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DMCs: Where Do They Sit On the Supply Chain?

By Rajeev Kohli, CIS, CITP, DMCP

SITE President 2016 and 2017

At the recent SITE Conference in Bangkok, I had the opportunity to lead a roundtable discussion on an interesting point of view – what does a DMC do. Do we supply? Or do we buy? Or both?

Now, this is not a new discussion and not one that has a straight answer. Being a well-established DMC myself, I have often struggled with the ‘perceptions’ and ‘prejudices’ of the food chain in our industry. I know there are so many others like me who feel the same.

I think it’s important for the industry to step back and accept the fact that when it comes to DMCs, one size does not fit all. No matter what role we fulfill in the incentive travel eco-system, they are not the same as you cross the world. When I was SITE President, I often had to explain that being a DMC in the United States and a DMC in India / Asia are two very different things. What we can do in our regions is very different. I am often puzzled why DMCs in traditional western markets put themselves down by refusing to provide services that can generate revenue. And why Western buyers mistrust the capabilities of Asian DMCs that are able to do a lot more than they are used to getting in their home countries. Not that one is better or worse than the other, but the differences of every destination and culture allow for great differences in operating styles and roles.

I once wrote an article for SITE on what makes a good DMC. I have myself come across situations where my teams work has saved the relationship between my third-party partner and their end client. A good DMC adds value. A good DMC makes our client shine before the end corporate. A good DMC adds value by knowing their territory. Everyone accepts this. But that appreciation sort of stops when it comes to trusting the DMC partner in getting the best value on the ground.

I recently polled the 54-member countries of the global DMC alliance EUROMIC (which is the oldest DMC alliance in the industry) and estimated that our members collectively bought services in their destinations in excess of $250 million US (if not more). All on hotel, venues, transport and other services. That’s no small number and we are talking only of 54 DMCs. Think how much larger that figure is in the entire DMC universe.

I don’t think its fair to brand a DMC simplistically as a ‘supplier’, full stop. That is where the client makes a very big mistake in underestimating the relationships the local knowledge and the buying power of the DMC. The DMC does local buying throughout the year for multiple clients. They build long term relationships and friendships. A DMC drives the local suppliers through a learning curve on providing better service and experiences. They know that the restaurant which was amazing last time has gone down in quality or that what renovation work is going on in the streets that won’t make the visit as wonderful as it was last year. Small things that only local eyes would know.

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