Small Co. Takes Big Bite Out Of Travel

<B> Small Co. Takes Big Bite Out Of Travel</B>

By Sarah Welt

<I>Los Angeles</I> - By consolidating all its domestic divisions with one agency and using its combined travel volume to negotiate airline discounts, Aecom Technology Corp. has shaved almost half a million dollars off its $7.5 million annual travel budget.

The architectural engineering firm has completed the anniversary of its first travel consolidation, using American Express instead of the more than 30 travel agencies that once handled its business. To keep Amex on its toes, Aecom signed a three-year contract that can be terminated at any time with just a month's notice if the firm isn't satisfied with the service it gets.

The company now is beginning to focus on its hotel program, using electronic requests for proposals to add more properties to its list of discounted rooms. Since the consolidation began, Aecom also has reduced its car rental vendors from eight to one and implemented a seven-member travel council that will create a companywide travel policy and roll out a single corporate card to all employees in 1999. By this time next year, Aecom also plans to give all travelers access to AXI, Amex's online booking tool.

The decision to consolidate came down from Aecom chief financial officer Joseph Incaudo, who three years ago created a task force to consolidate purchasing. Travel was the first project the firm tackled.

Aecom's travel manager, Carol Ann Bakeman, has been in charge of the consolidation since it began. Because she knew the consolidation was going to be overwhelming enough, she didn't go out to bid for a new agency, but rather chose to consolidate all operations with Amex, with whom the company already had a long-standing relationship.

"The last thing in the world I wanted to do was change agencies during a consolidation. I am sure we will put the account out to bid eventually, but we are still settling in," she said.

Bakeman said she insisted on the 30-day notice termination clause because, "I don't believe in three-year commitments; I don't think that is the way to necessarily get the best service and attention. But I have no complaints. I feel Amex is extremely supportive of the entire process, and to this very moment responds immediately to a complaint or problem."

Under the terms of the contract, Aecom pays Amex a transaction fee and receives back all revenue streams. Bakeman understands, however, that it is no longer feasible to operate as a profit center. "Let's put it this way: In this climate no one is making money," she said. "We are not in the onsite travel business any more to make money--that is a thing of the past. We knew that commissions were going away and we are not happy about it, but that is a fact of life."

Knowing that getting 100 locations under the American Express umbrella in one year would be no easy task, Bakeman took her Amex onsite manager and account manager along on all trips to meet employees and get them acquainted with the new service configuration.

Aecom implemented an eight-person onsite at its Los Angeles headquarters to handle travel in the United States, but agents also book trips for employees in regional offices overseas. There is also a VIP desk for a core group of frequent travelers. "I wanted them to feel they were still getting a great deal of attention, since they were all used to that," Bakeman said.

Another key goal was never to leave a traveler stranded, she said. "If you are stuck in an airport and all lines are busy, which is not unusual, the phone rings on my desk and three other desks. It never goes to voice mail, so we can take care of travelers in an emergency."

Since consolidating, Aecom selected American Airlines as its primary and Delta as its secondary carrier. Those agreements saved an estimated $450,000 in 1998, she said. "We have definitely proved we can move market share and that is because we have very strong support of senior management."

Aecom also has a special agreement with an Asian carrier where it receives back-end commissions, though it is not seeing much savings at this point because travel to Asia has been severely restricted. Bakeman also has negotiated deals with a couple of lower cost carriers, but has not had tremendous success in selling them to travelers.

On the hotel front, Aecom has negotiated discounts with over 40 properties and wants to add 20 more. It just began working with RFP Express of San Diego and has sent out 40 RFPs. The biggest challenge now is to get travelers to book hotels through Amex. "My message in practically every newsletter is: Even if the hotel is next door or across the street, please book your reservation through us so we can track room nights," Bakeman said.

On the travel policy side, meanwhile, booking through the agency is mandated by senior management. "It is, 'Thou shalt use the agency.' That is the one thing they are most firm about," Bakeman said.

Travelers outside of policy receive a reprimand and an exception report goes to their manager; after that, "We usually don't see them again."

Bakeman estimated Aecom has saved another $75,000 by catching travelers going out of policy and pushing alternative airports, "providing a town car for them just to ease the pain because we might be saving $700 to $800 on that trip," she said.

The company now operates with an umbrella policy that individual divisions can make stricter, but this year the seven-member travel council will try to come up with one companywide policy.

Technology, meanwhile, has been put on the back burner for now, though Aecom plans to roll out a booking product as soon as possible.

"I think it is the only way to survive. I am looking at AXI and Amex is already talking to our MIS people," Bakeman said. "The phones ring constantly. We estimate at least five to six calls per ticket." To cut down on calls, Aecom encourages the use of e-mails and faxes.

All these initiatives keep her busy, but not so absorbed that she can't take on the role of president of the Los Angeles chapter of the National Business Travel Association, which she assumed in January. "I feel it is vitally important to be active in the association," Bakeman said. "That's where your network and support are. And I just can't be a member, I have to be active. It's a compulsion.