FAQs on Tapping Lucrative Incentive, Meetings Biz

Like many travel agents, Ladica Javanovski, ACC, sees meetings and incentive travel as a natural progression of her growing travel business. She opened Paradise Cruises & Tours in Shelby Township, Michigan in September of 1993 as a cruise and vacation-oriented agency. To accommodate her clients, she became ARC and IATAN appointed in 1994. However, a few years ago, she decided that she did not need to be affiliated with ARC and IATAN, electing to remain a member of CLIA. Her agency specializes in complete vacations on land and sea.

But that isn’t enough, said Javanovski. “We believe that incentive travel is making a comeback, and will be a growth area in travel.  Companies are starting to bring back incentive travel, because they know it’s the best motivation tool they have.  With our group experience, it will be a natural complement/progression for our agency. Incentive travel is dominated by a few large incentive houses, and we believe that there is room for agencies that specialize in just incentive travel and no merchandise.”

The move into incentives is not without trepidation, she said. “We are confident that we will do a great job arranging incentive travel for our clients. But we are concerned about being compliant with laws such as Sarbanes-Oxley, even though we believe that the clients’ accountants would handle that issue. We feel we need to learn how to market our agency, and how to acquire clients.  We need help with marketing materials.  We need to understand how corporations purchase group incentive travel.  Also, we need help with fees; what may we charge for and how much.”

Debi Scholar

These are realistic but easily surmountable concerns, said Debi Scholar, an industry consultant. While meetings were waning over the last 1 ½ years in many industries, the meeting volume is escalating again making this a good time to get involved in this part of the business. Here are her answers to common questions from travel agents who are thinking of moving into meeting planning:

What are the benefits?

Travel agencies can increase revenue, expand business relationships and improve service by offering meetings, events and incentives to their offerings, said Scholar. 

“Meetings forge new relationships in an organization. For example, I was helping one agency who started servicing the Human Resources department with one meeting but when the Marketing and Technology departments heard about the successful meeting, they turned to the same agency for meeting services,” said Scholar.

“When an agency provides meeting services, it may lead to other prospective business such as helping the organization write a meeting policy, creating a crisis management plan, calculating carbon emissions or instituting virtual meetings.  Today, agencies are providing these services and making money doing so,” she added.

What is involved in meeting and incentive planning?

“Many components make up a meeting strategy, such as governance or oversight of an entire meeting program, site selection and sourcing, meeting planning, meeting technology, invoice reconciliation and payment and compliance tracking. By adding these services to their catalogue of expertise, an agency can penetrate new business from existing, loyal clients.

“Meeting, event and incentive needs tend to creep beyond the original scope. For example, one hotel may be secured but if more attendees register, a second property may be needed. More ground transportation and onsite assistance may be needed. All of these transactions are revenue-building opportunities,” she said.

“Once an agency is in the door, more services may be requested such as project management, content development and policy creation.  Keep in mind that some organizations may go out to bid for their meeting sourcing/planning company while others may select suppliers on a meeting-by-meeting basis. Regardless of the method that they may use to select a supplier, the criteria they most often use are service, geographic support, skill set, attention to detail, savings ability, risk reduction, compliance tracking, flexibility, consulting abilities and cost of the service.”

Agencies should be aware that meetings are visible and under scrutiny due to Sarbanes-Oxley (“SOX”), PhRMA and other regulatory requirements. For example, SOX requires clients to select meeting planning and third party suppliers fairly so you may be required to use request for proposals (RFPs) for ground transportation and others suppliers. Because all legal records must be retained and auditable, hotel and other supplier contracts may need to be placed into the client’s contract management system.”

What do agencies need to know about Sarbanes-Oxley (SOX)?

Using an agency is one way corporations can further ensure that they are following Sarbanes-Oxley (SOX) requirements, according to Scholar, who noted that while SOX only applies to companies that file reports with the Securities and Exchange Commission, many nonpublic companies have adopted the guiding principles. “Specifically, Section 404 requires management to be accountable for financial reporting, code of ethics and internal controls. I used to tell my meeting planning team, “if you wouldn’t feel comfortable with your actions or communications be displayed on the front cover of the Wall Street Journal, then you better rethink what you’re doing.”

Scholar said that an agency’s skills actually can assist clients in adhering to SOX guidelines. Regarding financial controls, experience with hotel cancellation penalties may benefit an organization when securing a venue for a meeting.  “An agency with meeting planning experience will ensure that the hotel contract contains language protecting the client if the meeting is cancelled or if the quantity of attendees is less than expected (attrition).” 

Regarding ethics, an agency’s experience with ground transportation, for example, may benefit an organization by managing the RFP effort when selecting ground transportation suppliers for a meeting, she said. Plus, an agency’s experience with managing and storing the meeting proposals, expenses and contracts will benefit the organization for internal control/audit purposes.

How do I find clients?

Just as it is a natural progression for leisure agencies to add destination weddings, parties and family reunions to their offerings, it is logical for corporate agencies to add executive meetings, conferences, incentives and training meetings, said Scholar.

If the client has centralized their meetings under a shared services organization structure, the best place to start is with the Travel or Meetings Leader, Finance, Operations, or Procurement, said Scholar. “However, many organizations do not have their meeting processes or operations under control.  In those clients, the best contacts are often Marketing, Human Resources and Training & Development. Often, these are the companies that most need help planning their meetings.”

How does pricing work?

There are many ways to price meeting services, said Scholar. These include menu-based pricing on a per-person basis, a fixed-based fee, cost per dedicated resource, time and materials, commissionable, cost-plus and pricing on a contingency basis. “There are pros and cons to all pricing scenarios and it really depends on the services included, the complexity of the meeting, and the resources required.  A consultant or meeting planner can help you determine the most advantageous pricing model to ensure a win-win strategy for your client and you.

How can I acquire the needed expertise?

Some agencies are leery of handling meetings and incentives because of the complexity in services, compliance requirements, pricing and support, said Scholar. “Partnering with a good meeting planning agency, adding a meeting planner, or consulting with an expert may be the key to a successful solution before approaching your client. 

Scholar noted that Acclaim Meetings (www.acclaimmeetings.com), a b2b meeting planning company, offers a range of services. “Travel management companies and agencies who want to launch or grow their meetings business can use Acclaim’s complete meeting planning service in which a team of experts becomes an extension of your operational staff and functions as your behind the scenes partner,” she said, noting that the company also can pair travel agencies with independent meeting planners who can join the agency’s staff as independent contractors, handling the business and lending their expertise.

Acclaim also offers educational and marketing tools for agents who want to develop this as a specialty, she noted.

Additional resources for those looking to learn about strategic meetings management and meeting planning are available from the National Business Travel Association (www.nbta.org) and Meeting Professionals International (www.mpiweb.org), Scholar said.