THE NAKED TRUTH BEHIND MANAGEMENT FEE-BASED vs COMMISSION BASED MODEL
Q: Are clients savvy and understand what DMCs are?
Some wonderful clients, like those from South America, do understand their local agency needs DMCs which know how to deliver the best event, while the European clients tend to book hotels directly and use DMC just for airport transfers. I would not dare to do their job, so I wonder how they think they can do events using just internet.
Q: Are DMC’s competitors to event and marketing agencies?
Even event and marketing agencies need to use DMCs as local expertise is everything. Even distances from A to B can be done diferently. DMCs would have been extinct by now if they had nothing to do.
Q: Do DMC’s provide better local access and pricing?
Of course, since DMCs use hotels for decades and after establishing a certain relationship with hotels, restaurants, and venues, DMCs have better negotiation conditions and longer options. Some hotels are even soft on penalties in case of no-shows etc.
Q: What do you think about the rise in budget transparency?
Budget always needs to be transparent even if the cost sheet is about 400 lines or more. We, in Penta DMC, do not put one EUR more on the menus and hotel rates if our commission is protected. There are some DMCs that put a menu of 40 EUR to 60 EUR and the client and agent expect that money on the plate when in restaurant.
Q: What do you think about this statement: We should be charging for what we do?
Expertise means being long years in business and it did not come for free. If we put hundreds of working hours into one project that has been worked on for months or years, we should get paid for that of course.
Q: Do you charge a fee for site inspections?
For a long time now in the world there has not been free lunch, but we charge no fee for site inspections. We copy paste the hotel and bus company policy. If the hotel does not charge us, we do not charge the client. Some hotels charge and later on deduct the inspection trip charges from the event final invoice. If a hotel is confirmed before inspection, of course we can get 3 bedrooms FOC. Same goes for the restaurants, they charge for inspection and deduct later on when the event takes place. Our time during inspection is paid by ourselves of course.