Insurance Co. Ensures Savings With Tighter Controls

New York Life Insurance Co. has saved nearly $3 million in corporate meetings spend by exercising greater control over meeting contracts, negotiating annual net-net zone fare agreements with major airlines and driving volume to preferred hotels in cities where those carriers maintain hubs.

The savings—$2.5 million of which are from negotiated air deals, including those for large incentive events—are the culmination of nearly four years of program development by director of corporate travel Joseph Campise and his predecessor. The company has put a great deal of effort into negotiating air deals, and has been rewarded by realizing savings far greater than the airlines' standard 5 percent discount off full fare for meeting attendees.

New York Life annually renegotiates the terms of its meeting deals net of all commissions and overrides with its two preferred airlines, a number Campise recently pared from three, and drives about 70 percent of all volume to those carriers. The terms also allow Campise to seek bids on specific large events, offering the preferred airlines right of first refusal, which has generated significant savings.

"We never leave our agreements alone," Campise said. "We send the airlines a list of all of our planned meetings and we update it every week. It takes a lot of work and a lot of conversations. They know when you know your stuff, and even then you have to go back several times. But it is a huge boost."

Campise said the carriers are most interested in actual meeting volume, which they measure by the number of attendee ticket bookings, instead of market share, which can be more difficult to measure with meeting business. New York Life books about $20 million in air volume annually, $9 million of which is for meeting and group travel.

The company also has sought to align its preferred meeting hotel program with its air program, specifically signing deals with properties near airline hubs. The crown jewel of this program is New York Life's deal with the American Airlines Training Center in Dallas. The company books a majority of its training meetings there, to the tune of about 6,500 room nights annually. "It's unique and it's our newest step," Campise said. He declined to elaborate on the deal. New York Life has crafted similar deals in other cities with Dolce International, a Montvale, N.J.-based conference center chain that manages the AA property, and other preferred hotels.

Campise said the corporate travel department reserves the right to move a meeting planned for a property outside of the preferred program to one that is.

"For most of our meetings, we will direct or redirect to our preferred properties, which leads to significant savings," Campise said. "We can't do it with some meetings—board meetings, for example—but we do it when we can. We won't do it if a contract is signed, but otherwise, it's subject to change."

The key to the entire meetings program is New York Life's ability to ensure that internal meeting sponsors comply with the corporate mandate to use the services of the corporate travel department for meetings management. Campise, who succeeded as corporate travel director Shaun Malay in March 2001, "pessimistically" estimated compliance to be between 75 percent and 80 percent.

There is no current consequence for not complying with the mandate. Campise acknowledged the challenges inherent in including such a consequence in policy as not reimbursing the expenditure—though some travel managers have created such policies for individual travelers (BTN, April 8), the same couldn't be applied to a meeting sponsor due to the magnitude of the expense. "We're grappling with it," he said.

The company also made another significant switch: Last year, it sought bids for agency services for both transient and meetings travel and chose Maritz Travel Co. for both. TQ3 Maritz Travel Solutions now has two meeting planners onsite at two New York Life locations that handle hotel negotiations for each event. Campise said those negotiations saved nearly $375,000 between January 2001 and November 2001.