Members Only: Comparing Membership and Non-Membership DMOs

Does working with a membership-based destination marketing organization (DMO) or convention and visitors bureau (CVB) have a significant impact on how they work with meeting planners? That’s the question we set out to investigate, and here’s what we found:

“In reality, about 50 percent of DMOs are membership based and the other 50 percent are not,” says Christine “Shimo” Shimasaki, the managing director of empowerMINT.com and the Event Impact Calculator for Destination Marketing Association International (DMAI). “I think there’s a wide misperception by planners who think that all DMOs are membership-based, and they might think that if a DMO is membership based that it will need to do what the members want, or will be biased toward the members.” She adds, “This concept that they are all membership organizations is a concept that we are really wanting to get past. At the end of the day, the DMO is really there to help fuel the economy by attracting delegates and helping to serve meeting professionals with the planning of their meetings and providing services for those meetings."

Membership-based organizations, Shimasaki describes, are those CVBs and DMOs who will collect an annual membership due from their members — various suppliers and local businesses that play a part in a successful meeting. Non-membership based DMOs and CVBs, on the other hand, do not require any membership dues.

There is also, Shimasaki notes, another DMO model based on partnerships, not memberships. “It’s more of an active pay-to-play model. Businesses may actively buy into certain marketing activities like trade shows or pay to be part of an ad campaign or buy into having a presence on the website. Those are more like partnership opportunities to pay to play,” she explains.

And as some DMOs decide to change their models from membership to partnership- or non-membership-based structures, Shimasaki says that it’s a reflection of the fact that many DMOs are “talking about whether they have the right model and language that they should be using to best serve and attract meeting planners.” 

She also notes that the majority of membership-based DMOs receive the majority of their funding not from membership dues but from occupancy taxes and other government resources.

Government funding is the main revenue source for the Arlington Convention and Visitors Service in Arlington, VA. “We’re a county government division within our economic development department; we know this model exists elsewhere, but we also know it’s not the most common model for a DMO,” says Emily Cassell, director, Arlington Convention and Visitors Service. “Because we’re not a membership-based organization, we really represent all of the hospitality businesses in our community, so this helps us make recommendations that are really focused on the planners’ needs,” she adds. “We don’t’ have to wonder whether someone is a member or not; if we were a membership-based organization, we might feel more compelled to make a member recommendation.”

Cassell, like Shimasaki, however, notes that CVBs with membership models, most likely do not derive most of their revenue from membership dues. “For most DMOs, the membership funding is a very small percentage and usually less than 5 percent, or maybe as little as only 1 to 2 percent of overall revenue.” 

Portia Conerly, Arlington’s meetings and convention manager, says that most planners whom she works with “never even ask about” whether her organization is membership-based or not. “Sometimes, they will ask me about who we send out their information to, however, and they really want to know that we’re giving them solid leads that really relate to their needs.”

Jack Ferguson, the president and CEO of the Philadelphia CVB, says that the benefits of being a membership-driven organization are invaluable. “We’re a 73-year-old, membership-driven organizations with about 850 companies whom we call our members,” Ferguson says. “When you look at each of those companies, each one has about 10 or maybe more people, so you’re really talking 8,000 or more people who want to belong to a CVB or DMO because they want to promote their goods and services to clientele that we bring in.” That scope of network, Ferguson explains, makes the CVB an increasingly valuable resource for planners. 

He adds, “We’re an important distribution channel for our members, and they see us as an extension of their marketing strategy; if they are a member of our CVB, their chances of reaching that customer are far grater than trying to get them on their own.” He estimates that the Philadelphia CVB collects a little more than $1 million annually in membership dues. “It really helps us deliver our message nationally and around the world to customers far and wide.”

“When planners come, we know how to connect the dots and find out what they need and we find the members who can deliver the services that they are looking for,” Ferguson adds. He is also quick to point out that regardless of membership or not, the Philadelphia CVB would never recommend a member that wasn’t a good fit for a particular meeting. “A CVB would not recommend someone or some service that hasn’t been proven. In the course of time, we want all of our members to share in the opportunity to service our customers but if we found out that a customer had a poor experience with an organization, we’d never leave that planner hanging. We’d immediately get in touch with the members and try to find a resolution or solution.”

He also notes that “membership has its privileges.” “If no one is really familiar with a certain company or organization and a planner decides to use them for his or her meeting, they could wind up being taken for a joy ride,” Ferguson says. “It’s a two-sided street; our reputation as Philadelphia, as a brand, rides on the quality of our members and we pay close attention to that.”

The Columbia Metropolitan CVB in Columbia, SC, transitioned from being a membership-based DMO to a partnership model in 2005, primarily in an effort to expand planners’ choices when bringing a meeting to the destination. 

“We wanted to be more inclusive of the hospitality-related businesses in the area, and the partnership model better suited our mission to server our partners,” says Kelly Barbrey, vice president of sales and marketing. “In addition, we wanted visitors and meeting planners to have a more comprehensive picture of the offerings within the destination, whereas the membership model provided our visitors with a more limited range of options.”

Barbrey also notes that, “The membership model did provide us with a small stream of revenue … and there are certainly pros and cons to each model. We made what we believed was the best decision that was the most advantageous for our partners and visitors at that time.”

Barbrey notes that, since the change, response has been positive from both planners and partners. “Our partners seem to appreciate the opportunity to receive complimentary benefits; instead of charging them an annual fee to receive benefits from the CVB, we now have a list of complimentary benefits. Of course, we still have some pay-to-play opportunities from cooperative advertising to paid ads in our official visitors guide and we also have a voluntary hotel program that allows hotels to contribute $1 per occupied room per night as a destination marketing fee and they can receive additional benefits and exposure that way.” 

Barbrey also adds, “Planners appreciate the ability to work with a wider range of partners when going through the CVB.” Jason Outman, director of sales, also notes, “The biggest benefit of not having a traditional membership model is that our clients have control over what properties they would like to target for the particular meeting or convention — positively adding to their overall customer service experience. Secondly, as a second-tier city, a non-membership model allows for our DMO to freely access the offering provided by our entire destination.”

Planners, Outman notes, “have more trust in knowing that they are being presented options and ideas that are inclusive to the entire region, as opposed to an exclusive list. Additionally, they have confidence in knowing that their leads are going to the properties and meeting venues of their choosing.”

Sue Walton, a seasoned meeting planner and co-owner of Evanston, Il-based May and Williams, Ltd., says that while she’s worked with a variety of membership, non-membership, and partnership-based DMOs, she thinks transparency is the best solution for helping planners put together a successful meeting.

“Often, DMOs don’t really identify themselves and it would be nice to know, up front, if they are membership-based or non-membership-based organizations,” she says. “None of them ever really state what they are and there’s often difficulty in answering that questions and I don’t know why.”

Walton adds, “I’m not brand loyal; I’m looking for the best property for my client. But I do want to know how [the DMO] markets, and if they’re playing favorites.”