<B>Earl Foster</B>
<I>2000 BTN International Travel Manager Of The Year</I>
By Megan Hjermstad
<I>Amsterdam - Business Travel News</I>last week named Earl Foster, director of global travel management at New York-based Joseph E. Seagram & Sons Inc., the 2000 International Travel Manager of the Year here during a general session of the Association of Corporate Travel Executives' 10th global conference.
<I>BTN</I>editor-in-chief David Meyer said Foster won the award for building a leading-edge global travel program and "for his professionalism, camaraderie, intelligence and articulation of travel buyers' needs on a global scale. Today we are recognizing efforts above and beyond reasonable expectations that have raised the level and broadened the horizon of multinational business travel industry dialogue."
In this past year alone, Seagram saved $41 million on its $275 million worldwide T&E through a managed global travel program.
Foster created the program from scratch when he came on board in 1997. At that time, each one of the Seagram divisions operated independently, with separate travel suppliers. Now, 90 percent of its operations around the world are incorporated in the global program and the other 10 percent are in some phase of integration.
"My initial vision was to leverage all of the travel in one bucket so that when a Seagram company speaks to any supplier in the world they're going to look at that as a worldwide deal only," said Foster. "I immediately told all the airlines and all the hotels that I want you to train any employee that works for you that if any Seagram employee comes to you, they refuse to negotiate and send them back to New York."
In addition to establishing a set of global supplier relationships, Foster built a travel team, compiled data to better leverage travel volume to achieve savings and led the Association of Corporate Travel Executives to expand its global reach and membership.
Foster is the fifth winner of the annual BTN award. Previous recipients were Hanna Murphy of Siemens, Allen Grimley of BP, Joachim Hamburger of Electrolux and Thomas Faller of ABB.
At Seagram, Foster created the vision and the policy and marketed the program at the very top level. He reports directly to the office of Seagram president and CEO Edgar Bronfman Jr. Acknowledging that the direct line reporting relationship affords him greater autonomy and control, Foster said, "Without that level of support, programs don't work. I'm probably more fortunate than most because I have that flexibility and freedom."
Seagram, which last year merged with French media company Vivendi, is in the process of integrating its travel program with the French program.
Meanwhile, Foster has overseen a global team, which meets a minimum of four times a year, consisting of a travel manager in Asia, who handles all of the businesses in Asia, a travel manager in London who handles all of the business in Europe and a London-based financial operations manager. Seagram has three U.S.-based travel managers: one for music business in North America, one in Hollywood for the studio business in North America and one for the spirits and wine business in North America, as well as a technology person and a global meetings program manager.
About three months ago, the CFO asked Foster what it would take to cut travel costs, not just savings, by 10 percent. "When I got the team together the last time, we brainstormed for an hour about what we could do to reduce travel by 10 percent," said Foster. "It was a really positive type of meeting."
The entire travel team sits in on all negotiations--either live in the conference room or via video camera--to represent the needs of the world. To create a new global policy, Foster got the team together by videoconference for two days and tore the policy apart line by line. Each business unit can tighten, but can't loosen the new global policy.
"When I first came to Seagram, if you traveled four hours or more, everybody that traveled paid first class. It was a typical unmanaged program, that's why they brought me," said Foster, who previously worked at Hewlett-Packard for 33 years. "Seagram was looking to reengineer the whole company and change the culture and the financial operations of the company, and when they started looking, travel made the top of the list," he said.
Prior to starting the program, every third complaint heard at Seagram's corporate headquarters had to do with travel. Six or seven months into the program, traveler complaints stopped.
"You have to manage programs; you have to sell people on why you want them to do what you want them to do," Foster said. "Everybody has different needs. Senior management has more financial needs, they're looking at shareholder returns, and travelers are looking at creature comfort. And when you can balance that, people get on the same road with you very easily."
Amidst the Vivendi integration, one piece of the Seagram travel program has been put on hold. Seagram a year ago brought on Tonsie McAden from ITT Sheraton to put a global meetings program together due to be rolled out in July, but that date has been extended until December. "We projected in the first year it would save Seagram $6 million on its $50 million meetings spend, just by leveraging the purchasing, training the meeting planners how to do it better and bringing technology in."
Seagram now uses Carlson Wagonlit Travel in Asia and Latin America and for the spirits business in the United States and Europe. The U.K.-based Travel Company is handling its music and studio divisions in Europe, and Hoffman Travel provides service for music and studio in the United States.
"I've never been a believer that you had to have one agency, as long as you can collect data. I don't want 50 agencies, but I don't think three agencies is a lot since those are the only ones we use in the world," said Foster.
Foster's financial analyst, Shane Antill, takes global data from TRX Inc., massages it with them, breaks it down and sends each travel manager a CD that they load onto their desktops. "If the president goes to them and says, 'I'd like to know this,' Shane's already written the queries, they go in and invoke it and within seconds they've got the data," said Foster. The data capability also provides power for external negotiations. "When we go out to bid, the first set of bids goes directly to Shane to do all the financial analysis."
In addition to pulling data from agency and card, Seagram is pulling from the airlines' flown data as well. Foster said the flown data hasn't helped a lot because there isn't enough yet available, but it has shown that what's going out booked is what people are actually using. "By getting the flown data," said Foster, "I can show where any differences would be, and they're pretty minimal in the scheme of things."
Card data is enabling Foster to negotiate with hotel companies using overall spend rather than the number of hotel room nights. "The general manager is not measured on room nights, he's measured on revenue. If I can finally tune that revenue and say, 'Look what a wide patron I am,' I get their attention."
Foster said data warehousing is one of the things Seagram has done extremely well. "Not only have we done this internally, we've dragged the industry along with us. We've made other companies much better at what they do because we speak so much, we're public so much and we share what we do."
Eighty percent of Seagram's agreements are global in nature, although discounts still vary around the globe. "When you have a reputation for being a global company that can deliver volume globally, when you have the ability to sit down and talk to them in the terms they want to talk to you in, they open up the doors for you," said Foster.
Seagram's primary carrier, United, has at least 50 percent of its long-haul business and more than 50 percent of its domestic business. The company also has negotiated net-net contracts with its secondary carrier, Delta, and with Continental, British Airways and Air France. "I have relatively few airline deals but they cover 85 percent of my worldwide spend. If you can get 85 percent of your volume covered with some kind of a relationship, you're much better off than trying to cover 100 percent of it with a whole bunch of people where none of them are really key and none of them are really happy," said Foster.
Foster has taken a global approach to technology, while rolling out products regionally. Seagram introduced Concur as its expense reporting system in Europe and North America, and next will introduce it in Asia.
When implementing the expense management program, Foster brought together everyone on his global team, along with the finance people. "My boss said, 'You own that?' I said, 'No, but they don't know that so I'm going to drive that process and make sure that we end up with one standard system across the globe,' and by involving all of them we're able to do that.'"
While the merger delayed the planned rollout of the E-Travel self-booking tool in the United Kingdom, all of North America as of Aug. 1 was up and running on the product following a three-month pilot. Foster is halfway to reaching his adoption goal of 60 percent--the proportion of 3,200 employees who responded to a companywide survey that they would use a self-booking tool.
Foster still is running self-booking through the agency, but he is working with E-travel to get Continental and Delta up and running direct so he can bypass the agency altogether.
Helping drive usage of the online booking tool is Seagram's practice of charging transaction fees directly to the travelers' charge card. The policy has been in place in North America for two years, in the United Kingdom for six months ago and the company intends to bring that to the rest of Europe in the next six months.
"I want the travelers to see it as a separate charge and to have to expense it, that way they get all the value and all the cost," said Foster. Travelers are billed a slightly lower price for online transactions, and tiered pricing based on the price of the ticket. "It's much more palatable to people when they get a $250 ticket and see a $20 fee, and if they get a $1,800 ticket, they see a $80 fee," said Foster. "The biggest thing we've done on a global basis is we've trained travelers to understand that no longer is travel free. Now they understand a little more about the process. And now they make some travel decisions."
In the past year, as ACTE's chairman, Foster continued to focus on building on the group's foothold in Asia. While he has given about 40 percent of his time to the organization, "Seagram, for allowing me to do those kind of things, got a real financial return. Suppliers want to try things with people who are visible. They have tried things with me faster than with somebody else."
Foster took an approach to expanding the association not unlike his global strategy at Seagram. "When I first took over ACTE, we said that ACTE was global, but ACTE wasn't global. It really was still a New Jersey-based firm and we had some European presence, but that wasn't even the United Kingdom--that was downtown London," said Foster. "My vision for ACTE was for it to look, act and speak as one organization." When Foster took over as president of ACTE in 1996, it had about 1,000 members and approximately $20,000 in the bank. By 2000, ACTE was 2,400 people strong and had more than $1 million. Under Foster, the association hired European staff and it has just hired an association management firm to man a new ACTE office in Singapore.