For destination management companies, the acronym “DMC” just doesn't say enough. Indeed, according to the definition established by trade group the Association of Destination Management Executives, DMC should be DMEATSTM, for destination management plus events, activities, tours, staffing and transportation management — all based on local expertise.
Just as many DMCs today are enjoying the opportunity to broaden business with a wider range of services, they suffer from increased competition and a blurry image. Here, seven DMC pros weigh in on their challenges and their opportunities.
It's tough to find a “typical” DMC. “Clients say, ‘Destination management — is that meeting planning? Special events? Production?’ All those categories tend to spill over into each other,” says Mike Lyons, president and CEO of Philadelphia-based GEP Philadelphia, part of the Washington-based Global Events Partners marketing partnership of independent operations.
Compounding the problem, Lyons says, is the poor performance of amateurs. “A lot of people jump in and out of this business; the mom-and-pops give us a black eye just by calling themselves DMCs,” he says. “They're dirtying the water for all of us when they don't do a good job.” He battles back by positioning his operation as the “Tiffany” of DMCs in his market: “If I do an excellent job, my business will always grow and people will come back.”
Even worse than weak competition is strong competition. “As clients are aware, this is a buyer's market,” notes Sharon Siegel, president of Miami-based Deco Productions, part of the Chicago-based DMC Network consortium, with representation in more than 50 locations in North America. Clients are requiring additional quotes, “so that clients you have worked with for years now are getting additional bids. Therefore, you must represent your services, lower the markup, retain creativity with small budgets, while still focusing on clients' needs and the ever-changing image of the DMC within the industry.”
Siegel strives to meet the challenge by offering both traditional transportation logistics along with event capabilities. “By providing both transportation and event services, we have more creative and logistical control,” she says, “which also increases the success of a program. Because of ever-expanding in-house capabilities, which allow us to be more competitive in pricing — particularly in today's society — I believe that every year we are increasing our business.”
Jason Lusk, CMP, director of destination management for Baltimore-based event production company P.W. Feats, agrees. Feats operates its own DMC division, with nine employees handling roughly three events a month for groups from 100 to 400. “A lot of DMCs have event partners,” Lusk says. “We have them in the office next door. We can provide one bill for the client.”
The Feats DMC division is strong enough creatively “that if an event is small enough, we'll produce it,” rather than sending it to the event side, Lusk says. “An event planner can spend its time much more wisely doing a huge event, but if it's just entertainment, linens and centerpieces, we can handle it,” he notes. “The client is paying for the appropriate amount of services.”
Many DMCs are feeling the pressure to expand services rather than to specialize. “The economy is such that many inexperienced planners utilize our proposals for information, and then call the suppliers directly once we have given them a suggestion,” notes Madelyn Marusa, vice president of industry relations for San Diego-based PRA Destination Management, with franchise operations in 13 U.S. cities. “The successful DMC will need to grow their product line. Maybe it is doing entertainment or entertainment production or online registration or meeting planning. To survive, we must truly be a one-stop shop for everything the hotel cannot provide, and then some services that they can — perhaps just not as well.”
With the pressure to do and be more, can independent DMCs compete with nationwide franchises and consortiums? It depends on whom you ask.
“I certainly recognize the importance of DMC networks and the information and lead exchange that they offer,” Lusk says. P.W. Feats, he notes, is considering applying to become a member of a contract DMC soon.
Although she describes her company as a “boutique” DMC, Sacco & Associates managing director Patti Sacco sees “tremendous value” in DMC networks. From her headquarters in Scottsdale, Ariz., she operates a satellite office in Syracuse, N.Y., and has network partnerships in four U.S. cities and one in Mexico. “With established partnerships, business opportunities are endless,” she says. “I do believe you must work with companies with reputations and backgrounds as [strong as] your own company. I always do a background check on the companies I partner with.”
But some see power in independence. Pat Schaumann, CSEP, CMP, president of MAC Meetings and Events, oversees a St. Louis headquarters and branch offices in New York, Seattle and San Jose, Calif. Although she says that DMC consortiums offer networking opportunities and lead generation, “My 21st century philosophy is that the DMC industry has changed, and that many DMCs have become large companies that should be able to generate enough revenues and referrals through their reputation,” she notes. “I maintain many good friends in consortiums and respect their decision to be part of these groups, but a growing trend is for clients to want their relationship-driven DMC to do their programs in other cities, or at least to act as a consultant on their programs, and consortiums prohibit DMCs from working in locations outside their own cities.”
Even large DMC operations have had to adapt to the sour economy of the last three years.
The sharp downturn of corporate meeting business in the San Francisco Bay area has challenged the San Francisco office of USA Hosts Destination Services. From its headquarters in Las Vegas, the company owns and operates 12 offices and has contractual partners in 12 more cities in North America, plus 14 partner relations abroad. As a result of the downturn, says San Francisco office vice president and general manager Don McPhail, “Other markets that have always been important to us, such as associations and incentive houses, now provide a larger portion of our business.” He adds that this pattern holds in several cities in which USA Hosts has operations.
Key to serving these segments has been USA Hosts' reputation for producing “exceptional” special events, McPhail says. “This has helped us increase market share in most of our destinations, despite a slightly reduced market base.”
So when an event planner is looking for a DMC, what's the best place to start? “Try to find a human being to listen to your question, or ask you about your goals during your visit,” McPhail advises. “Try to find someone who responds with personalized information and stands accountable for the results. That's what DMCs do. The larger the gap between automated check-in and personalized service, the greater the opportunity for a DMC to provide that service.”
RESOURCES: Deco Productions, 305/558-0800; GEP Philadelphia, 267/514-2727; MAC Meetings and Events, 314/421-2005; PRA Destination Management, 760/496-0540; P.W Feats Inc., 410/727-5575; Sacco & Associates, 480/483-5037; USA Hosts Destination Services, 415/986-2202