From the complete document, “A Thesis on the Advancement of Destination Management Companies”. Download here.
When clients began submitting notices of cancellation for upcoming programs in early 2020, the most common dispute was whether termination of the event service agreement was subject to the force majeure provision or the cancellation provision.
The force majeure provision typically allowed the DMC to retain earlier received deposits to cover actual costs incurred. The cancellation provision typically required the client to pay the DMC a certain amount of money based off the remaining estimated program cost. Somewhat surprisingly, the ability to resolve this dispute was not necessarily rooted in complex legal theory or crafty negotiations.
Instead, it was rooted in communicating what a DMC is, the services it renders, and the value received by the client up until the point of cancellation.
By discussing the facts, focusing on what each party felt was fair, and setting aside technical legal arguments, DMCs and clients were far more successful in maintaining a healthy relationship and avoiding unnecessary and protracted litigation.
When it comes to demonstrating value and the specific timing in which that occurs, DMC’s may rely upon a newly introduced concept.
The Program Lifecycle: The program lifecycle is a universal progression of event planning that reflects different intervals through which a meeting or event is traditionally formed.
An effective way to illustrate the services rendered by a DMC and the value received by its clients is by way of the below table.
By breaking down the anatomy of a program, DMC professionals are better equipped to understand and communicate their own product, while clients are more cognizant of services performed.
Stage 1 : Pre-Program
Clients typically solicit the services of DMCs for their upcoming meeting or event that is intended to be held in that DMC’s region.
The client provides basic information about the details of that program and ultimately requests a proposal. The DMC will begin gathering extensive pricing information, generating creative concepts, and collaborating with its team and its vendors.
The DMC presents the proposal to the client and, oftentimes, numerous revised versions are requested, along with hosted site visits.
At the conclusion of these efforts, the client either declines to move forward with the DMC, or it awards the business to the DMC. Once both parties have agreed to move forward in the planning process, the event service agreement would be introduced for execution.
Stage 2 : Program Planning
The DMC continues earlier efforts to complete planning, organizing, and modifying the program up until it begins. The DMC will routinely check-in with their client on the program’s details, while also sourcing and engaging vendors to provide unique and superior goods and services.
In doing so, the DMC becomes the liaison between the client and the vendor in order to assume responsibility for the management, production, execution, and even liability; an aspect of the DMC’s value proposition that goes overlooked far too often.
Stage 3 : Program Execution
The client partakes and enjoys the actual meeting or event while the DMC ensures its flawless execution. If and when matters arise, DMC personnel are typically present to address the issue and resolve it swiftly.
Stage 4 : Post Program
The client and the DMC debrief about all aspects of the program. Discussions about how to carryover certain components to future programs are considered, as well as candid conversations about how to improve certain components.
The DMC will perform all final invoicing and reconcile all matters with its vendors.
*This article is derived from the complete document, “A Thesis on the Advancement of Destination Management Companies”, available to download in the DMCC Library.
Download full document here.