5 steps to success for Destination Management Companies

by Padraic Gilligan, Vice President, Ovation Global DMC

The debate about the future of Destination Management Companies has crossed the Atlantic and has generated good commentary on the pages at MeetPie, the  excellent on-line platform of CAT Publications, publishers of Meetings and Incentive Travel magazine amongst others. In his comment there my good friend David Dodgeon of Green Route Southern Africa directs a fair question at me thus:

Maybe Padraic could let us know what radical re-invention is needed on behalf of DMCs and what he believes are the core elements that are being replicated by technology? We as DMCs think creatively, delivering cost effective solutions and with second to none client service.

Here’s my list of 5 things that Destination Management Companies need to do in order to re-define and strengthen a value proposition that otherwise could end up being limp and flaccid.

1. Be service focused

David correctly mentions the “second to none” service standards that most DMCs deliver – working after hours to get information to a client in a different time zone, leading destination site inspections on a 24/7 basis, dealing with endless programme alterations, taking calls on your cell phone while on vacation etc. MCI’s Roger Tondeur, once a DMC himself, refers to the DMC as “the slave of the slave” highlighting, graphically, our unique service ethos as DMCs.  This service attitude is our bedrock, the heart and soul of our value proposition. We need to work from this space always, protecting, nurturing and cultivating this mind set.

2. Be a Destination Marketer

The sweet spot for DMCs is not so much local knowledge and expertise. While this is a given we’ve now seen how niche on-line agencies can easily replicate it [see previous post] It’s how DMCs deploy this local knowledge to create demand for their destination.  DMCs are professionals in the delivery of company incentives and know that corporate meetings and events are not an end in themselves but merely the means by which objectives are achieved. DMCs know how to position a destination to deliver on corporate objectives and thus are perfect destination marketers for the Corporate Meetings and Events sector. Being creative destination marketers is another core element in the DMC value proposition.

3. Create one or more additional businesses

When you look closely at DMCs who continue to prosper in these challenging times it’s nearly always because they have diversified and created ancillary revenue streams. Some have developed their creative production capabilities and are de facto event management companies; others have invested in equipment and offer extensive décor services; others have leisure departments; others handle large city wide conferences with PCO capabilities etc. I believe there are great opportunities in the area of technology both in terms of selling technology as a service (offering event registration, for example) and using technology as an additional distribution for unique products and services (offering unique destination experiences on Viator.com for example). This is the DMC as entrepreneur and is another key aspect of the new value proposition.

4. Create LTAs with customers

The fatal flaws in the traditional DMC business model is that you only get the business when it confirms for your destination and most programmes are once off. You build up considerable relationship equity with a customer and often with the customer’s customer but once the event comes to an end so too does their business into your destination.  DMCs should look at establishing Long Term Agreements with customers both for  on-going business into their destination but also for business outside their destination where knowledge of the customer’s business and is a key ingredient of for success.  It could be argued that when this happens the DMC is no longer a DMC but an Agency and in competition with its own third party customers. Bill Prosser of The Competitive Edge makes this point in his MeetPie comment and I agree with him. However, this is also inevitable in the disintermediated marketplace in which we compete.

5. Stop Bitching and Moaning

Regrettably once 2 or more DMCs get together in real time and space, the dark clouds of doom and gloom can quickly gather and a bitch fest often ensues faster than you can say “the bastard went direct”. Much of the verbiage and commentary in the typical conversation between DMCs has been churning and festering in the system for about 30 years and is as fresh and interesting as a Harry Fine joke (Sorry Harry!!!) We need to stop this endless, numbing chatter about going direct, stealing ideas, going to bid despite 10 years working together, being the seventh DMC to receive the same RFP and so on. We need to accept that our ideas will be sought but not purchased, our time will be engaged but not remunerated, we’ll be lied to, led up the garden path and jilted at the altar. The marketplace is as cruel and ruthless as the schoolyard except there’s no teacher or parent to run to with your tales.

Get over it!

Padraic Gilligan works for MCI and, with Patrick Delaney, heads up MCI’s destination services division called Ovation Global DMC.

He is currently ADEMI’s DMC personality of the year.

The Run DMC reference is a tip of the hat to some very clever commentary on MeetPie from a certain Hugo Ponsonby Smythe of PS Taker Ltd