U.N.-Usual Program Wins Discounts
<B> U.N.-Usual Program Wins Discounts</B>
By Jay Campbell
<I>New York</I> - There are a number of things unique about managing travel at the United Nations, from oversight by the General Assembly to airline discounts based not only on historically good performance, but also prestige and goodwill.
One of the more unusual elements of the U.N. travel program is that it employs three in-house international rate experts to audit every itinerary before departure and ensure the lowest fare. The agency estimates that the savings the three bring in more than offset their salaries.
"In benchmarking with corporations that have large international travel volumes, we found this to be a peculiarity," said Anton Bronner, the U.N.'s chief of travel and transportation service. Nonetheless, he noted, "we've found these people can generate significant money-saving suggestions over and above what the travel agents can do, by working directly with travelers to offer alternative routings, split ticketing or new fare constructions."
Bronner said it could be the circuitous nature of much of the group's travel that makes such intense scrutiny worthwhile. That might explain why most corporations outsource fare auditing to firms such as Topaz International
"I've never heard of anyone having as many as three people," acknowledged Alex Houston, a former travel manager who recently became vice president at WTP-BTI Americas in Houston. "Most corporations rely on the agencies' international rate desks or audit firms. But if you're doing a lot of international, it makes sense."
Indeed, complex worldwide routings are common for U.N. travelers. But that also means Bronner has fewer opportunities to negotiate from the traditional standpoint of having big business on certain city pairs. The U.N.'s $35 million U.S.-booked air volume, in addition to $10 to $15 million authorized in New York but booked elsewhere in the world, is spread over 6,000 city pairs.
Over 90 percent of the U.N.'s trips, with the notable exception of New York-Washington shuttle flights, are international. The U.N.'s top 100 city pairs amount to less than 50 percent of its spend, and its leading city pair, New York-Geneva, represents just 3.5 percent.
"Large corporations usually have some routes that are 20 percent, others that are 10," said Bronner. "This extremely diverse and wide travel pattern makes the search for discounts relatively difficult. We have to cast a wide net; even if Swissair gave us New York-Geneva for free, it wouldn't make a huge dent."
Unable to reduce to a small number of preferred carriers because of the risk of lost coverage, Bronner has convinced 12 preferred carriers to offer across-the-board "Y for C" up-front discounts, where the U.N. pays full economy but gets capacity-controlled business class seats (C or D class). Between New York and Santiago, Chile, for example, the U.N. pays $940 one way, where the published fare is $2,090. To Rome, the fare drops from $2,434 to $1,100, and to Paris, from $2,633 to $1,000. Arrangements with an additional 16 carriers give Bronner discount coverage for more than 86 percent of his routes.
Bronner said the prestige of the United Nations helps, but it alone doesn't win such royal treatment. "We use one of those carriers that give us business for full coach to the tune of 240 percent of what would be expected based on their schedule alone," said Bronner. "Carriers with whom we don't have such a deal may get 20 percent, where their schedule says 30."
Such performance doesn't simply happen. To keep his discounts, Bronner has proven he can move market share. U.N. travel policy mandates that travelers use the lowest fare and that exceptions be approved by the head of administration (similar to a corporate CFO) and reported to the General Assembly (like Congress). Travelers must fly economy on flights under nine hours, with the exception of the most senior officials, who fly business class, and the Secretary General, who flies first class.
Bronner said he gets more than 99 percent compliance.