BTN Names Dominion's Kelliher 2007 Travel Manager Of The Year
|By:||Michael B. Baker|
AUGUST 13, 2007 -- Business Travel News last month named as 2007 Travel Manager of the Year Donna Kelliher, director of travel services for Richmond, Va.-based energy firm Dominion.
Faced with one of the most expensive airport markets in the country, Kelliher helped drive down prices by organizing travel buyers and local business leaders to gain and retain low-cost carrier service. While educating her neighbors, and subsequently buyers facing similar challenges in other markets, on the advantages of establishing a diverse air portfolio, Kelliher also devised a means of determining the optimal timing for advance ticket purchases, significantly reducing her company's more than $8 million annual U.S. booked airline spending.
"This travel buyer combined both her analytical skills and her propensity to reach out to the community to drive change and improve business travel not only for her company, but also for and with her peers," BTN editor-in-chief David Meyer said last month at a reception honoring Kelliher during the National Business Travel Association's International Convention & Exposition in Boston. "For the analytical acumen, foresight, powers of persuasion and true commitment to continuous improvement, demonstrated in several different ways, and the leadership skills deployed so adeptly at the Richmond airport, BTN is proud to name Donna Kelliher as the 2007 Travel Manager of the Year."
It was only a few years ago that Richmond International Airport ranked as one of the most expensive in the United States, deflecting local travelers seeking better fares to airports in Washington, D.C., Norfolk and Newport News, Va. After Southwest Airlines scuttled plans post-Sept. 11 to service the airport, Kelliher joined forces with local business and economic development leaders to woo another low-cost carrier to Richmond.
Thanks to those efforts, AirTran Airways started serving Richmond in 2005, and the impact was immediate, Kelliher said. Not only did AirTran bring lower fares to Richmond, but established carriers also responded to the competition by lowering their fares.
Even though this brought more traffic to the airport, most new customers eschewed AirTran in favor of the legacy carrier brands with which they had more familiarity, Kelliher said. She knew that AirTran wouldn't stick around if its passenger numbers were not favorable, and the airport then would be in danger of returning to the same premium-pricing situation as before. So, Kelliher and her task force colleagues turned their attention to local businesses.
"The legacy carriers had a stronghold on this market," Kelliher said. "We got the message out to the community, not telling them not to travel on legacy carriers, but to spread the wealth in managing their air portfolio."
Amid a marketing campaign, Kelliher reached out to dozens of procurement managers, CFOs and CEOs to show the importance of having a diverse air program. Many previously had given little thought to that aspect of their budget, she said. She also reached out to the Virginia Business Travel Association to get the message to small and midsize businesses, many of which were not operating under corporate contracts with airlines.
The results of the outreach quickly bore fruit. Within a few months, low-cost carriers began to see an uptick in their load factors, she said. Richmond air travelers now have seen reductions as high as 60 percent in airfares to New York, Boston and Atlanta.
Even with the success, Kelliher continues to advocate the importance of air portfolio diversity to her community.
"It's very easy to slip back," according to Kelliher. "We're not taking our eye off the ball. As far as I'm concerned, this is a lifelong project."
What happened in Richmond already is serving as a model for other airports with high ticket costs. Pittsburgh, where US Airways has long dominated, already has sought advice from the Richmond team, she said. "The interest is out there, so we've started to provide some guidance."
Following the success in lowering fares at the Richmond airport, Kelliher and her team then were able to determine that it made sense for the aviation program to eliminate its runs to Boston, as commercial air travel at that point made more financial sense.
"We zero in on the market where we can make a difference on the productivity factor as well as the cost," she said.
In most cases, corporate aviation programs operate separately from the travel program. Ensuring that wasn't the case at Dominion from the beginning has allowed for that sort of analysis, Kelliher said.
Kelliher has overseen Dominion's corporate aviation department as a part of the managed travel program since it was established in 1994. With the program under the managed travel umbrella, Kelliher has been able to ensure that Dominion is getting the best value possible from it.
"We do operate as one entity, and we've seen a lot of financial benefits as a result of that," Kelliher said. "They are a part of this company, so we didn't want them to operate as their own island."
At the same time, Kelliher, who has worked in travel management for 20 years at Dominion, has created a number of success stories within her own travel program, which has an annual overall travel and entertainment spend of $25 million to $30 million and about $8 million to $10 million in booked air volume. Most recently, she found a way to save the company hundreds of thousands of dollars on that air volume by challenging the existing advance ticket purchasing policy.
The light bulb first went off when she discovered a traveler exchanging a ticket for the fifth time on a reservation made six months prior. Using the Six Sigma analytical process, Kelliher determined that these cancellations and exchanges were significantly bulking up Dominion's air costs.
"It's very easy to start adding additional costs by cranking out charges, add/collects and transaction fees," Kelliher said. "The numbers can add up very quickly. You could be to a quarter of a million in exchange fees in no time."
Using Six Sigma, which she defined as reducing variation in a process to achieve continuous and breakthrough improvement, Kelliher analyzed travel management reporting data for 2004 that indicated there often was no financial advantage to booking airline tickets greater than 20 days in advance because of the possibility of generating unused tickets, additional booking costs and exchange fees.
Kelliher was able to determine that the optimal time to purchase a ticket was three weeks prior to a flight in some markets and even as low as one week prior in other markets. Kelliher defined as a defect any ticket purchased more than 20 days in advance and set as an objective reducing the number of tickets purchased more than 20 days in advance by 70 percent. Not wanting to overcomplicate the process for travelers, Dominion altered its travel policy to limit advance ticket purchases to 30 days.
"Basically, if someone calls the reservation center and wants to make a reservation outside of the mark, they're going to need further approval," according to Kelliher. "There's flexibility. We know there are certain markets where you need to book 90 or 120 days in advanceif you're going to a technology conference in Las Vegas, for example. We put reasonable guidelines in place."
Although the airport battle was among her flashier success stories, it's just a part of the effort Kelliher has made in spreading the gospel of effective travel management. She's conducted a number of seminars on other aspects, such as building a hotel program and reminding upper management of the importance of the profession.
"You tell the story at a very high level of the importance of managing the second-most controllable expense in your business, and you can sit there and see the bells going off," she said. "They have a high-level overview of what's going on in the company, and our goal is to put it on the radar screen."
Kelliher said the process demonstrates two qualities needed to be a successful travel manager: the ability to assess what travelers are doing and a willingness to buck conventional wisdom. In this case, the conventional wisdom was that the further in advance a ticket is purchased, the cheaper it would be.
"One of the things I believe travel managers in general do well is anticipate, and they also understand traveler behavior better than most," she said. "At one point, I'd operate on my intuition and what my gut is telling me, but we don't live in a world anymore where that's very effective, so we need to use the data. I'm always challenging the status quo. If you can measure something, you can improve it."
"Six Sigma has taught me that admitting you have a defect in the process you own is a good thing," Kelliher said. "We have used Six Sigma for preferred supplier compliance, electronic ticket tracking prior to introducing automated monitoring systems and T&E card utilization."
Of all her accomplishments, Kelliher said one of the most rewarding came after Hurricane Katrina in 2005. Within hours of the New Orleans levees breaking, she received a call from Dominion's facilities organization looking for lodging in the affected area. Realizing that wasn't the answer, Kelliher and her team started to assess the task at hand which, as it turned out, involved relocating more than 310 families, or more than 600 people overall, to Houston.
Using extended stay lodging partner Preferred Corporate Housing, Kelliher and her team were able to get those families into fully furnished units within two-and-a-half weeks.
"We basically moved entire family units in a very short period of time. Because we acted so decisively, we were able to obtain premier housing in secure locations," she said. "It was a huge logistical effort that took a lot of people and a lot of fabulous teamwork to pull off."
Although many corporations have emergency response plans in place for disaster situations, Kelliher said successful execution boils down to already-established groundwork that a good travel manager should have in place. "When dealing with an emergency response, the relationships you build over years of being in this industry really help you through it all," Kelliher said. "You reach out, select the right suppliers and the right partners, and you can do anything."
Kelliher also is quick to praise her own team and company management for their support in all of her efforts, but truly successful travel management needs even more than that, she said. As the Richmond airport story showed, travel managers can find victories by venturing beyond the walls of their corporate headquarters.
"Reaching out to the communities you live in can provide a lot of value," Kelliher said. "Dominion has been very supportive in that way, and I suspect most companies out there would be. Reach out to the local chamber of commerce or airport officials, and see if there's a way you can help enhance their understanding and knowledge of travel management and how it impacts what they're trying to accomplish."