The market growth in the early 2000s, the desire of the middle class to see the world and the yearly increase of the ticketing market led to the development of the agency, which posted EUR5.5 million revenue in 2005, writes BUSINESS Magazin (bmag.ro).
CMB Travel had been serving upmarket clients since the beginning, selling personalized vacations and exotic destinations. Many managers and entrepreneurs went to CMB Travel over the course of time and then, satisfied with the service, asked for offers for the companies they worked for. “The event division thus developed along the way, because of my principle of not turning any customer down,” Roxana Balcescu recalls.
Going from offer to offer for various events, Roxana Balcescu realized that even though the last few years had been difficult, she overcame them relatively easy, when all her colleagues on the travel market had trouble going forward.
The Balcescus had a rough time in the first year of the crisis in 2008, when they had to revise their revenue projections downwards from EUR10 million to EUR9 million, but the year was worse than they had expected so that they ended it with EUR7 million in revenue. 2009 and 2010 came with significant decline to EUR4.2 million and EUR3.8 million, and 2011 was a year of stagnation. Prospects for 2012 are either stagnation or slight growth, depending on the new contracts that the company might get.
The last few years have been slow for the industry they operate in, as the travel and event market went down, and the only stable business was the corporate travel.
Can corporate events be even more profitable than travel? Or are they merely easier to manage under the new rules of the market put in place in the last two or three years?
CMB Travel started to organize events every now and then a number of years ago. Generally, almost all travel agencies derive revenue from both leisure and business travel, with the percentage of the two varying from one agency to another. Most travel agencies admit that ticketing is their most profitable business, though, which is also the most frequent operation part of what is known as business travel. Yet corporate customers demands go beyond that, so that they are now asking for teambuilding offers, incentives (vacations organized for business partners) and most often, for corporate events.
“It became quite clear to us as early as 2004 or 2005 that event planning would follow an upward trend over the years to come,” says Roxana Balcescu, who had already organized events in 2006 and did not have a clear plan whether and how this part of the business would develop. An unpleasant experience with her employees made her reconsider: while an event organized by her agency was in progress somewhere outside Sibiu (central Romania), she was told her employees were not doing their job, as they should have, and she jumped in her car and drove there to address the situation without them knowing she was coming.
That was the moment when she realized the event planning had to become a separate division, which is currently employing ten people, which Roxana Balcescu herself runs, called CMB Events.
CMB Events thus entered a highly competitive market: the local MICE (meeting, incentive, conferences and exhibitions) market, which amounted to about EUR150 million in 2008 and slowed down significantly in 2009, according to the data provided by the Romanian Convention Bureau. The market stabilized at around EUR100 million in 2010 and 2011, experts in the industry say.
Even though the event planning market was affected by the crisis, as the RCB data show, it did not suffer as much as the travel market, where the decline was even more serious (about 50% in the three years of crisis). The worst affected were individual vacations.
The share of event planning in the entire business has increased by 2.3 times over the last three years and last year CMB Travel (which used to be core business of the company in the previous years, especially because of individual travel) accounted for only 29% of the turnover. The corporate business, however accounted for 71%, and 39% of this amount came from events (conferences or seminars). CMB Events includes corporate events, conferences, seminars, teambuilding, incentives and corporate parties. The main industries the company works for are the pharmaceutical, oil&gas industries and companies with large networks of distributors in other industries.
“The corporate segment is rebounding faster and more steadily from the crisis,” believes Roxana Balcescu, who hopes the standards she set in the company (clear quality and organization policies and the clear understanding of the customers’ needs and budgets) and the fact the company is known on the market for the events planned for 150 people on the average will make it easier to expand the customer base in the future.
“The year 2012 turns out to be difficult in many respects,” Roxana Balcescu says. She is optimistic though, because she noticed a slight growth of her industry as of mid last year and hopes it will continue. “
(English version by Loredana Frățilă-Cristescu)