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Sun 10 Feb 2008 04:00 AM

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Making ends meet

Budget management doesn't have to mean cutting corners; with careful planning, even Dubai can be a bargain.

Budget management doesn't have to mean cutting corners; with careful planning, even Dubai can be a bargain.

As well as dealing with a couple of thousand e-mails per day and holding a phone in one hand and a chequebook in the other, balancing budgets can be the toughest challenge for any event planner.

While no one disputes the importance of local, regional and international meetings, other factors like finding skilled staff and covering increasing rent costs can put a squeeze on the amount of cash available to event planners.

An experienced and trained meeting planner and a creative supplier can do wonders to a budget.

International polls show that the amount of cash put aside for meetings and events varies according to the nature of the function.

The American Express and Meeting Professionals International Future Watch 2008: a comparative outlook on the global business of meetings survey found that association planners predicted a 9.3% decrease in meetings budgets, while corporate planners believed that they would see a 27% increase in their meetings budget.

But whether the trend is up or down for planners in the Middle East, budgets still need to be managed.

For TraVision Inc. group president Bicky Carlra, budget management is all about making sure that the right person is doing the job: "As the spend of any corporate grows, it is critical to recruit professionals in-house to manage meetings/incentives - even if they still deploy a travel management company (TMC) or a professional meetings company to implement the same - thus using in-house expertise and a TMC's buying power," he explains.

"This will cut some of the unnecessary margins added. An experienced and trained meeting planner and a creative supplier can do wonders to a budget.

But planners should consider the profit strategy of the TMC or event organizer before they select one, he adds: "There is no motivation for an agency to reduce cost if they earn their revenues from a commission on the total budget.

"With a cost-plus structure you are aware of the real cost and management fee paid, which is based on the value addition the agency/TMC/professional congress organiser (PCO) brings to the table.

Accommodation and venue are generally the highest cost factor of any event, but a little flexibility goes a long way toward reducing the cost of a meeting, particularly in high-cost Grade A cities, Carlra argues.

"Companies may still try to focus on tier-one cities or cities that have special interest to their groups, but it's getting harder, as room rates have climbed 20-30% in the past year and there seems to be no low season anymore for cities like Dubai," he says.

"The easier solution is of course to go to second- or third-tier destinations, where rates are lower and there is availability. However we all know business-meeting attendance can drop significantly, especially with incentives, if the destination is not right, as it plays a critical role in drawing the right people."

One solution is to choose four-star accommodation for delegates and hold meetings or gala dinners in a superior venue.

"The other way is to use the twin city advantage," Carlra explains.
Many corporates are beginning to have a four-day meeting split into three days at a great hotel in Ras Al Khaima or Fujairah and return to Dubai on the last day for the gala event at a good venue.

"This way the meeting cost, plus that of accommodation, can be dropped by 40-50%; the difference in prices of good properties in Dubai and elsewhere.

And even an expensive destination can offer good value for money considering the product available, argues Frédérick Bardin, senior vice president, Arabian Adventures and Congress Solutions International.

"I think about the prices you pay in Frankfurt, London or Paris to eat in a good restaurant; how much space you have, what size table you have, the quality of the service and the quality of the food," he says. "Is it really expensive in Dubai?"

Other factors such as hotel or transport options can also have a considerable impact on costs: "A lot of the time you find cheaper hotels in the city, one of the reasons being you hardly find any three or four star hotels on the beach. If you go to the city you have much more choice in the three and four-star category.

Also there are a lot of periods where the beach is full but the city is not," Bardin says.

"You can find that one particular venue - one room in one hotel on one day - will be able to charge more on that particular day for whatever reason, so by switching to another place it can be cheaper.

Bardin also warns against using the hotel group's event planning department to organise a multi-day itinerary, since venue and F&B options will be limited to facilities managed by or partnered with that group.

"When the client wants something cheaper we can come up with alternatives; it can be a cheaper dinner menu, a cheaper wine, cheaper mode of transport," he says.

"Does everyone need private cars or can you put several people in one car or bus, or can you find a cheaper venue? It is value for money even though it is a lot of money.

And the money dedicated to certain aspects of an event is not always money well spent: "One last tip that I see all the time is wastage of food and beverage during meetings," adds TraVision's Carlra.

"Free flowing food, water, tea/coffee or premium beverage can add to the cost in a big way, however, if served during fixed breaks, brings down the cost significantly. Depending on the type of delegates, if the attendees can't tell the difference between standard and premium liquor brands, don't invest in the premium!

Corporate social responsibilityReed Travel Exhibitions group exhibition director, meetings and incentive events, Paul Kennedy, agrees that the region is not sufficiently price flexible, but points out that other considerations are beginning to become important among decision-makers.

"I think that in a few years a hotel's environmental and corporate social responsibility policies will be top-ten priorities for meeting planners," he explains, "The hotels will have to offset a company's presence with their policies. We're already seeing that emerge as a decision-maker, and venues that cannot demonstrate a commitment to those areas will have problems."

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