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Event: 3 day Conference and Gala Dinner
Venue: Sebel Albert Park
In-House AV company: Staging Connections
Contracted AV Supplier: CMS Australasia
Total Revenue for Job: $30,000
TOTAL TOD/Venue Labour Charges: $5440
 
We competed against Staging Connections (in-house) and another supplier to win this job and were able to provide a more competitive quote, despite them having equipment “in-house”.
 
Somehow, Staging Connections still managed to charge us almost 20% of our total revenue for themselves in labour alone! The Sebel has implemented a Contractor Supervisor policy that means there will always be a “Technician On Duty” when there is an external audio visual company onsite. This is not dependent on the event, nor on the experience the AV provider has with the venue.
 
As an experienced and reputable AV supplier that works in venues all over Australia, we have worked at the Sebel for many years, even back in the days it was called Carlton Crest. We know the venue very well and we also have the appropriate insurances, our own OHS policy and conduct Risk Assessments for all jobs. Up until recently, the venue charged TOD fees for the first 4 hours of an install and during the bump out. This made some sense.
 
The current policy now however, means that on any given event, there will be a 2nd AV Technician that sits next to the contracted AV Technician for the entire duration of the conference. What is their purpose? The policy states that it is to “Supervise” the contractor. They literally sit there at the AV ops position. Is this how you would like to spend $80 per hour of your conference budget?
 
On top of the Contractor Supervisor charges, we were also charged labour charges of 8 hours by Staging Connections for “Setting up” and “Packing Down” the permanently installed equipment that we cross-hired from them. We also believe that we were charged for labour that was performed by the Contractor Supervisor. If this is the case, we were being charge $160 per hour for 1 person’s labour!
 
What value was provided for $5440? What did the end client receive for this sum? To be fair, there was some internal patching required of the in-house supplier and there was also screens and projectors hired from the venue. The button on the remote controls to turn these on was pushed by the in-house AV company. Total labour perhaps could be generously put down as 2 hours.
 
In our opinion, there was not much value provided at all. In fact, we would much rather have seen that money go into providing a visually enhanced event for our client. Unfortunately, the money that is being paid to venues even when they are not providing the audio visual service means that events in these venues are suffering. We want to see these policies abolished.
 
Up until this point, we haven’t shed too much light on the commission arrangements between in-house AV companies and hotels. In our next TOD update, we will look at this and seek your opinion as to whether there is a conflict of interest in play. We will also outline our proposal for an alternative policy that will protect venues and not eat into the budget of Event Organisers.
 
If you would like to share your thoughts, comments or stories, please email us.

CMS Australasia is proud to present its inaugural showcase event to coming up in 2012…

Register your interest and book in early as SPACES ARE LIMITED!

With fine food, drink and a spectacular display of inspiring ideas for your events, CMS Australasia’s 2012 showcase will be one to remember!
More details will be coming soon…

The issue of TOD or Contractor Supervisor fees that we raised earlier in the year has been gaining the attention of various industry players. We very much intend to keep highlighting this issue until we together see these policies brought into reasonable and rational bounds. This will enable increased competition for suppliers of Technical Services, which will result in better events, which will strengthen the whole industry.
 
So far, the article “TOD Fees, Necessary Evil, or Just Plain Evil” has been published in CX Magazine online, Australasian Special Events website, CIM Magazine as well as other industry related websites. Read the full original article here.
 

We have had feedback from Audio Visual companies, the PCO Association, Prominent Event Managers and others including a former GM for the largest supplier of TOD Personnel in the country.
 

Here is what some of them are saying…
 

“The senior hotel executive who called could not (or would not) clearly explain what the charge was for but offered me a discount rate of $1000. What irked me most was the lack of a TOD present during the setup…”
-Event Producer
 

“They are an absolute wrought; created by venues and in-house AV providers to bleed more dollars from their clients. I understand that venues like clients to use the venues preferred AV suppliers, but as a client, I want to use who I choose to use. I want to use who I trust to deliver me the best result.  If my supplier signs an agreement with the venue to abide by their terms and conditions of use, then let so be it, leave it at that.  Most of my experiences with TODs are that if they are there at all, they stand around doing nothing – and who wants to pay for that? Not me. I had an instance once where one extremely lazy TOD who had nothing better to do with his time actually ate my dinner that had been set up for me back stage. Outrageous!”
-Event Manager
 

“The PCO Association has been concerned about this for sometime now…We have been running a blog on the topic which has received a number of comments. It is an area we are trying to resolve and have been taking on the hotels where we can.”
-The PCO Association, You can read their letter to the editor of CIM Magazine here…
 

This next one was from an in-house AV Provider…
 

“I think that it (TOD) is fair, the reason an AV company has presence in a hotel/venue is to get as much business as possible, venue A/V prices will (more often than not)  be more than external company’s so when the charges are applied it levels out the amount the end client has to pay.”
 

They are confirming our exact point. In-house AV prices are over inflated and the TOD fees, mean that the client ends up paying more, whichever way they go. Crazy!
 

“As hotels and venues have started to realize the money they can make on audio visual equipment hire without a single dollar spent on AV investment they have started to become excessively greedy. Many AV Hire & Staging companies will rightly argue that the current situation has restricted the growth on the AV Industry with the restrictions in place – and the greed continues, venues receive up to 30% commissions from AV suppliers on equipment and quiet often labour.
In relation to TOD fees unfortunately as highlighted above some AV companies have worked in many of these venues for years without any problems and have an intimate knowledge of the venue and suddenly find they have to pay TOD fees and the in-house supplier is also then having to supply a skilled technician at a low rate to the venue, so once again the venue can make a sizable profit on the recharge. For the inhouse supplier it just doesn’t make sense to have a skilled technician baby sitting a venue when they badly need that skilled technician on other events where they have their stock at least on hire.
Then you have the venues charging the non in-house AV Company to use the loading docks, lifts etc yet they don’t charge any other supplier such as bands, DJ’s, plant hire companies etc for use of the same – this is a charge they level directly at the non in-house AV supplier direct and not the venue hirer – bit rich when the contract for the venue hire is with the client and not the non in-house AV supplier.
AV Hire and Staging Companies have arguably one of the largest investments in stock and assets of any part of the Events Industry and are the ones who support and sponsor every major industry event but where are the industry associations on the subject of TOD’s and commissions.
I also never see a declaration in any AV or venue contracts advising of the commission arrangements in place between the two parties – which in itself I believe to be illegal.”

-Former General Manager for large in-house AV Supplier
 

Share your thoughts and experience with us.
 

With Christmas quickly approaching, many organisations are locking in their venues and suppliers for their annual Christmas events. Book in your Christmas function audio visual with CMS Australasia and receive a gourmet Christmas hamper as our Christmas gift to you. Contact us to take advantage of this great offer.