GlaxoSmithKline Unearths Travel, Meetings Synergies

While the merging of travel and meetings management is a utopian ideal, real world conditions can limit the extent of the convergence.

GlaxoSmithKline last year concluded that its attempt to merge the two functions was a good move in one respect but not in another. Bringing together the negotiations with air and hotel suppliers for both transient and group travel did create deeper savings and some softer benefits. However, Janan Johnson, director of procurement and corporate services for GlaxoSmithKline, found the processes for operational management of travel and events were "chalk and cheese."

While Business Travel International continues to handle GSK's travel globally, for instance, it became clear that GSK would continue to need up to 10 specialized event management companies as well. The responsibility for the logistical management of each meeting therefore devolved back to the relevant departments, such as marketing and sales, albeit using the air and hotel deals sourced centrally by Johnson's team.

Until last year, Johnson had retained parallel air and hotel contracts for meetings and transient travel. On the meetings side, GSK had four to six preferred hotel chains in the United States and the same number in the United Kingdom, its other major market. Chains on the preferred list abided by a set of terms and conditions which included a rebooking option and disclosing if another pharmaceutical company was meeting simultaneously at the same hotel. GSK meeting organizers were free to negotiate with whichever preferred chains they wanted.

On the air side, GSK had group air contracts that were negotiated in-house but booked and fulfilled by Maritz in the United States and BTI in the United Kingdom. GSK has a total air spend of $240 million and a transient hotel spend of $95 million.

Johnson felt confident enough to negotiate a consolidated event and transient deal because, she said, "we had good data, even though the patterns were very different. On the hotel side, we were able to determine spend at chain level." Management information was sourced from payment cards, travel management company data and hotel invoices.

Johnson found gaps in the program. GSK had a relationship with some hotels, for instance, for its group business but not for its transient spend. That meant travelers who stayed at a certain hotel for a conference might find they were not allowed to stay there on subsequent transient business because it was not a preferred property. "We wanted to put out a more consistent message," said Johnson.

Sorting out inconsistencies like this gave preferred hotels recognition across GSK's travel program. In return, GSK gained greater recognition for all of its travelers, regardless of whether they were traveling individually or as part of a group. "We have a lot of meeting spend in leisure destinations, such as Las Vegas and Orlando, where we don't have any business travel deals," said Johnson. "We were able to say to the chains which managed those hotels: 'Look at all the business we do with you.' "

Johnson found she could realize the same synergies when she presented airlines with merged transient and meetings data. "We started to receive recognition on routes we don't normally fly," she said. "It also helped with things like moving us up wait-lists."

GSK recently completed a global airline request for proposals in which any airline was allowed to bid on any route or combination of routes. Carriers were allowed to bid as alliances. Pricing had to be valid for flights originating from both ends of each city pair.

Johnson joined SmithKline Beecham in 1999 as travel manager prior to the company's merger with Glaxo Wellcome to become GSK. In October 2004, she was promoted to her current position, which gives her oversight of many more spending categories. These include financial services, tax, auditing, legal, consultancy and outsourcing.

Johnson continues to take a strategic outlook on travel. Her team practices what it calls "lean buying," which means identifying saving opportunities for GSK business units and approaching them proactively with advice.

"For example," she said, "we may tell a unit it is buying 4,000 room nights at one hotel but that if it gave the business to another hotel, it would save X amount of money. We are also helping them to change their processes, such as advising them to buy discounted, non-refundable tickets for outbound journeys but flexible tickets for their return legs."