Profiles In Travel Management: Mortgage Co. Squashes Costs
Mortgage Co. Squashes Costs
Company: Countrywide
Headquarters: Calabasas, Calif.
Annual U.S. booked air volume: $12 million
Home loan company Countrywide's use of alternate airports and an online booking tool has kept travel costs down in a time of explosive business activity. For 2002, Countrywide will spend almost twice the $7 million it spent in 2001, but it has not added travel staff to handle the uptick in volume and has kept its air costs low for its busiest city pair.
These days, Countrywide is a very busy company: Business activity in the mortgage industry speeds up when the economy softens and interest rates fall, prompting property owners to refinance their loans and drawing Countrywide's 4,000 traveling employees into the field.
"Travel volume really increased dramatically at the beginning of 2002," said vice president of corporate travel Dan Raynard. "We were at a slow pace through most of 2001, but when the interest rates began to fall at the end of the year, travel really started going crazy and it escalated all the way through 2002, almost doubling our air volume." Despite its rocketing travel volume, Countrywide has kept staffing levels flat, a trick it has been able to manage because it uses the Sabre BTS online booking tool for the majority of its air bookings.
Countrywide's self-booking system, which it calls Virtual Agent, is mandated for all bookings except international travel, and some meetings for which non-employee attendees have their travel paid by Countrywide. The program was launched in 2000, but the mandate did not come until May of last year, because, Raynard said, the company wanted a substantial level of usage and a bug-free system before it rolled out a mandate. "We really marketed Virtual Agent heavily in trying to get people excited about it, and it worked out fairly well," he said. "We had splash pages that came up when people signed into their computers in the morning. We put signs in the lobby of our offices in the morning when people were coming in, and we sent e-mails from senior executives saying, 'Try it out.'
"Currently, our adoption rate is around 70 percent," Raynard continued. The company will begin a transition to GetThere CorporateDirect beginning next month, a move he hopes will drive up adoption. "We're saving a lot of money though self-bookings," he said. "Without Virtual Agent, we would need more agents than we're currently using, but the bigger savings come from employees selecting lower fare tickets. It's almost like they're surfing the Net: They locate the cheapest fare, and they take it."
Countrywide's travel management company, Navigant International, helps encourage the use of Virtual Agent. "If we have a traveler who calls in for a telephone booking, the Navigant agent tells him to use the online booking system," said Annette Nevin, Navigant director of corporate account management for southern California. "If the traveler is unfamiliar with Virtual Agent, we show him how to use it." Navigant trained its agents to use the Countrywide self-booking system with only a minimal investment of their time, Nevin said, using the same online training system Countrywide employees use.
Countrywide has just three agents in Navigant's Phoenix call center, and Nevin said that without the self-booking tool the Countrywide account would require at least six agents. In addition to the Navigant agents, Countrywide has a VIP agent, another agent that handles international travel and two staffers that administer Virtual Agent, all of whom are Countrywide employees based in corporate headquarters. Countrywide maintains a "high percentage of touchless reservations," Nevin said, due to its effective training of travelers who use the self-booking system.
Countrywide has been a Navigant customer since November of last year, when its three-year contract with American Express expired. "Part of our philosophy is always go out to bid on any new contract," Raynard said. "We put our goals and vision on our RFP, and indicated that we were working on lowering our use of call center agents." Raynard also worked with Countrywide's contracting department to come up with a suitable agreement with Navigant. "Every time I do a new contract for travel agency or corporate card, the contract department looks at it," he said. "They catch numerous items every time."
The mortgage company also has trimmed travel spending by promoting the use of alternate airports. Countrywide travel policy states that if a secondary airport is within 50 miles of the primary airport, and fare difference exceeds $200, employees must take the less costly flight. "The trick is monitoring it," Raynard said. "We do daily pre-trip reporting, and if somebody is out of policy, we notify them via e-mail that they must take the cheaper flight."
The policy has paid off most dramatically on flight pairs between Countrywide's Calabasas headquarters in Los Angeles County and the lender's second biggest office, which is in Dallas. Of the 3,000 flights between those cities that Countrywide employees have taken so far this year, 73 percent of them originated from nearby Long Beach's Daugherty Field, a secondary location to the larger, more centrally located Los Angeles International Airport. Countrywide saves about $4 million annually directing its employees to the Long Beach airport. Ticket prices to Dallas from LAX average around $1,122, and flights from Long Beach to Dallas are usually $600 cheaper, Raynard said, averaging about $406."This is our biggest city pair," he said, "and we have done a pretty good job of moving our business down to the low-cost airport."