They
start with topline revenue. So is there a better metric than savings for
measuring meetings management efforts, one that supports that topline strategy?
American Express Meetings & Events' Jouaneh said the
whole picture is starting to change. "Our clients are looking at SMM as a
tool kit to support strategic business objectives," he said. "[They
are looking for] innovation in working with internal stakeholders to create
flexibility in solutions and service configurations. They want to balance
traditional tenets of savings, visibility and control with delivering on the
attendee experience."
Mobile meetings apps have become a huge part of that drive
to engage with the attendee—and establish touchpoints that go beyond the live
event, said Jouaneh. "There is a clear shift to mobile applications to
empower attendee engagement, pre-, during- and post-event, and there is more
desire for insights into how live meetings are driving business outcomes."
BTN's Strategic Meetings Management Survey reflected
that shift—to an extent. Similar to the
results of last year's survey, respondents deployed online registration at
higher rates than any other traditional meetings technology tool. Sixty-three
percent said they used them as part of their core technology stack. Asked
whether they had ever used a mobile meetings app, however, 73 percent said, "yes,"
but only for a fraction of their programs. They are eager to test the waters.
That result brings up a new question about meetings
management and technology adoption. Will mobile apps become the new gateway
technology for delivering meetings data? And what does that mean for meetings
management?
According to Wagner, it portends a larger shift toward
marketing and overall revenue generation as the focal point of meetings
management.
"When you look at SMM and marketing, there wasn't a lot
of data to pull out [until now]," he said. "The attendee registration
piece—[meeting organizers] just look at it as a way to automate the task of
planning the meeting." As mobile technologies have gotten better and
smarter, the data they generate has become more valuable.
Can't Mandate Meetings Policy? Look at Payment Process
Jill Huffman, senior
manager of global travel and meetings for Cardinal Health, needed to figure out
how to manage meetings without a mandated policy. Enter payment. Limiting
access to the purse strings proved an elegant solution. Here's what she did.
BTN: How did you get your hands on meetings
payment?
Huffman: Fairly
early in the process, I took over the governance of the meetings card. I worked
with finance to put limits on the payment vehicles so that any meetings payment
request would have to come back through my process.
BTN: What kind of limits?
Huffman: There
were three types of payment: travel cards, procurement cards and meetings
cards. I restricted the merchant codes on these cards so that travel cards
could only pay for air, hotel and car expenses up to $10,000 and could only pay
those categories. Procurement cards were the opposite: air, hotel and car are
restricted categories that cannot be charged on a P-card. Meetings cards,
however, are configured specifically for meetings and they have to come through
my process to get one.
BTN: That gives you a lot of visibility and data.
Huffman: I look at global meetings spend on a weekly
basis. We know what meetings are planned; we can shift business when meetings
are canceled, and we are able to capture the commissions, which helps pay for
the meetings.
"The data set you can get with the mobile app—you can
see how long attendees stayed in the session, you can track how they were using
the app features during the session to engage with the content or not to engage,"
Wagner continued. "Before now, we didn't have access to this data, and it
definitely wasn't making it back to the [customer relationship management
systems], the Marketos and Eloquas of the world. Now that we have the tools and
the data, SMM is going to evolve. It's always been a good value proposition,
with good savings and efficiencies. That's all good stuff. But companies have
meetings to grow the topline."
Small & Midsize Adopt SMM
As mature programs push the SMM practice forward, smaller
and midsize programs are reaping the benefits of lowered barriers to entry. The
BTN survey showed a larger percentage of small and midsize programs
working toward SMM than ever before.
For the smallest programs, perhaps those with fewer than 50
meetings annually that largely surround a headquarters city, certain practices
of SMM should apply. Companies clearly benefit from a risk and liability
perspective once they limit contract signing authority. Online registration,
another widely used facet of SMM among survey respondents with smaller
programs, can offer a task management benefit for any program. It becomes
questionable, however, whether tracking data for volume sourcing purposes is
worth the effort, according to Wagner. In the midmarket, though, it starts to make
sense.
"In the midmarket, SMM is trickling down," he
said. "They start purely in the venue sourcing space, and for many of
[these companies] sourcing equates to SMM. It can be a no-cost model through a
commission-based provider."
Whether the corporate meetings strategy will
extend beyond sourcing is a toss-up in the midmarket, but Wagner thinks they
should take a long, hard look at the opportunities. "If they learn the
market and expose that to their teams, they'll realize much more quickly than
their SMM predecessors that their work can drive revenue. Once they see this,
they'll approach SMM much differently than they might have four years ago."