Seagram's Takes A Spirited Approach To Travel
<B> Seagram's Takes A Spirited Approach To Travel</B>
By Sarah Welt
<I>New York</I> - Since the new year began, director of global travel management Earl Foster and his travel team have saved Joseph E. Seagram & Sons Inc. $5.7 million on its $100 million air volume--and by year's end they plan to push that figure to $24.7 million. That goal may be ambitious, but it's not unreasonable, considering that the program cut the company's travel costs by $19.07 million in fiscal 1998.
The savings in the first quarter of this year are the realization of a number of travel initiatives, including charging back agency fees to individual travelers, consolidating travel spending data from the recent acquisition of Polygram Entertainment into the existing data warehouse to facilitate vendor negotiations, selecting an online booking system, negotiating net fares for travel in the Asia-Pacific region, moving all European travel purchasing to a single dedicated Carlson Wagonlit reservation center in London, and negotiating direct links with car rental and hotel suppliers.
As a way to allocate the cost of the global travel management program, Seagram plans to charge back the entire cost of the operation by mid-year 2000.
"It's called corporate allocation," said director of global travel management Earl Foster. "There is a move afoot in corporate headquarters where you have to justify your reason for existing and you have to figure out who is going to pay for your services."
Additionally, Seagram is negotiating with two airlines in Asia to secure net fare agreements and plans to have contracts signed in the next 90 days. The company also has negotiated net fares in Europe, signing "two landmark deals" with Air France and British Midland four months ago.
Now, "over 80 percent of our spend in the whole Seagram structure is under a global contract," said Foster. With United Airlines, the company's primary global supplier, "in the first 30 days we probably moved 30 percent of our business. We signed an agreement in August 1997 and share move is largely complete, with only a few remaining opportunities to move share from AA and BA."
Seagram also plans to finish the selection of an online booking system and begin implementation in the next 90 days. "We are in diligence on it right now," Foster said, noting that travelers have expressed frustration at not having an online option.
Six months ago the company surveyed 1,200 travelers around the globe and found that 62 percent wanted the option of booking their reservations online. The survey also showed that 94 percent of travelers were aware of Seagram's preferred airline agreements, 65 percent knew about the hotel program and 55 percent wanted access to the corporate intranet site.
On the data management front, Seagram has been able to capture 60 percent of Polygram's data to date. It now plans to consolidate all European data in its global data warehouse within the next 60 days, and all Asia-Pacific data within 120 days.
Another initiative Seagram began six months ago was comparing flown data to booked data through feeds taken from its primary and secondary carriers. "An airline always wants to talk to you about revenue. Flown data says, 'I don't care what you booked on, just tell me what you actually gave me in passengers sitting in my seats and paying a bill,' " said Foster. "Airlines want to talk in all the same terms, to talk about the number of seat miles and miles flown and destinations and city pairs, but we want to talk about all that in a flown sense, not a booked sense. Nobody makes a profit on booked data, only on money that goes into the bank."
Foster declined to comment on which airlines he is working with, but did say he would like to be able to get data from all of Seagram's preferred carriers by July or August.
Meanwhile, Seagram on Jan. 4 began moving all of its European reservations to a central reservation center operated by Carlson Wagonlit Travel in London. Operations from the United Kingdom and Belgium moved to the center in February, where they will shortly be joined by France and Germany. Then one country per month will move to the center "until all Seagram company business in Europe is there," Foster said.
In order to take the best possible advantage of international currency fluctuations, reservation center agents are driving tickets back to the country of origin and printing them in local currencies.
On the meetings front, meanwhile, the company is establishing a global meeting planning function, and Foster has "just gotten the authority to take on an additional staff member" to head the unit. Foster now is in the process of interviewing candidates for the position.
To further improve its travel operations, Seagram also is negotiating direct links with suppliers.
"We are working on it with car rental right now, and in some cases with hotels," Foster said. "We are pushing for it. Anywhere I can create a direct link I will do it, absolutely. You get at the inventory faster, and you cut costs out of the equation. It's just a win-win situation for everybody.