ARC's CTD Appointments Gaining Ground
ARC's CTD Appointments Gaining Ground
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By Sarah Welt
Ten months into the program, 25 Corporate Travel Departments have been approved, with another 30 companies in some stage of the accreditation process. Additionally, one of the previously approved CTD locations, Bear Stearns & Co., last month received the green light to set up eight STP sites, bringing the total number of CTD locations to 33.
The most recent additions to the CTD family are Foundation Health Systems of Woodland Hills, Calif., Key Travel SVC (Del Monte Produce) of Coral Gables, Fla., Los Angeles-based Twentieth Century Fox Studios and, the newest, Hancor Inc. of Findlay, Ohio.
Airlines Reporting Corp.'s director of agency accreditation services Barry Lemley said it is significant that as of September, 4,000 agencies have closed their doors this year, while "I have not seen any CTD voluntary deletes since they've been approved."
While the most recent commission cut is a continuation of a five-year-old trend, Lemley said that as corporations continue to move away from revenue sharing to unbundled transactions and net fares, "I think more and more corporate accounts will work with agents to look at other options such as CTDs." He added that since United's announcement last month, "we've seen a fairly significant increase in our Web and fax service as well as phone calls from people looking at additional options."
Hancor Inc., with about $1 million in U.S. booked air volume, received CTD accreditation Oct. 27. The company had been a rent-a-plate for the past five years so moving to a CTD was a "natural progression," said travel coordinator Melissa Arnold. Little has changed under the new arrangement, except for the financials. Arnold had been booking travel and filing ARC reports for Hancor prior to the switch. The only part of its program it outsources is incentive travel, which accounts for one trip a year. It is in the process of contracting with Trams for the back-office function and hopes to have that up and running by the first of the year.
Foundation Health Systems, with $5.5 million in air volume, also has embraced the CTD option. The switch to a CTD in July seemed like an ideal fit for FHS, which has been a rent-a-plate since 1995. It went live Aug. 1.
By scrutinizing travel patterns, eliminating unnecessary trips, using video conferencing and implementing a stricter travel policy, FHS has been able to see a 30 percent reduction in its travel spend over the past year. It also has been able to reduce expenses by 7.5 percent by bringing all aspects of the travel program in-house and no longer paying a transaction fee to its travel agency.
While a rent-a-plate, FHS outsourced the back-office reporting function to an agency but since becoming a CTD has contracted with Sabre and is using TravelBase. Director of corporate travel Jill Stinson said, "I was running my own reports and the only thing they did for us was ARC reports. They would get debit memos and pay the debit memos and things related, but we still had work doing preparation for ARC reports. I said to senior management, 'what are we paying for?' and I couldn't answer that question."
Getting up to speed on doing its own reporting has involved a learning curve, Stinson said. However, "I would rather not outsource. It is still cheaper to do it in-house. "The only aspect of the program it is outsourcing at this point is 24-hour service with Thor Inc.
One thing that is unique about FHS is it uses a Lotus Notes database it created inhouse. The database enables travelers to make requests and agents to view preferences online. "We started in January and it is the greatest time saver," Stinson said. Additionally, the company's expense reporting department has access to the database and can see which travelers have not remained in policy. If travelers don't book through the travel department they risk non-reimbursement. The database also allows Stinson to track and report patterns and spending, as well as see how many reservations are completed each day and how long the process takes.
Meanwhile, Key Travel/Del Monte got CTD approval Aug. 1. and went live a month later. Prior to that, Del Monte had an onsite with Corporate Travel Consultants of Miami. The manager of the CTD, Kathleen Smith, was formerly employed by CTC and handled Del Monte's account as its sole onsite agent. "I went on vacation when I worked for CTC and they said they'd send someone over here to fill in. Well, they didn't handle the account properly and they ended up asking her to leave after three days. That is when they decided they no longer wanted to do business with Corporate Travel and asked me if I would work for another agency. I said no, but suggested to them there would be quite a bit of cost savings if they operated their own department," said Smith.
The major difference between being an agent and managing the CTD is now Smith is responsible for handling all reporting processes. "A lot that I relied on my other office to do, I have to do myself now," she said. "I had never done back-end refunds, reporting and reconciliation, and so I was worried I was not going to be able to handle it or understand it, but it's been a lot easier than I thought it was going to be."
ARC, meanwhile, has been working to improve the CTD application process. Beginning in the first quarter, companies interested in applying for CTD approval will be able to gain access to forms via a CD-ROM.