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Weeding Through the Masses

May 31, 2006

By Elizabeth Zielinski, CMM, CMP

Yesterday I asked a colleague – a well-known and respected meeting professional – what his biggest concern is when thinking about outsourcing to third parties. His response was, “how do I know that the person I hire will really ‘get’ what I’m trying to accomplish in the same way that staff does?”

His concerns are legitimate.  In recent years, the marketplace has been flooded with individuals and companies selling aspects of planning services to meetings.  Some are highly qualified and entrepreneurial, others see it as an early career path unto itself and begin with little traditional experience, and still others are in reality between jobs and filling their time with contract work in the interim. And how do you know which is the best fit for your organization when faced with little more than slick marketing pieces and references that are pre-screened by the third party him- or herself?

The good news is that when you are seeking a third party, your research can be far less restrictive than if you were hiring a staff member.  Many former employers hesitate to give any references – either good or bad – because of the potential liability. The same is not true of providing references for service providers and contractors.  Typically, former clients can and will be much more forthcoming about the work relationship.

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A Party By Any Other Name

May 30, 2006

By Elizabeth Zielinski

No discussion of third-party planners can begin effectively without talking about the big pink elephant in the room – what exactly IS a third party? Most of you probably think you know, and yet if I asked 10 of you, I’d probably get 25 different answers.

Sure, it’s clear enough to answer in some ways.  The APEX glossary defines a third party as someone other than the principals.  So it’s not the meeting sponsor and not the host facility, rather, a “third party” brought into the business relationship.  And that’s where it gets murky in the meetings industry.

In this industry, a third party might be a commissionable site selection agent, an independent meeting planner, a consultant, a travel director, or a freelancer (that’s off the top of my head and not a comprehensive list). Many of these terms have some overlap in exactly what they mean.  For example, I consider myself a consultant.  And I may plan meetings for hire, so that makes me an independent meeting planner.  I might do site selection as part of my services, but not for commission.  I don’t do travel per se, but I guess you could call my work freelancing sometimes.  So which one of those labels is mine?  Heck if I know.  I know what I’d choose if it were up to me, but unfortunately, that doesn’t translate into a common industry language.

So, my first piece of advice when working with third parties is to understand exactly how the third party in question works.  Don’t assume independents are commissionable (or that they aren’t),  don’t assume their company is small (or that it isn’t), and don’t classify one based on what you know to be true about “third parties”, because there’s simply too much wiggle room within the term.

Gearing up for some time off and the aftermath

May 26, 2006

By Dawn Penfold, The Meeting Candidate Network, Inc.

On my last vacation, I was all set for a relaxing week of golf, tubing on a lazy river, sitting on the beach and enjoying great restaurants with my family.  With my clubs, I also had my laptop, my cell phone, emergency hard copies of files and I had called all the hotels that I would be staying at to insure high speed internet access in the rooms and wireless out by the pool.  The flight was delayed and I was thilled that I could work while waiting forthe plane.  I mistakenly went swimming with my cell phone (don't ask) and instead of using the dripping wet and non comunicative cell phone as a sign that I should be getting away from it all, I high-tailed 25 miles to my local phone carrier store to purchase another phone so that I wouldn't miss a call. 

While today's gadgets can free up time and enable us to get away more and not lose touch with the office, they also have become foes.  A study showed that 33 percent of workers say they will be checking with the office while on vacation, according to annual survey.  Adding fuel to the fire, 22 percent of workers say their bosses expect them to stay in touch with the office while away, up 16 percent from 2004.

Technology has created a sense of urgency and the opportunity to reach the office and workers 24/7 worldwide. One-in-ten workers check with the office while on vacation.  So much for  relaxing, getting together with family and friends and that all important reason for a vacation in the first place - rejuvenation!  According to this survey, 35 percent say they feel stressed about work even when they are on vacation.

On this note, I am turning my cell phone off, heading for the golf course and wish you all a Happy Memorial Day Weekend.

Would You Like to Supersize It?

May 25, 2006

By Dawn Penfold, The Meeting Candidate Network, Inc.

The other day a candidate called me in desperation (and understadably so) saying that she had been out of work for over a year and she was close to losing her home and sanity.  She couldn't afford her mortgage let along the costs involved in conducting a job search. 

Me,  being too brutally honest at times said "McDonalds is hiring".  As I listened to the long silence on the other end of the phone, I realized that perhaps I should have made my point in a more gentile way.  The point I was making  -  there is work out there, perhaps not in the field of your choice, but there is work to cover your expenses in the crucial times.  The point I was making -  consider temping, working for the local CVB, database work, yes, even flipping burgers and asking people if they wish to supersize their meal,  to cover their basic expenses, mortgage/rent, food. clothing and utilities.

I know of one colleague who worked in a drugstore in the evening, leaving the days open for interviews.  Was it professionally challenging?  Not at all.  Did it put food on the table. Yes.  Did it give this person a sense of purpose?  In the most basic sense, yes.  Ironically, this person became familiar with the system of the chain drugstore and eventually went to work for the management team.  Hmmm, you never know.

Less Is More

May 24, 2006

By Dawn Penfold, The Meeting Candidate Network, Inc.

What does it mean to be overqualified for a position, have too much experience for a position and can a candidate really step back from a management role to a planner role?  I have had candidates who have held very senior roles in meeting management.  They oversaw departments, managed multiple people, managed the budget process, hired, fired and had a high income, yet they were miserable in their work.  They were happiest planning the meeting or the event, seeing a project come to fruition and then start anew.  They missed traveling and being an active participant in the success of a meeting.  When they try to step back though, hiring officials are hesitant about hiring them because they feel that no one can truly step back for less money and be happy.  And then, I have also seen professionals take this step back and forget what it is like to do the manual work of meeting management - pack boxes, check breakouts, count chairs, work it possible to step back and be happy and how do you sell this to a potential hiring official?

Dropped calls

May 23, 2006

By  Dawn Penfold, The Meeting Candidate Network, Inc.

I am a person who has fought the use of cell phones tooth and nail.  The only time I have mine on is when I am traveling or in the car.  I am not someone who enjoys sharing my conversations with people on the train, bus, in a restaurant or on the street.  Realizing that many people have only a cell phone now and not a land line has created the sense of being able to reaching someone 24/7.  I find my self speaking to at least 10-15 candidates a day while they are on their cell phone.  The interview seems to take place in a park, on the street, on the bus.  Calls are dropped in mid interview and mid thought.  There is rarely a clear reception. 

Telephone interviews need to take place in a quiet place, with crystal clear reception and uninterrupted. 

Don’t let your interview sound like this.  Yes, I am very   (static, static) for this position.  Are you there? Can you hear me now?  Sorry about the sirens.  Is this better?  Let me go over here for better reception.  Ok, this is better.  Yes, I’ll have a half caf latte.  So, can you tell me more about the position?  Sorry, I just went into an elevator.  Hello? 

And what side of the hair should the person part their hair?

May 21, 2006

By Dawn Penfold

This is what goes through my mind quite often when I receive a job order from a company and they give me the requirements for an ideal candidate for a meetings position.  In today’s environment, I have noticed that the criteria for hire is focused on the specific niche industry and experience in these industries rather than a general knowledge of meeting management, or that all important “gut” instinct and the willingness to learn.

Financial companies require financial meeting meetings experience, medical and pharma companies want medical or pharma meetings experience, associations want association experience, incentive companies require incentive experience and corporations require corporate experience form Fortune 100 companies.

In today’s work environment, when legal requirements knowledge on certifications, legal liabilities and idiosyncrasies of individual market niches, I understand the need for an experienced person.  But, possibly, is it because there is just not ample time to train and mentor that candidate with great potential.  Will the industry get so inbred with niche planners that out of the box thinking and new ideas will go to the wayside?

John's Thoughts on Privacy and the Audit Provision

May 19, 2006

From John Foster, Esq., CHME

Since attrition and cancellation damages can potentially add up to a large sum of money, meeting sponsors should include an audit provision in the contract to protect the integrity of the process. The reason for including an audit provision is that the hotel has an affirmative duty to prove that the attrition or cancellation damages billed to the meeting sponsor are actually owed and are accurate. The process of coding reservations to a specific group is neither scientific nor error free. The human element on the part of the hotel and the attendees virtually guarantees that mistakes in group coding will occur. Meeting sponsors should insist on the contractual right to audit the hotel’s in-house guest list with the supervision of a hotel representative.

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John's Thoughts on Attrition and Cancellation

May 19, 2006

From John Foster, Esq., CHME

The wording of attrition and cancellation clauses continues to be a major sticking point in hotel contract negotiations. The purpose of these clauses is to establish the level of performance required from one or both parties and the compensation due the injured if the performance level isn’t met. These terms must be prepared strategically because they represent potentially large sums of money and must be acceptable to both sides. The must also be prepared correctly in order to be legally enforceable.

Contract law provides that if one side breaches a contract, or under-performs, the other side is entitled to damages, but not penalties.  The purpose of this rule is to put the injured party in approximately the same financial position as possible as if the contract had been performed. This is called giving the injured party the “benefit of the bargain”.

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Lisa's Thoughts on Attrition and Cancellation

May 18, 2006

Where has this week gone? Here we are at Thursday already and John and I have barely begun to address all the topics we hoped to cover. In the interest of hitting as much as we can, I am going to address both attrition and cancellation together and give some quick responses to some of the  questions that I get asked most often by meeting planners.

Hotels don't want to include resale credit in their cancellation and attrition clauses, aren't they required to do that?

Hotel damage clauses are "liquidated damages," a legal term for an agreement by the parties in their contract as to the amount of damages that will be paid in a certain situation (remember again, the correct term is "damages" not "penalties").  By definition, liquidated damages are used when the parties agree that it would be difficult to determine the actual loss.  In other words, if it is easy to figure out the loss, a court could invalidate the liquidated damages.

I could write for hours on all the reasons why it is difficult to determine the hotel's actual loss in cancellation or attrition, but for our purposes, consider just one aspect: the hotel may sell two identical rooms at two different rates on the same night.  The hotel is clearly not making 70% profit on both the room sold for $100 and also on the room sold at $175.  But, you can't necessarily say that the hotel is making more on the $175 room, as you don't know if that guest used more power or water or if the guest damaged the furniture , etc.

So, the parties agree to use liquidated damages, in which they agree on an amount or a dollar figure in the contract rather than attempting to determine the actual loss.  In reaching that agreement, they are supposed to estimate the loss AND the ability of the injured party--the hotel--to reduce or "mitigate" that loss through resale.  In other words, if the parties agree that fair compensation for the hotel in a cancellation would be $100, and that there is a 50% chance that the hotel would be able to resell the room at the same rate, then they might agree on damages of $50.  Since the damages are already a compromise, it is not appropriate to reduce the damages even more by resale.

When a contract contains a liquidated damage clause, the injured party is not required to prove its actual loss or whether it reduced that loss by mitigation. The injured party simply is given the amount agreed upon in the contract--whether its actual loss turned out to be less or more than the agreed amount.

Even though the law does not require mitigation in a liquidated damage clause, many hotels do agree to give such credit, especially in attrition clasues.  Since hotels do not hold room blocks by room number, the parties must agree on a specific formula for how "resold" rooms will be counted and what credit will be given. Simply stating "less rooms resold" will only lead to disputes.

In a cancellation situation, hotels are very reluctant to include resale, and groups should be, as well.  If you cancel a 2007 meeting in 2006, under a regular liquidated damage clause you would pay the damages immediately, and the issue would be closed. If you add resale, you won't know what amount you will owe until after the meeting dates pass, which requires both sides to keep the matter on their books and to wait around to determine what is owed.  A group can't make a sound business decision as to whether or not it should cancel if it doesn't know how much it might owe.

Hotels are not out to "double dip" with their damage clauses, and in the majority of cases the hotel ends up not collecting even close to what it estimates.  If a group is concerned that the hotel will be able to resell all the cancelled rooms and thus the hotel will get an fair recovery, it is better to negotiate for a smaller liquidated damage payment rather than to include a resale credit.

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