IBM Taps Sato For Meetings

<H1>IBM Taps Sato For Meetings</H1>By Stefani C. O'Connor

<B>I</B>BM has awarded SatoTravel a long-term contract to manage its group air volume on the strength of the agency's bid last year for a piece of IBM's global transient agency business.

The contract is for travel for groups of 10 or more people going to the same location. The seven-year agreement to handle more than $30 million in annual volume takes effect Oct. 1, when it begins a three-month transition period from longtime incumbent BTI Americas.

IBM did not put out a separate bid for the group business. Big Blue made the award based on the bidding process it went through in the past year to consolidate its global travel management from dozens of agencies. Sato was one of several leading mega agencies that went after the massive transient business, which accounts for $300 million in annual U.S. air volume alone. In that recent contract award, IBM reduced its travel agency vendors to three: American Express for the United States; Carlson Wagonlit Travel for Canada, Europe, the Middle East and Africa; and Japan Travel Bureau for the Asia-Pacific region (BTN, March 4).

As IBM began fitting together the agency pieces of its revamped travel program, it also was evaluating agency capabilities for the group segment. The corporation's global RFP was broken into six regions, and vendors had the opportunity to respond to one, all or a mixture of the regions. "We submitted our proposal directly for the domestic transient business," said Robert Thomas, director of sales for Sato's Northeast region, with responsibility for marketing to IBM. "They had a few questions regarding our capabilities for meetings and planning, and we responded."

As the bid-proposal investigations progressed, it seemed that BTI Americas and IBM might not be seeing eye to eye on financial arrangements. "We priced the business in a way that we thought represented a fair return to us," said Lee Turner, BTI Americas executive vice president of the account management and sales group.

According to an agency spokesman, BTI's portion of IBM's group air business represented more than $30 million in annual air volume, although one source placed it closer to $60 million. Support for the computer company account came from more than 90 employees of BTI Americas and technology partner EDS in four major U.S. facilities. The account was initially set up with IVI about 10 years ago, and went by default to BTI Americas when that agency was created from the merger of IVI and USTravel in February 1995.

Turner said that BTI Americas has had several relationships with IBM and has assisted it in making hotel and car rental arrangements for meetings, which IBM contracts out on an as-needed basis. He added that he expects to maintain a current service and management relationship with Lotus Development Corp., an IBM subsidiary.

The agency's global joint venture, Business Travel International, currently has portions of IBM's international travel in 11 countries through several partner firms. "There's an individual decision process going on in each of those countries," said Turner.

While BTI Americas views the contract award as a cost-based decision, SatoTravel president and CEO Michael Premo believes it was agency technology that tilted the account toward his company.

"IBM felt strongly about SatoTravel's capabilities, and in particular our technical capabilities, and they have lead us to believe that really was the primary reason for selecting us, not necessarily the financial arrangement and the bottom line," said Premo.

That sentiment was corroborated by IBM. A source there said it was the agency's "technology, infrastructure, and some financial" components that gave it the win.

As if to prove the point, IBM's Rick Quinton, manager of integrated procurement solutions for worldwide corporate contracts, joined with Premo recently to mark the account win and to help cut the ribbon at Sato's new 50,000-square-foot corporate call center in Sterling, Va. There, depending on volume, 25 to 40 staff members initially will manage IBM's group travel, and SatoTravel's other corporate accounts.

Premo expects to handle a combination of domestic and international group air travel for IBM, but declined to speculate on how many travelers there would be. One source estimated that more than half of IBM's 300,000 employees would be affected.

Sato's Thomas said he has been working with IBM to communicate the change to employees.

Premo said Sato also will develop specific enhancements for IBM to use on the agency's front-end, pop-screen Eagle product, which is operational, and its PC-based Navigator self-booking solution, which is currently in an alpha version with a handful of users.

IBM's group air award is the first such corporate account for the $1 billion travel management firm. Known primarily within government and military contract circles, the airlines-owned SatoTravel entered the corporate travel market in 1994 and has since corralled major accounts including 3M, Lockheed/Martin, Qualcomm, Mitre Corp. and others.