Experts Examine The Keys To Car Policy Compliance

<H1>Experts Examine The Keys To Car Policy Compliance</H1With the auto rental industry seeking to reap gains similar to those won recently by air and hotel suppliers, car rental companies are driving even harder bargains with travel managers. Thus, ensuring traveler compliance with corporate negotiated car deals has risen in importance.

With that in mind, BTN car rental editor Lynn Woods recently discussed car rental policy compliance with Joyce Bembry, manager of business travel services at Du Pont de Nemours & Co., Wilmington, Del.; John Asselta, director of meeting and travel services at KPMG Peat Marwick in Montvale, N.J.; and Neil Abrams, president of Purchase, N.Y.-based Neil Abrams & Associates, a consultant to car rental vendors.

BTN: What are some of the ways you get employees to comply with your overall travel policy?

Bembry: There is an expectation that people will comply. And we have ways of modern tech compliance through our travel management company as well as our corporate charge card. When people are using other than what's specified, we ask why. Sometimes there are real good reasons why, but as long as it fills the business need, there is an expectation that you will do what the program suggests you do.

We prepare monthly exception reports for each of our strategic business units, and we help them understand what it means and how they can use it to help their business process. We take the position that the process is theirs to manage and implement. We're there to make sure that we have an appropriate program for them to use.

Asselta: Our travel policy, which just went out May 1, states that people are required to use their Diners Card and they are required to use travel services to book their air, hotel and car rental. But the word "mandatory" is used very infrequently. We have about 100 U.S. offices, and a lot of the time compliance has to do with how tightly an office is managing its people.

There are some real incentives. We have a revenue-sharing program, where after we cover our expenses any profit that is made is shared with the local offices. We have an annual trade show, where we bring in our preferred vendors to our offices, and we march between 200 and 500 travelers through the trade show.

We constantly incentivize our agents to sell preferred vendors and we run monthly contests. We even hired someone whose sole job is to work with our agents, including those at our 11 on-sites, in selling preferred vendors.

BTN: How effective is this sales effort?

Asselta: I think it's very effective. We often structure agreements where there is some sort of volume incentive-not so much with hotel as much as with air and car. We consistently hit that number with our car vendors and our air vendors.

BTN: What do you do to cut down car rental costs?

Bembry: You don't always have to have a car. Why not ask what kind of shuttle services are available? If you're going to be in a place for a week and you don't have that much driving to do, you're going to rent a car, drive, park, then take it back to the airport. Some people don't think of that, especially if they don't travel all the time.

BTN: Do you recommend in your policy when to use rental cars as opposed to taking public transportation or cabs?

Bembry: No, people need to make those decisions for themselves. We have 35,000 travelers with various business needs. The only thing we can do is try to have very cost-effective options. They have to decide what fits. We issued a global policy last year in July that had three "musts": You must use the designated travel management company, you must use the corporate travel card and as near as possible you must use preferred providers. But there is leeway on that because sometimes given the diversity of our company and our travelers, there is no preferred provider for what it is you're trying to do.

Abrams: There is a fundamental difference between airlines and hotels and cars. You have a fixed number of seats and a fixed number of flights. In hotels you have a fixed number of rooms. The inventory in auto rental moves up and down based on expectations, historical analysis, and commercial account programs for large-volume users. That is 30 to 50 percent of the cost of being in business-holding that vehicle there. Your hopefulness to be able to control your travelers would make a car vendor a bit nervous, as opposed to, "if you don't use our vendors you don't get paid."

Bembry: It's extremely difficult to mandate anything with providers other than your travel management company and the corporate charge card. Once in a while, you'll have a place that doesn't take the card. It's more difficult with car rental because your business takes you to so many places. But we do not enter an agreement with any provider unless we have every belief that we can deliver.

BTN: Who are your car rental vendors?

Bembry: National is our primary and Hertz is our secondary, but we go to some real out-of-the-way places where neither one of these exists. That's why you will sometimes see on an exception report where someone has used a provider that is not on our preferred list.

Asselta: Hertz is our primary. Secondary vendors are Avis, Budget and Alamo.

BTN: When you renegotiated your contracts, did you notice new charges from car rental vendors?

Bembry: The car rental industry has a bunch of problems right now, and they bring that to the table when it's time to negotiate. They have to act differently than they did when they could finance cars in a different way and they were connected to manufacturers. We have to understand what their problems are.

Abrams: This is the type of sensitivity and understanding needed. That's not to say that Joyce will be a pushover, but there is a sensitivity to industry nuances that must be considered when you are trying to do a fair deal with a dependable company.

Bembry: The problem is you can't just say you need an increase. You have to talk about the reasons why and tell me what it is you are doing about the increases. When vendors say, "Oh, but we're giving you this extra thing," they're not "giving" me anything, because everything they add on has a cost. And some of these we simply do not need.

Asselta: We realize the car rental industry has real challenges and for a number of years they haven't been making money. We believe, though, that there should be some reward for loyalty. If someone has supported you over the years and been with you during the lean times, it doesn't seem fair that you get a rate increase in excess of what the industry average is. And sometimes that's where the negotiation gets a bit shaky, because maybe the vendor starts to feel it's a God-given right that they will get X amount of business. Our job is to make them realize it's not a God-given right.

Abrams: Do you find that auto rental suppliers are any more or less difficult to work with than other vendors?

Bembry: They know more about what they have, what their costs are and what they need in order to manage them than the airlines do. Maybe that's because car rental is a simpler process.

BTN: What advice would you give to travel managers to improve compliance?

Asselta: First determine the value of the compliance and tell the traveler, "it's going to save the company X amount of money if you comply." Then sell that to management, saying, "this is what we are spending, but this is what we could save if we had compliance." You have to understand the big picture-not just, "Hertz instead of Avis," but why.

BTN: How much leeway is there between your current compliance rate and what you could do?

Asselta: Probably 20 percent.

Abrams: You can't guarantee 100 percent, but you have to keep pushing to get as close as you can. Travel managers have to take a proactive stance. What you say you can deliver, car rental companies have to expect you can deliver.

Bembry: If you were a travel manager, what would you do?

Abrams: I'd build compliance into an overall evaluation of management. That's how I would hold them responsible.