THE NAKED TRUTH BEHIND MANAGEMENT FEE-BASED vs COMMISSION BASED MODEL

We are asking the leading global and local DMCs to give us their opinion on the matter of budget transparency and charging for work.

Q: Are clients savvy and understand what DMCs are?

Those who use us most probably are but we constantly need to ‘educate’ our younger clients about the values of working with a DMC. We need to explain what is the added value we bring to make them be more succesful and not to assume that they know. With our extensive local expertise, creativity and resources we specialize in designing and executing the client’s event objectives from logistics to exclusive high-end programs.

Q: Are DMC’s competitors to event and marketing agencies?

No they are not in my opinion. The corporate client must decide who brings the added value in terms of destination knowledge, experience and creativity to the table and decide with their event agency or marketing agency what is the best price:quality solution. The core of our business is about local delivery of event planning logistics. We aim for operational excellence turning each event into a memorable experience. This can start from accommodation, meeting and conference venues, local transportation managent, creative evening functions and catering, social activities, audio-visual support, management and training. Also clients can count on for corporate gifts and give aways. But in the end, it also comes down to budget control so that the client does not leave the destination with a big question mark if everything was within the budget.

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Q: Do DMC’s provide better local access and pricing?

Definitely because they are constantly operating within the destination and know what works and what not. There is a deep trust between a good dmc and suppliers. As a DMC we have a tradition of local event design and creativity. By listening to understand the company culture and event motivation, we will work with the client to energize and motivate their community by means of incentive programmes, evening theming, decoration and local event production.

Q: What do you think about the rise in budget transparency?

Always been an advocate of this since we started our Ovation brand 12 years ago. Demonstating added value and adequate pricing will last longer than hiding mark ups and commissions. However, we are constantly confronted by agencies to ‘build in’ a commission for them which they do not want to show to their client. So it has shifted.

Q: What do you think about this statement: We should be charging for what we do?

We should be charging like consultants, not like travel agents. But what are our services? At Ovation Global DMC we pride ourselves to be destination consultants with an in-depth knowledge of the destination and its actors. We will consult the client (agency or corporate direct) on our destination’s feasibility versus the motivation of their project. We will help them select the right venues and hotels and we can do so because we know our local suppliers very well indeed and have experience of working with them. Which is not often the case of the agency we are working for or the ultimate client. We prefer to match the destination with the event objectives of the client. That’s why we want to know as much as possible about the project, why the client feels it is important to their organisation and why they believe our destination can deliver. But we go beyond venues and accommodations. As a good DMC we know the ‘people’ and as local business owners we are active in the local business community which would allow to invite the right speakers as well.

Q: Do you charge a fee for site inspections?

Yes, we agree this with the client from the start. But also we make it clear that we charge a minimum, negotiate free services from suppliers and that some of the costs can be deducted from the final bill once confirmed and operated. It’s more complex than that but it’s a basis of mutual respect.

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