Expanding the value proposition: an association's AMC partnership leads to expanded member value.

The future looked bright for the Hospitality Sales and Marketing Association International (HSMAI) as it entered the new millennium. Membership was on the rise, the industry was profitable and growing, and the association was moving forward and expanding its reach globally.

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Then there was September 11. And the association community was faced with the residual effects of a slow-to-recover economy and a collective mood of uncertainty. These factors affected all aspects of association business from membership and meetings to finances and revenue.

In the case of HSMAI--a 75-year-old, global, professional organization of sales and marketing professionals representing the hospitality industry--the challenges extended beyond the economic downturn. HSMAI's membership needed the support of their professional association more than ever. They faced industrywide rate cutting, staff reductions, and looming budgeting issues in their everyday professional lives. Members were facing the toughest economic times yet, and the association needed to support their radically changing needs.

In the spring of 2002, HSMAI turned these challenges into an opportunity for growth, improved finances, and enhanced member services by moving to an association management company.

With the state of the hospitality industry, the challenges of tracking membership data (due to failed technology), and the need to reallocate resources to create new member benefits, the board and I recognized that a transition to an AMC would allow us to reduce fixed expenses and provide the discretionary resources to continue the strategic direction of HSMAI.

At the time that we made this decision, I was on the board of the Convention Industry Council, which is managed by Association Management Group, a full-service association management company based just outside of Washington, D.C. I approached AMG's president, Bruce Wardle, to discuss the possibility of AMG providing services to HSMAI and to talk with him regarding the opportunity for autonomy within an association management company.

After extensive discussions, we decided to pursue a relationship with AMG in which the company manages the operational components of HSMAI. This allowed us to enhance HSMAI's technology, financial, and overall operational management capabilities.

For us, AMG represented a means of providing operational efficiencies and reducing general and administrative expenses through economies of scale. What followed was a transition that was transparent and seamless for our members. For the broad HSMAI membership, the only change being made at HSMAI was its physical address.

AMG offered us the resources and expertise of shared services departments in information technology, human resources, creative design, and finance and accounting to address the organization's operational needs. We signed an agreement with AMG on April 1, 2002, and physically moved our staff into the organization's new home at AMG on May 15.

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The move allowed HSMAI to cut the costs of overhead by eliminating the receptionist, office manager, database coordinator, and comptroller positions, which are now provided through AMG's shared services. Our database needs were fulfilled through AMG's information technology department. The transition also allowed HSMAI to upgrade its membership database software without the capital outlay that would have been required if we were still a stand-alone association.

Rather than being isolated in a standalone environment, HSMAI staff are able to grow through interaction with AMG's more than 100 employees with expertise and experience in association management, meetings, and communication. Knowledge and experience sharing is facilitated by monthly internal professional development meetings in areas such as publications, communication and marketing, information technology, and meetings. There is, of course, informal knowledge sharing among colleagues on a daily basis as well.

The move to AMG was an opportunity for the HSMAI staff to focus more time on strategic initiatives to directly benefit the membership. With AMG's shared services to handle the operational issues such as technology support, accounting, equipment purchasing and leasing, HSMAI staff now focuses solely on services and programs to assist members. As a result, HSMAI has developed additional value-added membership programs that have resulted in a membership increase of nearly 6 percent in 2003. In just the first quarter of 2004, membership is up by 4.4 percent.

With nearly 7,000 individual members from 35 countries, HSMAI's focus is on providing professional development opportunities and resources for its membership and hosting the largest and most prestigious travel awards event of its kind in the world to showcase the best in hospitality and travel advertising, marketing, public relations, and Web site design and development. The organization also hosts the leading trade show and educational events for meeting planners, producing dozens of meetings per year.

Through the growth in strategic programs and membership, coupled with the savings in operational costs provided by AMG, the association was able to create a new senior position--vice president of chapter relations--in January 2003 to enhance services to our members and chapters. HSMAI has used the savings provided by the transition to provide grants to chapters and develop a series of strategy conferences.

We are now marking our two-year anniversary with AMG. Our move to an AMC proactively addressed the challenges posed by internal operations and the external events within the hospitality industry. Over the course of the past two years, HSMAI has increased its membership, cut its operating expenses, developed new strategic initiatives, enhanced its online capabilities, and continues to exceed the expectations of our board of directors and members.

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Robert A. Gilbert is president and CEO, Hospitality Sales and Marketing Association/Client Leader, Association Management Group, McLean, Virginia. E-mail: [e-mail].