Managing Meetings At Joseph E. Seagram & Sons: Seagram Launches Cost-Cutting Campaign

<B> Managing Meetings At Joseph E. Seagram & Sons: Seagram Launches Cost-Cutting Campaign</B>

By Chris Davis

On the heels of a transient travel restructuring that saved nearly $20 million, Joseph E. Seagram & Sons is turning its attention to meetings. It has hired a full-time meetings professional to manage a consolidated meetings program it hopes will cut another $5 million in costs.

Under the direction of Seagram global travel management director Earl Foster and new global manager of meeting services Tonsie McAden, the program is aimed at cutting meeting costs through company-wide negotiated contracts with preferred suppliers. To that end, Seagram is about to mandate that all meetings be registered with McAden's department so data can be captured, and better air and hotel rates negotiated. The meetings department will not necessarily involve itself in logistical planning, however.

Seagram, whose businesses include Universal entertainment properties and several brands of beverages and spirits, currently operates a decentralized meetings program.

As is the case with many large companies centralizing meetings for the first time, Seagram's first mission is to get a better handle on its total annual meetings spend.

"We spend around $50 million on meetings, as best we can tell. Meetings are booked in many different accounts, so it's difficult to officially size it," Foster said. "Without an official registration system, that's as close as we're going to get. But in one year, we will have more official numbers, and the databases we'll have maintained will be sliced and diced by business units, type of meeting, purpose and budgeted versus actual spending."

McAden now is touring Seagram's various business units to introduce herself and the notion of a centralized meetings program to corporate planners.

"I'm doing a verbal soft sell, and the consolidation has been received quite nicely," she said. "Everyone is concerned about ease of process."

After McAden and Foster complete a needs- assessment, Seagram will mandate online meetings registration through the company's intranet travel home page. Foster said Seagram will build a stand-alone meetings page, linked to the travel page on the intranet, but some sort of meetings software will be necessary to complete the Web-registration module.

"That is the key to the holy grail," Foster said. "We'll be able to get at all the resources we couldn't before--everything will open up. We'll be able to leverage air and hotel volumes." Harvesting "low-hanging fruit," Foster said, should cut a minimum of 10 percent from the company's total meeting spend in one year.

Once the data is in hand, McAden will select preferred suppliers. It is here that Foster expects to save the most money.

"We will be focusing more of the business to a smaller number of suppliers," Foster said. "We will not say to meeting hosts that they can't have golf or tennis. We'll give them everything they want, but through a list of preferred suppliers. We will use the right kind of airfares and hotel rates to influence the buying decision."

McAden expects to generate savings by avoiding some hotel cancellation fees, using the system to redirect planners to space that others cancel at the last minute. "That's the benefit of an interactive intranet," she said.

Hyatt vice president of sales operations Fred Shea noted that such a program offers an out to both the corporate customer and its hotel suppliers.

"It's great that they have the opportunity to refill the business; so few companies have the ability to do this," he said. "We don't ever look at making money on attrition and cancellation penalties--they are only designed to reduce our lost profits."

While declining to cite exact revenues from these, he said, "it's safe to say we collect more than we used to. But we don't want to make money on this--we want the group to stay in our hotel, so that everybody wins. The negotiation of attrition and cancellation clauses is a big issue between us and customers--and going to court with a customer is a total lose-lose."

<B>The Promise Of Savings</B>

McAden also will look to incorporate facilities at Seagram-owned Universal theme parks into the meetings mix and to explore direct connections with suppliers wherever possible, she said.

Foster, also president of the Association of Corporate Travel Executives, knew that Seagram's meeting and group travel spending would have to be addressed when he was hired two years ago to manage the travel department (<I>BTN,</I> May 5, 1997). "I didn't have sufficient bandwidth in my team to take everything on in one shot," he said. "So I went after the biggest nut there was, transient travel, recognizing that once I get that done, we would go ahead and justify a meetings assistance program."

With Foster's success in saving more than $19 million in fiscal 1998 (BTN, April 12), he had little difficulty convincing senior management to try a similar meetings consolidation program. The promise of $5 million in savings "got their attention," he noted.

Foster's first step, after determining that no Seagram employee possessed the extensive meetings experience he sought, was to bring in McAden. "If I'm going to develop a brand new program, I needed to bring in someone with credibility, someone to sell to event planners," he said. "She brings skill sets that are credible."

Her wide range of experience in just about all aspects of the meetings industry includes stints as director of conference planning for ITT Corp. of New York, director of conferences for the Young Presidents' Association and director of customer promotions and events for The Luxury Collection. "I've planned board of directors meetings of 20 people and conventions of 1,500," she said.

Foster said he plans to look for benchmarks established by a number of other companies that have experienced similar meetings-consolidation scenarios.

"We benchmark on the transient side of the house," he said. "With our reach into the industry, we will do informal benchmarking and sharing of best practices. We are not of the feeling that everything has to be invented here.