Thailand-based DMCs tell micenet ASIA that suppliers in the country aren’t keeping up their end of the bargain.
by Kristie Thong
In a lunch roundtable held at Ginger Restaurant of Centara Grand, Bangkok during the week of IT&CMA and CTW Asia Pacific 2013, destination management companies (DMCs) based in Thailand highlighted that MICE suppliers in the country aren’t working together as cohesively as they should be.
Meeting & Convention Planner director of sales and marketing, Marina Chinanurakchart, said clients have been lost due to the lack of a signed agreement. Bringing up instances where hotels and venues undercut DMCs to secure a corporate client, it shines the light on the market’s lack of ethical practice for the sake of business.
“If we are on the same side of the business, suppliers should work together to make the destination sustainable,” said Sumate Sudasna, managing director of Creative Destination Management and president of Thailand Incentive and Convention Association (TICA).
He spoke of a situation faced where a client chose to liaise directly with a venue after a site inspection he had helped put together, leaving him out of the business.
In one scenario, Meeting & Convention Planner was working with a 500-pax group from Singapore which initially chose Bangkok but later needed another Thai destination. Given the verbal nod to pursue other opportunities on behalf of the client, Ms Chinanurakchart organised site inspections and preparations with a property in Phuket. The client later told her in an email that her services were no longer needed, while the hotel’s previous promise of a 10-per-cent placement fee was unfulfilled.
The property might have had an on-site DMC in Phuket, she said.
When asked how DMCS can protect themselves from future cases, she observed that many DMCs in Thailand have learnt the importance of having clients make an official appointment prior to site inspections and any further event planning.
“Clients will be willing to sign an official appointment agreement, but they are more cautious and it’ll take some time before it’s signed and returned,” she said.
There is a lack of transparency between suppliers as well as between suppliers and clients, Events Travel Asia managing director, Boontawee Jantasuwan pointed out, and that has to change.
Mr Jantasuwan, who is also membership and PR committee chairperson for TICA, reiterated that hotels ruin the market when they choose to undercut DMCs.
“I think hotels don’t realise that DMCs do the hardest part of the job. We finalise the programme, flights, and source for venues according to the clients’ needs and bring the business to them.”
DMCs at the lunch discussed the viability of declaring to clients that an expected commission is standard upon securing the business. While it has been established across the industry that DMCs receiving a nett rate will mark it up, Mr Jantasuwan felt there is no way to prevent the loss of business because hotels always prefer to liaise directly with clients.
“The reality is that hotels tend to quote lower for clients; they do it to meet targets,” Mr Sudasna said.
Before the conclusion of the lunch, the DMCs recommended a win-win solution to be proposed to the client during the pitching process.
DMCs could charge a nett rate and be the only contact for the hotel, or charge a commission and offer the client the flexibility of liaising directly with the hotel.