Citibank's Global Travel Program Shaves Off Costs

<I>New York</I> - By using a carrot rather than a stick, Citibank estimates that it has saved over $40 million in the past two years by pulling together its $160 million annual worldwide spend into a formal global travel management program.

To accomplish that, vice president of travel expense management Mary Kay Bellersen brought together diverse regions and personalities to negotiate and support air discounts with 14 partners, and continent-wide hotel programs in the United States and Europe. In the next few months, Bellersen will take her successful game plan to Latin America in Citibank's first regional hotel bid south of the US. border. And in the States, she will pilot the rollout of an online booking system designed to offer even greater negotiating power by moving market share to preferred vendors.

Through it all, Citibank has maintained its traditional decentralized stance. "We allowed the various participants the freedom of choice to pick the best partners in their own countries, but we gave them the tools to do that," Bellersen said.

Regional Independence

Bellersen's approach has left Citibank with 126 travel agencies and 83 travel coordinators in 98 countries. To pull together data, she collates information from every possible source-including corporate cards, agency back-office systems and even "slips of paper"-through the Prism Group's Travel Manager's Workstation, the system that will serve as the reporting module for Sabre's Business Travel Solutions when it debuts early next year.

Speaking at the first annual Global Client Consortium held last month by the SRG International travel agency group, Bellersen called the road she has traveled since 1992 "a long and tedious journey"-but one that has shown results in both bottom-line savings and improved traveler services. When asked to lead Citibank's first global purchasing effort, Bellersen had each major region nominate a coordinator and begin to consolidate data. A global airline committee eventually signed 14 global and regional contracts, with all savings returned to the individual countries.

Citibank started with the five routes that had the largest spend in Europe, Latin America and Asia-Pacific. In addition to negotiating global programs, the company signed multilateral regional agreements. "In smaller countries, where we could not negotiate because the flag carrier had the corner on the market, we put together broader-based proposals that offered the carriers market share on some external routes," Bellersen said. "Flag carriers had to contribute a lot more than just travel out of their own country-but many, like Lufthansa, Swissair and Air France, travel to other places. If a flag carrier did not serve the rest of the globe, we didn't choose them, so we do not have a program in some markets."

Next, Bellersen tackled a pan-European hotel bid. Committees in each country picked properties to be considered; RFPs were sent to each, and then returned to New York for Bellersen to score. The resulting hotel rates were between 28 and 35 percent below those of a large travel company whose rates Citibank used to benchmark, Bellersen said. In 1997, she will use the same model to build a preferred hotel program in Asia.

Citibank is considering opening regional reservations centers in Europe and Asia, but territorial issues have surfaced within the travel committee. "The Europeans are saying they don't want to have their res center in the United States, but they don't want to have it in the U.K. either," Bellersen said.

Compliance rates outside the United States are in the same 85-to-95 percent range that a recent<I> BTN </I>poll found to be the norm for American travelers (<I>BTN</I>, Nov. 11, 1996)-"and often they are higher," Bellersen said.

Senior managers seem happy with the program's results, which include a quick return on investment for an operation where costs added up to little more than Bellersen's salary and that of four staffers.

"The travel department became the flagship that went out and set a stake in the ground as far as global vendor programs," Bellersen said.