Profiles In Travel Management - 2005-06-06

Polo Fashions A Global Travel Program
Company: Polo Ralph Lauren
Headquarters: New York, N.Y.
U.S.-based T&E Spend: $30 million

Like many multinational companies involved in consolidated travel management programs, the team at Polo Ralph Lauren has realized the advantages and started to experience the challenges of going global. Mary Tardi, senior director of global travel services at Polo Ralph Lauren, embarked on establishing a global program in the winter of 2004 and since has taken the first major steps toward true multinational consolidation by defining Polo's relationship with a new travel management company, setting up a European travel headquarters in Geneva and implementing a strong global travel policy.

Tardi, who this month celebrates 13 years with Polo, said the company, which is completely consolidated in the United States, technically qualifies as an independent, fully accredited travel agency. At the time of approval, she said, ARC's Corporate Travel Department accreditation did not exist. Though the company maintains its own global distribution system agreements and full agency standing, Tardi quickly realized that pursuing a global strategy would require the support of a third-party TMC.

"In the fall of last year, we made a business case internally to continue the program overseas and started by basically doing a trip over to Europe and taking a look at exactly what booking channels were being utilized and how we could consolidate," Tardi said. "After many months of consulting with Partnership Travel Consulting and really analyzing what our business needs were, we decided and clearly saw that we couldn't initially start 100 percent internal. We needed to use the support of an outside TMC for very few services, and one that would agree that we would be branding this completely as Polo Ralph Lauren."

Tardi brought only those TMCs with global capabilities into the request for proposal and heavily weighed each agency's willingness to "subordinate themselves to Polo Travel Europe," to enhance program clarity for the company's 10,000 employees worldwide.

"Each of the major TMCs had global capabilities but, at the end of the day, TQ3 made a compelling case to treat Polo's program as a priority, but not try to dominate it. For lack of a better word, they're a silent partner," said Andy Menkes, chairman and CEO of New Jersey-based Partnership Travel Consulting. "No one within Polo even really knows who the agency is. Not unlike private-labeling clothing, TQ3 is not visible to the end-user or the market. In the building, there's no huge sign that has the name of that agency. Even though it's their IATA license, it says Polo Travel Europe."

On March 14, 2005, Polo Travel Europe opened its headquarters in Geneva, serving only that market "to see how the dust would settle," and less than one month later, Tardi rolled out the program, including a corporate sanctioned global travel policy, to the rest of Europe. By linking the Sabre GDS in the United States with the Amadeus GDS in Europe, Polo Travel can follow the sun with certain limitations.

"The key that is really working for us is that we have access to every passenger name record for all of Europe from here in the United States and vice versa. Our Geneva office is open for a certain timeframe, and when they're closed, we're open in the United States and we can support those records for after hours emergency purposes," said Tardi. "When we're closed, it's their middle of the night, and we're using the support of an outside vendor at that point."

Polo Travel next aims to expand into Asia and, by fiscal year-end, into Latin America as well. "When we get to the point that the Far East office is open, that gives incremental time zone coverage. Part of the vision in putting this together is that for most of the day, a traveler, regardless of where they are, can be serviced by a Polo agent," Tardi said. "Ultimately, the vision is a completely global travel program with regional locations, in such a way that we here in headquarters in New York can have access to all of our worldwide records, bookings and data."

Tardi describes selling the program to senior management as a "no-brainer"—operations in Europe prior to global consolidation were totally decentralized and cost savings untapped—but the process was not without challenges, particularly in assessing and implementing the appropriate technology.

"The most challenging thing for me was the GDS because there's not one GDS right now that is completely what I would call global," Tardi said. "I'm hoping that there is a GDS going forward that can handle us globally so we're not toggling between systems." Tardi also is working in an ARC focus group to further the cause of a global bank settlement program, a system ARC has expressed interest in facilitating.

Tardi said she has received little pushback to the company's stringent mandate—which drives 98 percent policy compliance in the United States—from European travelers or Polo management since implementing Polo's global travel policy, which was constructed to be flexible enough to include regional addenda. "It's clearly mandated in our new global T&E policy that travelers will not be reimbursed if they do not use Polo Travel," Tardi said. "What's very interesting about Polo is that we very seldom mandate anything, but our T&E policy is absolutely supported by the most senior-level management of this organization. Our CFO is thrilled in Europe that we've done this. It's given him a structure to enforce."

Though Polo's European travel program is still too new to accurately assess cost savings, Tardi looks forward to charting its growth while she and her team work to expand the program to Asia and Latin America. "In the first weeks we've been open in Europe, everything's positive," said Tardi. "I can see a lot of work ahead of me in analyzing data once we start collecting it, and I can certainly see a great potential for negotiating vendor agreements and cost savings."