Making The Move To Mandates

<B>Making The Move To Mandates</B>
<I>New York life Insurance Co.</I>

By Chris Davis

New York Life Insurance Co. plans to reduce its multimillion dollar meetings program by centralizing control over hotel contracts and optimizing deals in air negotiations. The move is the first step in what eventually may be a fully centralized and mandated meetings program, said assistant vice president of corporate travel Shaun Malay.

Malay said the insurance company already has saved about $250,000 in cost avoidance through improved negotiations and contracts on the 245 meetings--representing roughly 70 percent compliance--that New York Life has held since Jan. 1, when the new program went into effect.

In addition, Malay said the company has avoided more than $1 million in air costs by using net-net zone fares and applicable transient deals for meeting and group travel.

Under current policy, internal corporate meeting sponsors must, at a minimum, contact the company's meetings department to negotiate and sign air and hotel contracts. There are no restrictions on destination and site selection, Malay said.

"It's not a hard mandate, because we're all still growing and learning about this," Malay said. "We don't want to be draconian about this. We're a traditional company, but we don't want to have to go after people with a stick."

The key goals for the moment, Malay said, is to have all meetings registered so actual meeting expenditures can be documented, and to avoid contracts that include onerous cancellation clauses.

"We have many administrative assistants and other employees that handle one or two meetings a year, and they hold those close to the vest," Malay said. "They don't want us to take control from them, and we don't want to do it either. We just want to help them do the job better and get our hands around the numbers. Some of them may not know the ins and outs of a meeting contract and all of a sudden you're stuck with a $45,000 cancellation fee."

New York Life differentiates between group incentive events, training meetings--which include 7,000 people annually, predominately at the Dallas-based American Airlines Training Center--and small, corporate meetings. The changes the program has undergone affect the latter, Malay said.

Meeting sponsors currently must contact New York Life's American Express One onsite office by telephone, fax or e-mail to hold an event. Sponsors may select the date and the destination of the event, while Amex One planners can--though sponsors aren't required to use them--find and book the appropriate hotel and handle the attendee list.

"Using a property at one of our preferred chains isn't mandatory now, because our preferred transient hotels often don't meet the needs of meetings," Malay said. "For example, our policy states that transient travelers may not stay in luxury hotels, but that doesn't hold true for meetings; with negotiation, you may get a luxury hotel with more service options for the same cost as a non-luxury hotel. That said, we'd like to give those properties the first crack at the meetings business, if it fits, because of that relationship."

A meeting manager will walk the sponsor through the meeting planning process, and the agent will enter the event into a database designed to access New York Life's negotiated airfares through Sabre's global distribution system.

Malay has negotiated net-net zone fare deals with three preferred carriers, and will use either those fares or negotiated transient fares depending on the arrival and departure points of the attendees.

One key driver in maximizing savings, though, is the agents' ability to enter the correct airline coding for group travel. This, Malay said, can allow New York Life to receive traditional back-end discounts, such as a free ticket for a future event for a certain number of fares booked. Using those free tickets on high-price future flights can lead to significant savings, he said.

"Without the correct coding and special identifiers, we don't track the business properly and lose out on free tickets," Malay said. "Since we don't have a huge travel spend, we need to capture every piece of business to maximize leverage." New York Life charges back meeting and air transaction fees to individual departments on a quarterly basis.

The current meeting request and planning process isn't automated, Malay said, as only fax, phone and e-mail are used, but New York Life plans to give meeting portal StarCite a try, primarily because of the site's post-event reporting capabilities.

As the meetings program progresses, Malay said it's not out of the question that, down the line, his department may look to exercise more direction over site selection. "We may get to a point where we can suggest and leverage hotels to employees holding meetings, and then maybe destinations," he said. "It's not rocket science. We want to leverage all the volume we can.