Study Identifies Pros and Cons of Destination Management Companies

The Incentive Research Foundation has published an illuminating study on the relationship between destination management companies (DMCs) and meeting planners based in the United States. Researchers examined some of the perceived strengths and weakness of each group, as well as the impact of technology and existing marketing efforts.

Based on more than 200 responses from an online survey and multiple focus groups, the study analyzed the current state of DMCs and offers guidelines to meet new market challenges. The study was authored by Dr. Haemoon Oh, Ph.D., dean of the College of Hospitality, Retail and Sport Management at University of South Carolina, with support from the Incentive Research Foundation.

“The valuable information acquired from this research allows us to examine how similarly or differently DMC and meeting planner organizations react to the external business conditions and how well they’re prepared to take advantage of future opportunities,” says Melissa Van Dyke, president of the Incentive Research Foundation.

“The research showed us how building a long-term commitment between a DMC and a meeting planner radiated around trust. Each party’s opportunistic behavior, their engagement in communications, and their mutual financial dependence were key determinants of that trust.”

Research comparing DMCs and meeting planners revealed four important areas where views differed or aligned:

1. DMCs are More Positive: DMCs rated their strengths, opportunities and outlook more favorably than U.S. meeting planners did.

2. Views on Strengths: DMCs viewed their own strengths as helping to ensure events are  of high quality, handling unexpected requests and crisis management. However, meeting planners viewed DMCs’ top strengths as possessing local knowledge and saving time for planners.

3. Views on Weaknesses: DMCs believed their greatest weaknesses were the value of their resources being misunderstood and a lack of collaboration with other DMCs. Meeting planners believed DMCs’ biggest weaknesses were lack of creativity over time and offering replaceable services.

4. Agreement on Threats: DMCs and meeting planners both agreed that Internet search engines and hotels’ in-house DMCs were major threats to their relationship. Social media was considered both a threat and an enabler, offering opportunities for promotion and education.

Based on the data, the study also offers seven key suggestions for DMCs to better position themselves to do business with planners:

1. Continue building strong, dynamic networks of local expertise and vendors.

2. Proactively use social media technologies to provide more convenient services with information accessible across different platforms.

3. Provide a satisfaction guarantee for DMC services.

4. Build stronger international site inspections to highlight language, cultural and legal differences.

5. Develop and better promote DMC’s risk management services.

6. Work with larger DMC consortiums to create regional, national and global partnerships; but don’t lose unique, customizable programs that local DMCs are known for.

7. Develop informational programs and demos that raise the visibility and clarify the value of DMC services.

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