Recently, a top woman in the travel industry called entrepreneurs who offer package tours (including incentive agencies) “crackpot. As an entrepreneur in the beautiful incentive business, this touches me and what does this comment do to me?
Organizing an event abroad is a laborious but also a wonderful job. It sometimes looks like organizing an event in the Netherlands but legally there is a world of difference. For clients, it is advisable to check carefully how the event organizer is legally organized. Looking at it this way, there seem to be few differences compared to event organization in the Netherlands, but there are many snags.
Argument
For example, any organizer who puts together a package tour (a trip where you combine, among other things, transportation and accommodation under your own label) is a tour operator for the law. And that’s where a complicated argument begins. I limit it for the length of the text to the main points. A tour operator is responsible by law for help, assistance, insolvency coverage and repatriation in the event of a calamity. In short, the organizer is always liable. Even if the tour operator itself can’t do anything about it. And no, exclude in the fine print no agency will get away with that.
It can happen just like that
The organization of foreign group tours for business often involves large sums of money. Some of this falls on airfare, but much of the budget goes on hotel, food, meetings and activities at the destination. In practice, these costs must be paid in full before departure. Imagine that just that one day your group is flying to its destination and the flight is cancelled. It can just happen; airline bankruptcy, strike, bad weather at destination. The tour operator is responsible and liable by law to fulfill the agreed trip. The possible last minute cancellation costs in the event that the trip does not go ahead are at the risk and expense of the tour operator. Amounts that can add up enormously when large numbers are involved. A hotel or other supplier at the destination also can’t do anything about the fact that your group isn’t coming, but will “just” pass on the cost. The organizer cannot recover these costs from the customer.
Risk
These risks are only partially insurable. Case of entrepreneurial risk. Now, unfortunately, margins in the travel industry are not comparable to an average hourly rate of a law firm on the South Axis. Actually, it should be in view of the gigantic risks that must therefore be taken by law. But then I’m afraid I won’t have any customers left. The financial risk for an incentive agency can easily amount to several tons of euros for an assignment of 100 people. That at an average market margin of 12-15%. And if you are unlucky enough to have an acrimonious procurement you ‘may’ do it for 10%.
Passion
This margin must then be used to cover all preparation hours, EU VAT payments, operating costs (insurance, expensive accounting fees, study trips, bank, legal and communication costs, accommodation) , customer visits, inspections, creative concepts. And of course, as an entrepreneur, I also want to make (a little) profit. You don’t have to be a mathematician to conclude that the ratios are totally out of context. I hope that “Brussels” will one day amend the legislation for the MICE. For now, the industry must make do with it. And yet my passion for this wonderful beautiful profession overcomes me to keep this up! It certainly enriches me spiritually, as I organize wonderful productions in particularly beautiful destinations. Then again, I’m a little nuts, because indeed that’s how I feel sometimes as an entrepreneur in this industry.
