Putting Your Money Where Their Mouth Is

by Peter Shure

In 1997 the Professional Convention Management Association (PCMA) created an Ad Hoc Committee on Third-Party Issues. Chaired by John Folks, it was charged with identifying issues and concerns surrounding the business relationships among third parties, their customers, and suppliers. In a preliminary report to the PCMA Board, the committee grouped its recommendations into three broad areas: disclosure, value for fees paid, and fair and equitable business practices.

Taking a cue from the committee, the Twinsburg, Ohio-based Conferon, the nation's largest independent meeting planning company, has developed and published a company code of ethics. Not surprisingly, disclosure is the centerpiece.

"We simply put in writing the things we've been doing for years," said Conferon Executive Vice President Dave Lutz. "One reason we chose to do so at this time is that we've created a Conferon Sales Network, comprised of independent reps. Because it's more of a challenge to manage people who work independently," he continued, "we wanted to establish expectations of how we, as a company, do business. Anyone who doesn't meet those commitments can't be part of our team."

Mike Burns, Conferon's director of account management and chair of PCMA's Ethics Committee, and Bruce Small, of Hyatt, both served on the ad hoc committee on third-party issues. "While he does not know it," Lutz said, "Bruce had a lot to do with helping to shape our document.

"You see and hear a lot about ethics," Lutz continued. "But much of it just remains that-talk! We decided to document what we do and let our customers, suppliers, and the marketplace determine if it is or isn't good practice."

Without question, disclosure is a current industry "hot button." Conferon commits to disclose, in all written agreements with its clients, the commissions it earns from hotels and other suppliers. It also promises to fully disclose all known rebates and/or subsidies requested by clients at the time of initial lead distribution.

"We want to accurately and completely present all information," Lutz said, paraphrasing the code. "One problem we continue to hear of is third parties sending out leads - without saying whom they represent or providing incomplete information. We think hotels and bureaus should have that information."

Another issue that Conferon considers a cause for concern is that of a third-party getting a percentage of its commission up front - before a piece of business occurs. This kind of 'hidden' incentive," Lutz said, "may affect the recommendation for booking a particular property."

That was the impetus for Conferon's commitment to "uphold the best interests of clients by never accepting prepayments or incentives that would in any way influence our supplier recommendations."

"We have attempted to take a leadership position in this area," Lutz said. "The code of ethics is posted on our Web site. We'd like to get some playback from the industry. And, if it's positive, we hope others will follow suit." The Conferon Web address is www.conferon.com.

Peter Shure is editor in chief of Convene.