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Developing
a Better Business Model for Destination Management Companies
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New
IRF Study Provides Insights in Strengthening
the
Relationship between DMCs and U.S. Meeting Planners
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Washington,
DC – March 2016 / Newsmaker Alert / A new study published by the Incentive
Research Foundation (IRF), a non-profit research foundation focused
on motivation in business, analyzes the current state of destination management
companies (DMCs) and offers specific guidelines to help them reposition
themselves to better meet new market challenges—by developing and redesigning
their value propositions and relationships with U.S. meeting planners.
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The
study, Developing
a New Business Model for DMCs by Redesigning Their Value Propositions,
is authored by Dr. Haemoon Oh, Ph.D., Dean of the College of Hospitality,
Retail and Sport Management at the University of South Carolina and was
conducted using a mixture of multiple focus groups along with an online
survey, which garnered more than 200 responses.
With
support from the Incentive Research Foundation, the study explored the
current strengths and weakness in the DMC-meeting planner relationship,
assessing the nature of competition, the impact of technology development,
the variance in business models, and the understanding of existing marketing
efforts.
“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 IRF President Melissa Van Dyke.
Research
comparing the views of DMCs and U.S. meeting planners revealed important
areas where viewpoints differed or sometimes aligned:
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DMCs Are
More Positive: DMCs rate their strengths, opportunities, and outlook more
favorably than U.S. meeting planners.
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Views
on Strengths Differ: DMCs viewed their own strengths as high quality events,
handling unexpected requests, and crisis management. U.S. meeting planners,
however, viewed DMCs top strengths as their local knowledge and ability
to save planners’ time.
-
Views
on Weaknesses Differ: DMCs believed their greatest weaknesses were misunderstood
value and lack of collaboration amongst DMCs. U.S. meeting planners however
believed DMCs’ biggest weaknesses were a lack of creativity over time and
replaceable services.
-
Agreement
on Threats: Both DMCs and U.S. meeting planners agreed internet search
engines and hotels’ in-house DMCs were key threats. Social media, however,
was viewed as both a threat and an enabler, offering opportunities for
promotion and education.
Overall,
trust emerged as a key concept. “The research showed us how building a
long-term commitment between a DMC and a meeting planner radiated around
trust,” said Van Dyke. “Each party’s opportunistic behavior, their engagement
in communications, and their mutual financial dependence were key determinants
of that trust.”
Based
on this data, the study offers a number of important suggestions to help
DMCs better position themselves with U.S. meeting planners. Suggestions
to DMCs include:
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Continue
building strong, dynamic networks of local expertise and vendors.
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Proactively
use new social media technologies to provide more convenient services.
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Provide
a “satisfaction guarantee” for DMC services.
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Build
stronger international site inspections to highlight language and local
cultural/legal differences.
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Develop
and better promote DMCs’ risk management services.
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Work with
larger DMC consortiums to create regional, national or global partnerships,
but do not lose the unique, customizable programs for which local DMCs
are known.
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Develop
informational programs and demos that both raise the visibility and clarify
the value of DMC services.
To view/download
a copy of the complete study, go to www.TheIRF.org.
About
the IRF
The
Incentive Research Foundation (www.TheIRF.org)
funds and promotes research to advance the science and enhance the awareness
and appropriate application of motivation and incentives in business and
industry globally. The goal is to increase the understanding, effective
use, and resultant benefits of incentives to businesses that currently
use incentives and others interested in improved performance.
Contact:
Jon
Lieb / Anita Bell
for
IRF Media Relations
212-563-8025 |