Bloomberg Reduces Number Of Vendors

<B> Bloomberg Reduces Number Of Vendors</B>
<I>Consolidation Of Suppliers Brings 99 Percent Compliance Rate</I>

By Maria P. Vallejo

<I>New York</I> - Where does a travel manager start when she is charged with reducing overall travel costs despite an expected 25 percent increase in travel? For Bloomberg LP's Joanne Mineo, the answer was a new travel policy mandating the use of just three or four preferred vendors in each segment, combined with an e-mail-based booking procedure that moved reservation agents off the telephones.

Now the company, with 700 new travelers and a 1998 air spend of $5.7 million, is saving up to $82,000 a quarter and maintaining 99 percent usage of preferred suppliers.

The media company moved to this echelon of travel management under Mineo, its in-house travel manager, though employed by its travel agency, Journeycorp. Travel Management.

When she first came aboard the Bloomberg travel team in October 1997, Mineo found the program chaotic. "The policy was always fair, but it needed to be enforced and tweaked," she said.

With the support of Bloomberg's department managers and chief financial officer, Mineo developed a new policy designed to support four preferred airlines and three preferred suppliers in each other segment, with about 90 percent of Bloomberg's market share going to the primary vendor for the greatest negotiating leverage.

"I move and manipulate our contracts to the fullest extent," Mineo said. "If they don't match a lower rate, they'll lose our business. I'll always go with the lowest rates."

In addition, the new policy requires all travelers to accept trips within $250 of the cheapest available fares and rates. And to save on hotel costs, for travel between Monday and Thursday, travelers must leave their home cities in the early morning and return to their home destinations by 7 p.m., rather than stay overnight.

While the policy is tough, it does give travelers a little room for exceptions, though these require a manager's approval. Still, it obviously is working. "Hotels are starting to see our loyalty," she said. "It's not necessarily the dollars and cents; they're getting my market share. They're getting 99 percent of my business--and that's what they're looking for."

In the hotel program alone, 53 out of 56 travelers in New York last quarter stayed at the primary preferred property, as did 39 out of 45 travelers in Boston.

Travelers shifted to the second or third choice only if the primary vendor could not accommodate Bloomberg's employees, Mineo said. She chose a few boutique and "fun" hotels to keep the mix interesting and prevent her travelers from getting bored with their properties.

"We work very closely with the vendors," said Ronald Tiu, assistant manager of the Journey Corp. onsite. "We don't contract with 10 hotels, instead we work with a few primary ones. We have a very good rapport with our vendors." By promising and delivering volume, Bloomberg gets lower rates, guaranteed last room availability and exclusion from the service charges many travel buyers find so irksome and expensive. Some hotels in its program did not raise their rates in this year's contract, and at least one actually dropped its price. The company also regularly receives quarterly reports from its top vendors.

While some travel buyers may have clauses in their contracts mandating such reports, few actually receive them in a timely fashion, Mineo said.

In all, Bloomberg's tough attitude and loyalty saved it $137,000 in the third quarter of last year.

In putting the new policy together, Mineo also reconstructed the way travel buyers request and book trips. Tucked away in the corner of the Park Avenue office, the travel department responds to e-mailed travel requests full of Y's and N's, indicating whether a traveler needs air or car transportation, or hotel reservations. Starting in November, travelers were required to fill in standardized trip-request forms on their corporate e-mail system.

Rarely needing to pick up the phone, Bloomberg's agents now spend their time responding to the e-mail requests. Telephone lines are dedicated to emergency phone calls from employees on the road who are in need of immediate assistance.

Five agents, including Mineo and a satellite agent located in San Francisco, color code and prioritize the e-mails by departure date. Once picked up by an agent, e-mails are handled and reservation information sent back to travelers within four minutes, Mineo said.

While agents attempt to push Bloomberg's first-tier vendors, travelers are allowed to choose between several options. Mineo tracks and checks the travel patterns of every traveler, noting those who usually take the cheaper trip option versus those who always choose the more expensive one. She contacts managers and gives them with information on their travelers' behavior.

All travel expenses are charged to the corporate card, making it easier for Bloomberg to use an automated expense reporting system. The payment system returns billing information to the traveler for verification.

Bloomberg also uses the technology to ensure that travelers file expense reports in a timely fashion. The accounting department has been known to shut down a traveler's office computers until the employee verifies and returns his or her expense reports.