Recently, the sales director for a U.S. company was stunned by a request from a New York City-based DMC for payment to cover site inspection costs.
“Is this a new standard or something peculiar to the New York market?” she asked her LinkedIn group. In response to her query, several U.S. DMCs said they charged prospective clients for site inspection costs, which were rebated when the event was executed. An unscientific quiz of Canadian destinations and suppliers drew mixed responses. Some were gobsmacked by the idea of charging for research. But since hotels and airlines have instituted a whole series of add-on charges to their services, why should we be surprised when suppliers try to recoup some of their costs?
Catherine Morellon, media manager at Tourisme Montreal, was surprised to hear about the U.S. sales director’s experience. “Montreal doesn’t charge any fees and doesn’t plan to ever change that,” she says. “Actually, we recently issued a new value proposition stating our will to be even more service-oriented. When in Montreal, they are our guests, and we really care about being the best hosts.”
According to Lynn Chiasson, assistant director of sales for the Quebec City Convention Centre, neither the convention centre or Québec City Business Destination charge for site inspections or FAM trips. However, clients are asked to pay for their plane tickets upfront, and are reimbursed once they’ve visited. “As you know, no-shows and cancellations can be quite pricey for destinations, carriers and hotels,” says Chiasson. “This [policy] minimizes money ‘lost’ due to cancellations. It also gets the client more invested in the process.”
Krista Cameron, director of sales at Destination St. John’s, says the cost of “no-shows” has been an on-going, growing discussion across the industry.
Jennifer Holly is the chair and founder of Meeting of the Minds, a group of 27 Canadian destination marketing organizations (DMOs) that get together regularly to discuss the meetings industry. She reports that the problem of no-shows—for FAMs, site inspections and in-market events—is a subject that comes up often when the DMOs meet.
It’s a problem that Holly has first-hand experience with. In a previous position, she organized an event in Toronto that 192 clients registered to attend. Only 72 showed up. Aside from the disappointment was the f&b waste. And even when a group has f&b to donate to a homeless shelter, that carries a cost for the food as well as the safety approvals for the donation and its transportation to the shelter.
Without naming names, representatives from 15 Canadian destinations supplied their comments, thoughts and experiences on research costs. First off, none of the destinations charge clients for FAM and site inspection costs. However, while destinations allow clients to send one or two representatives, they all expect that costs for any additional person would be covered by the individual, not the host. In some instances, if the site inspection is during a particularly busy time for the city—maybe a client is hoping to tag onto a big event—hotels may charge for the room, but credit that back if the client selects them as a host property.
Like Québec City, several destinations ask guests to book and pay for their own flights. The tickets are reimbursed on the site. This has gone a long way to reducing client cancellations. The problem of no-shows varies. As much as all invitees are qualified by the hosts, no-shows and last-minute cancellations happen. Some destinations have no-shows occasionally, while others say it happens all the time.
One destination rep said they regularly experience as much as 30 per cent no-shows for FAMs. Another destination, which isn’t in the market often, averages a 10-15 per cent no-show rate. Others have had cancellations a day out. One host said, “I booked a flight, hotel and registration for a client to attend a FAM last week. The client RSVP’d and confirmed she was attending. My credit card was used and all payments were final except the hotel room, which could be cancelled. Three days prior to her flight, she sent an email stating that she could no longer attend as she was busy with work. I am now out $1,000 for the cost of the flight and conference registration.”
No-show losses can be small (an airline’s $75 name and date change fee) or substantial ($300-$1,000 for cancelled flight, plus food and beverage, gifts, tickets to special events, as well as staff time).
These are direct losses costing some host organizations thousands of dollars a year. The bottom line is that suppliers would appreciate clients embracing a kind of standardized industry etiquette for invitation acceptance and cancellations. “ASAP” is preferred, followed by at least two weeks notice.
Suppliers know that life happens, but would appreciate if everyone observed an Events Golden Rule: Do unto other planners and suppliers as you would have delegates do unto you.
– Allan Lynch is a freelance journalist based in New Minas, Nova Scotia. He writes extensively about the business events industry.
