Expert warns of hasty global deals

24 February 2000
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24 February 2000 | Elizabeth Bellamy

Travel buyers setting up global deals with suppliers should think globally, but act locally, an expert has warned.

John Cash, an independent travel consultant, said: "A lot of companies go too far too quickly. To do a truly global deal, you need to take things step by step."

Rather than going for a "big bang" approach, the best way to do this was to prioritise and phase in separate deals in each country, Cash told the Business Travel 2000 conference in London earlier this month.

"For example, a US-based company with a presence in the UK and Europe would need to set up separate deals, first for the US and the UK, and then for France and Germany," he said.

But it is essential to make sure that each headquarters is ready for the changes, he added.

Vanessa Brady, assistant vice-president of global travel, Europe, at Credit Suisse First Boston (CSFB), said negotiating global deals with airlines and hotels will save the company 12 per cent of its annual travel spend of £193 million this year.

Set up as the result of a travel policy introduced last October, one of these deals had seen the bank negotiate a company-wide agreement for north Atlantic flights between the firm's US, UK and Swiss headquarters, said Brady.

Travel on this route previously made up 75 per cent of CSFB's air spend, she explained, and the deal had cut prices by guaranteeing airlines greater traffic volumes. The bank had also halved the number of its flight carriers to 15 under the programme.

Tony Hughes, managing director of P&O Travel, said the trend for travel buyers to set up global deals with air travel, accommodation and car-hire suppliers had emerged during the past two years. By 2010, over 90 per cent of the world's companies are expected to be dealing internationally, he said.

Despite this, only a handful of firms are dealing globally in the true sense of the word, he added. Social, political and economic differences often made effective worldwide operations difficult.

Nevertheless, the global position and regional focus of CSFB's travel programme had allowed it to leverage its global spend successfully while incorporating local factors, such as tax and employee laws, said Brady.

John Lawrence, director of corporate sales, Europe, at Budget Rent a Car, said suppliers were keen to enter into global deals, but would "feel within their rights to challenge a firm's capability" to fulfil their part of an agreement regarding the volume of business.

SMfeb2000

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