. DMCs Seeking Creative Opportunities in a Difficult Landscape | Northstar Meetings Group

DMCs Seeking Creative Opportunities in a Difficult Landscape

New research from ADMEI finds that destination management companies are investing in digital and local solutions while facing difficult challenges amidst the pandemic.

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Destination management companies are facing powerful headwinds, but as they cope with lost business many are finding ways to diversify their offerings and get more creative in running their operations. That was among the findings revealed in the new DMC Evolution Survey from the Association of Destination Management Executives International. The study queried 278 DMCs in late August about the changes they've had to make in the past several months and when they expect to see business return.

The data reflects the challenges faced by DMCs, with half reporting workforce reductions of their full-time staff and 64.7 percent reporting reductions of their part-time staff since the beginning of the Covid-19 pandemic. Nearly half (47.2 percent) say they have no confirmed in-person events scheduled for the remainder of 2020, while 34.5 percent have just one to five events on the books.

The findings underscore the particularly difficult position DMCs are in, as many expend resources to assist with planning only to have the events postponed or cancelled — leaving the organizations with no revenue in exchange for their efforts.

As one respondent wrote: "If events moved from 2020 to 2021, then cancel or request to move again to 2022, carrying overpaid deposits to the yet-again new dates in 2022, it will mean that as a DMC we will have been working on files free of charge for two years."

Nearly two-thirds (63.4 percent) of respondents said that just one-fifth or less of their in-person programs for 2021 have a signed agreement in place.

"This underscores the concern of DMCs that in-person business is taking much longer than originally anticipated to return," said Alaina Tobar, regional general manager of PRA Northern California and president of ADMEI. "DMCs are doing work for 2021 business. Likely, they are doing the work without a signed agreement. It is vital that DMCs are paid for their work, even as they are in program development."

When asked about their biggest worries for 2021, a majority (50.9 percent) ranked travel bans of major corporations as their top concern, followed by an uncertain vaccine release date, lack of business in the pipeline and reduction in number and/or size of events.

DMCs expect the difficult landscape to continue into 2021, with 43.6 percent expecting their revenue to be more than 50 percent less than their 2019 revenue and 31.3 percent expecting revenue to be between 31 and 50 percent less. Comparing the number of events scheduled in 2021 to a typical year, 82.2 percent of respondents say they are decreasing and 60.1 percent say the same even when including 2020 postponements.

Despite these sobering numbers, the survey results also showed signs of opportunity. Nearly two-thirds of respondents (63.8 percent) said they have added services or diversified their company in response to the downturn in business. In write-in responses, DMCs cited a wide range of areas where they were investing to better meet the needs of today's event planners. These include:

  • Local events and clients, vs. international clients
  • Online/virtual events and online team-building programs
  • Private leisure tours and small-group travel
  • Virtual party boxes
  • Safety protocols and sanitization

"DMCs are reacting to continue to provide the services that the market needs and their clients are asking for," said Tobar. "This speaks volumes — the client understands that they can count on their DMC partners, even as we're navigating this new normal. And DMCs are delivering."

She added that the trend toward virtual and hybrid meetings will continue for the foreseeable future, and "we must prepare for that as an industry."

The respondents were asked what they would need to help accomplish this diversification and ensure their business can continue. In terms of what they most need now, the top resource cited was advocacy on behalf of the DMC industry to represent their interest, followed by access to a network of professionals to consult with (e.g., legal, financial, business and/or medical) and leadership on behalf of the DMC industry to provide an organized and unified voice.

"DMCs are part of a much larger meeting and event ecosystem," said Tobar. "It is vital that we are working together to raise our voices for the overall event industry."