Profiles In Travel Management: Aflac Travel, Mtgs. Strategy Ducks Easy Categorization - 2010-06-01
Aflac's corporate travel program has a split personality. While the insurance company brought its meetings and travel programs under the same roof long before it became popular, it also has gone against current conventional wisdom by maintaining a rent-a-plate agency configuration and shunning the use of an online booking tool.
Under the leadership of vice president of travel, meetings and incentives David Nelson, a 22-year Aflac and 38-year travel industry veteran, the company has managed to consolidate its spending for both meetings and travel and reduce the number of trips its travelers take.
The Columbus, Ga.-based insurance giant has operated a rent-a-plate since it brought its agency operations in-house in 1991. For the past 15 years, the company has rented its plate from travel management company BCD Travel and its previous iterations. Aflac employs a staff of five travel agents who handle all reservations, including 12,000 to 15,000 annual air tickets, while BCD Travel owns the ARC number and provides fulfillment and some support on a management-fee basis.
"The philosophy behind this is that I would rather have our own people looking after our dollars than some third party," said Nelson.
Aflac in the past has evaluated obtaining an ARC-accredited Corporate Travel Department designation, but "we do not want to become or own our own travel agency," Nelson said.
Aflac, which spends 95 percent of its midmarket travel volume on domestic travel, with the remainder to and from Japan—where it is one of the largest corporate insurers—has never adopted an online booking tool, a rarity among today's mature corporate travel programs. While its quarterly management fee structure with BCD Travel partially drives that stance, Aflac holds philosophical objections to the self-booking concept.
"We've always had the philosophy that our travelers are not the travel agents," Nelson said. "They have more important things to worry about than their flight arrangements."
According to Nelson, the company in 2009 reduced travel volume by about 15 percent from the prior year, and Nelson and his team are pursuing further reductions by emphasizing in the travel policy that travelers should consider alternatives before booking a trip.
Another area of focus has been reducing unused ticket liability. Nelson, who reports through Aflac's U.S. operations and administration department, said actively managing unused nonrefundable ticket saves the company thousands of dollars annually.
Aflac may be old-school with some of its transient travel practices, but on the meetings side it has shown to be ahead of its time. Aflac consolidated its meetings program 14 years ago. Nelson oversees all meetings sourcing and logistics, including transportation and lodging.
The company also has five full-time meeting coordinators who handle small management conferences and annual meetings of thousands of insurance agents and sales professionals.
Significant cost savings were delivered by the meetings program in the past year by scaling back programs and using more web-based technology for communications. Nelson added that he has seen "hoteliers really grabbing and wanting the business very badly. They are more willing to accept something that they might not normally accept. We are continuing to see that looking at 2011 and beyond."
The transient hotel program is sourced through BCD Travel's preferred program because the company lacks significant volume at any single property, according to Nelson.
Where Aflac has been able to build synergy between its meetings and travel programs is in its air travel and group scheduling.
Three years ago, Aflac implemented Atlanta-based meetings technology company SignUp4's online registration system, which through a partnership with BCD Travel last year began to integrate with global distribution systems to synchronize meeting attendees' profiles with their travel information. Nelson said this enables him to track air spending for individual meetings and produce arrival and departure information to increase ground transportation efficiency, a process previously handled by a third party.