Many Euro Companies Don't Manage Their Travel

<H1>Many Euro Companies Don't Manage Their Travel</H1>By Paul Needham

Frankfurt - Firms in German-speaking countries are only slowly starting to centralize management of their travel services and look into global travel agreements despite proof that they can achieve major cost savings.

While larger companies are making faster progress in introducing clearer travel guidelines, vast numbers of medium-sized companies are continuing to leave control of travel decision-making to individual employees and partner travel agencies.

Leading travel managers believe traditional thinking and long-standing relationships with travel agencies are largely the root cause of this resistance to change, although trade associations are presenting new ideas and strategies to their members.

A recent Carlson Wagonlit survey of 886 continental European corporate clients showed only 40 percent of them even possess a company travel guideline. Gabriele Moser, a Carlson Wagonlit spokeswoman, said, "We believe that companies need to become more aware that money can be saved in business travel and that a guideline is necessary for this."

"Centralization of travel services has come a long way in some firms, but in others there is nothing at all because they have agency in-plants," said Freddy Glaser, president of the Swiss business travel association SVFR. "Companies know that with an in-plant they have lower staff costs and do not need to get involved in what is not a core business. But they are not aware of how much money they are giving away and how much can be saved."

Smaller companies, for whom operating their own travel service is too costly, should ensure they monitor their travel agency partners and are involved in three-way discussions with airlines, he added.

Glaser said payment of management fees to travel agencies had not yet established itself in Switzerland, partly because agencies were reluctant to introduce an open book policy that would allow fees to be calculated. "The trend is that we as clients define what we want and what we will pay for it, but in return we want to have supplier commissions and kickbacks," he said.

Glaser said his own firm, the chemical company Ciba-Geigy, has an in-house travel service with an IATA sublicense through an agreement with Swiss travel group Kuoni and uses a satellite printer to issue airline tickets. "Our travel center breaks even and does not cost the company money despite the staff costs," he said.

Ciba has agreements with several airlines for net rates, pays the Swiss bank settlement plan directly and also earns commission from airlines. Glaser said Ciba-Geigy has "saved millions" on its budget of $25 million for flights out of Switzerland and $6.5 million on hotels in Switzerland.

The largest corporate client in Germany, the electronics giant Siemens, is aiming to save up to $133 million on travel costs, which include a flight budget of $200 million, as part of a travel management restructuring. Plans include a new agreement with just one or at most only several global travel agencies such as American Express or Carlson Wagonlit, direct negotiations with suppliers and a ceiling on hotel prices.

In the first stage, Siemens has signed a corporate card deal with Amex, under which all Siemens employees worldwide will have to pay for all travel-related expenses with the co-branded card. Amex will give the company full information on flight and other travel patterns.