Managing Meetings At Champion International

<B> Managing Meetings At Champion International</B>
<I>Champion Redefines Outsourcing</I>

By Chris Davis


In a new twist on third-party meetings management, Stamford, Conn.-based paper manufacturer Champion International Corp. has signed a multi-year contract, outsourcing its entire travel and meetings program to a brand-new company formed by its former travel and meeting managers.

The principals of DRS3 include Champion's former director of facilities administration and corporate services Carolyn Davis and manager of meetings and special events Michelle Rubin, who of late has been handling the outsourced Champion group travel account at WorldTravel Partners. The month-old DRS3 was formed with the intent of merging and managing meetings and travel programs for Champion as well as for other corporate customers.

Since 1997, Davis and Rubin said, they have sliced $2 million off Champion's $30 million total travel and entertainment budget, a number they expect will increase by an additional $600,000 in 1999. The savings were achieved by leveraging Champion's air and hotel volume with suppliers, establishing more favorable meeting contracts and increasing the use of net-net fares for group and transient travel.

Davis and Rubin consolidated Champion's group and transient spending in 1998, after each had consolidated her own department (<I>Meetings Today,</I> March 16, 1998). Rubin accrued negotiated meetings savings of nearly $600,000, and Davis estimated the number will reach $750,000 this year, after she captures a greater amount of meetings data through Champion's intranet travel page.

The next step was to leverage group and transient spending under combined contracts with Champion's travel suppliers. "In some cases, we talk to two separate sales representatives, because most suppliers still look at group and travel as two separate functions," Davis said. "Both sides know exactly what the contracts are and what kind of money is on the table. Often, though, their internal communication structure isn't in place to view the contracts as one account."

The contracting process cut Champion's travel tab by $2 million in actual discounts. "We report savings to senior management in terms of strictly negotiated savings. We don't throw in savings by comparing it to coach or Y fares or rack rates or any of that. We report it strictly as what the cost would be if you were to buy that ticket today and what our discount was on top of it," Davis said.

Last year, Davis and Rubin explored the benefits of net-net airfares, which are becoming more commonplace in transient travel but are still a relatively new concept in the meetings arena (<I>Meetings Today,</I> May 17). Their new deals account for a large portion of the additional $600,000 savings anticipated in 1999. "We were one of the first to really raise the net-net meeting fare question, and we went after that very aggressively," Davis said. "Now, we save 50 percent per meeting ticket."

Most of Champion's air travel is on Delta Air Lines, whose willingness to accommodate the net-net concept "says a lot for both our programs," she said.

Today, about 80 percent of Champion's meetings are registered on the travel home page, a step that is encouraged but not mandated. "The usage of the meetings department and online registration to capture data has been critical," Davis said. "It really helped us put our hands around that low-hanging fruit."

Davis and Rubin will continue to report to Paul Records, Champion's director of organizational development and human resources, and Jack Nimons, its vice president/controller.

Nimons plans to seek savings from the arrangement beyond the cost saving accrued simply by outsourcing the travel function. "We are looking for a further reduction of that $30 million (annual T&E)," he said. "Is that $3 million? I don't know. Right now, we don't have a solid monetary goal. But we do expect that they will provide even more savings as we develop key performance indicators."

Nimons said Champion outsourced the travel department--which, he noted, would not have involved laying Davis off--during a corporate downsizing of 2,000 employees after the company went public in October 1997.

"Carolyn told us she wanted to bid on the contract, and it came at the right time for her," he said. "This is a low-risk transition for Champion. Carolyn has been here for many years, knows our processes, and Michelle has saved us significant dollars in meetings without alienating any employees." In addition, keeping the two will make the change transparent to travelers.

In forming their new company, Davis and Rubin hooked up with Robert Steiner, currently executive vice president of Ixata.com, for whom he helped build RFP Express (<I>BTN,</I> April 26). Steiner was at one time the controller at Northrop Corp. until, much like Davis and Rubin, he and Northrop travel manager Gerard Smith left in 1992 to found a travel management consulting firm of their own.

As the professions of travel and meetings management mature, more managers are seeing the benefits of true consolidation of the two departments, Davis said. But Rubin noted that in many companies, "meetings management hasn't matured past logistical planning. Most planners have the necessary data sitting right in front of them, but they don't know what to look for and how to present it. You need to prove your worth on the bottom line.