Friday, 25 July 2014 00:00

Foreign PCO vs local DMC

At present, all industry associations claim to support professional ethics, but in case of adispute there are no parameters for reaching the verdicts of arbitration. The aim of this series of case histories is to identify benchmarks for the profession and permit the crossover from theoretical statements to concrete application of Ethics.

by Rodolfo Musco, CMP, CMM

The phone rings. A colleague – a meeting professional based in Central Europe – sounds frustrated and anxious.

“I am losing a very important client of mine because of a very negative experience that happened during an event in South Europe. You are a veteran in our industry, and I do hope that you will agree to give me advice on how to solve this problem. Time is a critical factor, and a legal international dispute can take months and years, as well as a lot of money”.

“As a member of one of the Associations of the Convention Industry Council, you can utilize the services of the alternative dispute resolution group”.

“It takes time and money as well”.

 “Then, tell me the problem, and I will try to give you some advice”.

“Last January my best client committed me to organize a conference for 200 people in South Europe.

As usual, I looked for a good and professional DMC in the city chosen for the event. The membership directory of the two most important industry Associations were beneficial for this step.

After the first approach, I sent a detailed briefing to the DMC, receiving fair proposals for venues and services.

We agreed on the time for the site inspection, including a joint checklist to site and contents for a social program consisting of a full day excursion to enchanting spots.

During the site inspection, I only needed to request changes and assessments to the program proposed by the DMC, and I was glad to notice that it was in line with the briefing and the client’s needs.

Participants flow to the Mediterranean destination at the end of April. The conference worked well, and the services were provided at a good standard.

The day of the social program arrived, and the participants boardedthe five busses, looking forward to the beautiful places advertised in the conference folder.

The problem

It took three hours to reach the area. We were supposed to sea the beautiful coast, but a long line of cars and busses was hiding it. It seemed that all natives were on the road. The weather was beautiful and it was… May 1st, Labor Day, the spring’s national holiday that brings millions of people to the shore.

The guides did their best to keep the guests quite. The restaurant was only a few kilometers away, on the hills, and from its terrace the breathtaking vision would reward the many hours spent on the bus.

Twelve kilometers with twenty five narrow curves. The busses needed to maneuver three or four times at each curve, taking more than one hour to drive the short distance.

The Mediterranean food and the good wine created a miracle which let guests forget the more than five hour drive.

But the worse was still to come. A sightseeing tour was scheduled in the afternoon. The road was totally blocked. Once they reached the lovely township by the sea, guests refused to get on the buses with the knowledge that they would have to stay five to six hours on them to reach their hotel.

It was becoming dark when a solution was found: a hydrofoil was rented to take the guest to the closest city by sea, from where they could take a train to the city of their hotel.

The results

The following day the group flow back to Central Europe, and the comments were not such to make a conference organizer proud of his performance.

My client considered his investment lost, as he did not reach the objective of motivation that was expected by moving the conference from our country to a sunny one.

Of course, he refused to pay for the poorly organized day tour.

On my side, I did not pay the balance of 10% of the total account, and asked the DMC for a proposal to clear the file.

The DMC’s position

The DMC insists that I pay the balance of the total bill, plus the extra costs for the incidentals to take participants back to the main city. He states that I was aware of the itinerary and the selected restaurant and tour, so the final choice was my total responsibility.

It has now been three months that we have debatedthe question, and in the meantime, the DMC has contacted my client and requested payment for the final invoice amount.

Of course, my client refused to make the payment. Nevertheless, this last move increased my client’s disappointment”.

I reacted promptly. Passing the list of the members of the international industry association that included both parties of the dispute, I focused on two members well respected in the market.

The first was the current president of the national chapter of the association, and a well respected hotel manager. The second one, a travel agent, was serving the national federation of travel agencies as its vice president.

I called the two colleagues on the phone and asked them to join me in an arbitration. They accepted.

Then I sent an email to the president of the DMC, informing him of the request received to arbiter the dispute. I explained that I had no power to judge, unless the two parties agreed on an alternative dispute resolution. I also informed the DMC’s president about the two people that I was recommending to include in the arbitration group, giving him the full right to accept all or to accept the arbitration while proposing an arbiter chosen by himself.

He agreed in writing, and I requested a written explanation of the circumstances surrounding the event from both the conference organizer and the DMC.

In a couple of days I was able to circulate the statements to the two “colleagues” composing the arbitration group with me.

The arbiters’ judgment

There was no doubt that the social program was a disaster from the motivation point of view.

Whose fault was it?

The itinerary was suggested by the DMC, but was approved by the conference organizer.

Stated in this way, the conference organizer should be considered as having the final responsibility of the bad results. However, two elements were pointed out:

  1. What was the discrepancy between the moment of the site inspection and the day of the social program?
  2. Who should know the special conditions of the traffic during the day scheduled for the excursion?

1) Site inspection and delivery of the program

The site inspection was conducted in February, during a weekday, using a fast and comfortable car that could easily drive to the restaurant on the hill.

Both parties were considered guilty in not realizing that a bus cannot drive at the same speed and cannot maneuver sharp curves like a car.

Both parties were considered guilty in not producing a contingency plan, as professionals should do for each segment of each program.

2) Special traffic conditions on the chosen day


The DMC was considered guilty for not evaluating the expected conditions of traffic on the special day chosen for the excursion.

May 1st is a special day in South Europe. People leave the metropolis to enjoy the mid Spring and early Summer. It is usual to have lunch in scenic off-road restaurants with relatives and friends. Each country has its habits, and a DMC should know it and appropriately advise the client.

Good alternatives were available a shorter distance from the main city, and this might have reduced the travel time even on this special day.

Also, a program change could have been suggested, scheduling the working session on May 1st, and the social program the day before.

Finally, the DMC’s action to refer directly to the organizer’s client was considered unethical.

The verdict

The parties accepted the verdict, and the DMC reduced the cost of the excursion and the extra costs from the invoice.

The conference organizer paid the balance.

The whole arbitration process took less than two weeks and the dispute was solved.



Its seems that all of a sudden DMCs are growing up as mushrooms.

Ten years ago, simple travel agents started to write on their shop windows “Incentives”, trying to capture a bit of this special market.

Nowadays they write “DMC” on their company letterhead and business cards, but all they can do is to provide logistics services.

What is a real DMC? First of all, a DMC cannot be a one-man organization. The “C” of the acronym stands for “Company”, and an individual is not a company.

Harry Baum is considered the originator of this specialization, and he assisted me in preparing a seminar released on behalf of the MPI Italia Chapter. Here are the keynotes.

Definition = A DMC is a organisation dealing with tourism and specialised in planning and managing meetings and incentive travel programs in a defined area on behalf of incentive houses and meeting professionals based in another territory.

Roles = A DMC is not a ground operator, nor a travel agency. A DMC is managed by a meeting planner and an incentive travel specialist who knows the standard of the specialisation and can interface with his client in order to produce ideas and solutions, completely in step with him or her.

What should a DMC offer = A deep knowledge of the territory of his specialisation; a deep knowledge of the event planning standards; a deep knowledge of local suppliers and third parties; flexibility; creativity; commitment to contribute in realizing unique events.

The tools of a DMC = Quality of services delivered; quality in the event management; rapidity in providing solutions and feed back; transparent costs and rates; membership of international industry associations.

The concept of “destination” = Even though it is impossible to determine the extention of a DMC’s “destination” knowledge, occasionally a DMC can be ineffective in too wide an area. The territory of its influence is the one in which all “values” have been researched and mapped, in order to be ready to provide suggestions and appropriate solutions without incurring a client’s risk.

This means that a DMC is very seldom a “country management company”, with the exception of small countries.


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