Ethical Debates

What's more unethical: disclosing what previous suppliers have bid on your meeting to sweeten the bids from subsequent suppliers, or trying to renegotiate your room rate if your host city's occupancy rates plummet a month before your event?

According to 455 corporate, association and independent planners who responded to an ethics survey in March, it's far more egregious to divulge information before the contract is signed than it is to try to alter the terms after the fact. On a scale of one to six (with one being "extremely unethical" and six being "definitely ethical"),disclosing previous bids scored an average response of 2.90. Almost half of respondents, 47 percent, say disclosing bids is very unethical, assigning it a rating of either one or two.

"I think it's a good idea to tell the hoteliers and other suppliers where they need to be to win the bid. But it's not a good idea to share specific details of other bids," says David Lutz, former president of Conferon Global Services and now managing director of Velvet Chainsaw Consulting, a new meetings-industry consulting firm in Aurora, OH. "It's a fine line. It's all right to guide the bidders, but you can't give away specifics."

On the flip side, insisting that a hotel renegotiate a contract when its occupancy level drops was judged to be somewhat more ethical, with an average rating of 3.67. Only 25 percent of respondents rated renegotiating as one or two on the ethics scale. And 31 percent considered renegotiating a contract if the business conditions turned in their favor quite acceptable, rating the practice a five or six.

According to Mark Roysner of Roysner & Associates, a Calabasas, CA-based law firm that specializes in the meetings industry, the two issues are, in fact, connected. "Most planners feel that if they don't shop around for rates during the bidding process, then the hotelier should honor the spirit of the agreement and be willing to renegotiate to give them the best possible rate anyone can get at the property during the actual meeting time frame," he says.

Roysner also adds that hoteliers who balk at the idea of renegotiating risk alienating planners because it makes the planners look bad to their organizations and attendees, and hurts those planners in future negotiations because attendees start booking hotels that aren't in negotiated room blocks. "That's why planners look at the issues of disclosure and renegotiation as a quid-pro-quo situation," Roysner says. "They feel that if they didn't use other bids as a stick during the negotiation process, it doesn't feel right if they don't have the best rate when their group is on property."

On another topic: Destination management companies are viewed respectfully by planners, as 66 percent of respondents rated taking a DMC's proposal and using it whole, without payment for the idea, as a one or two (very unethical), while only 23 percent rated it five or six. But recreating specific elements of a proposed program was a different matter, as only 30 percent gave it low marks (one or two) on the ethics scale, while 23 percent found little or nothing wrong with it (five or six).

"Taking the whole thing is turning the DMC into a consultant, and it's wrong not to pay them," says Roysner. "But the general consensus seems to be that bits and pieces are fair game because it's the execution of the overall idea that is being sold."

Pat Schaumann, president of St. Louis-based MAC Meetings and Events, strongly disagrees. "The same amount of intellectual property exists in a piece of a proposal as in the whole thing," she says. "It's just like plagiarizing a book—there's no difference if you steal a chapter or the whole manuscript. It's still plagiarism."

Corporate planners, on average, ranked most of the scenarios as more unethical than did association and independent planners. "That's not surprising, considering that corporate planners are far more likely to have guidelines set in place by upper management," says Lutz. "It's being driven by the Sarbanes-Oxley Act. Corporate planners are more likely than association planners to have at least some rudimentary code of ethics in place."

According to the survey results, 26 percent of corporate planners work for companies that have rules about the gifts planners can and cannot accept from suppliers. Only 17 percent of association planners and 18 percent of independent planners work for organizations that have a formal policy in this area. Further, 23 percent of corporate planners have a limit on the dollar amount of gifts they can accept from suppliers, compared to 12 percent of association planners and 18 percent of independents.

But no matter where they work, a majority of planners have no formal ethics policy to guide them; 57 percent have no guidelines at all. Only 31 percent have rules about gifts planners can and can't accept from suppliers, and 27 percent have a limit on the dollar amount of gifts they can receive. The largesse also extends to attendees—less than 10 percent have limits on the dollar amount of in-room gifts for attendees.

When it comes to the type of gifts planners feel most comfortable accepting, it seems the line has been drawn at airline tickets, which scored a moderate 3.12 on the scale of one to six. More acceptable than that were room nights (4.40), hotel points (4.57), room upgrades (5.05) and meeting services such as receptions and coffee breaks (5.14). "The big issue on perks is that they should be things that benefit the sponsoring organization, not the individual," says Lutz. "All the other examples are soft dollars—they wouldn't cost the suppliers anything to offer them. In the case of an airline ticket, planners assume the hotel or CVB is paying for the ticket—that's probably why planners rated airline tickets so low."

What about accepting a familiarization ("fam") trip as a prerequisite to booking a property? The schism isn't as sharp as one might think: Only eight percentage points separated those who rate it one or two on the ethics scale (40 percent) and those who rate it five or six (32 percent).


Right & Wrong: The Ethics of Travel Perks and Gifts

Accepting a fam trip to a destination where you have no real chance of placing a meeting: 1.59

An independent planner accepts remuneration from both the event client and the property where the event is held without informing both parties: 1.70

Accepting a fam trip as a prerequisite to booking a property: 3.25

Which Policies Does Your Organization Have Regarding Gifts For Meeting Planners?

Rules about gifts planners can and can't accept from suppliers...31.4%

Limit on dollar amount of gifts...26.8%

Limit on dollar amount of in-room gifts for attendees...9.0%

None of the above...56.9%