Profiles In Travel Management - 2007-02-05(2)

Asian Progress Yields Promotion
For her pioneering efforts to build a travel program across Asia for Intel between 2000 and 2006 by deploying a consolidated travel management company strategy, a unified and tough travel policy and preferred supplier deals in a region where these all remain unusual, the company promoted Megan Stowe, its former travel manager for Asia, to the role of global strategic sourcing mobility manager.

Like a number of multinational companies that have attempted to integrate Asia/Pacific into their worldwide travel programs, Stowe found unique challenges but achieved success by avoiding the assumptions that apply to Western markets. Not only is the travel infrastructure different in many respects—China, for example, has its own global distribution system—but, said Stowe, "you have to understand the cultures."

She experienced numerous examples, including negotiating with a group of suppliers in China who would only address her male colleague, and others who preferred to confirm deals with a handshake rather than a physical contract with terms and conditions.

Two major global changes in travel strategy at Intel made Stowe's job even more challenging. The first was the consolidation to a single global travel management company, which abruptly ended numerous long-term agency relationships, in a region where they count for even more than in the West. The second was the downgrading of air travel policy to coach for all destinations and all personnel. This too was potentially tricky in a region where many cultures are sensitive about perceived status.

The company multinationally consolidated to one travel management company in 43 countries in 2003, undertaking the entire conversion in two months. Asia/Pacific took two weeks, although Japan remains in the hands of a local TMC.

By the time this happened, Stowe already was contending with the switch to a coach-only policy, a rule which remains in place today. "They keep going back to reconsider it, but senior management gets a fright when they see the dollars it would add," said Stowe.

At first, she added, the tougher policy proved problematic in Asia, but "as soon as they saw it was a rule with no exceptions for senior management, that helped, because people in the region stick to the rules."

Business class is permissible for a small number of reasons, including flying with clients who are in business class. This avoids losing face, and Stowe said that is particularly important in Japan and China.

"When I was explaining why we had switched from business class to coach, I couldn't take the big-company approach of stamping down my authority. In India, I had to communicate more directly, and I sat down with employees and staged many tips-and-tricks forums with them. In Japan, I had to do it in a more roundabout, gentle way. While Indians ask a lot of questions, no one wants to ask one in Japan."

Stowe backed up the messages of policy change and consolidation by carefully adapting her communications to each market. "Some companies treat Asia as one place, but you can't do it that way," she said. "It has more than 150 languages and 25 currencies, and there is more diversity than in Europe. Indians are very different from Chinese and Australians very different from Vietnamese. Also, Australia is an extremely mature travel market, whereas in Vietnam they don't know what a travel program is."

Stowe encountered similar cultural diversity in her dealings with suppliers. "Finding who to send the request for proposal to was a whole challenge," said Stowe, adding that numerous suppliers could not communicate in English. "Negotiating was also very different in each country. In India, you could be more aggressive, but in Japan, you had to go through three to four meetings before you could even get to the right person to negotiate with." Chinese and Indian airlines also are generally prepared only to give back-end rebates, even though Intel has adopted a policy of negotiating upfront discounts elsewhere.

Persuading suppliers to move to paper agreements required sensitivity. Stowe was reasonably confident suppliers would deliver on verbal agreements because of the importance laid upon reputation and maintaining relationships, but during her time in Asia she saw a change in attitude to formal contracts. "Asian suppliers have learned that multinational companies like having paper," she said. "However, we have had to respect other cultures and let them understand how a formalized agreement is good for both sides."

With a diverse background including teaching and medicine, Stowe joined Intel in Australia in 1996, originally to manage the company's marketing and trade shows. She switched to travel in 2000, moving to Singapore. Although Intel is an American company, Asia is its largest marketplace. Even so, there was no structured travel program in the region when Stowe took command. A U.S.-based mega travel management company served as its TMC in several markets but numerous other TMCs had pieces of the business as well. A handful of deals with hotels negotiated locally by secretaries had not been communicated throughout the organization, while the concept of corporate contracts simply did not exist among most regional airlines. Intel, which has a global travel spend of more than $300 million and 50,000 travelers, also was using 22 different corporate cards.

Although things are changing now, a contract made little sense in the early days of Stowe's Asian travel management tenure because there was no management information with which to measure performance against agreements. Conversely, the lack of deals gave little incentive to look for data. Nevertheless, Stowe started by asking local administrative assistants for information and—in the case of accommodations—appealing to hotel general managers.

Since then, Intel has introduced an expense management tool, to which it has added travel management company data. However, management information remains virtually nonexistent in such markets as Laos and Cambodia, and the lack of a consolidated card means Stowe has to rely on ticketed rather than flown data. Intel intends to introduce a mandated card worldwide during the next few months.

Yet another aspect of travel management where attitudes vary is self-service reservations. Intel already uses an online booking tool in the United States, United Kingdom and Ireland. Stowe said India, Hong Kong, Singapore and Australia also are asking for an online booking tool, whereas it is likely to prove far less popular in Japan, where the culture is such that employees expect their travel management company to prepare their boarding cards. Stowe also said she would encounter problems with loading fares into booking tools. At present, corporate travel agents in several markets book negotiated Intel fares using paper rate sheets they keep on their desks.

Still, Stowe said the travel management environment in Asia is maturing. "You still have to respect other cultures," she said, "but the differences are not as pronounced as they were seven or eight years ago."