April 12, 2002
TO:
Deans, Directors, Chairpersons and Executive Managers
FROM:
David Brower, Assistant Vice President, Chief Financial Officer and Controller
SUBJECT:
Travel Program Policy Changes
Several dramatic changes in the travel industry and in the procurement of airline tickets have taken place in the past few months.
Airlines have increasingly made available low cost tickets on their web sites and through internet ticket sources that are not made available to traditional travel agencies. In addition, all major US airlines announced the elimination of airline ticket commissions on March 21, 2002. The airfare commissions were used by MSU to pay for cluster travel agency service fees and for some MSU Travel Office services. Also, Council Travel's parent company declared bankruptcy and has recently been purchased by STA Travel. The Council Travel office in the MSU Union remains open and is now called STA Travel.
In response to these changes and recommendations made by various MSU travel stakeholders, including the MSU Travel Advisory Task Force, the following revisions to the current MSU travel policy are being made effective April 15, 2002:
- The mandate that all MSU reimbursed airfare is purchased through Spartan, Anderson or Council/STA Travel will be suspended to allow airline tickets to be purchased directly from airlines, web sites or consolidators, with special discounted fares, without the need for prior written exception from the MSU Travel Office.
- Spartan, Anderson Travel and STA Travel will continue to offer direct billing of airfare, discounts on Northwest and United Airline fares (discounts currently 14%), fare decrease monitoring, 24 hour assistance and full service as normal. Non-MSU individuals traveling on university business may continue to use MSU Travel Cluster services, but are not required to.
- To offset the elimination of airline commissions, Spartan Travel, Anderson Travel and STA Travel will continue to charge service fees they deem necessary to MSU business travelers. All service fees remain reimbursable, but may vary between agencies.
- The elimination of airline commissions has resulted in lost funding for elements of the MSU travel program. To continue support of direct billing and the travel advance functions, a travel advance fee of $15 per advance will be charged. A wire transfer fee of $25, for any purpose, will also be charged. The minimum amount of expenses to qualify for a domestic travel advance will be reduced from $350 to $300. The minimum amount for a graduate assistant advance will remain $100. The fee for advances and wire transfers may be charged to all university accounts, since the cost of these services are not included in the calculation of indirect cost rates.
A review process will be initiated to consider alternative direct billing options for MSU travelers who choose to purchase airfare from airlines, consolidators or web sites, other than those offered by Spartan or Anderson Travel. There are a number of issues that remain to be explored, including the shifting of work to departments, accountability, documentation and retention requirements and other procedural issues. In the meantime, availability of travel advances may help in some cases.
The consolidated travel program that MSU implemented on November 1, 1998 has been successful in achieving its desired objectives. Direct billing of airfare and annual airline discount savings in excess of $500,000 per year to departments have been very beneficial to our travelers. These benefits are still available from Spartan and Anderson Travel and we encourage their continued use as appropriate.
The intent of these travel policy changes is to allow for increased flexibility and to further enhance the cost savings opportunities for our travelers. The increasing trend of airlines offering less expensive tickets from the Internet, elimination of travel agency commissions and travel industry financial difficulties following the September terrorist attacks have prompted the implementation of the revised MSU travel policies detailed above.
Further significant changes in the travel industry are anticipated. We will continue to monitor these and address them, as appropriate, after consultation with campus travel stakeholders.
Please distribute this information to affected faculty and staff.