The changing role of the DMC in a post-pandemic world

The role of the destination management company (DMC) in delivering luxury events and incentives looks set to shift considerably and take on new relevance as corporate groups start to look at their post-Covid travel plans.

‘The presence of a good DMC’ ranked third out of 18 possible ways that incentive travel programmes will shift in the light of Covid-19 according to the Incentive Travel Industry Index (ITII) 2020 – a research study published by the SITE Foundation and Incentive Research Foundation.

Destinations around the world will recover from the pandemic at different speeds, dependent on a number of factors from infection rates and vaccination roll outs to local government and travel restrictions, all of which will impact on the ability to deliver events. For agencies organising events overseas, having the local knowledge, expertise and support of a DMC will be increasingly invaluable in managing this ever-changing minefield of information.

Health & safety management

“The value of a DMC will be more important than ever as we continue to navigate through the end of the pandemic with changes that have forever impacted a destination,” says Gabriele Finocchio, director of sales and marketing at Milan-based Mutika DMC. “Government regulations have changed on a sometime weekly basis. A DMC is able to understand restrictions and provide necessary protocols for groups to travel safely and with risk management a top priority.”

Athens-based Horizon DMC, our partner for inVOYAGE Mykonos 2021, agrees. “As challenging it may be for the DMCs to follow-up with the ever-changing hygienic protocols and safety, this is enlarged when one is attempting to ensure these regulations are followed from a distance. Your on-site partner is the one that will ensure everything is planned correctly and that each vendor complies with the latest international or local protocols,” says deputy president Ifigenia Tsitouri.

Health security and compliance with Covid-protocols will be key to restoring client confidence in booking live events and incentives. No corporate is going to sign off travel unless they are convinced it is safe to do so and their groups will not be put at unnecessary risk. This means every supplier involved, from hotels and restaurants to caterers, transport and activity providers, will need to show they are Covid-secure.

Kerry Roos, director of incentives and travel at Green Route Africa (below), comments: “Anyone can sit down and write a Covid-security protocol and publicise it, but it’s about having someone on the ground who understands how critical that is and making sure they are not just good at writing manuals but following them too. We can make sure our suppliers are being held accountable.”

Post-pandemic landscape

Repeated lockdowns caused by the pandemic have had a devastating effect on many event suppliers from a financial perspective, and the sad truth is that not every business will survive. “As the local DMC, we can provide insight into the suppliers that might be at risk financially,” says Roos.

Valerie Bihet, owner of Miami-based event agency VIBE, which also provides DMC services for inbound business, agrees: “Unfortunately a lot of businesses are closing. If you book something now, you don’t know for sure if it will be there in six months. Even as a local agency and DMC, we don’t know for sure, but we have connections and hear things, so are more likely to have a better understanding.”

Another way DMCs can help practically is by providing additional on-location staffing if needed, so agencies can limit the number of people travelling. “Before, agencies would have sent two to three people out to the destination to manage an event, but if they have a good DMC they trust, they may now choose to send just one person and better utilise the DMC,” explains Bihet.

New trends

Aside from the increased focus on health and safety, the ITII research highlights a number of ways incentives might change in the immediate wake of Covid, including smaller group sizes and a preference for quieter rural and remote destinations. This could open up more independent boutique properties to luxury incentives and events that might previously have not been on the radar.

In both cases – with more remote destinations and smaller exclusive properties – the local knowledge of DMCs will be invaluable. “I am convinced the big city hotels traditionally used for incentives are not necessarily going to be the hotels of choice. Clients are going to want to stay out of city centres for a while and will opt for smaller more nature-based properties and exclusive takeovers,” says Richard Holt, group CEO at Concepts Collection, which delivers luxury experiences and events across Southern Africa.

“Many of these properties are not known to agencies. Our local knowledge in this area is more advantageous than it ever was – 90% of our accommodation partners are owner-managed wine estates and lodges and we know what works and what doesn’t.

“From a health and safety and a creativity perspective, that knowledge is absolutely crucial. My role as a DMC now is to be twice as creative and come up with new ideas, whilst ensuring that health and safety protocols are adhered to.”

Creativity

Indeed DMC services are not all about venue-finding and on-the-ground logistics – they can add a huge amount of value to the creative process too. However, in recent years, there has been criticism directed at DMCs by some agencies who argue they are not being creative enough and just offering the same off-the-shelf activities. DMCs have in turn argued that they are being expected to turn briefs around too quickly and with too little information about the end-client and their objectives

Roos says that pre-Covid, she often received briefs from agencies asking for a response within one or two days while stipulating that it needed to be both creative and competitive. “Creativity is not something you switch on and it happens. If people are really looking for creativity, they need to give us time to be creative otherwise they are going to get a variation on something already available,” she says.

“It’s also collaborative. The agencies we work with best and that get the best out of us are those that work in a collaborative way and share more information with us.” 

The pandemic could end up being a critical turning point for the DMC market. David Vogel, executive vice president at Italia Connection, believes that the role of the DMC had been reduced more and more in recent years. “The service, the local knowledge, the negotiation power, the logistical prowess and that confident and relaxed feeling that everything is taken care of has been more and more taken for granted. It was seen as an overpriced service that was not really worth its money, because so much was available on the internet. So much was being minimised in its value because one had just to Google for a better deal.” He believes that those who supplied quality, gave honest prices and service will survive and exist after the pandemic.

Mark Gatt, managing director at ECMeetings Malta and ECM Portugal agrees: “I think the pandemic will help DMCs in the long term. In the past couple of years, everyone felt they could become a DMC, and some have given the industry a bad name. There has been a lot of repetition and copying of ideas. The pandemic will result in the survival of the fittest – those who continually evolve and innovate will thrive.”

Flexible contracting

As the middle-man between agencies and suppliers, DMCs have already played a vital role in helping agencies postpone and rebook events multiple times and secure refunds. “DMCs have really put their neck out for clients in this pandemic when it came to cancellations. On many occasions, we went back to suppliers and reached amicable deals for our clients. We were able to do that as a result of our buying power,” says Gatt.

“We have also had situations where a supplier didn’t want to or couldn’t provide a refund. As we know we will have business with that supplier in future, we refunded the client on their behalf and now have a credit with the supplier to spend in future, thereby supporting the supplier as well.”

When restrictions finally ease, that role as the middle-man is likely to become even more important from a contracting perspective. According to Roos, a good DMC should be able to add a huge amount of value in negotiating flexible terms with their supply chains to give clients more confidence in booking. “We see our suppliers’ as an extended part of our team. We are all in this together to help move business forward and need to mitigate the risk on terms and conditions as far as makes business sense for everyone in the chain,” she comments.

Elliott Grant, director at a new UK start-up agency BLACK BOOK (above), agrees that flexibility will be vital to getting clients buying again. “We are hopefully about to sign two incentives for 2022 and 2023, and the reason we are able to get the clients to sign is because we have worked with DMCs to get a level of flexibility and protection.”

He concludes: “I have always thought DMCs were vital and even more so now. I am a big advocate of DMCs and wouldn’t deliver a project without one.”