<B>Amex Tackles Mtgs.</B>
<I>Debuts Card That Separates, Sorts Expenses</I>
By Chris Davis
American Express Corporate Services has created a corporate meetings card designed to allow corporations to separate meeting expenses from other travel bills and sort group expenditures by internal department, specific event or supplier.
The card, called the Corporate Meeting Card, was expected to be released late last week. The cost of the card will be determined on an account-by-account basis and will follow the same structure for corporate card pricing, said Tareef Shawa, director of corporate card marketing for Amex Corporate Services.
The card likely will be most applicable for corporations that employ professional meeting planners to stage its events, as the cardholding planners' charges will be labeled with a specific identifier to enable expenditures to be grouped in accordance with the specifications of the corporation.
American Express has developed the card over the past year, and many corporate meeting managers have been anticipating its arrival in the marketplace.
"I've been waiting for something like this for years," said Tonsie McAden, manager of global meetings and hotel programs for Joseph E. Seagram & Sons in New York. "It can be very difficult to find and track where the meeting expenses are within a company, but with this we could break expenses out by department, or type of meeting or hotel chain. It's perfect for us, and we're very keen on it. It will help to mechanize the entire process," McAden said. "Bills will not get stuck in accounting and hotels will be able to receive payment more quickly."
While companies will see some cost savings due to the time and labor saved by avoiding cutting numerous monthly checks to a multitude of meeting suppliers, the potential for highest savings is longer term: Consolidating meetings expenditure data, be it sorted by internal department or meeting supplier, offers corporations more negotiating power in the future, Shawa said.
"When it comes time to negotiate, you're supplied with better hard data for hotels and airlines, which is strictly meeting spending," Shawa said. "It is a tool that can help corporations prove they've fulfilled meeting volume commitments to their preferred suppliers."
Companies that aren't fully centralized and have planning operations in different departments or locations can use the data to compare expenditures between departments, possibly alerting them to the potential for cost savings, Shawa said.
Before issuing meeting cards to interested clients, Shawa said, American Express will work with the company to determine the preferred method of generating meeting expenditure reports and how the meeting manager wishes the data itemized. The cards then would be configured to allocate categories of meeting charges into specific reports and the company billed monthly.
American Express tested the card with about 200 companies, all of whom volunteered, Shawa said. One of them, Storage Technology Corp. of Louisville, Colo., likely will charge $2 million annually on the card, said manager of travel and meeting services Randy Krumpeck. "It's making things easier for us because now we cut a single check once a month to pay our meeting bills instead of a dozen or so times a month to prepare multiple payments to vendors."
The card will be accepted anywhere that accepts American Express, Shawa said. Benefits to hotels include the ability to be paid for meeting services by Amex immediately, instead of waiting for corporate clients to reconcile expenses.
While hoteliers will benefit by receiving payment on a consistent basis from American Express, there is some concern about the process fees Amex would charge hotels, and how that would affect hotel rates.
"The fact that we would get paid on a consistent American Express billing cycle is terrific, and the planner would have very accurate historical meeting information when it was time to rebook, which is good for us too," said Frank Fredericks, director of sales at the Washington Monarch Hotel in Washington, D.C. "But there would be processing fees to American Express, and eventually that cost will catch up with hotel pricing. I don't mean that hotels would raise prices for clients using the card. I just hope the service will be worth the extra cost."
The release of the meeting card is the second major development regarding group travel expenditures and corporate cards in the past three months. In August, Diners Club announced it developed a new product with Andersen Consulting's meetings department that allows corporations to assign specific transactions from meetings booked on its corporate card to different cost centers (Meetings Today, Sept. 18 ). Unlike the American Express program, Diners Club does not require a separate card but is available only to its clients.