Boost Your Budget with a DMC

“Do more with less.” 

It’s a common directive these days and planners looking to pinch pennies may opt for less expensive hotels, scale back on F&B, and pass on hiring a destination management company (DMC) to help organize the event. After all, how is spending money on a third-party supplier being “budget conscious”? 

But there are several specific, sometimes surprising, ways in which using a DMC can actually help a planner’s bottom line. 

“The question becomes one of, ‘Can we offset the cost of our services by our expertise in so many areas, by our relationships with subcontractors or vendors that give us special pricing?’ ” explains Chris White, chairman and CEO of Global Event Partners (GEP), a worldwide partnership of DMCs. “And the answer to that is yes.” 

The first, and perhaps most straightforward, advantage of using a DMC is the prospect of reduced pricing. Nearly every DMC has developed relationships with local vendors that allow it to negotiate better rates for venues, hotels, transportation, and catering. This is especially true for hotel space internationally, White says.

“This is a very, very difficult concept for U.S. clients to absorb,” he says. “They think if they’re going to a chain hotel, if they call their local Marriott, Sheraton, Hilton person in the States, they will get a better deal. It’s not true internationally.”

Yolanda Woeke-Jacobs, director of sales and marketing for South Africa-based DMC Dragonfly Africa, adds that these relationships also allow the DMC to negotiate value adds, upgrades, and services the planner may otherwise not have access to. And when planning an international meeting, a DMC can connect a planner to businesses on-site that can produce signage, gifts, and other materials less expensively than if they were procured elsewhere and transported.

These relationships can also lead to unexpected perks, according to White. “Our Paris DMC is constantly getting e-mails and updates from subcontractors about specific venues,” he explains. “Unbeknownst to the client, there may be some new or exotic or even a very famous venue that has a date to fill and will lower prices significantly if it can get that evening filled. The chances of the client hearing about that updated information is next to zero unless it contacts a DMC.”

Further, the DMC has expert knowledge of the area and can navigate potential conflicts, such as citywide events. And when cancellations arise or things go awry—such as when a volcano eruption in Iceland resulted in numerous flight cancellations across Europe, says Jim Schultenover, president of GEP and Krisam Group—the DMC can more easily rebook hotels, transportation,  and the like.

Jennifer Wilson, meetings manager for the Association for Financial Professionals, experienced firsthand how DMCs can help planners creatively save money. “In 2009, when we were looking at [planning] our [annual] conference, we pulled back significantly on our budget. We cut it in half,” she says. But the DMC was “so creative and just able to offer such interesting ideas that our attendees didn’t even know we’d cut our budget. I came in under budget—$100,000 under budget.”

The savings that year came mostly from venue and entertainment selection, she says. “And it didn’t end up being lacking: It was one of our most successful conferences.”

However, perhaps the most surprising yet significant way a DMC can provide financial benefits for a planner is by serving as feet on the ground in the destination—for less than the cost of full-time staffers. Essentially, DMC personnel are increasingly serving as freelance planners for companies with staff and budget constraints.

“Almost every meetings team—probably 99 percent—is under extra pressure with less staff; the number of programs are growing and they just don’t have the resources,” Schultenover says.

Marty MacKay, president of GEP’s Washington DC, Baltimore, and Philadelphia division, agrees. “A lot of times there’s only one person coming to manage the group on the planner’s side. [Or] they don’t even get to come [and] they set things up from afar,” she says. 

Wilson experienced this firsthand, as well; her team went from three to two right as the economic crisis set in—but her workload remained the same.

“I handle the majority of the logistics for our annual meeting,” she says. “I only have a limited amount of time to worry about [logistics] along with the rest of the whole conference that I’m planning. We definitely had to start relying even more on our third-party resources, such as the DMC, to help us.”

In addition, just like full-time staff members, the DMC can offer assistance before, during, and after the event, Schultenover says. “The DMC can be a filter to handle everything they’ve contracted on behalf of the customer,” he says. “So there’s this pre-, during, and post-[event presence] in addition to the services that they’re actually providing.”

Karen Shackman, president and founder of Shackman Associates New York, says another way a DMC can help save a planner money is by leveraging relationships with local venues and hotels to find out if resources can be shared.

“It’s worthwhile talking to or finding out from the DMC or the hotel if there are other events going on in the hotel where you can piggyback,” she explains. “We’ve actually done this on a number of occasions. [For example], we’ve done production for some clients and have worked with a previous company’s A/V setup so they don’t have to strike and we don’t have to rebuild where you sort of defray the cost of both. [Or] we try to piggyback on some of the food and beverage costs at hotels or in the town, maybe sharing similar menu items.”

All that said, the experts agree that there are instances in which planners benefit from going direct and cutting out the middleman. The top factors in this decision? The size and complexity of the program. Planners of small, simple events are “much better off going direct,” White says.

But size and complexity are not always congruent. Small groups that require TLC and a high level of service would benefit from a DMC. “It still comes back to: What’s the goal of the customer, what’s the VIP status of the attendees, and what’s the complexity of the program?” explains Schultenover.

When Wilson plans a program that includes special events, even when the program takes place in her home city of Washington, DC, she puts the offsite activities in the hands of a DMC.

“I’d like to think that we know the area, but even then it seems wiser to put it in their hands so that we can focus more on the meat of the meeting—and what’s happening with the program from 9 to 5—than on the special events,” she says.

Whether you ultimately intend to work with a DMC or not, experts advise giving the DMC a call early in the process. At that point, details are still fluid, meaning you can take advantage of greater discounts, as well as make money-saving tweaks. And if you do not intend to contract with the DMC, the DMC can at least point you in the right direction.