Proving Their Value: National Life Group's Internal Planners Make Their Case

The Case for an Internal Conference Department

In a report to Charlie Kittredge, National Life's senior vice president for sales and distribution, Lynn Averill, director, travel and conferences, detailed the number of meetings handled by the department every year, the expense of those meetings, and the cost to operate the department. In addition to those numbers, she included the following for consideration:

THE CONFERENCE DEPARTMENT ADMINISTERS THE CORPORATE TRAVEL POLICY

* National Life entered into an agreement with its official travel agency in June 1988.

* Although recent reports show that travel expenses are up, our records indicate air expenses are down. We have realized savings on individual travel by advising travelers to travel smarter. "Lost savings" (which result from travelers not choosing the least-expensive carriers or routing, or not using earned travel certificates) have been reduced by nearly $50,000 since 1994.

* National Life's contracts with five major airlines earn it airline travel certificates based on total travel volume. Using earned certificates available right now would mean an immediate savings of approximately $21,000.

* National Life's contracts with car rental companies have generated car rental certificates worth more than $1,000.

THE CONFERENCE DEPARTMENT'S RELATIONSHIPS BENEFIT NATIONAL LIFE

* I can document cost savings and benefits to National Life and its affiliates based on the time I and my team have spent building and maintaining relationships with members of the travel and hospitality industry. Those savings amount to more than $160,000 over the past three years alone from the following:

* Attrition/cancellation penalties waived

* Amount of required deposits reduced by tens of thousands of dollars

* The same hotel rate negotiated for three consecutive years

* Savings realized from local inns and hotels that allow reductions in anticipated attendance on the day of the events

THE CONFERENCE DEPARTMENT IS MORE COST-EFFECTIVE THAN AN INCENTIVE HOUSE

* Incentive houses negotiate commissionable rates rather than net rates.

* Incentive houses charge, on average, a fee of 20 percent.

* Interest from deposits is placed in escrow for the incentive house, not the company.

* Since negotiations are between the incentive house and the hotels, the company loses its own negotiating clout.

* Typical concessions negotiated as part of a contract, such as complimentary suites and airport transfers, discounted staff rooms and food and beverage, and the complimentary one room per 50 used, are usually not passed on to the company when they are negotiated by an incentive house.

* Incentive house representatives do not have comprehensive knowledge of company culture, internal operations for awards and recognition, and program development. The connection to the field force is lost.