Transcript Slide 1

Strategic Meetings Management
Peter Moen
Vice President, Carlson Meetings and Events
Strategic Meetings Management
I. Industry Changes
II. What is Driving Change?
III. What is Strategic Meetings Management?
IV. Where are the Savings?
V. What are my Options and Critical Success
Factors?
Meeting & Events:
A Fertile Ground
• Estimation of Meetings and Events spend is about 150
Billion US$ (35- 45 % of Business Travel spend)
• Historically meetings and events have been managed
individually and outside of the corporate travel program
• Rarely do companies have group and meeting data to
leverage with corporate travel data
• Meetings and Events often times is very nearly as much
as corporate travel, varies by industry segment
Group Policies
Percentage of companies reported to have…
Nascent
Stage
15 %
"No
formal
policy
Source: AT KEARNEY
Best
Practice
36 %
"No formal policy
but informal
guidelines exist "
29 %
"Meeting/Events
policy as part of
the T&E policy"
20 % 100
%
Embryonic
Meeting
Events Policy
Procurement Involvement
60%
Today
60
50
To what extent has
procurement become
involved in your
decision-making
process
40
30
18%
20
15%
10
0
None
Source: Prmedia Business
Minimal
Involvment
(<50%)
Highly Involved
(50+%)
Procurement Involvement
Future
60
50
To what extent has
procurement become
involved in your
decision-making
process
41%
40
27%
32%
30
20
10
0
None
Source: Prmedia Business
Minimal
Involvment
(<50%)
Highly Involved
(50+%)
What is driving this
Change?
Drivers of Change
• 9/11 – More control from Procurement
• Success of Corporate Travel Programs
• Sarbannes-Oxley
• Growth of the Internet
What is Strategic
Meetings
Management?
Three Major Travel Spend
Categories
Individual
Business Travel



Highly leveraged through
established supplier
programs
Big push to book
through the Internet
Typically consolidated
with one agency
Small Meetings

Arranged by
Administrative Assts

Booked as corporate
travel transaction

Little or no procurement
process for airline or
hotel selection and
contracting
Managed by Procurement
Large, Complex
Events



Involves attendee mgmt,
production, on-site
assistance
Typically managed Ad
Hoc
Separate procurement
process
Managed by Sales
and Marketing
Existing Process
Procurement
Process
Suppliers
Air
Fulfillment
Meeting/Event
Arranger
Meeting/Event
Arranger
Meeting/Event
Arranger
A different process is followed for every meeting
and event
Strategic Meetings Management
Procurement
Process
Suppliers
Air
Fulfillment
Meeting/Event
Arranger
Meeting/Event
Arranger
Meeting/Event
Arranger
Consistent Procurement, Delivery and Air Process
Where are the
Savings?
Corporate vs. Group
5%
15%
5%
5%
Air
25%
Air
45%
Hotel
Hotel
35%
65%
Corporate
Group
Much
higher
hotelMisc
(65% vs. 35%) spend in group travel
Air Hotel
Ground
Air

Hotel
Ground
Due Food and Beverage, Meeting Room, Audio/Visual
High
Yield business for hotels, can be used to leverage
transient rates
Misc
Procurement Process
Step 1
Meeting Requirements
Size, Type, Timing, Flexibility, Destination options
Step 2
Site Selection
Step 3
Bid Process
Availability, F & B, Room Rate, Function Space
Step 4
Concession
Negotiation
Room Rate, Meeting Room, Commission, F&B
Step 5
Contract Negotiation
Step 6
Meeting Operation
Air Analysis, Destination Scans, Final Specs
Cancellation Penalties, Attrition, F&B Guarantees
F & B Guarantees, Room Attrition/No Shows,
Audio/Visual, Activities, Billing Review,
Ground Transportation,
Following ALL Steps can generate 15% to 25% Savings
“Unmanaged” Procurement
Process
Step 1
Meeting Requirements
Step 2
Site Selection
Step 3
Bid Process
Step 4
Concession
Negotiation
Step 5
Contract Negotiation
Step 6
Meeting Operation
Provides leverage with Suppliers,
often these processes not followed
without a policy and process
Without Steps 1-3, very little leverage,
savings opportunity reduced
Without knowledgeable, experienced
on-site support, very little savings
obtained during meeting operation
Performing only Steps 3-4 reduces savings to <3%
Procurement vs. Operation
Step 1
Meeting Requirements
Step 2
Site Selection
Step 3
Bid Process
Step 4
Concession
Negotiation
Step 5
Contract Negotiation
Step 6
Meeting Operation
62% of savings generated following
all steps of Procurement process
38% of savings obtained during
Meeting Operation
Savings Breakdown
15-25% Total Savings Opportunity
Majority of
Savings are in
Hotel Negotiations
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1
Air
Lodging
F&B
Ground
Miscellaneous
Spend by Meeting Type
# of Meetings
Spend
8%
26%
18%
45%
74%
Low Medium High
29%
Low
Med High
Low Complexity, (74%) yields the lowest amount of spend (26%)
High Complexity, (8%) yields the greatest amount of spend
(45%)
Savings by Meeting Type
12.2%
14.0%
13.5%
12.0%
10.0%
7.8%
8.0%
6.0%
4.0%
2.0%
0.0%
Low
Med
High
What are my options?
Configuration Options
• Preferred Supplier
– Allow planners to choose between 3-4 suppliers
• Outsource to One Supplier
– Similar to corporate travel, leverage technology,
processes and dedicated teams
• Manage internally, central services
– Hire and manage process through internal
workforce
Estimating Spend
• What is our Meeting and Event Spend?
• What is the savings potential?
• What technology do we need?
• What is the cost of delivery?
• What is the Return on Investment?
Estimating Spend
Meeting spend is a function of total T & E expense
Step 1 - Estimate total T & E
T & E Spend
Total T & E Spend
Air
Land
Domestic
$ 22,000,000
$ 10,000,000
$ 12,000,000
Estimating Spend
Meeting spend is a function of total T & E expense
Step 2 - Estimate % of Meeting Spend
T & E Spend
Total T & E Spend
Air
Land
Est Meeting Volume @
Domestic
$ 22,000,000
$ 10,000,000
$ 12,000,000
25%
$
5,500,000
Estimating Spend
• Administrative Survey can also be used
– Helps validate the “top-down” calculation
– Helps identify stakeholders
– Needs executive sponsor to ensure high response
rate
• Questions will help identify # and type of
meetings
– How many meetings do you plan a year?
– What size are the meetings?
Estimating Savings
Savings is based upon spend categories
Step 3 - Estimate Meeting Spend Breakdown
T & E Spend
Total T & E Spend
Air
Land
Est Meeting Volume @
Meeting Volume Breakdown
Air
Lodging
Food & Beverage
Ground Transportation
Misc.
Total Meeting Spend
Domestic
$ 22,000,000
$ 10,000,000
$ 12,000,000
25%
$
5,500,000
$
1,375,000
1,925,000
1,650,000
275,000
275,000
5,500,000
25%
35%
30%
5%
5%
Spend Breakdown %
based upon
consolidated
database of spend
Estimating Savings
Step 4 - Estimate Savings based upon spend breakdown
T & E Spend
Total T & E Spend
Air
Land
Est Meeting Volume @
Meeting Volume Breakdown
Air
Lodging
Food & Beverage
Ground Transportation
Misc.
Total Meeting Spend
Potential Savings
Air
Lodging
Food & Beverage
Ground Transportation
Misc.
Domestic
$
22,000,000
$
10,000,000
$
12,000,000
25%
Total Savings
5,500,000
$
1,375,000
1,925,000
1,650,000
275,000
275,000
5,500,000
$
$
$
$
$
68,750
308,000
174,900
16,500
13,750
$
581,900
$
117,425
$
699,325
12.7%
25%
35%
30%
5%
5%
5.0%
16.0%
10.6%
6.0%
5.0%
Savings before Commissions
Hotel Commissions
$
6.1%
Savings %’s by
category are based
upon historical results
Meetings Technology
Program Management
Meeting
Request
Qualification
Procuremen
t Sourcing
and
Contracting
Invitation
and
Registration
Airline
Ticketing
Technology
On-Site
Execution
Post Event
Data
Consolidate
d