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2016 Event Disruption Study
DownloadsFull Report: 2016 Event Disruption StudyWhite Paper: Mitigating Risk in Modern Meetings and Incentives White Paper: Adjusting Perspectives Regarding Disruptions in Meetings and Incentives
Prepared for The Incentive Research Foundation by
Haemoon Oh, Ph.D.
Dean and Distinguished Professor College of Hospitality, Retail, & Sport Management
University of South Carolina
Miyoung Jeong, Ph.D.
Associate Professor School of Hotel, Restaurant & Tourism Management
University of South Carolina
Acknowledgement – This study was funded by the Incentive Research Foundation (IRF). In addition to the funding, the input and feedback of the IRF staff during the research process are greatly appreciated.
This 2016 Event Disruption Study reports broadly on the state-of-the-art of event disruptions, from the event planner’s point of view, and their impact on the event planning business.
The study also aimed to develop suggestions for future industry practices in handling disruptions.
Disruptive incidents do occur and they are happening in an increasing frequency these days. They include many weather-related phenomena, public enemy such as wars and terrorism, the business partner’s mistakes, and the client’s lack of cooperation.
Eighteen planners participated in a preliminary personal interview study, and 266 planners participated in a nationwide survey in 2016.
- 59% of planners reported that they had experienced any disruption that affected the overall outcome or success of at least one event in the past 12 months. They estimated that about 23% of all 2015-2016 events they planned were impacted (negatively) by a disruption.
- The two most frequently occurring disruptions are weather-related events (38%) and vendor failures (28%). Planners also discussed these two categories of disruptions most frequently when planning events.
- For the most recent disruption, contract hotels were responsible for handling it (47%).
- In general, of the business partners, airlines present the most frequent cause of disruptions through cancellations, delays, and overbooking (61%).
- Among the partners, hotels were most helpful in handling disruptions, perhaps because more disruptions occurred within the responsibility of hotels.
- Among the partners, hotels were best prepared to handle crises or disruptions, followed by DMCs, and airlines. Nonetheless, there was room to improve significantly in the partners’ overall preparedness to handle disruptions.
- 43% of planners or their companies have experienced one or more disruptions causing a financial loss. The amount of the most frequent financial loss fell between $10,000 and $99,999.
- 19% of the planners with one or more disruption experiences in the past 12 months reported that those disruptions damaged the company’s reputation or brand. This implies that approximately 4.4% of all events in the past 12 months experienced some disruptions to the extent which they affected the company’s reputation.
- 41% of the planners have experienced some increase in the time and effort to plan for disruptions in the past two years. 39% of the planners expect that their time and effort to plan for disruptions will increase somewhat in the next two years.
- 54% of the planners require inclusion of contingency plans in all contracts they enter.
- 68% of planning companies provide guidelines or assistance for planning for disruptions.
- When planning for disruptions, the Internet is the most frequently used resource, followed by vendors and company manual.
- 49% of planning companies or planners actively communicate to their attendees about potential disruption situations and suggested actions.
- Hotels were the most frequently switched partner (26%) for failure and poor disruption handling.
- 68% of planners have changed the destination at least once because of perceived risks or disruptions.
- Limitation of liabilities is the most frequently included legal protection in contracts with both vendors and clients.
- Overall, planners perceived their partner’s disruption handling to be about 76% to excellence, consistent with their overall satisfaction with their partner’s disruption handling rated to be about 74% satisfactory. There is room to improve in disruption handling by partners, which will improve the planner’s satisfaction.
- The level of confidence held by planners about planning for disruptions is about 79%. Much room to improve through additional training and assistance.
- The planners listed strong relationships and cooperation with partners and vendors as the most needed resource in their disruption planning.
- Most companies require contingency plans in contracts and provide assistance in disruption planning, regardless of specific disruption experiences.
- A financial loss due to disruptions tends to cause heightened prevention measures, more frequent partner switches, and more frequent communications about disruptions to clients.
- The partner’s event-specific cooperative and creative offerings are more critical determinant of partnership trust than the resources the partner has.
Recent disruptive incidents such as the terrorist attacks in Brussels and Paris, the shooting in San Bernardino, CA, and the spread of the Zika virus urge event planners to develop detailed and focused event plans for their clients’ safety as well as their company’s business success. Today, the travel and hospitality industry is experiencing various disruptive challenges. Most disruptions are unpredictable and thus uncontrollable, often broadly impacting the planning and operation of group incentive travel and offsite corporate meetings. These disruptions can include weather delays, natural disasters, technology outages and hacking, participant or attendee security, medical outbreaks, and terrorism, to name just a few. Disruptions can negatively affect the company’s brand or image as well as the event business model when a disaster or situation is captured unfavorably on social media or by the news media.
In recent years, both the frequency and severity of disruptions have escalated to a point, for example, of forced cancellation of the entire event. Already in 2011, about 43% of planners surveyed for the State of the Industry experienced cancellations as a result of unpredicted disruptive issues (Ibrahim, 2011). Such disruptions relate frequently to weather, full/overbooked flights (lack of flight capacity for rerouting), terrorist attacks, geopolitical unrests, and globalscale virus activities. While disruptive situations have always been a factor for incentive event and meeting planners, their occurrence, and more seriously their growing magnitude of impact on the company’s brand in more recent years, is of critical concern due to today’s unstable geopolitical environment, 24/7 news cycle, social media, and volatile brand and societal image environment. The increasingly disruptive event environment creates intensifying risks, which need to be mitigated and/or require appropriate industry-wide strategies and efforts to deal with for successful meeting and event businesses.
In this industry-wide project, we attempt to tackle some urgent questions and issues related to disruptions in event planning and operations. Specifically, we investigate among others:
a. Type of disruptions encountered or anticipated by planners;
b. Frequency of disruptions experienced;
c. Causes, sources, or origins of disruptions;
d. Impact of disruptions on;
i. the success of a planned event and
ii. the company’s image and brand reputation beyond the event
e. Strategies or actions used by planners to mitigate/manage disruptive situations
f. Evaluations of partner readiness for and performance in disruption handling; and
g. Implications for future industry actions
2. Definitions of Terms
The term events mean off-site, overnight meetings, corporate events, and/or incentive group travels.
Disruptions in this study includes, but are not limited to, various predictable and unpredictable accidents, delays, and/or failures caused by both natural and human acts compromising the success of an event. Among disruptions, acts of God relate to inclement weather, natural disasters, medical outbreaks, etc., while public enemy includes terrors, wars, security threats, traffic accidents, flight delays, etc. Vendor failures could mean overbooking by partner hotels, facility/equipment malfunctions, strikes, technology failures, lack of cooperation, contractual breaches, service failures, etc. Client (or attendee) failures cover no shows, lack of cooperation, cancellations, attrition, social media, etc.
Planner(s) in this study is a professional continuously engaged in planning various events, meetings, and group travels. Depending on the context, the planner may represent their company in responding to the company’s policy, procedures, and practice questioned in this study.
Partner(s) means vendors, suppliers, and other business operators that are in partnership relations, either contractual or informal, with the planner for an event, such as hotels, destination management companies (DMCs), airlines, other planners, etc.
Client(s) are mainly the contracting organizations or their representatives (e.g., executives and decision makers of customer organizations), while attendees of an event typically indicate those are general customers attending the event on site. These two terms could be used interchangeably in some specific context.
Qualified by the screening questions, the respondents to this study were in a position in their company to influence decisions related to site selection, registration housing, event logistics, and execution of meetings and events in connection with their sales force, employees, channels, or customers.
This project consisted of three stages of studies in sequence: secondary research, personal interviews, and a national survey.
1. Secondary Research
The secondary research focused reviewing recent scholarly papers, research reports, and other relevant materials on the topic of the project. We covered various hospitality and tourism research journals as well as some trade journals. We also reviewed available research reports on the related topics. As a result, we concluded the following:
a. Scholarly research on disruptions in event planning and execution is scarce and the published studies are fragmentary. In particular, little research has been reported in recent years addressing the increasing outbreaks of terrorist acts and global scale medical crises such as Zika virus and bird influenza.
b. Few studies provided either a broad conceptual framework or a reliable measurement tool to investigate the impact of disruptions on event outcomes.
c. Some private companies provide research results, but their reports are more descriptive of focal disruptions or of type and frequency of disruptive events than projective into the consequences of disruptions for event success.
d. Few reports touched on detailed measures used by planners to avoid or prevent potential disruptions and, hence, there is a serious void of understanding about the industry’s best practice in disruption prevention and management.
e. Most reports were limited to, by and large, a description of disruption incidents without identifying the locus of responsibility among the partners.
f. There is an absence of both tracking (e.g., longitudinal) and benchmarking studies as a disruption management practice, which could provide valuable reference information for the industry.
We designed our study to address some, if not all, of the issues we discovered through our secondary research as well as through many rounds of discussions with incentive and event planning practitioners and other industry experts. We also used the findings from our secondary research to validate the findings from our personal interviews in an effort to assure that our subsequent national survey eventually addressed the industry’s most pressing issues around event disruptions.
2. Personal Interviews
Through our secondary research, we found no consistent framework and measurement variables to investigate disruptions and their impact on events. Therefore, we conducted personal interviews to build a necessary foundation for a subsequent national survey.(1) We randomly drew 25 planners from a national directory of planners for a personal phone interview. We recorded, with notification to and agreement by the participant, the entire interview for each participant and later transcribed each interview for the purpose of content analysis. We stopped interviewing additional planners after completing the first 18 interviews because we judged that additional interviews were not adding any significant, new information for the project.
The specific goals of the personal interviews were to:
a. Generate the types of risks or disruptions that the planners have encountered in the past two years;
b. Identify the types of contingency plans, methods, or tactics to mitigate the risks the planners listed; and
c. Identify the types of resources used in the contingency plans and financial estimates.
Based on the findings from the personal interviews, we verified the face validity of (a) the identified risks, (b) contingency methods, and (c) type of resources used by planners through discussions with eight planning practitioners/experts. We further reconciled these findings with those reported in the previous relevant studies we reviewed in the secondary research phase. The summary results of the personal phone interviews appear in the next section of this report.
3. National Survey
We conducted an electronic survey with planners nationwide, with a goal of collecting 200 response sets. The measurement variables we developed from the previous stages of the project were operationalized into survey questions. Seven professionals reviewed and provided feedback to refine the survey draft between several revisions.(2) We used QualtricsTM to place the survey on the web and contacted planners via email by using the directories available through IRF, our professional network, and a planner panel retained by a third party organization. Data collection took place over about a four-month period in the mid-2016.
For the national survey, we specifically targeted the planners who:
(1) Had at least some influence on decisions related to events at their organization;
(2) Would complete planning and executing one event in the 2015-16 period;
(3) Would conduct an event that involved at least 10 room nights; and
(4) Experienced any disruption that affected the overall outcome or success of their events in the past 12 months.
By targeting this type of planners, we attempted to achieve a high degree of sample relevance for the study as well as secure rich sources of information. To this end, we placed four screening questions in the beginning of the survey; the respondents who did not qualify by any of these four questions were sent to the end of the survey for immediate termination of their participation.
1. Type of Disruptions Experienced or Anticipated
We summarize the findings of our personal interviews in a table below, based on the transcribed interview contents. The summary focuses on the type of disruptions with some necessary elaboration and examples. The interview sample included 18 planners, 11 of whom were female, with the majority (83.4%) aged 41-60, 95% having worked in event planning for at least five years, and 67% planning at least 10 events per year. The range of event sizes they plan is between as low as 10 and as high as 5,000 attendees. They were based in more than 16 different cities of 13 states and Canada. In terms of the event size by the number of attendees, 28% of the respondents indicated that they had planned events of 10 to 500 attendees. Another 28% indicated 2500 to 5000 attendees, followed by 1000 to 2500 attendees (22%). Additional information about the interview sample appears in Appendix 3.
|TYPE OF DISRUPTION||ELABORATION & EXAMPLES|
Diet, food and beverage, health, and wellness issues
A heart-attack on premise; someone who actually fell out of a wheelchair or fell out of a motorized chair who needed medical attention right away A person who was drunk at a particular location and fell off a cliff An attendee at a ski event once that broke his leg.
Food poisoning, with people getting sick E. coli or some outbreak, redoing the menu Allergies Food running late Ethnic diversity related to dietary constraints, vegetarian, kosher, & porkfree. Food poisoning Food contamination, trips, and falls
Event attendees that are not checking into the contracted hotel Attendees taking too long to come back from breaks.
Suppliers/transportation issues/guests or speakers no show
Terrorism, political crisis, or travel safety/security
Construction or management issues
An accident to the truck transporting the production equipment
Strikes and protests
Strikes in the venue cities like Athens and the DMC’s lack of contingency plan
|Social media||Negative publicity|
|Vendor follow-through||Signage made on wrong material so it was too heavy to use
The band cancels and comedian misses the flight.
The hotel doesn’t follow through with the contract or exploits loopholes.
The hotel rearranges meeting/sleeping rooms, undercutting hotel rates so attendees buy outside of the room block (happens when a late cancellation in the other rooms of the hotel causes the hotel to scramble for guests to fill the vacancy)
The hotel becomes a union property affecting contracts.
Hotel staff changed between event contracting and launching
Vendors/venues not providing the correct food, rooms, servers, not having what was specified
Last minute changes
Client wanting an additional meeting room right before the trip
|Exchange rates/currency||Time of contract signing has a different rate than time of payment, affecting budgets and client willingness to book/travel.|
|Social acceptance||Traveling to the countries that restrict LGBT rights can alienate the attendees, and companies may prefer more liberal destinations.|
Personnel/staffing/ change in personnel
Hotel sells space that is too small
Experience levels, language, and vocabulary barriers (internationally) New relationships with vendors; on-site managers must be established.
Country’s political instability (e.g., Turkey, Zimbabwe, Egypt, Germany, etc.)
Hotel Overbooking/ Hotel rooms
Language barrier and unreliable car and bus services
Affects guest satisfaction
|Catering||People don’t get the correct order, especially a worry when VIPs don’t get their order.|
|Additional insurance||High costs for celebrity guests|
|Contract amendments||Can lead to budgetary concerns and cranky venue management|
Findings of the national survey (explained later in further detail) indicated that planners seemed to experience disruptions quite often for their events. Of the 266 survey respondents (planners), 59% reported that they had experienced at least one disruption that affected the overall outcome 12 or success of their event in the past 12 months. Their disruption experience related to acts of God (38%), vendor failures (28%), client failures (24%), and public enemies (18%). A small fraction of them (3%) reported other disruptions such as a car accident for the speaker, a VIP’s family emergency, rate and service interruptions by Airbnb and/or Uber, client work stoppage by sudden mergers and acquisitions of their company, exchange rate, and widespread sickness affecting almost 18% of the group.
Two disruptions most concerned about when planning events. Weather and natural disaster (heat, hurricanes, tornado warning, rainout, snow storms, volcanoes, etc.) topped the list (35%). Vendor failures (16%) ranked as number two disruption most concerned.
Change of destinations due to disruptions. Most planners indicated the disruption that caused change of destination was weather and natural disaster (10%), followed by medical crises such as Zika virus (8%). Planners also changed their destination because of terrorism or political instability (8%). About 6.5% of the planners changed their destination due to vendor failures.
2. . Frequency of Disruptions Experienced or Anticipated
The 18 planners from the personal interviews reported on the most frequently encountered disruptions. Weather was the most frequent disruption (8%) in the last two years, followed by terrorism (5%), unreliable vendors or vendor failures (5%), and medical crises (5%). Facility or technology problems as well as on-site emergencies including security emergencies appeared next disruptions to various events in lower frequencies. The planners also reported client failures and attrition as the most frequently experienced disruptions.
According to the 18 interview participants, the most frequently used type of contingency plans was to have all the responsibilities and solutions listed in detail in contracts. Onsite emergency plans were most frequently included in contracts. Flight cancellation plans also catch the planner’s attention frequently, while many planners seemed to use pre-event meetings to discuss possible disruptions and backup plans. Others cited as frequently used contingency plans having facility experts, researching the destination well, having alternative sites ready, and finding reliable vendors.
More than half the 18 personal interview participants or their company (55%) have not experienced any disruption that caused a financial loss.
What kind of disruption was most frequently discussed in event planning? A quarter of the planners who participated in the personal interviews chose weather and natural disaster and then vendor failures (12%). Besides, 7% of the planners reported that they discussed flight delays or cancellations most frequently, while about 4% discussed client failures most frequently.
3. National Survey Sample Characteristics
A total of 266 planners participated in this study. They included 46% female and 58% with a college degree, followed by 23% holding a postgraduate degree and the rest holding either an associate degree (13%) or high school diploma (5.7%). Age of the respondents had a broad representation with 18% in their 20s, 30% in 30s, 22% in 40s, 21% in 50s, and 9% in 60s or elder. The largest proportion of the respondents (30%) conducted 10- 20 events in the past 12 months, followed by 23% conducting fewer than 10, 16% 21-30, and 16% 31-50; also, 16% conducted more than 50 events in the same period. Their position included variously owner, president, vice president, sales manager, IT director, purchasing manager, director of events, etc.
The respondents’ business locations (and branch offices) represented at least 159 cities, 46 states (largest 21 from California), and 11 countries including Australia, France, Italy, Jamaica, and Ireland among others. More than half their companies (53%) have been in operation for more than 10 years, while 27% in 6-10 years and the rest in fewer than five years. Nearly one half their companies (47%) had more than 50 employees, followed by 16% employing 26-50 people, 14% 10-25, and 17% fewer than 10. Self-employment or self-ownership accounted for about 5%.
The respondents’ companies were best characterized as corporate (i.e., internal event planning department for a corporation) for 50%, followed by incentive house/third party such as ITA, BCD, Maritz, etc. for 26% and independent planner (e.g., independent or boutique planning group) for 16%. The primary job or assignment focus of their business was incentive planning for 15%, meeting planning for 36%, and both incentive and meeting planning for 44%. For their industry focus, 37% were the high tech industry, 35% the finance/insurance, 15% the automotive industry, and 13% the pharmaceutical/medical/ life science industry. The FY2014 total revenue before tax for their company was more than $10 million for 26%, $1.1 – 2.5 million for 21%, $2.6 – 5 million for 14%, and less than $100,000 for 4.4%.
4. Causes, Sources, or Origin of Disruptions – Results from the National Survey of 266 Planners
For the most recent disruption experienced by planners as described earlier, we also asked the planners about which partner was supposed to handle the most recent disruption if the disruption was supposed to be handled by their partners. The planners chose hotels as most responsible (47%), followed by DMCs (17%) and airlines (2.6%). About 9% of the respondents listed both hotels and DMCs, their own company, security companies, and event venues as most responsible. In general, the party responsible for handling disruptions depended on the type of disruptions as each disruption tended to involve different business partners or vendors.
Among various business partners or vendors, airlines appeared as the most frequent cause of disruptions to events. Almost 61% of the respondents chose airlines as causing disruptions to their events most frequently. Hotels were the second most frequent cause as chosen by 56% of the respondents, followed by local transportation companies other than airlines (40%), catering companies (35%), and DMCs (24%). A fraction of the respondents (4.5%) listed as the most frequent partner causing disruptions companies like third-party hotel sourcing companies, cruise lines, equipment or support vendors, floral suppliers, and union labors.
In contrast, when asked which business partners or vendors were most helpful in handling disruptions, 59% of the planners listed hotels as most helpful, followed by DMCs (44%), airlines (27%), catering companies (24%), and local transportation companies other than airlines (23%). A fraction of the planners (4%) mentioned other partners or vendors such as local convention and visitors bureaus (CVBs) and security companies as helpful.
Planners perceived hotels as best prepared to handle disruptions among their partners. To the question of how well prepared each partner was for handling disruptions, on a scale of 1=not at all prepared, 2=somewhat prepared, 3=prepared, 4=well prepared, and 5=very well prepared, hotels scored 3.69 (standard deviation, sd = .99) followed by DMCs (3.52, sd=.98), airlines (3.34, sd=1.12), and other vendors (3.13, sd=1.02). While generally positive, there seems to be room to improve the degree of preparation for handling disruptions across event industry partners.
5. Impact of Disruptions
5.1.On the Success of the Event
Disruptions appear to be an enduring issue impacting the success of events. The survey participants reported that, on average, 23% of their 2015-2016 events have been impacted by a disruption. About 50% of them reported the percent of their 2015-2016 events that were impacted by a disruption was somewhere between 10% and 30%.
Many disruptions often resulted in a financial loss to the event and company. Of the 266 planners, 43% reported that they or their company had experienced one or more disruptions causing a financial loss for an event. The largest proportion of them (16%) reported that the financial loss ranged from $10,000 to $99,999, followed by 10% reporting it to be less than $10,000, 9% between $100,000 and $499,999, and 5% between $500,000 and $999,999. Five planners (2%) reported it was $1 million or more. Types of disruptions causing such financial losses varied widely including operational mistakes by hotels, inclement weather, air traffic disruptions, bomb threats and terrorism, client no shows or cancellations, healthcare issues, etc.
5.2. On the Company’s Image and Brand Reputation
Once they occur, disruptions seem to damage the company’s reputation. While the respondents reported that 23% of their recent events experienced one or more disruptions, 19% of all respondents estimated that disruptions damaged the company’s reputation or brand. The type of disruptions damaging the company’s name value varied widely. For example, the respondents quoted as the most damaging disruption some case-specific disruptions such as cancellations, client no-shows, terrors in Europe, false ads, food poisoning, hurricane, flight delays, late deposits, noise, storm, and service failure. Similarly, the second most damaging disruptions also included highly incidental disruptions such as accidents, no shows, inclement weather, booking failure, sickness, information technology system crashes, and miscommunication, to list just a few. Overall, these damaging disruptions were associated mostly with the failures of vendors, partners, or clients.
The negative impact of disruptions on the company’s reputation was a general concern to the planners. With the statement that, when planning for an event, they were very much concerned about disruptions that might damage their or their company’s reputation, 65% of the planners either agreed or strongly agreed, while 20% either disagreed or strongly disagreed. The remaining planners neither agreed nor disagreed with the statement.
6. Disruption Mitigation Strategies
Planning for potential disruptions appeared to be fairly significant in overall event planning. On an 11-point scale ranged from 0=not at all significant to 10=very significant, the mean significance score was 7.3 (sd=2.2) with the median and mode of 8, respectively. More than two third (67%) of the planners estimated they spent up to 25% of their event planning time on planning particularly for potential disruptions. Their estimated amount of time and effort spent on planning for disruptions in the past two years has increased somewhat (41%), remained about the same (39%), increased significantly (14%), decreased somewhat (5%), or decreased significantly (2%).
The majority of planning companies require inclusion of contingency plans for disruptions. Specifically, 54% of them required contingency plans for all events they planned, while 37% required for only some events. Twentythree planners (9%) reported that their companies never required any contingency plan for disruption. To determine which events require inclusion of contingency plans, companies used various criteria such as number of participants or size of event (most common), company’s expense, client expectations, economic impact to the company, guests of honor, importance of the event, location, level of risk, timing of event, and nature of the event (e.g., indoor vs. outdoor).
Once the company requires inclusion of contingency plans for disruptions, the majority of them (68%) provide guidelines or assistance, although 21% of the companies still do not provide any. The type of assistance varies from company to company and some examples include:
24-hour access to call centers, emergency services, and corporate travel agency
List of other vendors available
Backup or contingency plans for no shows, transportation, suppliers, speakers, Wi-Fi, and airline reservations, etc.
Checklists, standard operational procedures (SOPs), policies, procedures, and crisis management (safety and security) manuals
Classroom training and online workshops
Consulting and advising
Dedicated resources for contracting, legal review guidance, and counseling
Extra staff, employee assistance, and fail safe team
Financials and funding
Security assistance, especially global, and security training
Registration with US Embassy and state department in case of international events and participation
Travel advisory information
Negotiation with vendors
Not only do companies invest in contingency plans for disruptions in event planning, but they also demand their vendors and clients to have contingency plans before contracting. Nearly 93% of the planners or companies require such plans for all or at least some contracts. Only 7% of planners or companies did not require contingency plans in any contract.
Planners (and their companies) evaluate the level of perceived risk including disruptions and disruption handling before contracting. When asked of the degree of such risk evaluation on a 5-point scale ranging from 1=not at all to 5=to a great extent, they scored 3.98 (sd=1.08) for the destination city, 3.94 (sd=1.22) for the destination country, 3.90 (sd=1.01) for the destination venue, and 3.70 (sd=1.07) for potential program partners.
The Internet (websites) was the most frequently used resource when planning for potential disruptions. On a 5-point scale ranging from 1=never, 2=seldom, 3=sometimes, 4=often, to 5=always for an assessment of usage frequency in planning for disruptions, the Internet resulted in 3.98 (sd=.98), followed by vendors and partners (3.87, sd=.99), company’s guidelines or manual (3.58, sd=1.23), third party consultants or companies (3.27, sd=1.14), and application software (3.04, sd=1.18).
Contingency plans for disruptions seem to be part of regular discussions between the planner and their business partners. The question of how often they discuss potential disruptions and contingency plans with their business partners resulted in a mean value of 3.79 (sd=.94), on the same frequency scale as above. The type of contingency plans discussed included variously:
- 24/7 emergency assistance
- An alternate hotels/locations/destinations, speakers, routes, vendors, dates, travel routes, schedules, events, and/or general backup plans (“Plan B”)
- Ability to cancel with no penalty and contract options to avoid attrition
- Additional ground transportation
- Agents on call to rebook cancelled flights
- Force majeure clause and its specific terms such as “travel to or along the way”
- Data privacy and security
- Safety precautions
- Emergency and business continuity, emergency evacuations, and emergency plans and procedures.
- Extra staff and fail safe team
- Language help
- Medical services for weather and natural disasters
Communications. Planners or their companies actively, albeit not active enough, communicate to their attendees about potential disruption situations and suggested actions. To the statement “I or my company actively communicates to my attendees about potential disruptions and suggested actions,” planners gave an average score of 3.7 (sd=.95; 74% to strongly agree), on a 5-point scale ranging from 1=strongly disagree, 2=disagree, 3=neutral (neither agree nor disagree), 4=agree, and 5=strongly agree. There seems to be room to improve in communications to clients about disruptions to avoid additional financial and reputational losses.
Partnership loyalty. Poor disruption handling by business partners cause planners or companies to switch partners. Almost one half the planners (49%) have switched at least one business partner due to the partner’s poor handling of disruptions. Among the switched partners, hotels were most frequent (26%), followed by DMCs (11%), and airlines (7%). Other switched partners included in a much lower frequency third party hotels sourcing, caterers, housing providers, security partners, speakers, suppliers, tech partners, transportation companies, and other vendors.
Changing the destination was also common among planners or companies to avoid risks or disruptions. In the past two years, 48% of the planners or companies changed destinations one to three times because of perceived risks or disruptions. Another 16% changed destinations 4-7 times, while a small fraction of them (4.2%) changed 8 times or more. The planners who never changed destinations were about 32%, perhaps because they did not anticipate or experience disruptions. The changed destinations included, internationally for example, Africa, Austria, Bangkok Thailand, Cancun and Los Cabos Mexico, Caribbean (Dominican Republic and Puerto Rico), some European capitals, Greece, Istanbul, Japan, Paris, and London. The domestically changed destination, for example, included Boston, Charlotte, Chicago, Jacksonville, Las Vegas, Miami, Naples, Nashville, New York, Orlando, Seattle, St. Louis, Tampa, and Washington DC.
Questions concerning some legal protections such as limitation of liability (e.g., waivers, disclaimers, notification, etc.), indemnification, and force majeure could be critical in recovering from disruption impacts. Indemnification is defined as guarding or securing against anticipated loss through compensation agreement with the partner, while force majeure refers to an unexpected and disruptive event that may operate to excuse a party from a contract. On a 5-point frequency scale (1=never, 2=seldom, 3=sometimes, 4=often, 5=always) with a 6=don’t know option, limitation of liability scored 4.19 (sd=1.05), indemnification 4.08 (sd=1.09), and force majeure 4.10 (sd=1.11) as to how often the planners (n=253) or their companies required in contracts with vendors.
The same legal protections were less often required to be in contracts and varying more with clients. On the same scale as above, limitation of liability scored 4.03 (sd=1.30), indemnification 3.95 (sd=1.29), and force majeure 3.83 (sd=1.31).
Seen from the standpoint of attendees or event/program sponsors, legal protection was of less an issue. Based on the same frequency scale, attendees or event sponsors required legal protection sometimes or often from the planner or his/her company (3.56, sd=1.51), from the vendors or partners of the planner (3.62, sd=1.47), and from other attendees (3.25, sd=1.54), respectively.
Who signs attendee waivers? An equal number of planners (34%) reported that either (1) the attendee signs waivers for both himself/herself and his/her guest or (2) both the attendee and the attendee’s guest sign waivers separately. Twenty percent of them reported that they required nothing (no waiver).
Collection of attendee waivers was divergent as well. About 25% of planners collected waivers on line, while about the same proportion of planners never collected waivers. Collection of waivers on line or on site, whatever is convenient, accounted for 24% of the planners, while onsite collection represented 18%. Other ways of collecting waivers included, in a much lower frequency, attendees on line/guest in person, fax, and online with no signature but checking a box for agreement.
7. Partner Readiness and Performance in Disruption Handling
As part of the national survey with planners, we asked a series of questions addressing the readiness and performance of their business partner/vendor that was supposed to handle any recent disruption that affected their event. The results reflect the state-of-the-art of the event industry suppliers’ practices and performance in crisis management while pointing to directions for industry-wide improvement in such practices.
Planners evaluated the partner’s overall handling of the recent disruption on a 5-point scale with 1 indicating poor and 5 excellent. The mean was 3.8 (76%) with a standard deviation of 1.17. More than half the respondents gave either 4 or 5 on the scale, showing general satisfaction with their partner’s disruption handling even if there still was some room to improve.
Planners’ satisfaction with the partner’s performance in handling disruptions was moderately high, still with room to improve. On a 5-point scale anchored with 1=very dissatisfied, 2=dissatisfied, 3=neutral, 4=satisfied, and 5=very satisfied, the mean score was 3.71 (sd=1.06, 74%). About two third of them (65%) reported they were either satisfied or very satisfied, while 13% were either dissatisfied or very dissatisfied.
Planners’ evaluations of the partner’s readiness or capacity to handle disruptions were positive, but not strongly positive enough leaving some room to improve. On a 5-point scale ranging from 1=strongly disagree, 2=disagree, 3=neutral (neither agree nor disagree), 4=agree, to 5=strong agree, planners gave 3.58 (sd=.92, 72%) to the statement that the partner was carrying a good insurance coverage for the disruption the partner was supposed to handle. About 57% either agreed or strongly agreed with the statement while 12% disagreed or strongly disagreed; 31% remained neutral.
For the statement that “If necessary, the partner could take care of the loss associated with the disruption through its insurance plan,” the planners marked an average of 3.57 (sd=.96, 72%). About 56% either agreed or strongly agreed, whereas 11% disagreed or strongly disagreed. About one third (33%) of them stayed neutral.
Could planners rely on the partner’s contractual protection against such a disruption that affected their event? The mean score was 3.61 (sd=.95, 72%); 59% either agreed or strongly agreed while 31% were neutral and 10% were either disagreed or strongly disagreed.
The partner’s resourcefulness. When necessary, planners needed the partner to take care of the loss associated with the disruption through the partner’s insurance plan and coverage. For such a possibility, the planners rated their partner at 3.57 (sd=.96, 72%). About 56% agreed or strongly agreed that their partner would do it, while 33% remained neither agreed nor disagreed. The planners who disagreed or strongly disagreed was 11%.
Whether the partner had an appropriate infrastructure and resources to handle such a disruption resulted in a mean score of 3.75 (sd=1.03, 75%). Roughly two third (66%) of the planners agreed or strongly agreed with the statement, while 22% were neutral and 12% either disagreed or strongly disagreed.
The partner’s experience in handling such an emergency situation was rated 3.63 (sd=1.11, 73%). Almost 60% of the planners rated their partner positively (i.e., agreed or strongly agreed), while 14% negatively (i.e., disagreed or strongly disagreed) and 27% neutral.
For the statement “The partner offered a good contingency plan for such a disruption,” the mean score was 3.56 (sd=1.11, 72%). The planners who agreed or strongly agreed accounted for 58%, while those who disagreed or strongly disagreed were 17% and the rest (25%) neutral.
The fact that the partner had good safety records was rated at 3.76 (sd=.92, 75%). The agreed or strongly agreed planners constituted 65%, the disagreed or strongly disagreed 8.1%, and the neutral 27%.
The partner’s overall financial capability may be an important factor in forming a business relationship for a variety of reasons. Planners rated the partner’s—the partner that handled the most recent disruption affecting their event’s outcome—financial capability to be in a good shape overall (3.81, sd=.91, 76%). More than two third (69%) either agreed or strongly agreed with the partner’s financial strength in a good shape, while only 7% denied it and 24% were neutral.
The partner’s financial strength seemed to give planners some sense of relief for the business relationship (3.75, sd=.91, 74%). Only 8.6% of the planners were negative, while 65% were positive and 28% neutral about it.
Planners were weakly positive (3.77, sd=.89, 75%) about the partner’s financial strength to, if dictated, cover potential disruptions to their event. Almost 66% of them were positive, while 27% neutral and 7.1% negative.
Three questions measured the partner’s reputation for disruption handling. First, to the statement “In general, the partner had a good reputation for its business,” the planners gave 3.95 (sd=.85, 79%); 75% were positive, 17% neutral, and 6.6% negative. Second, the partner’s brand name recognition was moderately positive (3.98, sd=.88, 80%), with 73% being positive, 22% neutral, and 5.6% negative. The partner’s quality and integrity in handling event disruptions were rated at 3.79 (sd=.90, 76%), based on 66% affirming, 25% neutral, and 9.1% disaffirming.
The partner’s cooperative performance was also measured with three questions. First, whether the partner was cooperative for the success of their event, planners affirmed their partner’s cooperation to be 3.81 (sd=1.02, 76%); 67% were affirmative, 21% neutral, and 11% disaffirming. Second, the helpfulness and willingness to assist of the partner’s staff were somewhat weakly affirmative, with 66% being positive, 23% neutral, and 11% negative. The planners’ satisfaction with the cooperative business relationship orientation the partner demonstrated was rated at 3.76 (sd=1.07, 75%), derived from 66% expressing positive, 20% neutral, and 12% negative.
Five questions tapped trust in partnership, which turned out to be generally positive. For the question whether the partner could be trusted or not, the planners affirmed (3.91, sd=.95, 78%) with 77% being positive, 16% neutral, and 7.2% negative. The second question of whether the partner could be counted on to do what was right resulted in a weak agreement (3.80, sd=.98, 76%), based upon 67% affirming, 23% neutral, and 10% disaffirming. The partner’s level of integrity resulted in 3.89 (sd=.98, 78%); 70% agreed or strongly agreed with a high level of partner integrity, 21% rated neutral, and 8.6% neither agreed nor disagreed. The planners gave 3.88 (sd=.95, 78%) to the statement “This partner is a very reliable supporter of my event planning business,” which derived from 72% being affirmative, 19% neutral, and 8.6% disaffirming. The last trust question was whether the partner was consistent in the manner they conducted the business with the planner, which resulted in a mean score of 3.90 (sd=.86, 78%) from 72% confirming, 21% neutral, and 6.6% disconfirming.
The partner’s creativity was measured in three questions. First, whether the partner was creative offering unique programs was rated at 3.67 (sd=1.05, 73%); 60% was affirming, 27% neutral, and 13% disaffirming. Planners rated the partner’s resourcefulness in suggesting different ideas for their event programs to be 3.70 (sd=.99, 74%), with 62% either agreeing or strongly agreeing, 3.75 3.76 3.81 The partner's staff was always helpful and willing to assist. I am satisfied with the cooperative business relationship orientation the partner demonstrated. The partner was cooperative for the success of my event. The partner's cooperative performance 3.8 3.88 3.89 3.9 3.91 This partner can be counted on to do what is right. This partner is a very reliable supporter of my meeting planning business. This partner has high integrity. This partner is consistent in the manner they conduct the business with me. This partner can be trusted. Trust in partnership 29 27% being neutral, and 11% disagreeing or strongly disagreeing. The partner’s innovativeness in adding fresh aspects and values to the event was rated at 3.60 (sd=.99, 72%); 59% affirmed, 27% remained neutral, and 15% disaffirmed.
Based on their evaluations of the various aspects of their partner’s capabilities above, planners expressed their commitment to their future business relationship with the partner in the case they had a chance to conduct another similar event in the same destination. Four questions gauged their relationship commitment. The statement “I am very committed to working with this partner” resulted in 3.72 (sd=1.09), with 65% agreeing or strongly agreeing, 22% being neutral, and 13% neither agreeing nor disagreeing. The intent of planners to return to the same partner without hesitation was 3.65 (sd=1.13) strong; 63% were positive, 19% neutral, and 18% negative. Planners gave 3.73 (sd=1.09) when asked as to whether the partner deserved their event business again; 66% affirmed, while 15% disaffirmed and 19% stayed neutral. Finally, the same partner was not likely to be the planner’s sole, strong favorite choice among many possible partners as reflected in the mean score of 3.69 (sd=1.12, 74%); 64% affirmed, 19% remained neutral, and 17% disaffirmed.
8. Implications for Future Industry Actions
In terms of the resources that planners usually use or additional resources that they wish to have, seven of the eighteen personally interviewed planners indicated technology including online communication/monitoring systems, conference apps, or better Internet connectivity would be helpful in addressing possible disruptions. Four of the eighteen interviewees mentioned a comprehensive website that included everything from weather to hotel information of the destination was or would be very helpful. Three planners mentioned the additional resources should be well-trained staff members who were especially experienced with new conference apps and other supportive technology. Two planners indicated experience was one of the key resources that helped them address the previous disruptions. Other resources mentioned included better vendors, strong legal department which could help with examining the contract, extra suppliers, and partner review steps.
More than one half the planners (51%) expect that their time and effort to plan for potential event disruptions will increase either significantly or somewhat in the next two years. Only 7.9% expect a decrease, while 41% expect no change.
Planners’ perceived competence in planning for disruptions was good. Three questions measured it on a 5-point scale anchored with 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree. The statement, “I am confident I can plan effectively for a variety of potential disruptions for my incentive group travel, meetings, and events,” scored 3.89 (sd=.89, 78%), with 77% affirming (i.e., agree or strongly agree), 15% neutral (i.e., neither agree nor disagree), and 7.5% disaffirming (i.e., disagree or strongly disagree). Planners were ready to address various issues related to event disruptions (3.96, sd=.86, 79%); 81% affirmed, 12% remained neutral, and only 6.8% disaffirmed. They also felt they had knowledge and experience in planning for different disruptions (3.94, sd=.95, 79%); 78% were positive, 14% neutral, and 7.9% negative.
Planners indicated the extent to which they needed several resources for handling various disruptions they anticipated, on a 5- point scale ranged from 1=not at all, …, 5=to a great extent. The mean scores (sd; % scaled against 100%) were 3.70 (1.06; 74%) for additional training and education, 3.93 (.97; 79% ) for previous experience, 3.68 (.99; 74%) for additional manpower and staff, 3.70 (1.11; 74%) for reliable third party reference sources, 3.89 (1.01; 78%) for the company’s support and guidelines, 3.67 (1.08; 73%) for assistance by experts or consultants, 4.17 (.94; 83%) for strong relationship and cooperation with partners/vendors, and 3.72 (1.13; 74%) for strong legal team supporting contracting. Apparently, relationship quality with their partners appeared to be a resource in a greater demand for planners.
In general, 55% of the planners reported that their internal and external clients set expectations or criteria for crisis (disruption) planning, while 43% reported no such partner demand. According to the former group, those expectations or criteria included variously:
- General disruption prevention and handling plan
- Backup and (medical) emergency plans (Plan B, with alternate options)
- Advance notice
- Bi-monthly security calls with CMO and security partner
- Cancellation policies
- Chain of command
- Communication strategies and procedures
- Contract and terms (clauses that mitigate risk and minimize damages) and obligations
- Down payment
- Exit strategy
- Extra help, staff, team, etc.
- Full risk assessment
- Government involvement for security
- Service guarantee
- Predetermined operations manual for disruption handling
- Knowledge and contracts regarding potential issues
- Planning and policy documents
- Refund policy
- Reviews and safety plan
- Setting up emergency fund
- 100% availability at all times
- Partnership with other vendors
- Awareness of vendor planning
- Budget allowance
- Destination advisory policies
- Financial auditing practice procedures
- Hotel rooms ready on arrival
- Individual meeting with security
- Insurance and sufficient coverage
- Leadership presence
- No loss of revenue
- Trained staff
- Venue relocation
- Vendor vetting
Preventing the negative impact of disruptions to any event tends to prevent damage to the company’s reputation or brand name. The planners who experienced any disruption that affected the overall outcome or success of their events in the past 12 months tended to report (20% correlated) that their companies also experienced disruptions in the past two years that damaged their company’s reputation or brand, or vice versa. Although small, there was a tendency that disruptions, once they occurred, tended to affect not only the outcomes of the event itself but also the overall reputation of the company. Of course, in general disruptions tended to affect the event’s outcome itself more (59%) than the company’s reputation (19%).
Disruption experience gives learning effects to the planners in terms of disruption prevention and planning. We compared two groups of the planners on various planning activities and perceptions: (1) one group that reported they experienced any disruption that affected the overall outcome or success of their event in the past 12 months (“the disruption group”), vs. (2) the other that reported no such an experience (“the no disruption group”). These comparisons accounted for statistical sampling errors. Following is a summary of the comparisons:
- Both groups are equally concerned about disruptions that may damage their or their company’s reputation when planning for an event.
- Both groups equally require legal protections such as limitation of liability, indemnification, and force majeure to be incorporated in contracts with both vendors and clients.
- The disruption group considered their planning for disruptions as part of their overall event planning to be 13% more significant than did the no disruption group. Apparently, disruption experiences seem to make planning for disruptions a more important part of overall event planning.
- Before contracting, the disruption group evaluated destination venue (16% greater) and potential program partners (13% greater) to a greater extent than did the no disruption group for the level of perceived risk including disruptions and disruption handling. Previous disruption experiences seem to make planners be more careful in assessing disruption risks associated with the event venue and partners, perhaps because most disruptions were attributable to the venue and partner. Nonetheless, both groups evaluated destination city and country to the same extent for such disruption risks.
- The disruption group discusses potential disruptions and contingency plans with their business partners 14% more often than the no disruption group does. Also, the disruption group communicates to their attendees about potential disruption situations and suggested actions 10% more actively than the no disruption counterpart does.
Preventing any damage to the event should be the focus in disruption planning as a damage to the company’s reputation produces less learning effects. Similarly, we compared two groups on the same planning activities and perceptions: (1) the one group that reported they or their company experienced any disruption in the past two years that damaged their company’s reputation or brand (“the damaged group”), vs. (2) the other group that reported no such a disruption or damage (“the no damage group”). The damaged group communicates to their attendees 14% more often than the no damage group does about potential disruption situations and suggested actions. However, the two groups were equal on:
- The level of their concerns about disruptions that might damage their or their company’s reputation;
- The significance of their planning for potential disruptions in overall event planning;
- The extent to which they evaluated destination country, destination city, destination venue, and potential program partners for the level of perceived risk (including disruptions and disruption handling) before contracting;
- The frequency of discussing potential disruptions and contingency plans with their business partners; and
- The extent to which they required both their vendors and clients to incorporate into contracts legal protections such as limitation of liability, indemnification, and force majeure.
Planning for disruptions required more time and effort in the past two years and it will continue requiring more planning time and effort in the near future. The significance of planning for potential disruptions to overall event planning has a small positive correlation with (a) the increased amount of time and effort the planners spent to plan for potential event disruptions in the past two years (24%) and (b) the amount of time and effort that the planners think will increase in the next two years for planning for potential event disruptions (20%). In other words, the more time and effort the planner spent in the past two years or anticipated to spend in the next two years to plan for event disruptions, the more significant he or she considered planning for disruptions was to overall event planning.
In addition, the increased amount of time and effort spent in the past two years to plan for event disruptions has a fairly strong correlation (61%) with the amount of time and effort predicted to increase for the same purpose in the next two years. That is, the planners who reported an increased amount of time and effort spent recently on disruption planning tend to expect an additional increase in time and effort they need to spend in the near future on disruption planning. Clearly, the planners who are mindful of and actively engaged in disruption planning expect to spend even more time and effort in the future on the same planning activities.
Regardless of previous disruption experiences, event planning companies are trending to require contingency plans for the events they plan. Whether planners have experienced any disruption that affected (negatively) the outcome or success of their event was an important determinant of whether their company required inclusion of contingency plans for at least some events. While 59% of the planners experienced such a disruption in the past 12 months, more than 91% of their companies required contingency plans for at least some events. Having not experienced any such event disruption in the past 12 months, 34% of the companies still require inclusion of contingency plans for at least some events. Only 6.8% of the planners have not experienced such a disruption and their company does not require contingency plans for any event.
Most companies require contingency plans for their events regardless of whether they have experienced reputation-damaging disruptions or not. When planners (or their company) have experienced any disruption that damaged the company’s reputation or brand, their company tended to require contingency plans for disruptions for at least some events. In contrast, a small proportion (8.6%) of those that have not experienced any such disruption tend to require no contingency plan for any event. While 81% of the planners (or companies) have not experienced any reputation-damaging disruption in recent years, 91% of the planners required inclusion of contingency plans for at least some events.
Most companies provide guidelines or assistance for disruption planning regardless of whether they have experienced a disruption affecting the outcome or success of the event. The planners who experienced any disruption affecting the outcome of their event in the past 12 months tended to report that their company provided guidelines or assistance in planning for disruptions. Almost 63% of them experienced such a disruption in the past 12 months; yet, three quarters of them confirmed that their company provided necessary guidelines and assistance for disruption planning. While 25% affirmed the availability of their company’s guidance or assistance with no particular disruption experience in the past 12 months, 11% reported the unavailability of such assistance even if they experienced a disruption in recent years.
A small number of companies experienced a damage in their reputation due to disruptions and it does not seem to affect resource decisions for disruption planning. Whether the company experienced any disruption damaging its reputation or brand had nothing much to do with whether it offered guidelines or assistance in planning for event disruptions. That is, the proportion of the companies providing or not providing guidance or assistance were balanced between those that had experienced any reputation-damaging disruption and those that had not.
Companies are providing guidance and assistance for disruption planning. The demand for disruption planning tended to coincide with the company’s support for disruption planning. The planners who reported that their company provided guidelines or assistance for disruption planning also considered disruption planning was a more significant part (13% higher) of their overall event planning than those who reported no company assistance, or vice versa. Similarly, those with company assistance said their time and effort to plan for disruptions had increased 9% more in the previous two years and would increase 14% more in the next two years.
Disruption experiences tended to require vendors and clients to have contingency plans in business contracts. The planners reporting that they had a disruption affecting the outcome or success of their event in the past 12 months also reported that their company required vendors and clients to have contingency plans in some or all contracts. Although 59% experienced such a disruptive event recently, nearly 93% of their companies required their vendors/clients to have contingency plans in at least some contracts. Moreover, 37% of the planners who reported experiencing no such disruptive event in the past 12 months still reported that their companies required their vendors and clients to have contingency plans in some or all contracts.
Recent reputation-damaging disruptions motivate companies to require contingency plans by vendors and clients. The companies that experienced any disruption in the past two years that damaged their reputation or brand tended to require their vendors and clients to have contingency plans in some or all event contracts. Although only 19% of all planning companies experienced such a disruption in the past two years, nearly 93% of all companies required their vendors and clients to have contingency plans as part of at least some, if not all, contracts. Only 7% of all companies did not experience a reputation-damaging disruption in the past two years and they also did not require their vendors/client to have contingency plans in any contract they entered.
Companies tend to require contingency plans both for events and in contracts. The planning companies that required contingency plans to be included in the events they planned also tended to require their clients/vendors to have contingency plans in some or all contracts. For example, 91% of all companies required contingency plans for some or all of the events they planned, while 93% required their vendors and clients to have such plans in some or all contracts.
The more significant disruption planning is, the more often the planner discusses potential disruptions and suggested actions with their business partners. The significance of disruption planning in overall event planning significantly correlated (47%) with the frequency of discussions about potential disruptions and contingency plans between the planner and the business partner. That is, the more significant disruption planning was to overall event planning, the more often the planner and the business partner discussed potential disruptions and contingency plans.
The more competent the planner feels about disruption planning, the more often s/he discusses potential disruptions and suggested actions with the business partners. The frequency of discussions on potential disruptions with the business partner is also modestly correlated with the planner’s perceived competence in disruption planning. That is, the more competent and ready the planner is, the more often the planner discusses with the partner on potential disruptions. Measured with three questions reflecting (a) disruption planning confidence (33%), (b) readiness to address various disruption-related issues (47%), and (c) disruption handling knowledge and experience (39%), perceived competence has an average correlation of 40% with the frequency of discussions.
The more the company requires contingency plans of its business partner, the more actively it communicates to its clients about potential disruptions and suggested actions. The companies that require contingency plans for the events they plan tend to communicate more actively to their clients about potential disruption situations and suggested actions. For example, the companies that require contingency plans for all events engage 10% more in communicating potential disruptions and suggested actions to their clients than those that require contingency plans for only some events. Compared to the companies not requiring contingency plans for any event, the companies requiring contingency plans for all events communicate 41% more actively to their clients about potential disruptions. Similarly, companies requiring contingency plans for only some events communicate 29% more actively to their clients about potential disruption situations and suggested actions.
Chances are that disruptions will cause both a financial loss and a damage to the company’s reputation simultaneously. Although nearly 50% of the planners reported that the recent disruption they experienced resulted in neither financial loss nor damage to the company’s reputation, 13% said the disruption damaged the company both financially and in reputation. Almost one third (31%) of the planners reported a financial loss but no damage to the company’s reputation, whereas 7% reported a damage to the company’s reputation without causing any financial loss.
Disruptions causing a financial loss motivate heightened disruption prevention measures. Companies with an experience of a disruption causing a financial loss (“Yes”) tend to be more sensitive to prevention strategies. For example, compared to the companies that have never experienced a disruption of financial loss, they discuss 11% more often potential disruptions and contingency plans with their partners. They also tend to require in contracts with their vendors and business partners incorporation of legal protections such as limitation of liability 9% more often, indemnification 10% more often, and force majeure 12% more often. Similarly, they also tended to require in contracts with their clients incorporation of limitation of liability 14% more often, indemnification 15% more often, and force majeure 16% more often.
Disruptions causing a financial loss result in a higher tendency to switch the partner, or vice versa. Planning companies with an experience of a financial loss due to disruptions tended to have switched their business partners more often (28%), while those without such an experience also tended less to switch (i.e., stay with) their partners (34%). Of the 262 companies, 22% have switched their business partners without a disruption experience causing a financial loss, while 16% had a financial loss due to disruptions but still did not switch their partners.
As the amount of a financial loss due to disruptions goes up, so does the tendency to switch the partners. The number of planning companies that switched their business partners was consistently larger in all categories of financial loss amounts. For example, 17 companies reported that they lost less than $10,000 due to a recent disruption and switched the partner causing such a loss, while only nine (9) companies lost the same amount but stayed with the same partner.
The more competent the planner was in disruption planning, the more frequently the planner uses vendors and partners. The planner’s disruption handling competency was measured in three questions addressing his/her (1) overall confidence in planning effectively for a variety of potential disruptions, (2) readiness to address various issues related to event disruptions, and (3) knowledge and experience in planning for event disruptions. More competent planners tended to use vendors, partners, the Internet (websites), and the company’s guidelines or manual, in that order, followed by application software and third-party consultants or companies.
Poor partner performance in disruption handling is a likely cause for more frequent discussions about disruptions with business partners, stricter legal protections in contracts, and more negative evaluations of the business relationship. The planners who switched their business partner tended to discuss potential disruptions with their partner 11% more frequently and require legal protections in their business contracts 8% more often than those who did not switch their business partner. In contrast, their evaluations of the partner that was responsible for handling the most recent disruption were more negative than the evaluations given by the planner that did not switch the partner. The negative evaluation gap was approximately 6% for the partner’s disruption handling, 8% for trust in the partner, and 12% in their commitment to the business relationship with the same partner.
The client’s expectations or standards for disruption prevention/handling also mean requiring legal protections from the planner, vendors, and other attendees. Once they set expectations or criteria for crisis (disruption) planning for planners or companies (“Yes”), the clients also tended to require specific legal protections from the planning company 21% more often, from the vendor or business partner 19% more often, and from other attendees 21% more often.
Finally, we examined how planners would have built a trusted and committed relationship with their business partners, with a focus on the latest disruption they experienced. We used a basic process model borrowed from the relationship marketing literature. In short, planners would build trust in their partners based on a variety of input factors such as, used in our examinations, the partner’s insurance coverage, resources, financial capability, reputation/brand name, cooperation, creativity, and performance in disruption handling (especially, recent ones). Trust is known to build the planner’s commitment to the partner and partnership. This mental process model looks like this:
Since each input variable we examined was a broad concept, we used a few questions to capture the variable’s range of meaning. The following table summarizes the variables and their measurement question items.
Our examination focused on comparing the impact of each input variable on trust in the partner or partnership, in an absolute sense (i.e., each variable’s independent, not relative, impact scaled against 100%). The partner’s cooperative behavior appeared to be the strongest determinant of partnership trust (64%), followed by the partner’s creativity (57%), resources (55%), financial capability (53%), and so on. Of the seven input variables compared, insurance coverage was the weakest determinant of partnership trust. Interestingly, the partner’s performance in handling the latest disruption was not as powerful a determinant of partnership trust. Overall, the partner’s event-specific helpful behaviors such as cooperation and creativity seem to be more instrumental to building partnership trust than rather what the partner has in business conditions such as resources, financial capability, reputation, and insurance coverage. Trust in the partnership alone could determine 59% of planners’ commitment to the partnership for future event businesses.
For reference to Appendix 1 (Meeting Planner Disruption Study Interviews with Meeting Planners) and Appendix 2 (The Survey Questionnaire), please download the full study here.