PwC Saves Thru Mtg./Travel Convergence

<B>PwC Saves Thru Mtg./Travel Convergence</B>
<I>PriceWaterhouseCoopers</I>

By Chris Davis

Aggressively moving to capture and manage one of the largest corporate meeting programs in the country, PricewaterhouseCoopers has not only centralized all group travel functions but merged its meetings and travel departments, saving millions of dollars through hotel cost avoidance and better negotiated airfares.

The two departments have worked in tandem since July, enabling better direction of meeting and transient volume to meet commitments with preferred vendors and increasing clout at the negotiating table. The combined volume, and the Florham Park, N.J.-based PwC's ability to control it, has led to deep discounts.

"It makes so much sense because there are so many synergies," said director of travel and meeting management Gilda Caputo. "If there are issues with commitment numbers on either side, the other can help. By centralizing, the meeting management department's purchasing power grew tremendously and we save millions by avoiding cancellation liability through redirecting meetings," Caputo added.

PwC, which ranked second on BTN's 2000 Corporate Travel 100 index of the largest corporate travel programs (BTN, Aug. 28, 2000), spends between $100 million and $110 million on meetings alone, with a little less than half of that dedicated to group air travel.

While the primary effect of the meetings/travel merger on corporate travelers and meeting sponsors has been an increased effort on all fronts to entice the use of preferred suppliers, the effect on PwC's bottom line is far more dramatic. More than 80 percent of corporate events are planned through the meetings department. Since PwC meeting planners and travel coordinators are able to influence travel and meeting destinations, Tampa-based director of travel and meeting management Mark Williams, to whom Caputo reports, is able to present an impressive package of controllable volume to air and hotel suppliers, leading to favorable rates and fares.

For example, PwC has negotiated zone fare packages with major carriers that include lower fares than the airlines' public zone programs.

"We save tons through PwC-specific zone fares," Caputo said. "It's because we can direct traffic somewhat and push meetings volume to cities that are our preferred airlines' hubs."

Williams said the major carriers negotiate differently, but credit for both meetings and transient volume is included in contracts. "There is a combination," Williams said. "Some airlines approach the structure of meeting fares based on the transient agreement, and modified it as we requested. Other carriers take a more traditional approach where we work through their meetings network and use transient as a base, but it takes a second, smaller round of negotiations to complete it with them."

The seeds of PwC's new meetings and travel program were planted shortly after the July 1998 merger of Price Waterhouse and Coopers & Lybrand. Both companies had modified, downscaled consolidated meetings programs. Coopers & Lybrand had consolidated all its employee training programs and was, in fact, part of the training department. Price Waterhouse also had consolidated training meetings, but also included events from other, but not all, departments. After the merger, PwC hired consultants to examine how the new meetings department should operate and what efficiencies could be gained.

"We worked on it for more than two years, and now we have a group that sources, one that plans, and one that handles our benchmarking database," Caputo said. "It's a train that moves on a track, and now it includes 1,300 meetings."

PwC's meeting sponsors are mandated to contact the meetings management services department, and the company now boasts 100 percent compliance for training meetings and about 80 percent compliance for others. Sponsors' initial contact includes very basic meeting information, which the meetings department's sourcers will use to analyze destinations and properties.

PwC's internal database of destination costs for different types of meetings is updated by hand after each event. The department will report back general cost assumptions from the benchmark database to the meeting sponsor and the senior manager whose responsibility it is to approve the event, as well as cost projections for alternative cities and properties. Since each PwC department pays for its group travel costs and the meetings department does not yet charge back services, meetings sponsors and senior management have the final say in destination selection.

"We are not in a draconian situation where we tell them where they're going," Williams said. "But they do have to go through us. When the meeting is approved by management, it is with a budget and they need to be pretty close to that number."

PwC drives compliance with a carrot instead of a stick, alerting meetings sponsors booking events on their own of the cost-saving services the meetings department can provide. The company is aided by its preferred hotel chains, which alert the department of stray meetings booked, Caputo said.

"We push for them to use global preferred partners and give lots of reasons--better rates, better negotiations," Caputo said. "If they don't want to, well, it's their budget. We're not policemen, but we strongly suggest."

Once the consolidated meetings program was up and running last spring, Caputo and Williams met to consider closely aligning the meetings and travel departments. Better negotiations was a major point, but so was the cost avoidance from shifting hotel volume to meet transient commitments or evade cancellation fees.

PwC's upper management was sold easily on the idea, Williams said, helped, in part, by a former PwC travel executive who recommended the course of action. The young program, though, still has room to grow and produce more savings.

"We have saved a significant amount of money, but have been asked to save a significant amount more," Williams said. "We haven't found any drawbacks yet, and there are more efficiencies to be had. It's still an evolving program and there's more we can do. There are opportunities for further cross-pollination of staff, as meeting managers get to know more about transient and vice versa. We will do that as the opportunity presents itself, since it helps the firm to have more experience in each area.