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October 8, 2009

Pádraic Gilligan :Global DMCs – a beautiful oxymoron?

Can local knowledge really be delivered on a global basis? The managing director of Ovation Global DMC believes that the global DMC is answering the call of international organisations for a safe pair of hands through the economic turmoil.

The core value proposition of destination management companies (DMC) has been, is and will always be the provision of local knowledge and expertise to agency, association and corporate meetings and events planners. The DMC is the indispensable destination-based professional that mediates the local experience for the visiting parties. His local knowledge and expertise provides the core ingredients for the motivational experience and plays a vital role in helping to achieve the business results.

So why, then, are we seeing a dramatic rise in the number of DMCs proclaiming themselves to be “global”? Is the concept of a “global DMC” not fundamentally contradictory? Is it another beautiful oxymoron? How can you possibly offer “local” services on a “global” basis? What is the value proposition of a global DMC organisation? Why should a client use a global, rather than a local DMC?

Global presence needs global support
The first set of questions may be answered simply: clients are operating more and more on a global basis and want partners who are global too. But what about clients who are not global? Is there anything in the Global DMC value proposition that provides compelling reasons for non-global clients to select the globally aligned DMC as opposed to the independent, non-aligned local operator? I strongly believe that there is and, in fact, I would go so far as to claim that the global DMC concept is the next stage in the professional evolution of Destination Management Services as a specific, key niche in our value chain.

First, some context. The now fragmented, non-standardised distribution chain which characterises our industry means that the DMC may be working for an end-user client, an association or corporate third-party agency or, indeed, some combination of both. DMCs have had to create complex cost matrices in order to recognise these new distribution realities and protect all parties in the chain – from operating exclusively in a wholesale environment (as client to the agent), DMCs now frequently operate in a retail environment (as client to the user) and, sometimes, in an environment which straddles the two. This has come about as a result of the internet which offers everyone unlimited access to local destination knowledge and contacts and because of the rise of procurement, which seeks to buy direct and demands transparency.

Strategic vision
If the raison d’être of DMCs is to provide peerless local knowledge and expertise, what is the raison d’être of global DMCs? Ultimately, it’s precisely the same but with something more that relates to both tactical and strategic business results.

A local DMC can only provide meaningful engagement with a client around the appropriateness and relevance of his own destination in relation to the meeting, incentive, conference or event under consideration. If he’s a good salesperson (and most DMCs are excellent!) then he’ll find all the reasons why his destination should be chosen. Global DMCs, on the other hand, are not tied exclusively or uniquely to one site and can provide truly objective advice around the relevant suitability of any destination as it relates to the business objectives of the client.

The bigger picture
While all local DMC are skilled in creating amazing client experiences whatever the budget might be, global DMCs can do even better. Again, not being tied to one specific site, the global DMC can advise on a macro level where a client is going to find the best experience for the available budget. Global DMCs can also provide comparative price matrices up front, thereby saving the agency or corporate meeting planner significant time and effort.

Clients invest millions in meeting and event programmes that are delivered, usually, by one-off teams created exclusively for that programme. Many such teams have no previous experience of the client’s brand or business. Often these teams work together for up to 36 months (and longer) and in so doing build huge brand, relationship and emotional equity with each other and in each others’ businesses. Then the event takes place, is successful and all the positive equity evaporates as the client has to commence again from scratch with another team, another DMC and another place. Global DMCs provide the perfect solution to this as the team can stay together and the client can be sure of consistent, seamless delivery of his meeting or event by a team immersed in all aspects of his brand.

A safe pair of hands
In times of economic downturn and uncertainty clients need to be certain that all partners on the event delivery chain are financially solid both now and in the future when the event happens. Clients will also need to be sure that adequate systems and certification are in place in relation to insurance and security, heath and safety, disaster recovery etc, global DMCs, typically, as medium- to large-sized enterprises, operate in accordance with best international practice in all of these areas and have robust financial strength.

Global DMCs are not Goliaths or Samsons muscling in on the turf of long-established but non-aligned local DMCs. As long as they continue to service their clients’ needs, their future is secure. Global DMCs, rather, are responding to the kaleidoscopic changes in the marketplace and defining a new value proposition that combines the essential local knowledge and expertise with a new global strategic understanding. In so doing I believe we are elevating and professionalising our standing in the industry.

Pádraic Gilligan is managing mirector of Ovation Global DMC and a board member of Site.

First published on South African website Incentiveworld


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