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Mayo strikes exclusive travel deal with Carlson Wagonlit

Mayo Clinic’s recent decision to centralize all of its corporate travel accounts — which represent perhaps the largest billings among private employers in Minnesota — is causing ramifications through much of the Rochester travel industry.

In any business decision, especially involving millions of dollars in travel expenses like Mayo’s account does, there are winners and losers.

And the winner is Carlson Wagonlit Travel, one of the world’s largest travel agencies which has expanded its presence here to handle Mayo’s business. And the major losers are AAA Travel and Corporate Travel, which handled the lion’s share of Clinic billings before Mayo’s decision to consolidate effective Nov. 1.

The Clinic’s account formerly involved just trips by Rochester-based personnel, but the new move centralizes all of Mayo business-connected travel that originates from its other operations in Jacksonville, Fla., and Scottsdale, Ariz.

Additionally, all of Mayo Medical Center’s major sponsored tours for employees is being shifted from Carrousel Travel in Minneapolis to an arm of Carlson Companies, which has several subsidiaries dealing with business and leisure travel.

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In addition to its Carlson Wagonlit Travel division, Carlson Companies has ownership or franchise relationships with a string of hotels, motels, restaurants, and cruise ships along with marketing operations. Such well-known brands as Radisson Resorts, Country Inns and Suites and T.G.I. Friday’s are among Carlson Companies holdings.

Mayo’s operations in Rochester embrace some 28,000 employees. Its travel account, bolstered primarily by significant foreign and domestic travel by its 1,700 staff physicians and scientists here, rates as the largest or among the largest private-employer travel accounts in Minnesota, several in the industry confirmed to Travel Scene.

Other employees involved

And 22,000 additional employees in Jacksonville and Scottsdale, including another 1,300 physicians, now are covered by the new policy.

The Clinic, of course, is not alone among big businesses seeking to reduce travel expenses via consolidation — typically these contracts involve negotiated rebates from commissions the designated travel agency earns from individual vendors. Mayo also hopes that the change will enhance service, flexibility and improve efficiency.

IBM, including its Rochester plant, went with a national American Express single-agency contract some 15 years ago. Mayo, at that time, didn’t totally centralize but designated AAA and Corporate Travel as essentially "favored" travel vendors.

Another obvious factor in Mayo’s decision to shave costs is that travel expenses in general have risen in recent years, and an Amex Business Travel survey predicts another 4.3 percent increase for 2007.

By including employee-paid but Mayo Medical Center-sponsored group trips as a part of the new package, the Clinic ends a 16-year tie with Carrousel Travel. Carrousel’s previously-scheduled trips for 2007 — to Belize, Italy, South America and New York — will go forward as they were contracted for before Mayo’s decision. But beginning in 2008 these activities will be handled through an arm of Carlson.

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Billings at $40 Million

How large is the Mayo account? The Clinic hasn’t said but outsiders put its corporate billings in the range of $40 million a year.

Additionally, Carlson will benefit in several other ways: from potential "add-on" travel from spouses and families of Clinic employees who are at meetings or conventions; the afore-mentioned Mayo Medical Center employee group travel; plus any travel arrangements generated from an unknown number of Mayo patients who can be connected via a hot-line to Carlson offices.

All of the agencies involved in handling prior Mayo travel obviously are obviously affected by the move, but both Corporate and Carrousel plan no layoffs. "While we’re disappointed with Mayo’s new program" said Carrousel partner Rob Harris, "we’ve enjoyed our relationship. But business is business."

AAA Travel, whose relationship with the Clinic pre-dates even Carrousel’s, lost two employees in the switch — including its manager and a travel agent who handled Mayo’s account. Both joined an expanded Carlson operation, which recently opened an office in the Brackenridge Skyway to handle Mayo traffic. Carlson has another office at a northwest shopping center for the public.

Bidding involved

The Clinic’s decision was based on competitive bids, it has been reported. And we’ve learned of some changes from previous Mayo travel policies. New is a Mayo Corporate Travel Card which must be used for all business travel.

Other policies, either new or renewed, include hotel, meal and rental car caps, and a prohibition of in-room hotel courtesy bar expenses. Mayo also will follow the federal Fly America Act, which requires all international air travel paid for with federal funds to be on an American-flagged carrier.

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Carlson Wagonlit Travel, with several thousand offices, is a giant in the industry, and it calls itself the largest travel management company in the world outside the U.S., and the world’s first global network of travel service companies. It’s a major part of Carlson Companies, a huge player in the marketing, travel and hospitality industry. All Carlson brands had 2005 sales of $34.4 billion.

Founded by the late Curt Carlson who years ago turned Gold Bond trading stamps into a fortune, the company is one of the largest privately-held firms in the U.S. Its chair and CEO is Marilyn Carlson Nelson, daughter of the legendary Curt. She also is a member of Mayo Foundation’s Board of Trustees and serves as a board member of several other well-known companies. Nelson has been recognized often as one of the nation’s travel industry leaders.

Bob Retzlaff is travel editor of the

Post-Bulletin. He can be reached by

phone at (507) 285-7704 or by e-mail at retz@postbulletin.com.

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