Independant Meeting & Event Planners
Corporations and associations have outsourced meeting-planning functions to third-party planners, who are independent contractors. While the corporations and associations remain responsible for the meetings' content, independent planners typically handle all other details, in particular, finding venues and negotiating contracts. Most of an independent planner's business depends on a reputation for fair dealing, referrals, and continued relationships. Thus, the best planners are careful to ensure that all parties are aware of all contract provisions, including those for commissions. Planners also ensure that the hotels treat meeting clients fairly when not all rooms in the block are picked up and it is necessary to invoke attrition clauses.
A pioneering survey of independent meeting planners finds a rapidly growing field of professionals who seek to make conference arrangements that are mutually beneficial for all concerned. The qualitative survey took an in-depth look at the views of nine independent planners and ten hotel room division managers. Although the independent planners are typically retained by associations and businesses to negotiate with hotels and conference centers, the planners also desire to maintain good relationships with the hotels. While anyone may hang out a shingle as a meeting planner, the most effective independent planners have at least a decade of experience and have worked for professional certification. Although some independent planners accept commissions (as though they were travel agents), many of those interviewed suggested that a flat fee or an hourly rate is a better way to arrange compensation. The most common services offered by independents are on-site meeting management, site inspection and selection, and group sales agreement negotiations on behalf of their clients. By ensuring that their clients are aware of all financial arrangements between the planner and the hotel, independent planners avoid potential role conflict and sell-dealing (notably, avoiding acceptance of secret commissions or other payments to steer business to a particular hotel).
Intermediaries have long served the valuable marketplace function of bringing together consumers and producers of goods and services. Among such intermediaries are real estate agents, travel agents, financial advisers, and, increasingly, independent meeting planners. Intermediaries also often provide important organizing, negotiating, and planning services. Sometimes these intermediaries represent and are paid by the buyer, and at other times they represent and receive compensation from the seller. Some arrangements make the intermediary an agent for either the buyer or the seller--but not both. The sometimes-murky relationships between buyer, seller, and intermediary raise concerns about possible conflicts of interest that intermediaries face as they deal with both the buyer and the seller.
Independent meeting planners are becoming important intermediaries in the hospitality industry, where conventions, conferences, and other meeting events represent an important and growing source of business. While corporate and association meeting planners still generally handle content-related meeting activities, corporations are outsourcing noncore activities and are seeking the services of independent third parties to line up meeting venues. Despite the growing importance of independent meeting planners, we see little research about them.
To fill that gap, we reviewed the published literature, examined representative group-sales agreements, visited the Web sites of relevant professional organizations, and conducted in-depth interviews with several meeting planners and hotel room division managers to learn more about independent meeting planners. In particular, we gathered information about who they are, what their functions are, and how they are compensated. As part of our analysis, we recognized the potential conflicts of interest meeting planners might face in their intermediary role. In this article, we summarize what we learned and offer recommendations for avoiding or at least reducing the potential conflicts of interest. We hope that the lessons learned can allow hotels to adjust their way of doing business so that independent meeting planners can better serve their clients and eliminate or mitigate the potential conflicts among meeting producers, independents, and hotels.
Independent Meeting Planners' Growing Importance
The importance of meeting planners has grown along with the business of organizing meetings and events, which itself has been growing rapidly. The 2002 Meetings Market Report, published biennially by Meetings and Conventions, reported that slightly more than 1 million meetings were held in 2001, with nearly 80 million attending (52 million at corporate meetings, 16 million at association meetings, and 12 million at conventions). (1) These meetings generated $41 billion in annual hotel revenue that year, which represented 37 percent of total hotel revenues of about $110 billion. When all travel expenses are included, these meetings generated $102 billion in total revenue in 2001, with roughly 31 percent going for room accommodation; 23 percent for food; 20 percent for air transportation; 8 percent for speakers, entertainment, and audiovisual equipment; 6 percent for ground transportation; and 12 percent for miscellaneous items.
According to the Successful Meetings 2003 State of the Industry Report, (2) corporate planners (such as those working for Microsoft or General Motors) account for 34 percent of meeting planners, association planners (such as those working for the American Medical Association and American Bar Association) account for 27 percent, and independent meeting planners (third-party planners) account for 13 percent, with the others (those working for the government, housing bureaus, and travel agencies) amounting to 26 percent. Independents (outside contractors who provide specialized meeting planning services for a fee) emerged in the 1970s and now number several thousand. (3) Since corporations started to downsize and outsource their meetings function, independent planners have constituted the fastest-growing segment of the community of meeting planners. (4) Even large companies such as Microsoft, which has a substantial department to plan for meetings, have decided to outsource certain aspects of their operations (such as site selection) to the independents to concentrate on the content of meetings, such as themes and speakers, instead of the logistics.
