CO Combines Transient, Group Air

<B> CO Combines Transient, Group Air</B>

By Chris Davis

Continental Airlines has joined Delta in offering the consolidation of transient and meetings travel by allowing interested corporations to integrate both into a single agreement.

Officials at Continental, which began permitting integration in July, said integrated agreements can benefit the company and the airline, but other major airlines professed no interest at all in a similar program.

It seems clear, though, that such an agreement isn't for every corporation, particularly those with large, decentralized travel programs. Those corporations may have several associates negotiating their own contracts with an airline, and an integrated agreement could wreak havoc upon their travel system.

But companies with a single travel program and manager might find the integrated agreement far simpler and possibly more cost-effective than multiple agreements that essentially cover one travel department.

Bill Boyd, president and chief executive officer of Dallas-based Sunbelt Motivation & Travel, said he hasn't seen a great deal of interest from companies in such a program. Consolidation can have benefits for corporations, but those that enter into such an agreement might give up some negotiating power, particularly on the meetings side, he said.

"The jury's still out. It's got its pros and cons," he said. "The pro is whatever you're able to negotiate on a corporate deal can extend to the meeting contract, and if you have volume agreements with the airlines, meetings are a great way to make that volume. It becomes easier to fulfill your contract.

"On the con side, oftentimes the flexibility that you're able to negotiate with meetings is not found in the corporate negotiations. The best of what you're able to negotiate is not available on both sides of the fence. It's either or. You've got to take the corporate contract, so you're not able to negotiate the flexibility you get with the meetings contract."

Planners with their eyes on the bottom line might like the effect an integrated agreement would have on volume requirements, Boyd said, but there are consequences.

"The reason I haven't seen much interest is because many of the savvy meeting professionals know they're giving up something by putting meetings agreements on their corporate contracts," he said, "but obviously other professionals who may be having trouble meeting their volume requirements might think it's great. From their perspective, they can fulfill their volume requirements, take their data to the airlines next year and get a better contract."

The airlines had sharply differing opinions on the merits of consolidated agreements.

"We're trying to be a little more proactive in integrating corporate travel and meetings travel and marry the two, and recognize that there has been a history in the airlines business where one department was separate from the other and there wasn't any real communication between the two," said Brenda Davis, manager of group and incentive sales development for Continental. "What it boils down to is having in the meetings agreement an addendum to the corporate agreement so it's packaged, presented and negotiated all together."

The benefits corporations can realize from integration will be most notable when it's time to renegotiate with Continental, Davis said.

"The benefit to the corporation is that they'll get recognition for all their business in total," she said. "When it's time to renegotiate, the relationship will be based on the total picture, instead of pieces of the picture. It's good for the airline, since we're able to maximize our opportunity, and it's good for the customer to get total recognition for all of the business that they're bringing to us."

Davis said Continental was prepping its sales force on the new program so that corporate clients can be alerted to the new option.

"We're working very closely with our sales counterparts that are dealing with the corporate travel side," she said. "It's so new, we're just starting to get the word out to our own field salespeople."

Other major airlines dismissed the idea of group and transient consolidation, affirming that neither they nor their clients were particularly interested.

"We don't have any intention of doing it. I don't see an advantage. We've never had any clients ask for it," said Gail Bill, Northwest Airlines senior manager of meeting and incentives sales. "They're two different products. The corporate product is all individual corporate business travel, while travelers using the meeting product actually go to the conferences and the meetings. Under our definition of a meeting, other types of corporate travel may not qualify for our more heavily discounted meeting product like our zone fares. We have minimum requirements to use the zone fare and we will continue to do that.

"If you incorporated the meetings into the corporate, I don't know how you would ever stay on top of how those programs were being utilized and whether those programs were utilized the way you want them to be utilized. So we intend to keep the meeting product and the corporate product as two separate products," Bill said.

Officials at American Airlines agreed.

"We typically work with separate agreements because we're typically working with separate people in the organization. Not always, but often. You have a different corporate transient travel manager vs. a meetings manager," said Mark Nickells, managing director of groups, company meetings and specialty markets for American.

"I guess there could be some value to that, but we're not working on it. I can't say there has been interest from American's clients," Nickells said

Bob McNally, Delta's system manager of meeting, incentive and group sales, said integration works well for his airline under certain circumstances.

"A corporation may be organized so that a single travel manager oversees corporate as well as meeting travel, and it is beneficial for the customer as well as Delta to have a single agreement addressing both corporate and meeting travel," McNally said. "In other cases, one travel manager may be focused on daily, corporate business travel, while another travel manager oversees meeting arrangements including air travel. In that example, it may not make business sense for there to be a combined corporate and meeting travel agreement.