I started working full time in the hospitality industry in 1993 and have spent the majority of my career working for major global hotel brands such as Hilton, Marriott and IHG. Recently I’ve joined Conference Care, a leading UK Venue finding and event management company, as Sales Director. A colleague who also works in hotels commented, slightly tongue in cheek, that I’ve gone over to the dark side. This has prompted me to think about the three-way relationship between venues, agencies and customers that touches all of us within this industry and now, more than ever, this will lead customers to consider, what value does my agency add?
My passion for the meetings and events business was first ignited by my first ever job as Sales
Co-ordinator at the Hinckley Island Hotel in Leicestershire. We were an unusual venue in that we had two main meeting rooms that each had a capacity of 400 people. Watching the elaborate sets being built and then watching our Conference Services Manager, Sue, run these events with the precision of a military sergeant major really gave me an insight and an understanding of how to sell this space to customers both from a sales and operational perspective. Fast forward a few years to the 3rd of September 2001 and I started my dream job, Sales and Marketing Manager at the Marriott Forest of Arden in Warwickshire. In three weeks’ time, our nearest competitor, the Belfry, was due to host the 2001 Ryder Cup, an event with a great sporting tradition. The Ryder Cup was set to be an amazing event for the whole of the Midlands area. The immediate impact on our 214-bedroom hotel, much to the delight of my GM, Heiko Figge, was that we were due to deliver a record month in turnover for Marriott. And then, on the afternoon of Tuesday 11th September, the terrorist attack on the twin towers happened. It had a global impact on the hospitality industry. The Ryder Cup was postponed to the following year, many events were completely cancelled, others postponed. Marriott, to their credit (they had a hotel in the twin towers and a number of Marriott colleagues died in the attack), instructed their hotels to be understanding in their customers cancellation requests and agreed not to charge fees, given the unprecedented circumstances.
Fast forward 19 years and I’m again starting a great role in the midst of a global crisis. This time Covid 19 has brought ours and many other industries to their knees.
So, let’s start with a few facts and figures. According to The Business Visits and Events Partnership (BVEP), the UK events industry is worth an estimated £70 billion per annum. This incorporates conferences and meetings, corporate hospitality, outdoor events, exhibitions and music events. Bear in mind, this is direct spend only, the indirect spend in bars, restaurants and transport would raise this considerably. The cancelling of large events can affect entire cities’ economies.
The wider implications on the economy can be illustrated by The Edinburgh festival, due to take place in August until it was called off last week. The festival generates hundreds of millions of pounds for the local economy. Taxi drivers, restaurants and hotels will miss out. The Creative Industries Federation has warned of a cultural catastrophe, with its chief executive, Caroline Norbury, saying that companies could go under in weeks. The cancellation affects 25,000 performers.
We work in a seasonal business and the immediate impact of the current social distancing initiative to stop the spread of Covid 19 means that for April, May and June as a minimum, there will be no live events, conferences or sporting events. That wipes at least £17.5 billion out for the next 3 months, with many corporate customers saying they are not considering booking any events until at least September so there will be a longer-term reach on our industry.
A very non-scientific straw poll of FTSE 100 companies would reveal that at least 80% of them outsource their Meetings and Events business to a third-party agency. I suspect that most of these organisations also probably don’t insure against cancellation in normal times and even if they do, with the notable exception last week of the All England Club, pandemic might not be a consideration in previous insurance policies, leading to numerous battles with insurance companies to recoup lost revenues.
So, in these unprecedented times, if you have contracted your business to an agency, this is how they really earn their money and demonstrate the strength of that three-way, customer, venue, agency relationship. Go onto most agency websites and at the heart of their customer proposition lies three things :- 1) we will save you time 2) we will save you money 3) we will ensure you deliver a great event with a tangible ROI.
Now, more than ever, is the time to test this theory. Over the past few weeks, both pre and post starting with Conference Care, I’ve seen a range of responses from venues. From charging full 100% cancellation charges (quite within their contractual rights of course, as cash flow is absolutely crucial to all businesses, whether large or small) to waiving initial cancellation charges providing the client rebooks within a certain period and a whole range of different solutions in between. Procurement professionals are looking to their agency partners beyond cost saving which is a key marker in times of normal business, to instead focus on cost avoidance. How much an agency can mitigate in cancellation charges is a question that will be asked up and down the UK at the moment. The strength of your agency will determine just what this cost avoidance figure looks like for your individual business. So, let’s look at what makes a great agency and then we can explore how this impacts on the current situation we find ourselves in: –
- Industry expertise – technological advances suggest that anyone can become an expert. You can do a 360-degree tour of a venue without ever leaving the comfort of your own home. Working from home and social distancing possibly make this a necessity at the moment. However, there’s still no substitute for venue knowledge. One of the things that’s impressed me since starting at Conference Care is the commitment that each operations team member visits over50 venues per year. That’s over a 1000 venue visits a year. It’s not just the knowledge of a venue that gets built up here, it’s the strength of that working relationship that you can then call on in difficult times. Aligned to this, longevity of service is another key factor contributing to knowledge and expertise. At Conference Care, a company established 25 years ago, there are 18 staff that have over 10 years’ service. That’s really allowed them to build their relationships with venue partners to another level.
- Acting as a partner between the venue and the customer. The 1st April felt like a watershed moment. Many hotels have been temporarily closed with employees at venue level and National Account Managers of some of the major brands being placed on Furlough. The knock-on effect is it making it increasingly more difficult to contact the right person at a venue and in some cases, our own customers. This is what your agency is there for. To provide this service and go above and beyond to ensure robust communication is still in place.
- Trust and transparency – acting on behalf of the customer to do the right thing. There’s no such thing as free, right? Agencies earn their fees largely in commission from meetings and events. Cancellation fees may be commissionable so in the short term, and an agency may not push that hard to mitigate a cancellation fee for an event in the hope that their cash flow is maintained. However, a great agency takes a long-term view. Conference Care still has some customers from when they first established the business 25 years ago and many other customers with 10 years or more relationship and history with them. Our approach is that we need to do everything possible to support our customers through this pandemic, and agreeing an amicable solution to cancellation fees between venue and customer will form a big part of ensuring that ongoing trust.
- Which brings me to my 4th point, that of negotiation. A strong relationship forged between a venue and the customer ensures that agencies pride themselves on being able to propose a better package than if the customer booked direct. That negotiation may be price, it may be added value, it may be enhanced terms & conditions. At the present time, it’s the latter that’s dominating. Conference Care, like all other agencies, has experienced an unprecedented loss of business, with events either cancelling completely or postponing until later in the year. Our primary role at this time is mitigation of cancellation terms. Our team has dealt with over 1000 cancelled events, and we have avoided £3Million in cancellation charges. I’m sure we aren’t unique in this approach. There’s no secret formula to this but points 1, 2 and 3 and the investment in our venue and customer relationships have ensured that we have delivered this cost avoidance and supported our customers wherever possible.
So, to the future and when we come out of this, which, given the resilience of our industry, we will do, what will we see: –
- Virtual Meetings & live streaming– often talked about and evidence that some companies are using this as a platform already, will become more mainstream. Event content will be king here, as virtual delegates can leave at the press of a button.
- Face to Face meetings – After weeks and possibly months of lockdown, I personally think that face to face meetings will be one of the key factors in kick starting our economy again. It will start slowly with smaller meetings and then grow and develop. Ultimately, we are sociable in nature and seeing people face to face is what we do.
- Contract expertise – Contracts will be examined more than ever before, and agencies will need to become experts in the interpretation and application of them. What does that clause on page 23 mean and what does force majeure actually include? Is your agency giving venue contracts due diligence and scrutiny, or just passing them on to you?
- Sustainability – Will this come back on the agenda? Take a look at the pollution reports for some of the UK’s largest cities or even better, pop your head out of the window at night. Pollution has dropped massively both in the UK and globally. Will we revert to type and simply jump straight on a plane or get into the car post lockdown? I think and hope that this might change our behaviours permanently going forward and measurement of sustainability with regards to events will feature high up on the agenda.
Just as a footnote. The Ryder Cup was played out at the Belfry in September 2002. I had the privilege to go and watch some of it. Europe successfully beat the American team and the atmosphere was one of celebration. The Marriott Forest of Arden enjoyed its best ever week financially and at the time, held the record for the highest turnover in revenue for a single venue in a week. I make this point to emphasise that we will get through this current crisis as an industry. I haven’t got a crystal ball so can’t say when, but I look forward to seeing you on the other side.
I hope these thoughts spark debate and prompt more questions. I’d love to hear what you think about my views about what makes a great agency and my thoughts about priorities post Covid 19. I can be contacted via firstname.lastname@example.org / 07548 227899.