Friday, 25 July 2014 00:00

Problems among players. Who is right?

Players in meeting organization are several, and each of them may have a different concept of Ethics. That is why international industry associations should frame the subject in order to better define what is ethical and what is not.

by Rodolfo Musco, CMP, CMM

Who are the players interested in the organization of a meeting or an incentive travel programme? Let us try to identify the answer to this basic question.

At the top of the list there is the conference initiator, the organization – public body, association, private company, etc. – that decides to promote a meeting to achieve defined objectives (communication, motivation, spread of knowledge, etc.).

At the second level there is the conference organizer, the professional that knows how to combine the ingredients for the highest ROI (return on investment) from the meeting for all the stakeholders.

 Both the conference initiator and the conference organizer may dialogue with delegates, participants and speakers.

Generally speaking, the possibility of bad practice in the relationship between these players is a remote one. On the contrary, many problems may come out between the conference organizer and the other players, such as:

  • The management of the conference venue and their staff
  • The “third party suppliers” and their staff (air lines, DMCs, A/V equipment suppliers, caterers, ground transportation companies, production companies, etc.).

Each category of players have different needs and business practices, so that misunderstandings and conflict of interests may easily arise.

Clear contracts are the basis to avoiding problems, but the rhythm of business does not allow for spending money and time to cover all the aspects of practice, mostly for meetings that must be organized in a short time.

In case of dispute, arbitration is a good alternative to the standard legal process, mostly among groups that operate in different countries. Case studies are important to orient arbiters in the process of their judgement.

Here are two new cases. The first of them covers problems between a meeting manager and a DMC. The second highlights a strange case among two meeting managers and the management of a conference venue.

CASE SEVEN: “BUSINESS IS BUSINESS”[1]

The incipit of the story is similar to many cases: a message by internet brings the good news that an American company has decided to launch a new product in Europe and has accepted the proposal of the European conference organizer. The chosen site is one of the four proposed in different European regions.

The conference organizer was diligent to propose sites after basic negotiations with conference venues in order to identify costs, availability and meeting the needs of the specific event.

Deep analysis of accessibility and travel costs was included in the proposal, so that the organizing process did not start from the very beginning when the good news reached the conference organizer.

An alliance for success

The conference organizer is convinced that no one knows a territory better than one who lives in it.  A good alliance with a professional DMC is important to avoid risks and to increase the chances of success.

With this in mind, the conference manager called a colleague based in the area chosen for the conference.

“I have been requested to manage a conference for 650 participants. It will take place in your area. Shall we cooperate on this program? As you know, I work on a fee basis. I offer to share duties and the professional fee on a 70 – 30% proportion. The total responsibility will be mine, and I will serve the program with three of my most experienced meeting coordinators. I have already negotiated five hotels, including the one with the total conference capacity. The number of participants is increasing, so that I need a sixth hotel. Can you negotiate with the 4 star hotel that was closed during my site inspection and secure 80 guest rooms?

I will manage directly the social program, the signage, the pre-event communication, the on-site communication, the data base of participants, the rooming lists, the set up of conference rooms, the F&B functions and the A/V equipment.

You should take care of transportation from the airport and the train station to the hotels, the welcome desk, the companion’s leisure program and the dine-around for the first evening.

I am ready to provide you with all the notes and accounts, so that you can monitor each penny in and out for a clear share of the margin.”

The answer of the DMC was enthusiastic: “We’ve know each other for fifteen years, and we adhere to the standards of the two top industry associations. I am sure that the meeting coordinator that will manage this program from my side will learn a lot from you.”

A written agreement was signed.

Everything seemed to work well, besides the fact that neither a written contract with the sixth hotel nor a contract with the bus company was provided before the conference.

During the last site inspection, the detailed event plan was agreed to with the two meeting professionals and the 3 meeting coordinators.

The problems

During the two weeks preceding the conference, the manager of the DMC was… abroad. She reached the site of the event on the evening of the first day, when most of the incoming work was done, including the dine-around arrangements operated by the meeting manager.

The meeting coordinator provided by the DMC had a hard time putting together all the pieces of transfers and the welcome process alone, so much so that the three meeting coordinators assisting the meeting manager were overloaded with extra responsibilities, including the briefing to the hostess assigned to national delegations and hotels.

The meeting manager worked with his staff to review the transportation plan from the hotels to the airport and train station, and obtained a consistent reduction in the number of busses and hostess involved.

The worst issue was that at the end of the meeting the DMC never provided the basic information for the accounts included in the invoice.

An easy review showed that the rates of the sixth hotel and of the bus company were marked up by 20%, in spite of the written agreement to work on net rates and share the professional fee.

There will not be future cooperation between the two professionals, of course. The most unfortunate situation is that the manager of the DMC is still a member of the two leading industry associations.

CASE EIGHT: WHEN THE HOTEL MANAGER DECIDES TO ACT AS A CONFERENCE ORGANIZER

The national branch of an international company operating in the real estate business, gets together all its brokers and consultants once a year for a convention.

For three years in a row a conference organizer is committed to take care of the event. The commitment includes the collection of participation fees and all the financial relationship with the conference hotel for the logistics.

The financial report of the last convention was not clear, and the client company has decided not to renew the commitment to the same conference organizer, in spite of the fact that the venue for the next conference had already been researched and announced to participants.

A new meeting manager was selected and hired. His first task was to visit the selected venue and re-negotiate all services according to a new program.

In fact, the new meeting manager is more experienced than the previous one, and is more familiar with the American way of defining a program for such an audience.

The re-negotiation was managed six months before the event, based on the fact that no contract was signed to bind the company to the conference hotel.

Packages

During his site inspection, the meeting manager found out that two breakout conference rooms did not meet the technical requirements needed to secure the success of the session. He also notified to the venue’s GM of the decision to place one of the dinners off property.

The owner and GM of the conference hotel appeared reluctant to provide revised rates. It was not difficult for the experienced conference organizer to find out that the hotel was somehow linked to the preceding organizer.

“I understand that you consider this business taken by my predecessor in this commitment. I assume that you think it ethical to give him a finders fee. This may be the reason for you not to discount the dinner that we are now planning off property, but, please provide me – or the client company – with the splitting of rates, so that I can suggest the appropriate cost combination for the early birds, the on site registrants, etc. The rates breakdown will also allow me to administer prepayments and all the financial aspects of this convention”.

“Sorry, but your predecessor said that I will manage the registrations and collect all the payments. That is why rates have been provided as tourist packages: two different  flat rates, one  for a three-day program and one for a two-day reduced plan. I cannot agree to remove myself from managing the registrations because I need to pay commissions to the gentleman that brought the business to me.”

“What about all the information that must be included in the database for the correct administration of the convention, the pre-event communication, the registrations to seminars, to the social program, and all the rest?”

“We are planning to transfer to you the information on a weekly basis”.

“Are you organized with on-line registrations? If not, what is the software that you use for the registration data?”

“We work with the software for the hotel management, but can provide data as a Word format”.

Who is guilty?

It is easy to define this case as a unique one. However, so called professionals that take advantage of some firsthand information are more prevalent than one wouldthink.

The conduct of the former conference organizer is not much different from the English organization that has registered internet sites that have the appearance of as local convention bureaus for many European and North Africa cities[2].

Unusual would be the description of the conduct of the hotel owner and GM: he pretended to act as a conference manager without having a competence in pre-event communication and all the procedures for the correct management of breakout sessions, facilitators, confirmation process, etc.

Useless to say that the “new” conference manager decided to reduce his fee in order to avoid the damage of changing the site of the conference. He also decided  to take full charge of prepayments and collection of registration fees and accommodation rates in order to manage data for the best results of the convention.

Why are associations so far from understanding the real problems that impact their members?


[1] Other case studies have been covered in the same magazine in years 2003 and 2004.

[2] See the case history number five presented in “.IT” # 2, 2004

 

 This article is copyrighted. Any partial or total use of its content without the authorization and the reference of the autor will be prosecuted by SIAE, Editors and Autors Society
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