Profiles In Travel Management: Kodak Develops Consolidation Picture - 2007-12-17

The Eastman Kodak travel program has seen its travel costs decrease between 10 percent and 15 percent since it began consolidating travel management services four years ago with WorldTravel BTI and now BCD Travel. In that time, Kodak also has reaped more than $1 million annually in airfare savings through policy changes, including abolishing business class travel, persuading travelers to book the lowest applicable fare and driving traffic to low-cost carriers in its home market.

"The concept to consolidate into a worldwide program was done for a number of reasons, one of which was to leverage our total volume in air and as much volume in hotel and car rental as we could," said Eastman Kodak manager of global corporate travel services Doug Baldy. "We were also trying to get better service levels to our travelers and the application of our travel policy more consistent throughout the world."

Baldy has worked in tandem with BCD Travel and its Advito consulting subsidiary to implement a global travel policy and corporate card program, a primary carrier relationship with United and a single car rental contract in the United States and Europe with National Car Rental.

Previously, Kodak's program, which encompasses 12,000 travelers in 34 countries with $41 million in companywide air volume, was fragmented between multiple agencies, including the former Rosenbluth International in the United States and Japan, Carlson Wagonlit Travel in Europe and WorldTravel BTI in smaller markets, including Puerto Rico. While the Kodak travel team led by Baldy thought that 66 percent of its air volume was derived from North America, 22 percent from Europe, 7 percent from Brazil and Mexico, and 5 percent from Australia and Japan, it also knew it had left considerable volumes out of the mix. "We discovered we had the big countries under control," said Baldy. "The other spend we found was $100,000 in Venezuela, $200,000 in Argentina and $300,000 in Singapore. It wasn't millions, but it was significant."

Baldy said a key to Kodak's success was enabling alterations in the global travel management plan to reflect local market needs. "People do business in different parts of the world in different ways, even in the same company. You need local support and local buy-in, and we've done it in a number of ways," he said.

Kodak also reduced costs by outsourcing some of its travel management functions to BCD Travel and shedding internal manpower. The travel team, which used to have eight members, has been reduced to five, including Baldy and two staffers dedicated to fleet services. Some former Kodak travel team members have since transitioned to BCD Travel and are dedicated to the Kodak account.

Meanwhile, Baldy worked to attain domestic air savings despite being subject to high airfares at Kodak's Rochester, N.Y., headquarters. Before the introduction of low-cost carriers at the Greater Rochester International Airport in 2000, the airport was the one of the most expensive in the country, Baldy said. The entry of JetBlue Airways and AirTran Airways to Rochester not only offered Kodak new air travel booking options, but also drove down legacy carrier pricing, Baldy said. "We've watched our cost per segment go down, and the cost per mile has stayed same for five years," Baldy said. "We attribute that to a whole variety of discounts, change in policy and low-cost carriers bringing in competition."

Directing 75 percent to 85 percent of air volume to preferred suppliers, Baldy said, is an old model that is "not a magic number any longer, because with airlines changing discounting practices, we had to adjust some travel policies."

The travel policy encourages travelers to book the lowest possible fare, use low-cost carriers and use the company's GetThere online booking tool, which processes 75 percent of domestic tickets and 35 percent of point-to-point international reservations. Through an internal survey of the program's top 50 citypairs, Baldy found air tickets cost 24 percent less when booked online. "When the traveler has to push the button, visual guilt sets in and they are not going to buy something more expensive when they can't blame it on someone else," he said.

While Kodak expects BCD Travel agents to reinforce the policy by offering the lowest possible fare to travelers, "We do not expect our travel agency to be a police force and refuse to sell a fare," said Baldy, who tells agents, "You are not going to be the police, but you will be the snitch."