There has been a lot of talk recently on both sides of the Atlantic about the future of destination management companies. I was recently asked my thoughts on what radical reinvention is needed for DMCs so they can survive and thrive. Here's my list of five things that DMCs need to do in order to redefine and strengthen a value proposition that otherwise could end up being left by the wayside.
1. Focus on service
Deliver "second to none" service standards. This means 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 program alterations, taking calls on your cell phone while on vacation, etc. MCI's president Roger Tondeur, once a DMC himself, refers to DMCs as "the slaves of the slave (the planner)." This service attitude is our bedrock, the heart and soul of our value proposition. We need work from this space always, protecting, nurturing and cultivating this mind-set.
2. Become a destination marketer
Of course, one of the DMCs' key selling points is their local knowledge and expertise. But it's how DMCs deploy this local knowledge to create demand for their destination that sets them apart from competitors who simply plan tours and events. 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 corporate objectives and thus are perfect destination marketers for the 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 that continue to prosper in these challenging times, it's nearly always because they have diversified and created ancillary revenue streams. Some have developed creative production capabilities and are de facto event-management companies; others have invested in equipment and offer extensive décor services; still others have leisure travel departments, and some organize large citywide conventions, 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 it 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 long-term agreements with customers
The fatal flaws in the traditional DMC business model is that you only get the business when it is booked in your destination and, for most programs, these events come to the destination just that one time. 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 ongoing business into their destination as well as for business outside their destination, where knowledge of the customer's business is a key ingredient for success. It could be argued that when this happens, the DMC is no longer a DMC but a planning firm and in competition with its own third- party customers. However, this is also inevitable in the competitive marketplace.
5. Stop complaining and face reality
Regrettably, when two or more DMCs get together, the dark clouds of doom and gloom can quickly gather and a complaint session often ensues. Much of the verbiage and commentary in the typical conversation between DMCs has been churning and festering in the system for about 30 years. We need to stop this endless, numbing chatter about going direct, stealing ideas, going to bid despite 10 years of working with a client, 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 and some clients will be less than honest. 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!
Pádraic Gilligan is vice president of Ovation Global DMC (ovationdmc.com).