NBTA Attendees Sweat Out The Stagnant Economy At Dallas Show

Dallas - "The whole economy kind of sucks right now," Continental Airlines CEO Gordon Bethune told the National Business Travel Association's annual convention this month, which organizers said drew a record number of attendees, above 4,800. "We need you to have a meeting like this every week."

Bethune appeared with Richard Anderson, his alliance counterpart and CEO of Northwest Airlines. The two responded to several issues raised by delegates, including data aggregation with Prism Group. "Prism has been controversial with some firms, but it is hard to do a share-based contract if you do not have the denominator," Anderson said. Both were stumped when asked about reverse auctions, a trend that has not penetrated the airline industry.

The pair took the opportunity to push the Continental-Northwest alliance, insisting customers are treated the same regardless of the operating carrier and that corporate clients have a single bid process, single point of contact and huge network available to them.

"JetBlue is not going to take you to Brainerd, Minn., or Beaumont, Texas," Anderson said. Bethune added that he sees no losers as a result of the partnership, "except those guys in Chicago and maybe those guys in this town."

The pair moved to reassure attendees in a few other areas, including an improved value proposition for price-conscious business travelers. "We are exploring how we can deliver value for the people in the back who didn't buy the cheapest fare," Bethune explained. "We're coming out with product ideas, tailored for those who paid a little more. We need to treat them with dignity. We do need to be all things to all people, and we can't walk away from 40 percent of the marketplace."

On the operations front, Anderson said airport security "really is top notch in the United States today" and advocated both a trusted traveler program and the second-generation Computer Assisted Passenger Prescreening System, known as CAPPS II. He added that the federal Transportation Security Administration's security process at airport checkpoints "needs to be done in 10 minutes consistently around the United States."Buyers and suppliers continued to seek the real value of negotiated airline contracts. "We look at discounts as a form of investment," said Steve Praven, United Airlines director of global accounts, during the NBTA aviation committee presentation. "We look for a return, for share shift. Everything we have been through in the past two years shows our programs work and provide value." Even so, "we have been our own worst enemy," said Delta Air Lines general manager of corporate national sales Bob Somers, referring to airlines' ability, or inability, to manage account performance. "If accounts are not performing, they will be terminated or adjusted." Though travel managers have heard that threat for 18 months or more, Somers said, "You will see a lot more of that in the future."

Panelists emphasized several developments that make it more difficult for accounts to perform. "Fare class exclusions reduce the value of corporate deals you have in place and make it harder to meet share targets," said Bob Brindley, vice president and general manager of Travel Procurement Solutions, a division of WorldTravel BTI. "If the policy is lowest fare, it may be difficult to get a traveler onto a preferred carrier; maybe ask your preferred for flat fares."

Management Alternatives vice president John Heilner suggested some buyers should "partition their program into two parts: one that is negotiated and the other focused on lowest available fares."

Meanwhile, travel managers asked how carriers can charge fares at levels well below cost. "If we raise fares, you won't pay them," Somers replied. "You'll just go to someone else."

One buyer then told airline representatives in the room that "if service came back and you raised airfares, we would pay." Somers acknowledged that "some of us lost focus on customer service. At the end of the day, that could be what separates you from others."

Airline representatives also promised travel managers that dramatic changes to schedules—frequent during the past two years—will be considered in measuring performance. "If someone misses a major performance number because of some of our changes, we will figure out a way to make adjustments," United's Praven said.

Meanwhile, new contracting tools for travel buyers were announced at the convention, including Eclipse's Airline Purchasing Index, which measures airline profitability and customer service performance for a specific account, and a revamped Air Program Manager from Travel Procurement Solutions.

In a bid season in which buyers again are expected to have the upper hand in room rate negotiations, members of the NBTA hotel committee went to great lengths in the Reinventing the Hotel-Buyer Partnership in the Changing World session to reassure hotels that they value their long-term relationship.

"If the partnership between buyers and suppliers is too heavily weighted to one side, the underlying dynamic won't work," said Beth Caligiuri, NBTA hotel committee chairman. "As the role of the travel manager has gotten more complicated in the past few years, so has the role of the hotel national account manager. Any travel manager, for example, who thinks account management is the only thing a NAM does these days is sorely mistaken."

The challenge for Caligiuri, who is strategic procurement manager for The Coca-Cola Co., is to come up with the common denominators. "We all know the economy has changed, but how can we find whatever commonalities exist and understand each other's roles and responsibilities?" she asked.

For their part, national account managers have weathered the downturn in business travel on a variety of fronts. "We've seen cutbacks from our top customers, and hotel owners, consequently, are being financially challenged," said John Gillespie, director of national accounts for Hyatt Hotels & Resorts. "What's more, job security has become a challenge because every aspect of our business is feeling pressure. We've seen layoffs and downsizing. Likewise, we've had additional responsibilities put on everyone's back."

Peggy Lee, global travel and marketing manager for Silicon Graphics, took hotels to task for the property descriptions that appear in the global distribution system and her online booking tool. "I'm looking to our hotel partners to help us with compliance by improving these hotel descriptors. The more appealing and well suited our travelers find your hotels, the more likely they are to book them and, therefore, improve compliance with my preferred suppliers," she said. Travelers respond to everyday, approachable language. "They understand descriptors, such as 'king-bedded room with a coffeemaker and Ethernet connection,' rather than a series of acronyms for these room features that read like some kind of secret code," Lee said.

Kate Erickson, national director of business travel sales for Omni Hotels, focused on the request for proposals stage of the buyer-supplier interaction. While acknowledging that national account managers need to stay involved through every aspect of the process, she said hotels needed as complete as possible a breakout of a buyer's room night requirements in a market.

"Do you need airport locations, downtowns, the suburbs?" she said. "Also, the number of hotels you're using in a market is valuable. If we're being considered as the primary hotel in the market, for example, that really can make a difference on rate. The more information shared with us, the better rate we can provide in the long run."

Given that chronic rate loading issues have impacted the effective management of hotel programs, the NBTA hotel committee devoted an entire session to it. The Developing Solutions: Improving the Hotel Booking Experience session fell short of solutions and focused instead on the "mystery" of why negotiated rates either do not get loaded accurately in the GDS in the first place or are loaded and then manage to "drop out" at some succeeding point.

To Jack Lever, Bayer hotel and car program manager, most frustrating is when non-accepted rates at a property continue to be loaded in the GDS, in addition to those accepted. "If hotels are going to work around us, we're going to work around them," he said.

Alison Guilbeaux, director of business development and hotel consulting services for WorldTravel BTI, said too many hotel national account managers think the process ends when rates are accepted. "To the contrary, the process is ongoing through the year, which is why so many buyers now feel the need to audit rates periodically," she said.

As distribution methods have multiplied to include online booking tools, rate loading has grown in complexity, noted Linda Kent, director of global agency distribution for Starwood Hotels & Resorts Worldwide. "The number of places the booking gets touched has grown, increasing the chances of the loaded rate dropping out," she said.

During a session dedicated to taking control of cost-saving opportunities through meetings management—one of four such sessions in NBTA's inaugural meetings seminar track—several buyers and consultants detailed differing metrics of meetings cost and savings measurement and weighed the importance of measuring cost avoidance.

"Our key metric is cost per attendee," said Tracey Wilt, travel and meeting services purchasing consultant for Xerox Corp. "We only measure actual cost reduction, not cost avoidance."

Though American Express Meetings & Incentives vice president Jay Roseman said he sees few companies measuring cost avoidance in relation to time saved, both American Honda Motor Co. manager of corporate services Charles Franklin and Apple Computer global travel manager Kathleen Ramsay said their companies do exactly that. "It's a valid efficiency measurement," Ramsay said.

Wilt said about 20 percent of total Xerox travel and entertainment spending currently is meetings related; Franklin said 15 percent; and Conferon national corporate sales director Rick Binford said 30 percent. Taking into account all production, printing and audiovisual needs is a good indicator of such spending.

Roseman noted that, typically, about 25 percent of corporate air transactions are meetings related and every dollar spent on meetings and group air usually translates to between $3 and $4 spent on the ground, including at hotels.



NBTA's ground transportation task force during its Understanding the Ground Transportation Industry panel announced a new tool to help travel administrators measure the success of corporate ground transportation programs. Gauging compliance, ground transportation spend and traveler satisfaction, the online tool provides an internal score card that helps companies determine if program goals are being met.

Meanwhile, a year after NBTA released its first electronic ground transportation request for proposals format, car service vendors are seeing the tool's penetration in the marketplace. Jeff Dziama, BostonCoach senior vice president, said since the RFP has been released the car service company has seen a growing level of sophistication among corporations' negotiating strategies.

Steve Pitel, director of national sales at chauffeured car service company Dav El, also found that buyers have been using the RFP, estimating that about 60 percent of RFPs submitted to Dav El have been formatted like the one NBTA released last year. The ground transportation task force, meanwhile, also released a glossary of terms in an attempt to demystify jargon in the ground transportation industry.

American Express announced Avis, Budget and Starwood as partners in its Savings @Work program—Amex's corporate card offering that targets midsize companies with annual revenues between $10 million and $1 billion. Anre Williams, American Express Corporate Services senior vice president and general manager for the middle market, said through the program, "American Express negotiates the savings on the behalf of the client."

With Avis, Budget and Starwood now onboard, Amex's first travel partners that offer discounts through the card program join such vendors as AT&T Wireless, Dell, FedEx and Staples.

Amex said midmarket companies in the program can save an average of 25 percent on Avis car rentals, up to 25 percent on standard rates through Budget and an average of 20 percent off rates at Starwood properties.



Participants in one session agreed that online fulfillment and online support are two separate activities, but some differed on how that can be addressed. "They are different, but we integrate everything into one system," said Expedia sales engineer Andrew Everett. "Agents and customers are on the same system, for cases where intervention is necessary. On the consumer Expedia site, 98.5 percent of the transactions are touchless. Corporate is more complicated, but our goal is 90 percent."

According to Johnson & Johnson manager of travel services Wendy Nathan, "In June, we changed how we're using the Amex e-fulfillment center in Miami. We set up a prompt for if you already have a reservation and another for navigational support. I think of fulfillment as after the PNR is created, whereas e-support is navigational help or other customer service issues. I had always thought the same people could do both, but depending on how you're set up, it may be better to separate it."

J&J processes about 10,000 transactions a month using the Corporate Travel Online product from Amex. "If you have a few people dedicated to your account," Nathan said, "well, not exactly 'dedicated' but assigned—you should never have a person dedicated in this kind of situation—it kind of changes the whole dynamic. If you have someone trained on your account and maybe one or two others, then I think a lot of your account-specific stuff will be taken care of."

The National Business Travel Association reported record attendance numbers for its 35th annual convention and tradeshow, with more than 1,000 corporate travel buyers and 375 exhibiting booths. NBTA said the show was an opportunity for travel professionals to work toward a rebound in the industry.

"Business travel professionals from all over the world have come together in Dallas to exchange ideas, share best practices, make the best deals and keep the travel industry going," said former NBTA president Kevin Iwamoto, who during the show passed the presidential reins to Carol Devine, director of corporate travel for the Burlington Northern and Santa Fe Railway Company (see story, page 9). Betty Sweetman, senior travel manager at Amgen Inc., was elected vice president.

Meanwhile, NBTA announced new members to its board of directors, which includes Iwamoto, as well as: Lynne Brunner, travel manager at Nashville, Tenn.-based HCA; Jeffrey Kurn, travel technology strategy manager at Palo Alto, Calif.-based Hewlett-Packard; Kevin Maguire, manager of corporate travel at Austin, Texas-based Tokyo Electron America; and Michal Ann Stewart, corporate travel manager for Southlake, Texas-based Sabre Holdings. Charles Franklin, manager of corporate services for American Honda Motor Co., who was elected president of NBTA's Chapter Presidents' Council, also will serve on the board.