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Article Excerpt
Many of the biggest business travel spenders continued to cut travel costs last year, but the total amount of spending by the biggest buyers was on the rise in 2004. Increased travel spending for commercial air travel by the 100 largest corporate spenders reached $8.3 billion in 2004, after two years below the $8 billion mark. While the turnaround is a good sign for the industry, the 100 companies that spend the most on U. S. booked air tickets have plenty of room to rebound to the year 2000 heights of $1 billion in total expenditures, net of overrides, refunds and exchanges.
The threshold for being included on this list--$33 million in net 2004 U.S. booked air volume--was $1 million lower than last year's list, but IBM also pushed the top of the list higher with a $129 million increase that brought its air spending to $493 million. All but one of the Corporate Travel 10 increased its U.S. booked air spend substantially. The exception, GE, retained its second-place status despite a $10 million drop in U.S. booked tickets. Air tickets booked by GE outside the United States soared $65 million in 2004, pushing companywide air expenditures to $455 million. Even as an anomaly, GE's performance is indicative of one reason for the overall rebound, a marked resumption of international travel.
This 18th annual edition of the Business Travel News Corporate Travel 100 reflects some slight but interesting shifts in market share among travel management companies. American Express continues to dominate its closest competitors by more than a two-to-one ratio, but found itself with three fewer companies that call Amex their primary or consolidated U.S. agency services provider. WorldTravel BTI picked up one new company as the gap widened between it and third-place Carlson Wagonlit Travel, which lost five CT100 accounts in 2004.
New this year among the smaller pieces of the primary travel management company pie, BTN has broken out the four companies that have taken control of operating their own travel management services. This year's smaller slices also include one online originating travel management company, Travelocity Business.
BTN wishes to thank the travel buyers at the majority of the companies listed here for their cooperation in compiling this information and providing the industry with spending and process benchmarks, details of practices they are employing, what they accomplished last year and this year so far and their goals from here.
Accompanying BTN's annual recognition of business travel buyers who each have raised the bar for a specific industry practice, it is fitting that these Corporate Travel 100 listings offer examples of efforts to drive, if not mandate, online use; capture and leverage meetings spending; and consolidate global travel management.
Corporate Travel 100 Methodology
The 2005 Corporate Travel 100 ranks corporations by 2004 U.S. booked net air volume, as provided by the company or estimated by industry sources and Business Travel News.
Editors compiled corporate profiles from phone interviews and questionnaire responses, primarily with corporate travel buyers. More than 70 of the companies on this list filled out the questionnaire, which asked them to list vendors in order of preference.
In cases in which companies did not cooperate or to supplement their data, information was gleaned from annual reports, published reports and interviews with industry sources outside the company. Business Travel News editors gave those companies the opportunity to respond to information gathered from outside sources and public information. Data gathered here reflect the most recent full year, 2004.
1 IBM
Armonk, N.Y.
U.S. booked air volume: $493 million
Preferred vendors: American, Delta; Hilton, Hyatt, InterContinental, Marriott, Starwood; Hertz; BostonCoach, Carey International; Galileo
Consolidated global agency: American Express
Largest in the domestic corporate market, IBM s net U.S. booked air volume in 2004 grew by $129 million, following recent acquisitions and amid strong sales growth. A world leader in computer hardware and service, company revenues last year rose to $96.3 billion and earnings climbed 11 percent to $8.4 billion.
According to the company's Web site, IBM's travel council provides "the lowest priced, best-in-class travel solution anywhere in the world within the boundaries of the IBM corporate travel policy that differentiates the IBM traveler and optimizes the travel process through e-travel industry solutions." Subcouncils focus on airlines, hotels, auto rentals, travel agencies, auto leases and ground transportation.
American Express provides global travel management and corporate card services.
IBM employees in North America are required to book travel through Online Travel Reservations, a Galileo-built and hosted reservations tool. IBM's Web site said the system's savings are estimated at $75 million in the first three years "based on reduced agency fees and lower airfares." IBM and Galileo also have a global distribution services agreement.
Employees may book directly with Delta Shuttle, JetBlue and Southwest. Other Internet bookings are allowed when comparable itineraries provide specified savings levels. Business class policies also define classes of service for international flights.
The company requires use of several preferred hotel chains for transient and group travel. In some cases, hotel companies electronically transmit detailed hotel folio data through Amex charge cards to IBM's internal expense reporting system.
IBM requires travelers when possible to use Hertz for car rental and recommends BostonCoach and Carey international for ground transportation services.
IBM is a business travel supplier in many ways, including distribution and transaction processing, outsourced travel procurement and IT services, expense reporting software and self-service kiosk technology.
2 General Electric
Fairfield, Conn.
U.S. booked air volume: $280 million
Companywide air volume: $455 million
Preferred vendors: Hilton, Marriott; Hertz; Sabre: Sabre GetThere
Consolidated global agency: Carlson Wagonlit Travel
Last year, General Electric added direct links Marriott, JetBlue, and Hilton to those it already had with Swabiz. The company also implemented the Avion reporting system in the fourth quarter of last year, which it now is using globally. It previously used the Vantage Point system in the United States.
GE continued building on its "follow the sun" travel management philosophy last year, facilitated by GE's global distribution system relationship with Sabre.
Now that it has added Hungary to the countries that use its consolidated reservations center in Warsaw, it processes nearly every reservation made in Europe there.
The central reservations facility General Electric established last year in Beijing for all of China now is processing 75,000 tickets per year.
General Electric uses the Sabre GetThere online booking system to book more than 65 percent of its domestic tickets and 50 percent of its tickets globally. General Electric has been a pioneer of touchless transactions for years, and consistently fulfills about 90 percent of online transactions without manual intervention.
Last year, GE continued to use its homegrown expense reporting system in the United States and to deploy the Concur system outside the United States.
GE has more than 82,000 U.S. cardholders and more than 100,000 worldwide using the GE MasterCard.
GE's U.S. booked air volume for 2004 was $10 million lower than in 2003, while companywide air spending grew by $55 million. Its workforce only grew by 0.7 percent to 307,000 employees in 2004.
Last year, GE also implemented a companywide umbrella policy and realigned reporting. It completed integrating Amersham and Universal by September.
3 Boeing
Chicago
U.S. booked air volume: $274 million
Preferred vendors: American, United, Delta; Hilton, Marriott; National, Alamo; Sabre; Sabre GetThere; Gelco
Consolidated U.S. agency: Boeing Travel Management Co.
The Boeing Co. last year saw a healthy II jump in corporate travel spending, with its U.S. booked air volume going from $253 million in 2003 to $274 million. The company services its corporate travelers through Boeing Travel Management Co., a wholly owned subsidiary that also serves smaller corporations as well as leisure travelers.
In addition to using its own travel management company, Boeing's travelers may also find themselves traveling using the company's products, as Boeing vies with Airbus as the largest manufacturer of large commercial jets. With 159,000 employees, the company is the world's largest aerospace company as well as one of the largest defense contractors.
The company uses Sabre's GetThere tool both within and outside of the United States. Last year, the tool gained 70 percent adoption for U.S. originating domestic travel.
The company this year is working toward global consolidation of its travel program.
For expense management, Boeing's corporate cardholders use the GE Capital MasterCard both within and outside of the United States. Gelco is the company's supplier of expense reporting tools and services both in the United States and abroad.
4 Lockheed Martin
Bethesda, Md.
U.S. booked air volume: $206 million
U.S. T&E: $500 million
Preferred vendors: United, American, Delta, Northwest, US Airways; Marriott, InterContinental, Hilton; Avis; Sabre; Sabre GetThere; IBM
Consolidated U.S. agency: TQ3Navigant
Lockheed Martin, the world's leading defense contractor, last year continued to tighten its travel policy by introducing a nonreimbursement policy to work in conjunction with recent mandates, including use of preferred vendors and the corporate online self-booking tool. Through TQ3Navigant, its single agency partner, the company initiated a global travel program in 26 countries in the fourth quarter of 2004 and completed the consolidation in the first quarter of 2005.
In 2004, Lockheed Martin achieved 80 percent adoption of online booking with GetThere, the company's primary global online booking tool, up from 67 percent in 2003. That figure is steadily rising as Lockheed continues to push online booking, and currently stands at 82 percent. The company also increased hotel booking compliance from 45 percent to 70 percent in 2004 and completed a series of road shows or "travel fairs" throughout its business locations to acquaint employees with the changes to corporate travel.
Lockheed Martin also deployed a companywide meetings policy in early 2004 as part of an effort to consolidate its 55 separate business unit policies to one. The company mandated using GetThere DirectMeetings technology on an event's front end and a U.S. Bank Visa meetings card for payment. Lockheed Martin's 80,000 cardholders use the U.S. Bank Visa corporate card.
The company implemented a system it developed with TQ3Navigant which automatically alerts travelers who book through an agent that online booking is available. The alert points out the savings achieved through online bookings and reminds travelers to use preferred vendors.
Lockheed Martin also employs alert functionality through its global expense reporting system developed by IBM. The system automatically asks travelers if they booked their air and hotel reservations through Navigant. If not, the corporate controller is alerted in a monthly expense report, jeopardizing traveler reimbursement.
In 2005, the company plans to enhance customer satisfaction with travel services. Lockheed Martin also aims to achieve horizontal integration of travel services to improve ease of use for customers and continue its overhaul of meetings policy.
Lockheed uses Sabre as its primary global distribution system both inside and outside the U.S. and employs 130,000 people worldwide. Total company sales in 2004 increased more than 14 percent to $35.5 billion, up from $31 billion in 2003.
5 UBS
Zurich, Switzerland
U.S. booked air volume: $180 million
Preferred vendors: American; Hertz, Enterprise
Consolidated domestic agency: None, uses WorldTravel BTI, American Express
After a couple of years of reining in travel costs, business boomed for the financial services giant UBS last year, driving up spending for U.S. booked air travel by nearly 200 percent from $60 million in 2003.
Company sales for 2004 grew 20 percent from 2003 to $60 billion. Its growth in net income over 2003 was 38 percent, yielding $7 billion. In Asia, revenues rose 24 percent in 2004.
The investment bank expanded its competitive position in the United States in such key areas as prime brokerage and equities sales and trading. In wealth management, UBS made several small acquisitions that helped it gain critical mass.
UBS provides investment banking, asset management and Swiss retail and commercial banking services and employs more than 67,000 people in 50 countries.
UBS focused on raising use of its EZ travel booking tool, which employees now use for more than 40 percent of transactions in the United States.
6 Johnson & Johnson
New Brunswick, N.J.
U.S. booked air volume: $172 million
Companywide air volume: $272 million
U.S. T&E: $633.2 million
Companywide T&E: $915.9 million U.S. booked meetings air: $20.1 million Preferred vendors: Delta, American, United; Starwood, InterContinental; Avis, National; Sabre; American Express CTO; IBM
Consolidated global agency: American Express
Johnson & Johnson's online booking tool usage reached 66 percent of gross U.S. transactions in 2004, a 30 percent increase over the previous year. The company uses American Express' Corporate Travel Online booking tool. This year, J&J plans to mandate use of the online booking tool for all point-to-point domestic reservations.
J&J reported $7 million more in 2004 U.S. booked air volume than in 2003. Companywide, it had a booked air volume of $271.9 million in 2004 and T&E spend of $915.9 million.
This year, Johnson & Johnson plans to revise its T&E policy. The company plans to centralize sourcing for corporate meetings and events and reported a meetings-related air spend of $20.1 million in 2004. It also plans to launch the online booking tool in Latin America and Asia Pacific. Johnson & Johnson plans to increase online booking throughout Canada and Europe.
J&J uses American Express for its entire corporate card program and has 34,615 U.S. cardholders and 55,489 cardholders worldwide. In 2003, some Johnson & Johnson employees overseas carried Visa cards. American Express also handles all of the company's agency business both domestically and internationally.
The company's preferred U.S. global distribution service is Sabre. J&J uses the IBM expense reporting system.
7 Citigroup
New York
U.S. booked air volume: $167 million
Companywide air volume: $320 million Preferred vendors: American, British Airways, Delta, Virgin, Lufthansa; Avis, Hertz; Concur
Consolidated U.S. agency: None, uses American Express, Travelocity Business
Citigroup raised U.S. air travel spending by $24 million in 2004 over 2003, as companywide volume grew by $30 million. It uses American Express and Travelocity Business for U.S. travel management services and mostly Carlson Wagonlit Travel and Business Travel International elsewhere.
This year, the company made further strides in leveraging transient and meetings spending in its hotel negotiations.
Citigroup requires domestic business travel to be booked online using its TravelPlanner booking tool, which has driven compliance to more than 85 percent. Meanwhile, it is deploying its online booking tool globally.
Its more than 30,000 U.S. and 40,000 worldwide cardholders use Diners Club.
8 Deloitte
New York
U.S. booked air volume: $160 million
U.S. T&E: $432 million
U.S. booked meetings air: $6 million
Preferred vendors: American, Continental, Delta, Northwest, United; Hilton, Hyatt, Marriott, Starwood; Avis, Budget; Apollo; Cendant Travelport
Consolidated U.S. agency: WorldTravel BTI
Deloitte's U.S. booked air volume last year went up $3 million to $160 million. The company last year began an extensive request for proposals and rate loading initiative with its hotel suppliers--using frequent audits and supplier reports to ensure hotel rates are loaded accurately and on time. Through the extensive process established by its travel team along with suppliers, Deloitte at the beginning of the year managed to achieve 100 percent compliance among hotel vendors, all of which had correctly loaded rates by Jan. 1. The company this year is continuing its rate loading initiative through monthly audits.
The travel team last year team boosted customer-service levels by developing measurement tools and processes to highlight areas for improvement.
Deloitte this year completed requests for information and requests for proposals for the firm's online booking tool. As airline contracts expire this year, the company will renegotiate with carriers, while also looking toward completing an agency request for proposals.
Last year saw no major changes to travel policy and none are slated for this year.
Deloitte's cardholders in the U.S. use either the American Express card or Diners Club card. On the other end of the expense management equation, Deloitte uses an internally developed expense system based heavily on a customized SAP module.
8 ExxonMobil
Irving, Texas
U.S. booked air volume: $160 million
Companywide air volume: $260 million
U.S. T&E: $267 million
Companywide T&E: $550 million
Preferred vendors: Continental, British Airways, Air France; Marriott; National, Hertz; Ariba
Consolidated domestic agencies: None, uses Carlson Wagonlit Travel, TQ3Navigant, American Express
ExxonMobil continued to sort out its global agency approach last year, with TQ3 taking on a little more responsibility for U.S. services, with the bulk of the U.S. program still being served by the former TQ3 and Maritz team that now fully is integrated under the Carlson Wagonlit flag.
The company also continues to do business with American Airlines, United Airlines and Air Canada in North America.
American Express provides some international travel management services and remains ExxonMobil's global corporate card provider.
It also continues to use Amadeus as its primary global distribution system in Europe and Sabre as its primary GDS throughout the Americas.
The company still is evaluating online booking options and is working to make its selection this year.
ExxonMobil is working to standardize its T&E processing approach on a worldwide basis sometime next year.
Otherwise, it is pursuing a corporate strategy of streamlining, automating and consolidating travel suppliers and processes worldwide.
10 Accenture
Chicago
U.S. booked air volume: $159 million
Companywide air volume: $363 million U.S. T&E: $358 million
Companywide T&E: $708 million
Preferred vendors: United, American, Delta; Marriott, Starwood, Hilton; Hertz, Avis; Apollo, Carlson Wagonlit Horizon
Consolidated U.S. agency: Carlson Wagonlit Travel
Global efforts marked many of the Accenture travel management team's accomplishments in 2004, as the company launched several endeavors to negotiate contracts and deploy online booking tools.
Accenture, which increased U.S. booked air volume by about $4 million from 2003, last year established global airline deals and implemented an IJet tracking and alert system for international travel.
The consulting giant selected Sabre's Get There online booking tool for some internationally based travelers and began to deploy it in Australia, Ireland, Italy and Spain. Accenture continued to use the Horizon online booking tool, part of its preferred domestic agency Carlson Wagonlit Travel's Symphonie suite of self-booking tools, for U.S.-based travelers. This year, the firm hopes to select and deploy self-booking tools in eight more countries, including some in Latin America. CWT is Accenture's primary agency overseas, with about 73 percent of transactions, but American Express fulfills about one-quarter.
Accenture also expanded its use of global performance reporting to include hotel contractual compliance. Its 18,500 U.S. and 58,000 worldwide cardholders use the American Express corporate card.
Accenture's 2005 efforts will revolve around balancing enhancements of its travelers' experience on the road, including offering promotions and services while expanding technologies, while driving additional airline and hotel policy compliance.
11 Bank of America
Charlotte, N.C.
U.S. booked air volume: $154 million
Companywide air volume: $175 million
U.S. booked meetings air: $5.2 million
Preferred vendors: US Airways, United, Delta; Marriott, Hilton, Starwood; Hertz, Avis; Galileo; Sabre GetThere
Consolidated U.S. agency: American Express
Bank of America's 2004 travel volume shows a marked increase from 2003 levels due to the integration of the former Fleet Financial Services, a Boston-based bank acquired by Bank of America and fully integrated into the travel program last year.
Bank of America this year will convert its international agency to TQ3Navigant; before, American Express was its primary worldwide agency, with about 71 percent of its foreign transactions. Maringa Turismo and Amex's U.K. operations handled an additional 8 percent and 6 percent, respectively, of Bank of America's international transactions. American Express remains the firm's consolidated domestic agency.
Though many of Bank of America's 2004 travel management achievements concerned the Fleet merger, the firm also tackled creating single sign-on technology to use consistent passwords across most internal technology tools.
In September 2004, Bank of America rolled out an enterprisewide strategic meetings management policy to funnel all events that cost $10,000 or more through a central meetings and events department. The firm expects adoption rates this year to hit 80 percent to 90 percent, with the help of three years of detailed meetings spend data. BOA tracks cost savings with the Plan2Attend meetings management tool offered by WorldTravel Meetings & Incentives.
This year, Bank of America plans several new policy revisions, including tightening next-class air use on formerly unrestricted domestic city pairs, and automating a formerly verbal pre-trip approval process.
12 Northrop Grumman
Los Angeles
U.S. booked air volume: $153 million
U.S. T&E: $364 million
Preferred vendors: United, Delta, American; Budget, Avis; Sabre GetThere
Consolidated U.S. agency: American Express
Global defense contractor Northrop Grumman reduced U.S. booked air spending by $16 million last year as its sales grew 14 percent...
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