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Article Excerpt
For the first time since 1996, the total estimated U.S. booked air volume of companies that had the 100 largest travel budgets as determined by Business Travel News was below SB billion, representing another significant year-to-year drop following a $2 billion cut in 2001 from the 2000 peak of $11 billion. Furthermore, on an annualized basis at least, business travel conditions are expected to get worse before they get better.
This 16th annual edition of BTN's Corporate Travel 100 chronicles the deep cuts made by the industry's mega accounts, such as the 20 percent drop at IBM that, combined with slight growth at GE, means Big Blue no longer is the single-largest corporate account. It also provides details about the best business travel practices that can enable such savings when times are tight.
The 27 percent fall in CT100 spending from 2000 to 2002 corroborates industrywide thinking that the largest companies cut back more drastically than midmarket and smaller ones. Overall ARC volume in that time span also fell dramatically, but at a lower rate of 23 percent. Air travel represents the biggest chunk, usually just over 40 percent, of a given company's travel and entertainment budget.
BTN's research also found that overall demand from the big companies is unlikely to grow in 2003. Seventy-seven firms with annual U.S. air travel budgets of more than $30 million expected their average 2003 spend to be $72.7 million, down from the $83 million average in 2002. All industry segments except financial firms see their air budgets dropping further this year. The some goes for all U.S. regions apart from the Midwest and South.
Not only are corporations traveling less, but they also are using airline percentage discounts that average in the mid-30s, booking 9 percent of their tickets with low-cost carriers and 60 percent of their tickets more than one week in advance. Financial firms are the biggest users of low-cost carriers, while consulting companies are the least likely to give up frills. Pharmaceutical firms book their tickets earliest, with consulting companies most likely to buy within seven days.
Of the 84 companies that returned to this year's top 100 list from the 2002 ranking, 36 reported double-digit, year-over-year percentage drops in air spending in the United States, topped by remarkable cuts of 14 percent at Lucent, 51 percent at Royal Phillips Electronics and 51 percent at Ernst & Young. Twenty-five returning companies grew their volumes, with the largest of gains driven by consolidation at Northrop Grumman (86 percent), ChevronTexaco (83 percent) and Hewlett-Packard (67 percent). Some volume growth reflected higher demand, among such corporations as Bechtel, Raytheon and the Detroit Big Three.
Sixteen corporations on this year's list were not on lost year's, with some appearing for the first time. For the second straight year, the 100th company's travel budget shrank, to $33 million from $36 million. The U.S. travel programs at 83 of the CT100 were consolidated with a single travel management company. The rest used multiple travel management providers or handled it internally.
BTN tabulated agency marketshare of the top 100 by assigning all the estimated U.S. booked air volume of a given account to its consolidated U.S. provider. Additional estimates were made on the percentages of non-consolidated volume that is managed by primary providers.
American Express maintained its lead among the CT100, tallying an estimated 38.9 percent marketshare and 39 of the accounts, nine of them shared with competitors. Amex worked with two more CT100 companies than a year earlier.
With three more fully consolidated (T100 clients than it had last year, at 21, WorldTravel BTI's share of total volume grew by about three percentage points, parking it securely in second place following Amex in terms of overall share among the biggest accounts. Shared accounts fell to three from four.
Following WorldTravel, Carlson Wagonlit Travel recorded CT100 marketshare of 14.2 percent, down from 16 percent the prior year. CWT had two more consolidated accounts, at 14, and one more shared, at five, compared with last year's (CT100 study. Rosenbluth International fell from its previous level with three fewer consolidated accounts and a 9.3 percent marketshare. Excluding the inevitable account losses, however, the recently announced acquisition by Amex would gather within the combined entity nearly half the total CT100 volume.
BTN wishes to thank the travel buyers at almost all of the companies listed here who cooperated with our efforts to compile this information and create industry benchmarks. About three-quarters of the companies listed here filled out questionnaires aimed at generating the information we publish in this issue. They also answered other questions, with aggregate responses shared only by participants, on airline, agency, car and hotel practices, spending, and negotiated rates and discounts, as well as card and technology use.
The following pages benchmark the nation's largest corporate travel management programs in terms of achievements, goals, policy changes, preferred vendors and spending patterns.
AGENCIES' SHARE OF CT100 ACCOUNTS
AMERICAN EXPRESS 38.9%
WORLDTRAVEL BTI 19.9%
CARLSON WAGONLIT 14.2%
ROSENALUTH INT'L 9.3%
SELF-MANAGED/NON-CONSOLIDATED 6.3%
TQ3 TRAVEL 3.3%
SEA GATE/ADVANCED 2.9%
NAVIGANT INT'L 2.8%
TOTAL TRAVEL MGMT. 1.1%
TRAVEL MGMT. PARTNERS .8%
TRAVEL & TRANSPORT .4%
Business Travel News' estimate for each travel management company's
composite share of the CT100 companies' U.S. booked air volume
Note: Table made from bar graph
THE CORPORATE TRAVEL 100
COMPANY AIR VOLUME *
1. GENERAL ELECTRIC $270
1. IBM $270
3. DELOITTE & TOUCHE $225
4. THE BOEING CO. $215
5. LOCKHEED MARTIN $202
6. PRICEWATERHOUSECOOPERS $197
7. JOHNSON & JOHNSON $183
8. EXXONMOBIL $164
9. ACCENTURE $160
9. KPMG $160
9. RAYTHEON $160
12. SIEMENS $150
13. CITIGROUP $142
14. UBS $139
15. HEWLEIT-PACKARD $135
16. NORTHROP GRUMMAN $134
17. WORLD BANK $115
18. PFIZER $112
19. JPMORGAN CHASE $110
19. TYCO INTERNATIONAL $110
21. MOTOROLA $105
22. AOL TIME WARNER $103
23. ORACLE $102
24. BANK OF AMERICA $101
25. MICROSOFT $100
25. WALT DISNEY CO. $100
27. ERNST & YOUNG $96
28. DUPONT $90
28. GENERAL MOTORS $90
30. CISCO SYSTEMS $85
31. GLAXOSMITHKLINE $82
32. PROCTER & GAMBLE $80
33. GOLDMAN SACHS $78
34. MERRILL LYNCH $76
35. FORD MOTOR CO. $75
36. CHEVRONTEXACO $73
36. PEPSICO $73
38. VIVENDI UNIVERSAL $71
39. ELI LILLY $70
39. THE INTERPUBLIC GROUP OF COS. $70
41. ABBOTT LABORATORIES $68
41. DEUTSCHE BANK $68
41. SHELL $68
44. DAIMLERCHRYSLER $66
45. MERCK $65
45. SCIENCE APPLICATIONS INT'L CORP. $65
45. VIACOM $65
48. HONEYWELL $62
49. ELECTRONIC DATA SYSTEMS $61.4
50. SAP AMERICAS $61
51. ALTRIA $60
51. AT&T $60
51. BP $60
51. MORGAN STANLEY $60
51. NOVARTIS $60
56. VERIZON $57
57. MEDTRONIC $56
58. CREDIT SUISSE FIRST BOSTON $55
59. UNITED TECHNOLOGIES CORP. $54
60. SCHLUMBERGER $53
61. THE THOMSON CORP. $52.1
62. COMPUTER SCIENCES CORP. $52
62. MCKINSEY& CO. $52
64. FEDEX $51.5
64. ROYAL PHILIPS ELECTRONICS $51.5
66. BECHTEL $50
66. DOW CHEMICAL $50
66. WACHOVIA $50
69. GENERAL DYNAMICS $49
70. AON CORP. $48
70. ITT ALLIANCE $48
72. UNITED NATIONS $47
73. DELL COMPUTER $45.6
74. OMNICOM $45
75. WYETH $44
76. SBC $42.3
77. BANK ONE CORP. $42
77. MCKESSON CORP. $42
79. BAYER AG $41
80. ASTRAZENECA $40
80. BAXTER HEALTHCARE $40
80. BRISTOL-MYERS SQUIBB $40
80. CONOCOPHILLIPS $40
80. FIDELITY INVESTMENTS $40
80. GENERAL MILLS $40
80. INTEL $40
80. NCR CORP. $40
88. BAE SYSTEMS $39.5
89. UNILEVER UNITED STATES INC. $39.2
90. BOOZ ALLEN HAMILTON $37
90. NEWS AMERICA $37
90. THE COCA-COLA CO. $37
93. INTERNATIONAL PAPER $36.5
94. AMGEN $36
94. EMERSON $36
96. COMPUTER ASSOCIATES $35
97. NESTLE PURINA $34
98. LUCENT TECHNOLOGIES $33.9
99. SPRINT $33.4
100. KIMBERLY-CLARK $33
* All numbers in millions, representing 2002 U.S. booked air volume
THE CORPORATE TRAVEL 100 ALPHABETICAL LISTING
RANKING * COMPANY
41. ABBOTT LABORATORIES
9. ACCENTURE
51. ALTRIA
94. AMGEN
22. AOL TIME WARNER
70. AON CORP.
80. ASTRAZENECA
51. AT&T
88. BAE SYSTEMS
24. BANK OF AMERICA
77. BANK ONE CORP.
80. BAXTER HEALTHCARE
79. BAYER AG
66. BECHTEL
90. BOOZ ALLEN HAMILTON
51. BP
80. BRISTOL-MYERS SQUIBB
36. CHEVRONTEXACO
30. CISCO SYSTEMS
13. CITIGROUP
96. COMPUTER ASSOCIATES
62. COMPUTER SCIENCES CORP.
80. CONOCOPHILLIPS
58. CREDIT SUISSE FIRST BOSTON
44. DAIMLERCHRYSLER
73. DELL COMPUTER
3. DELOITTE & TOUCHE
41. DEUTSCHE BANK
66. DOW CHEMICAL
28. DUPONT
49. ELECTRONIC DATA SYSTEMS
39. ELI LILLY
94. EMERSON
27. ERNST & YOUNG
8. EXXONMOBIL
64. FEDEX
80. FIDELITY INVESTMENTS
35. FORD MOTOR CO.
69. GENERAL DYNAMICS
1. GENERAL ELECTRIC
80. GENERAL MILLS
28. GENERAL MOTORS
31. GLAXOSMITHKLINE
33. GOLDMAN SACHS
15. HEWLETT-PACKARD
48. HONEYWELL
1. IBM
80. INTEL
93. INTERNATIONAL PAPER
70. ITT ALLIANCE
7. JOHNSON & JOHNSON
19. JPMORGAN CHASE
100. KIMBERLY-CLARK
9. KPMG
5. LOCKHEED MARTIN
98. LUCENT TECHNOLOGIES
77. MCKESSON CORP.
62. MCKINSEY & CO.
57. MEDTRONIC
45. MERCK
34. MERRILL LYNCH
25. MICROSOFT
51. MORGAN STANLEY
21. MOTOROLA
80. NCR CORP.
97. NESTLE PURINA
90. NEWS AMERICA
16. NORTHROP GRUMMAN
51. NOVARTIS
74. OMNICOM
23. ORACLE
36. PEPSICO
18. PFIZER
6. PRICEWATERHOUSECOOPERS
32. PROCTER & GAMBLE
9. RAYTHEON
64. ROYAL PHILIPS ELECTRONICS
50. SAP AMERICAS
76. SBC
60. SCHLUMBERGER
45. SCIENCE APPLICATIONS INT'L CORP.
41. SHELL
12. SIEMENS
99. SPRINT
4. THE BOEING CO.
90. THE COCA-COLA CO.
39. THE INTERPUBLIC GROUP OF COS.
61. THE THOMSON CORP.
19. TYCO INTERNATIONAL
14. UBS
89. UNILEVER UNITED STATES INC.
72. UNITED NATIONS
59. UNITED TECHNOLOGIES CORP.
56. VERIZON
45. VIACOM
38. VIVENDI UNIVERSAL
66. WACHOVIA
25. WALT DISNEY CO.
17. WORLD BANK
75. WYETH
* All rankings reflect 2002 U.S. booked air volume
RELATED ARTICLE: Methodology
The 2003 Corporate Travel 100 ranks corporations by 2002 U.S. booked air volume, as provided by the company or estimated by industry sources and Business Travel News editors.
Corporate profiles were compiled by editors from phone interviews and questionnaire responses, primarily with travel managers or senior decision makers. In some instances, public relations representatives, travel agents and others identified with the companies aided the research. In other instances, information was gleaned from annual reports, published reports and interviews with industry sources outside of the company.
In cases where companies did not cooperate, Business Travel News editors gave them the opportunity to respond to information gathered from outside sources and public information. Travel volumes and other figures were as of year-end 2002.
THE CORPORATE TRAVEL 100
1 General Electric
FAIRFIELD, CONN.
U.S. booked air volume: $270 million
European booked air volume: $70 million
Preferred vendors: Hertz; Sabre; GE Capital
Consolidated global agency: Carlson
Wagonlit Travel
Moving to digitize everything it can, General Electric continues to emphasize the Internet as the most cost-effective booking channel, following many years with a high adoption rate. Although GE for years has directed travelers to sites that do not participate in the GDS, usage is infrequent. Following the strategy in its Phoenix fulfillment center, GE is moving as much as possible of its European travel budget, which includes roughly $70 million spent on air, to a new Carlson Wagonlit Travel electronic service center in Warsaw, Poland, that handles automated and telephone reservations.
Also part of its digital effort, GE implemented an online dispute process allowing travelers to save time and faxes when disputing charges on their travel cards with GE Corporate Payment Services. Nevertheless, credits can take up to three months.
To enhance security and safety, GE instituted a pre-trip process, called the Travel Advisory System, which applies for nearly all GE travelers to certain country groups. Without approval through the system, corporate travelers are denied the ability to make reservations to those particular countries. GE bans travelers from back-to-back ticketing.
Hertz is GE's only exclusive transportation supplier, and the general guideline is to book the smallest practical car. Travelers are issued a free Hertz gold card, which ensures the GE rate is applied and no unnecessary insurance is charged.
1 IBM
ARMONK, N.Y.
U.S. booked air volume: $270 million
Preferred vendors: American; Hertz; Galileo
Consolidated global agency: American Express
IBM has deployed an online travel reservation solution in the United States designed and built by Galileo for IBM. Specific to the United States, IBM converted to using the Galileo global distribution system in the third quarter of 2002.
IBM has sourced its travel agency business with American Express globally, with the exception of Japan. Amex also sells an expense management tool from IBM.
The company's U.S. booked air volume of S270 million in 2002 puts IBM in a tie with General Electric for the highest ranking in this survey. It is the first time since BTN in 1995 began ranking companies by U.S. booked air volume that IBM was not alone in being ranked first.
3 Deloitte & Touche
NEW YORK
U.S. booked air volume: $225 million
Preferred vendors: American, Continental, Delta, Northwest, United; Hyatt, Marriott, Starwood; Avis, Dollar, Hertz; Galileo; Diners Club
Consolidated domestic agency: WorldTravel BTI
During the year, the Deloitte & Touche travel department successfully used its online booking tool to lower agency costs. In 2001, the firm consolidated all its domestic travel with WorldTravel BTI, and that relationship continued through 2002.
Non-U.S. travel remains unconsolidated. Also during the year, the travel team brought the hotel request for proposals process in house and gained further efficiencies.
Regarding travel policy, changes were made in 2002 to eliminate first class airline bookings, while mandating the use of nonrefundable fares.
For 2003, Deloitte & Touche seeks to increase adoption of its online tool and, in the process, hopes to increase the use of its preferred hotel and air suppliers. In addition, the firm intends to implement an extended stay desk within WorldTravel BTI to identify trips where extended stay lodging is appropriate and direct travelers to the appropriate hotels. Given the extended stay lodging service model, these types of properties tend to be more cost-effective than traditional business hotels.
Deloitte & Touche's 20,000 U.S. travelers are required to use the Diners Club corporate card.
4 The Boeing Co.
U.S. booked air volume: $215 million
SEATTLE
Worldwide booked air volume: S260 million
Worldwide T&E: $475 million
Preferred vendors: ANC; Sabre; Sabre GetThere; Gelco
Consolidated domestic agency: Boeing Travel Management Co.
The Boeing Co. reduced its U.S. booked air spending by $13 million, the first such decrease in several years, and it continues to focus on driving down travel costs.
It mandates use of a corporate GE MasterCard globally.
In 2002, Boeing travelers used Sabre's GetThere online booking system for 33 percent of the ticlets they booked.
The world's largest aerospace company and the biggest manufacturer of commercial jets also is the operator of its own travel agency, wholly owned subsidiary Boeing Travel Management. Boeing outsources the management of its travel to the subsidiary, which provides full agency services through a large reservation center.
5 Lockheed Martin
BETHESDA, MD.
U.S. booked air volume $202 million
Worldwide booked air volume: $235 million
U.S. T&E: $400 million
Worldwide T&E: $450 million
Preferred vendors: American, Delta, Northwest, United, US Airways; Hilton, InterContinental, Marriott, Prime Hospitality, Starwood; Avis; Sabre; U.S. Bank Visa; Sabre GetThere; IBM Consolidated global agency: Navigant Int'l
Lockheed Martin Corp., the world's largest defense contractor, spent a large part of 2002 refining recently implemented programs and policies. Through a recent push of Sabre's GetThere self-booking system, the company was able to increase adoption to 60 percent corporatewide, with aspirations to increase this number to 75 percent in 2003.
Lockheed during the past year made some changes to its travel policy, including revising some language to strengthen the use of approved suppliers and executing a process for handling policy noncompliance to include possible nonreimbursement.
Spending for U.S. booked air tickets went down only a few million dollars from 2001 spending as the company continued to grow. Meanwhile, Lockheed Martin employees significantly increased their use of approved hotel programs. As a direct result of using reverse auctioning to contract with hotels in its top seven city markets, the company was able to decrease its supplier base by 83 percent in these markets.
Another addition to the company in the past year was a corporate communication plan that included the employment of a new travel partal to distribute updated internal business travel information.
Lockheed Martin's travel is consolidated with one primary agency, Navigant International, which provides full service through dedicated reservation center facilities. The corporate card program is mandated worldwide for its 80,000 cardholders, who use cards issued by U.S. Bank Visa. Lockheed Martin's goals for next year include reducing agency costs to meet current market pricing.
6 Pricewalerhouse-Coopers LLP
NEW YORK
U.S. booked air volume: $197 million
Worldwide booked air volume: $310 million
Worldwide T&E: $836 million
Preferred vendors: Air France, America West, American, British Airways, Delta, Lufthansa, United; Raffles, Starwood, Wyndham; Budget, Hertz; Galileo, Sabre; Sabre GetThere
Consolidated domestic agency: American Express
PricewaterhouseCoopers continued to steeply decrease its year-over-year spending by cutting back its U.S. booked air volume another S55 million in 2002, following a drop of more than $30 million the year before.
With IBM'S purchase of the Pricewaterhouse-Coopers' consulting practice late last year, the company's air volume next year is poised to drop more than it did in the past two years combined, to about $95 million.
Despite spending cuts and a 20 percent increase in online bookings through Sabre's GetThere system, the company was able to add a travel staff position to handle data and reporting issues during 2002. PwC had made cuts in internal travel staff in 2001.
In revamping its travel policy lost year, PwC ruled out first class status for all international travelers, making business class the standard. PwC also took steps toward requiring greater policy compliance, such as not reimbursing travel expenses that were made outside of policy. Compliance improved quickly following the policy implementation.
Last year, PwC also downsized the number of its preferred hotels and renegotiated rental car agreements. The company also was able to negotiate extensions to existing airline agreements, even after making clear its intention to sell the consulting business.
Though it has obtained CTD status, PricewaterhouseCoopers continues to have a full service relationship through American Express offices to manage consolidated domestic travel. BTI is its primary agency for travel outside of the United States. Its card vendor worldwide is American Express.
In 2003, PwC aims to refine its airline program, given the dynamics of the marketplace, as well as further consolidate hotel volume and increase online booking by another 20 percent. It uses an internally developed expense tool that it enhanced in the past year to break out the expenses better by classifying expenses more granularly. The company now is in the process of reworking the firm's internal finance package. According to its strategic plan, a PwC team led by the finance division and including travel management will implement a new expense package by July 1 of next year.
7 Johnson & Johnson
NEW BRUNSWICK, N.J.
U.S. booked air volume: $183 million
Worldwide booked air volume: $266 million
U.S. T&E: $600 million
Worldwide T&E: $850 million
Preferred vendors: American, Delta, United, US Airways; Hyatt, Starwood; Avis, National; Sabre; American Express (TO, IBM XRS
Consolidated domestic agency: American Express
With less staff to do the job, the travel department at this global pharmaceutical company relied more heavily in 2002 on its online booking tool to drive efficiencies and create cost savings. Johnson & Johnson had rolled out American Express' CTO booking system, first in the United States and, subsequently, to the company's international travelers.
A number of acquisitions in 2000 had swelled the ranks of company travelers. Similarly, the travel department introduced the IBM XRS expense reporting tool in two stages: first in the United States and then in international markets. American Express has remained the company's corporate card vendor. Worldwide, the company had 52,393 cardholders at year-end 2002, of whom 32,320 were based in the United States.
8 ExxonMobil
IRVING, TEXAS
U.S. booked air volume: $164 million
Worldwide booked air volume: $270 million
U.S. T&E: $325.6 million
Worldwide T&E: $550 million
Preferred vendors: Air Canada, Air France, American, British Airways, Continental, United; Hertz, National; Amadeus, Sabre; American Express; Concur
Consolidated domestic agency: TQ3
Travel Solutions
ExxonMobil last year consolidated all North American and European travel operations with TQ3 Travel Solutions and now ranks among the travel management company's largest global clients. The full service TQ3 relationship includes dedicated call centers in Dallas and Toronto, as well as a pan-European center in Brussels.
The energy giant previously was dealing with 71 agencies worldwide, including Maritz, which had been serving Mobil, and American Express, which handled Exxon. American Express still handles much of the combined ExxonMobil's Asia/Pacific travel operations. Latin American business still is split among several agencies.
The company's U.S. booked air volume in 2002 rose $14 million, roughly to the year 2000 level. Worldwide air volume and worldwide T&E costs essentially hove been flat for three years. Last year, ExxonMobil reduced the number of preferred supplier contracts in its air program from 20 to just six, all of which are on a net-net basis and managed market by market on a share basis.
The company continues to have global distribution system relationships with Sabre in North America and Amadeus in Europe. National remains the primary car rental supplier, with Hertz serving as secondary.
Meanwhile, Amex remains the mandated corporate payment system worldwide, with a 95 percent penetration rate. ExxonMobil operates in about 200 countries around the world.
9 Accenture
CHICAGO
U.S. booked air volume: $160 million
Worldwide booked air volume: $292 million
U.S. T&E: $290 million
Worldwide T&E: $475 million
Preferred vendors: American, British Airways, Continental, Delta, Lufthansa, Qantas, United; Hilton, Hyatt, Marriott, Starwood; Avis, Hertz, National; Sabre, Worldspan; American Express; KDS
Consolidated domestic agency: Carlson Wagonlit Travel
Accenture last year decided to transition from its internally developed Via Online booking product to Carlson Wagonlit Travel's Symphonie suite of self-booking tools. The transition was made in March 2003. The decision was made partly because, with Via Online adoption increasing to 85 percent in 2002 from 70 percent in 2001, Accenture believed it had all but realized all potential savings from the tool, which was created by Accenture subsidiary Navitaire. The move also enabled...
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