Little headway made in saving meetings costs – ITM
Meetings, conference and events spend is still some way from being conquered by organisations seeking to consolidate their meetings and “transient expenditure”, according to the Institute of Travel Management.
A survey amongst the ITM’s panel of 120 business travel buyers, who collectively make up more than 40% of the FTSE Top 100 companies, found that the emotive nature of travel is even greater in the meetings sector.
Stakeholders and the role of meetings in the achievement of wider business objectives make the commoditization of meetings harder, according to the research.
ITM Executive Director Paul Tilstone said: “With meetings there are more opportunities for things to go wrong on a grander scale. So it’s not surprising that whilst 65% of travel buyers also manage meetings, 67% manage conferences and 60% manage events expenditure, few have made real headway in terms of savings, policy or compliance.”
Traditional travel management companies have not overtaken specialist venue find and event management agencies in popularity amongst buyers despite the trend towards consolidating expenditure.
Although 60% deploy a combination of the two, 41% of survey respondents rated their specialist meetings agency as “excellent” or “good” compared to 25% for the equivalent service provided by a TMC.
“This is being driven – in part – by the lack of online meetings technology, especially amongst TMCs,” Tilstone claimed.
“It is clear that there is limited control on MICE expenditure through policy, authorisation processes and compliance measurements. Perhaps it is this first step of putting controls in place and measuring activity and spend which needs to happen before consolidation to a single booking methodology can occur.”
The survey also highlighted a need for greater transparency. Venue sourcing agencies are remunerated through a combination of hidden commissions (12%), transparent commissions (14%), transaction and management fees (18%) or a combination of both commission and fees. But almost a quarter of travel buyers are unsure how they pay meetings suppliers.
Tilstone said: “As procurement takes over meetings management of MICE, transparency will be vital to quantify return on investment. Because the largest element of meetings expenditure comes from hotels and specialist venues, which still work primarily on commissions, business travel’s move to manage that expenditure could drive intermediaries to remove commissions from the equation, thereby bringing hotels and venues in line with airline inventory.”
Colin Goldney, managing director of ITM research partner Argate Consulting claimed there were massive opportunities in the sector.
“With so many companies using a TMC, developing services in this sector could pay dividends for the TMC community. If TMC’s were to focus on their meetings offering they would almost certainly ride the wave of travel buyer consolidation,” he said.
by Phil Davies
Phil Davies
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