Number Of Cos. Combining Mtgs., Transient Decreases

<B>Number Of Cos. Combining Mtgs., Transient Decreases</B>

By Chris Davis

Though many corporations in the past few years have investigated the possibilities of bringing their meetings under more centralized control in conjunction with the travel department, that trend has not led to an increase in the number of companies leveraging both transient and meetings volume for contracts with airlines and hotel chains.

According to a recent Meetings Monitor survey of corporate planners, fewer companies are negotiating combined contracts than did so last year, though most still do. About 57 percent of corporations leverage both transient and meetings volume for air negotiations, down from 70 percent last year, and 62 percent do so in hotel negotiations, down 3 percent in the same time period.

There are reasons why some corporations would shy away from combining contracts for both air and hotel, and most are related to the level of centralization of the company's meetings program. Those who give internal meeting sponsors carte blanche over meeting destinations and sites likely would find a combined contract ineffective, as transient travelers rarely stay in the cities and hotels meeting sponsors prefer.

"There's no real trend one way or the other," said Hyatt Hotels and Resorts vice president of sales operations Fred Shea. "Some companies can, because it gives more negotiating clout and a better understanding of their overall expenditures, but many companies are segmented between travel and meetings, and many meetings aren't in the same hotels or chains where transient travelers stay."

A company's size also is a key factor in its negotiation of contracts, Shea added: "It's not that big a deal with smaller companies; it may not give them negotiating power because of the structure. The time and energy to centralize something that can be handled locally doesn't make sense for a lot of companies."

While Shea said Hyatt considers overall corporate volume in meetings negotiations, there's no guarantee it has an effect in each case. "We love to deal with companies who have one person with a handle on overall negotiations and, of course, we pay attention to overall volume," he said. "Individual pieces may fall together, but not always, and the individual property may be disconnected in that case."

Major airlines offer several meeting and group travel packages, including such front-end discounts as zone fares and back-end savings like free tickets and upgrades on future flights. Some companies embrace them, others prefer all discounts up-front, including those companies who have negotiated net-net fares on all flights, and those using zone fares for meeting and group travel (Meetings Today, Aug. 14).

"I do a blanket corporate air contract that covers both transient and group travel," said Steve Clark, assistant vice president of conference and travel services at CUNA Mutual Group of Madison, Wis. "We have done some deals with individual hotels, but we don't have enough hotel volume to justify a blanket chainwide agreement. But with our air contracts, we've gone with net-net agreements for all fares, including group."

Clark, who oversees both the meetings and travel departments for CUNA Mutual, only this year went to net-net contracts for both transient and meetings air, but has negotiated volume-based contracts that encompass both forms of travel for the past three years. Since more than 90 percent of CUNA Mutual's meetings involve company employees exclusively, and all travel for any purpose must be ticketed through the company's agency, Clark said a volume-based agreement was the smartest and most cost-efficient way to go.

CUNA Mutual, therefore, eschews such back-end discounts as free tickets and upgrades common in carriers' meeting deals in favor of the discounted rates a volume-based contract provides. Companies that, unlike CUNA Mutual, employ separate programs for transient and meeting travel, however, are less likely to see the benefits of combined contracts.

"A combined contract is not to the direct benefit of planners not involved in corporate travel," Clark said. "In a purely meetings environment, it would benefit my department more to negotiate a meetings-only contract because I would have upgrades and free tickets to offset budget in conducting meeting discounts. A combined contract is a better deal for the company, because it will save more money up-front across the board."

Clark also pointed out that free tickets awarded under a meetings-only contract include an expiration date, so planners may feel pressured to use them, regardless of the cost of the flight. For example, he said, a free ticket on a single $200 flight saves the company $200, but under one of Clark's combined deals, there would be savings of $36 on each ticket.

"We currently negotiate separate for both air and hotel, primarily because we're in the process of moving all volume to one agency" said Sandra Morris, manager of special events at Winston-Salem, N.C.-based Sara Lee Corp. "We work with preferred properties for transient travel as opposed to preferred chains, but my site selection is not based on preferred agreements with those hotels."

Sara Lee's internal meeting sponsors are allowed a fairly wide berth for selecting the site of their events, Morris said, and their choices don't often correlate with the needs of the corporation's frequent transient travelers.

"There's a lot of cities where it makes sense for us to develop preferred agreements with properties for transient travel, like Winston-Salem, or the locations of our other primary offices," Morris said. "But those locations are usually not high on the lists of where our meeting sponsors want to go."

Weyerhaeuser Co. of Federal Way, Wash., recently began mandating that all meetings with at least 25 attendees register through its travel and meetings department, said director Suzanne Loeb. As such, the department can gear those meetings toward properties with which Weyerhaeuser has preferred agreements.

"The mandate didn't kick in until just a few months ago, so 2001 will be the year we have clout in meetings spending," Loeb said. "We didn't have a good idea of meeting spend. Originally, we tried to charge as much on our American Express corporate card as possible, but we still missed a lot. Now, those meetings must be assigned a charge number through this department otherwise the internal sponsors won't get paid." Weyerhaeuser tracks group air spending separately and negotiates accordingly, Loeb said.

Other companies, though, still keep a fence between travel and meetings. "We've always negotiated them separately," said Susan Unger, travel coordinator for Commercial Federal Bank in Omaha, Neb. "I don't know if that's something we would consider changing in the future, but it's not under consideration now.