Section 2: Funding & resource

Essentials

Your destination is unlikely to have a dedicated fund for supporting business events, including the staffing and operational costs related to software or marketing and sales activities. Destinations at the ‘essentials’ level may have one person managing business events alongside other responsibilities, such as leisure tourism marketing or travel trade, with limited capacity to focus solely on attracting more business events.

You may look to fund some of your activities through existing membership fees from partners like hotels, venues, or attractions. Generally, you don t have a specific budget for any sales activity or training relating to business events sales and marketing.

Advanced

At the advanced stage, you will have a dedicated team focused solely on business events, including specialists for areas like the ambassador programme. Your destination will have a clear strategy and action plan for proactively targeting business events, operating both domestically and internationally. You will have a specific budget for marketing, communications and sales activities, which may be sourced from your organisation or generated through a combination of commission income, trade show partnerships, membership fees, and private sector income (for example, paying to be listed in a venue directory or destination guide).

You are likely to participate in sales and marketing activities such as exhibiting at trade shows both in the UK and abroad, and you will be a member of industry associations like the Meetings Industry Association, ICCA, and PCMA. Your ambassador programme is likely to be well-established, and you actively bid for and secure international association conventions. 

Commission-based model

The commission-based model involves a destination charging a commission, typically between 8-10%, on business placed. The business events team or convention bureau manages venue finding and accommodation bookings, forwarding enquiries to the appropriate venues and accommodation providers. Once the client confirms their booking at a venue, the venue is required to pay a commission based on the final total, usually after the event has concluded. This is important to consider when forecasting, as the final amount is calculated post-event. The destination (CVB or team member) is responsible for agreeing on the commission rate with the venue and issuing the invoice for payment.

Example:  The Association of Biological Science contacts your destination’s convention bureau with the following enquiry:

• 500-person conference
• 500-person gala dinner
• 500 rooms for three nights

You forward the enquiry to your venues and hotels, obtain rates and availability, and share the proposal with the client. Once the venues are selected, you make the introductions and the event planning proceeds directly with the venues and hotels.

After the event, you will check with the venue/hotel for the final commissionable amount. In this case, you would need to check with two venues and possibly five to ten different hotels, each of which will need invoicing. It’s important to account for the administration required to raise Purchase Orders, invoices, and follow up on payments.

For instance, if the total for the conference venue was 50k (clarify whether catering is included in the commissionable amount and check with your finance team regarding VAT), a 10% commission would mean invoicing for 5k.

To generate 100k in commission income at a 10% rate, you would need to place around 1 million worth of business in your hotels and venues (approximate, depending on VAT arrangements).

You are unlikely to claim commission if you are working with an agency, as they typically claim the commission themselves. You’ll need to agree on the terms with the agency before starting any venue searches. Some agencies may be willing to split the commission with you if you manage accommodation bookings on their behalf. 

With large international associations, Professional Conference Organisers (PCOs) may be brought in after your destination has won the event, and they will often expect to receive all the commission.

✓ Pros

• Generates private sector income.
• A clear return on investment (ROI) can be demonstrated to your members (hotels and venues), quantifying the value of the business placed.
• Your suppliers only pay you for actual business that takes place and the commission rates for convention bureaus are generally a lot less than for online travel agencies (who charge anything between 15% and 25% commission).

✘  Cons

• The process can be labour-intensive and requires dedicated resources to:
• Proactively target the business you want.
• Manage the enquiry, venue finding, and accommodation booking process, including proposals, site visits, and coordination.
• Handle invoicing and financial administration.
• Manage amendments, cancellations, and queries regarding hotel bookings.
• If you re handling a large volume of enquiries and bookings, you will need software to manage the process, which adds an additional cost. This could reduce the resources required to manage bookings if they become automated through the software.
• Income can fluctuate year on year, making it difficult to plan. Commission is typically only received once the event has taken place and guests have checked out. It is not a stable solution to financing business events / convention bureau activity in a destination.

It’s also important to note that this can be a very unstable financing solution when used alone and that you would need to ensure that you have other stable, sustainable funding for resource, tools and implementation of your business events strategy.

In addition you should be aware that there are a growing number of SaaS (Software as a Service) platforms, live availability platforms and AI which are increasingly influencing the way planners book events, particularly for corporate meetings. Considering the role that the business events or CVB team plays as a trusted advisor and local expert and connector, the more bookings that are automated the more this could impact on enquiries via CVBs impacting commission income in the future.

Membership-based model

Many destinations operate a membership-based model, where business event venues, hotels and suppliers pay an annual membership fee in exchange for various benefits, such as listing on your website and guaranteed conference enquiries. This model is often used alongside the commission-based approach. 

Membership tends to offer more stability and is easier to predict. In many UK destinations, the membership model is managed by the Destination Marketing Organisation (DMO) or LVEP and may either include the Convention Bureau or business events activities, or it may have a separate, add-on membership specifically for these services.

✓ Pros

• Provides more stable income and is easier to forecast year on year.
• Depending on the membership rate, it can generate reliable income for business events.
• Membership can be tiered into different levels (for example, gold, silver, bronze), encouraging members to invest in additional activities, such as participating in trade shows or receiving a certain number of email communications to clients each year.

✘  Cons

• Membership fees may not generate a significant amount of income, as this depends on the rates set and what members are willing to pay.
• Effective account management is crucial for retaining members year on year, which requires dedicated resources.
• New members must be continually targeted, so business development efforts should be considered.
• To keep members engaged, you need to ensure you re regularly sending enquiries their way.

Activity based funding

Depending on your available resources, there are opportunities for the private sector to support funding activities by creating commercial opportunities for both members and non-members. Each of these activities come with varying levels of resource requirements so it’s important to consider the resource and budget implications of delivering these activities:

• Venue Guide: You could collaborate with your marketing team to create a bespoke venue or hotel guide, either in print or online. Income could be generated through sponsorship sales or by charging suppliers a fee to be featured.
• Exhibitions: If your destination has its own exhibition stand at a trade show, you might consider selling space to partners, allowing them to exhibit alongside you. This can help offset the costs of the exhibition space or build.
• E-newsletters / Blogs / Promotions: You could sell marketing opportunities to your members, offering them increased visibility on your website, social media channels, or in your newsletters.

✓ Pros

• Can generate a significant income from the private sector.
• Provides added value to your member organisations.
• Enables you to participate in activities, for example, trade shows where you may normally not have sufficient funds to do so.

✘  Cons

• Resource intensive  you will have to deliver what has been paid for so it’s important to factor in both the time and cost to implement the activities.
• Financial pressures on your stakeholders businesses may mean they cannot pay for extra activities; the income is not guaranteed and could fluctuate year on year.

Another possibility to generate further income is to offer the services of the Convention Bureau / accommodation booking team to other events. Some destinations in England are already working successfully to support other citywide events both sporting and cultural. The connections into the local hotels, venues and suppliers are hugely beneficial regardless of the type of event. 

Sports / cultural events

Sports events often have participating teams who stay for an extended period (two weeks or more) in the destination. Software used for accommodation bookings for business events could also be used for sports team bookings as well. This has the potential to generate a significant income stream  although it can be very labour intensive. Some destinations who have done this have used some of the revenue generated to pay for additional temporary staff to support the booking process.

Film production

If your destination is used a lot for film production this can also be an opportunity to book extended stays in hotels for the cast and crew during filming. Large productions often come with their own agency but for the smaller, independent productions you may find an opportunity there to manage their bookings for them and obtain a commission payment from the accommodation provider.

✓ Pros

• Has the potential to generate a significant income for the Convention Bureau through commission income.
• Uses existing software for accommodation bookings.
• Often only has one dedicated person booking for each team (so you don t deal with every individual booking).

✘  Cons

• Extremely labour-intensive  you may have to employ an additional staff member or take on a freelancer to support this type of project. However, you would be able to fund this from the commission you earn.
• Complex payment terms often come with sports events  often they require special cancellation conditions or deposit payments. You will need to negotiate contracts with each hotel.
• Depending on how the organisation is structured you may have to take payment directly from the client and then pay the hotels. This requires careful planning and consideration of any risk to your organisation in doing this. 

Do not rely on making commission income from spectator bookings. Most members of the public will use their usual booking channels — online OTAs or direct with the property. The way to make money from bookings is to handle the main participants, artists and staff / crew for specific events. Also be aware that major organisations such as the BBC already have their own dedicated venue finding and accommodation booking agency — Access Bookings.

There could also be an opportunity to combine resources and funding across the various departments to help fund more advanced software or staff to support the increased bookings.