Business Travel News - December 17, 2007 - (Page 12)

TRAVEL MANAGEMENT Profiles In Travel Management KODAK DEVELOPS CONSOLIDATION PICTURE The Eastman Kodak travel program has seen its travel costs decrease between 10 percent and 15 percent since it began consolidating travel management services four years ago with WorldTravel BTI and now BCD Travel. In that time, Kodak also has reaped more than $1 million annually in airfare savings through policy changes, including abolishing business class travel, persuading travelers to book the lowest applicable fare and driving traffic to low-cost carriers in its home market. “The concept to consolidate into a worldwide program was done for a number of reasons, one of which was to leverage our total volume in air and as much volume in hotel and car rental as we could,” said Eastman Kodak manager of global corporate travel services Doug Baldy. “We were also trying to get better service levels to our travelers and the application of our travel policy more consistent throughout the world.” Baldy has worked in tandem with BCD Travel and its Advito consulting subsidiary to implement a global travel policy and corporate card program, a primary carrier relationship with United and a single car rental contract in the United States and Europe with National Car Rental. Previously, Kodak’s program, which encompasses 12,000 travelers in 34 countries with $41 million in companywide air volume, was fragmented between multiple agencies, COMPANY: including the former Rosenbluth International in Eastman Kodak the United States and Japan, Carlson Wagonlit Travel in Europe and WorldTravel BTI in smaller GLOBAL AIR SPEND: markets, including Puerto Rico. While the Kodak $41 million travel team led by Baldy thought that 66 percent HEADQUARTERS: of its air volume was derived from North AmerRochester, N.Y. ica, 22 percent from Europe, 7 percent from Brazil and Mexico, and 5 percent from Australia and Japan, it also knew had left considerable volumes out of the mix. “We discovered we had the big countries under control,” said Baldy. “The other spend we found was $100,000 in Venezuela, $200,000 in Argentina and $300,000 in Singapore. It wasn’t millions, but it was significant.” Baldy said a key to Kodak’s success was enabling alterations in the global travel management plan to reflect local market needs. “People do business in different parts of the world in different ways, even in the same company. You need local support and local buy-in, and we’ve done it in a number of ways,” he said. Kodak also reduced costs by outsourcing some of its travel management functions to BCD Travel and shedding internal manpower. The travel team, which used to have eight members, has been reduced to five, including Baldy and two staffers dedicated to fleet services. Some former Kodak travel team members have since transitioned to BCD Travel and are dedicated to the Kodak account. Meanwhile, Baldy worked to attain domestic air savings despite being subject to high airfares at Kodak’s Rochester, N.Y., headquarters. Before the introduction of low-cost carriers at the Greater Rochester International Airport in 2000, the airport was the one of the most expensive in the country, Baldy said. The entry of JetBlue Airways and AirTran Airways to Rochester not only offered Kodak new air travel booking options, but also drove down legacy carrier pricing, Baldy said. “We’ve watched our cost per segment go down, and the cost per mile has stayed same for five years,” Baldy said. “We attribute that to a whole variety of discounts, change in policy and low-cost carriers bringing in competition.” Directing 75 percent to 85 percent of air volume to preferred suppliers, Baldy said, is an old model that is “not a magic number any longer, because with airlines changing discounting practices, we had to adjust some travel policies.” The travel policy encourages travelers to book the lowest possible fare, use low-cost carriers and use the company’s GetThere online booking tool, which processes 75 percent of domestic tickers and 35 percent of point-to-point international reservations. Through an internal survey of the program’s top 50 citypairs, Baldy found air tickets cost 24 percent less when booked online. “When the traveler has to push the button, visual guilt sets in and they are not going to buy something more expensive when they can’t blame it on someone else,” he said. While Kodak expects BCD Travel agents to reinforce the policy by offering the lowest possible fare to travelers, “We do not expect our travel agency to be a police force and refuse to sell a fare,” said Baldy, who tells agents, “You are not going to be the police, but you will be the snitch.” —Seth Harris Chinese Travel Management Grows BY SETH HARRIS next few years is the expansion outside of Foreign and Chinese-owned corpora- China within JAPA and beyond JAPA. That tions doing business in mainland China has not yet started.” Unlike the U.S. market, in which air and are managing travel similarly as expenditures increase and policy compliance is on hotel costs count for the bulk of the travel the rise, according to a survey of 230 trav- bill, expenditure on meals and entertainel buyers that American Express Business ment grabbed top billing for buyer responTravel released last week at its China Busi- dents at more than 40 percent of total expenditures. Air travel accounted for about ness Travel Forum in Shanghai. The 2007 Business Travel Barometer saw one-quarter and lodging accounted for 12 a sharp increase in the number of corpo- percent of total T&E costs in China. rations gaining strong compliance levels. While Amex said China’s GDP grew at Nearly half of responits fastest rate in 11 years dents reported that their at 10.7 percent in 2006, employees comply with more than half of reT&E policy more than spondents did not inCompanies in China with more 50 percent of the time. crease T&E spending in than 50% adherence to T&E policy “In many markets, this a 12-month span beginmaturity has grown ning in August 2006. much slower than in The survey also 2007 47 percent China over the years. In showed more compa2006 28 percent Europe, most markets nies raising T&E expenstook over 10 years to get es. Nearly half of responSource: American Express Business Travel real control of their situdents said their T&E ation,” said president of American Express budgets have increased, up from 28 perglobal travel services Charles Petruccelli. cent in the same period last year. More than “What is interesting in [Japan, Asia/Pacif- half expect their T&E expenditures to inic and Australia] is the acceleration that is crease during the next 12 months. Amex sought survey respondents from happening, which is similar to the accelerorganizations with at least 100 employees ation of the economy.” Similar to the U.S. domestic market, 69 from six industry sectors across Shanghai, percent of surveyed corporations said the Beijing and Guangzhou. Most were from majority of their travel expenditure was in Chinese-owned companies. One-third mainland China, but Petruccelli expects re- worked for foreign-based multinationals. gional travel patterns to shift. “Most of the Only 12 percent of respondents were Amerbusiness travel business resides in China,” ican Express clients. he said. “What is going to change in the ■ sharris@btnonline.com ■ CHINESE COMPLYING NBTA Adds Green To ’09 Hotel RFP BY MICHAEL B. BAKER The National Business Travel Association has modified its Modular Hotel Request For Proposals to include environmental questions and support dynamic pricing requests for the 2008-2009 hotel negotiating season. NBTA’s hotel committee announced the amendments to its RFP last month. The changes address issues hoteliers and consultants said increasingly have been discussed in hotel negotiations. Green issues in particular have proliferated in RFPs, although consultants have said they largely are for informational purposes, not decision-making purposes (BTN, Oct. 8). “You almost have to include green questions in any kind of request for hotel or meetings information, because it’s so politically hot right now,” NBTA pres- ident Kevin Maguire said. Such questions address hotel carbon-offset programs, environmental certification programs, recycling and water conservation initiatives, as well as the communication of such programs to hotel guests. “I’ve seen a lot of hotels with great green ideas, but you stay at the room, and those procedures are never followed,” said Maguire, who also is manager of travel for intercollegiate athletics for The University of Texas. The new RFP also addresses needs of the physically challenged, asking such questions as availability of handicapped parking. Consultant Carol Ann Salcito, president of Management Alternatives, has not seen any buyers use green questions as a dealmaker or breaker. “All corporations are trying to step up to the plate. We have not seen a big impact yet,” Salcito said. “If there was a corporation where everything is equal with rates and amenities and one hotel has a better green initiative than another, then it would be kind of crazy if they didn’t go with them, but we just haven’t seen that apples-to-apples scenario yet.” Access the 2007 Business Travel Buyer’s Handbook see btnonline.com/handbook The RFP’s pricing matrix now also reflects cap/ceiling rates and the percent discount taken from best available and corporate rates. Travel buyers have been adopting dynamic pricing in cities where they have less volume (BTN, May 21). NBTA’s model hotel RFP is widely accepted as the industry standard. ■ mbaker@btnonline.com ■ Business Travel News Monday, December 17, 2007 www.btnonline.com http://btnonline.com/handbook http://www.btnonline.com

Table of Contents for the Digital Edition of Business Travel News - December 17, 2007

Contents
Amex to Go End to End
Hood Back at BCD
AirTran First Sabre XML Airline
Inside Track
MasterCard Upgrades Reporting, Data
Amadeus Debuts Hotel Platform
Washington Wire
Kodak Moment
Travel Management
Forum
Mtg. Buyers Give Carriers Lower Marks
Meetings Today
Drawing Boards
Black Book Contents
Airlines
Private Jets/Charter
Associations
Car Rental Companies
Conference Centers
Consultants
Lawyers
Travel Management
Travel Security
Travel Technology
Ground Transportation Companies
Education
Hotel Chains
Corporate Housing
Hotel Management Companies
Hotel Rep Firms
International Business Services
Payment Systems
Technology
Back-Office Accounting
Data Consolidation and Reporting
Hotel Program Services
Meetings Management
Miscellaneous
Reservation Systems
T&E Expense Management
Travel Management Companies
Travel Angency Networks

Business Travel News - December 17, 2007