Jack Reynaert has had a lot on his plate since taking over
as Meritor’s global travel manager in 2011. The 37-year travel industry veteran
took on a half-baked managed travel program that involved multiple agencies,
conflicting policies and dysfunctional online booking tools that made travelers
search hard to find preferred properties, and he turned it into a model of
compliance and composure. Now, he’s honing dining spend.
In his first year with Meritor, Reynaert refined the
company’s travel and expense management recipe, streamlining policy,
implementing better technology and consolidating agencies. He brought traveler
services in house and pushed compliance. The effort realized $1.4 million in
first-pass yield for Meritor on its estimated $16 million in travel spend, but
Reynaert was looking for more. “I look at part of my job description as revenue
recovery: commission recovery from hotel and GDS, rebates for basis points on
card,” he said. “Why not restaurants?”
Negotiating with a handful of restaurants would be ineffective,
given the breadth of Meritor’s travel program and traveler needs; yet piecing
together a network was completely off the table. “It’s way too fragmented,” he
said. But attending a trade show a couple of years back, Reynaert discovered
Dinova, a preferred restaurant program provider that delivers a network of
eateries—from grab-and-go to fine dining to private catering—that offers
corporations access to volume discounts.
Dinova’s Deal
According to Dinova, meals represent about 10 percent of
overall travel spend, rivaling car rental as the third-largest business travel
expense, after air and hotel.
“Most companies are very interested in any kind of leverage
they can get with procurement in this marketplace,” said Dinova president Vic
Macchio, who claims 40 of the BTN 2015 Corporate Travel 100 as clients.
Dinova works within the traditional parameters of a managed
travel program, in that it provides a set of preferred restaurants to the
corporation; the corporation drives volume to the network and receives cash
rebates based on its corporate volume. Participating restaurants benefit, as
well, gaining access to the corporate channel, which will fill the front house
Monday through Thursday. That’s not to mention that corporate travelers spend
more per meal than the average transient customer. Cumulatively, Dinova manages
more than $3 billion in corporate travel meal spend, and the volume is growing.
Through August, meal spend within the Dinova program has increased 5.5 percent
compared with the same period in 2014, owing to higher transaction volume and
climbing spend per meal.
“The business model is simple,” Macchio said. “We negotiate
with restaurants that want to be in this network and have access to the
corporate channel. [The restaurants] pay a rebate on all of the transactions
generated by our client companies.” Dinova transmits the lion’s share of those
rebates back to its clients. It retains “a few points in the middle” and
absorbs the costs of setting up the network and the technology, said Macchio.
Applying The Program
It’s a model that worked for Meritor but not without
Reynaert’s smart preparation to understand where his travelers were already
spending their food dollars and his work to match that back to the Dinova
program to ensure effective coverage.
Meritor’s solid corporate card program provided the
linchpin, said Reynaert. “I took on corporate card about three years ago, so I
knew we had great data. At Meritor, the only way you can travel is with a
corporate card, so our compliance really is 100 percent. And it was easy to
share that information with Dinova to make sure we were a match.”
Armed with the understanding that a company can’t mandate
restaurant choice like it can card use, however, he rolled out the dining
program with a soft launch. He put the program in place and advised some
administrative staff to steer business to the Dinova network but otherwise let
the program travel by word of mouth.
“Without even pushing the program, we can go back and say we
recovered dollars, and it really helps our operations,” said Reynaert, who
proceeded to cook up a communications campaign for the dining program after
launching a SharePoint site for Meritor travelers. “We’ve got a link on the
site that says, ‘Take a bite out of meal expense.’ I love puns. So it kind of
grabs their attention, and the program is easy to use. And if you want to save
the company some dollars, jump on in.”
Meetings & More
Administrative staff and meeting planners were key
constituents in Reynaert’s restaurant rebate strategy. The company was rolling
out a strategic meetings policy around the same time, so extending the concept
to meetings was a no-brainer.
Meritor admins can access Dinova network caterers for
in-office and out-of-office meetings. For larger-scale catering and events that
call for private dining rooms and specialized venues, meeting planners can use
a new Dinova platform that pinpoints private dining options and provides
virtual tours and other information pertinent to group dining. Dinova has
forged relationships with high-profile restaurants in cities like Las Vegas to
help meeting planners organize creative dine-arounds and garner substantial
rebates in the process. “It’s a really phenomenal program,” said Reynaert, “A
lot of times meeting planners want to break away from a hotel. You don’t want
to be locked into a single facility.”
What’s In It For Me?
At the end of the day, though, adoption could falter for a
program that can’t be mandated or measurably enforced. Dinova’s answer was to
roll out a loyalty program in which travelers reap points while corporations
retain the rebates. “We are launching that,” said Reynaert. “Our people love
points, and they don’t have to do anything but use the corporate card. It’s
easy for them, and they know it helps us offset costs. … This is just one more
element of the model that enforces how effective the program is.”
Now that Meritor is actively steering employees to the
program and the loyalty program is in place, Reynaert said the positive
response could enable him to double his “soft launch” rebates.
“Our travelers are always looking for guidance, so when
someone is traveling into a city they haven’t been to before, we actually
suggest restaurants for them. That drives up the volume, which we appreciate,
and [the traveler] appreciates the help.”
Replicate Meritor’s Managed Dining Success
Mandate The T&E
Card: Drive all spend, including restaurant spend here.
Lock The Purchasing
Card: Block merchant category classification codes for restaurants to force
restaurant spend onto the T&E card.
Leverage The Global
Card: If you have a global card, capture that data and provide that to the
dining network, too.
Prepare To Double
Dip: Driving restaurant spend to the T&E card will enhance the card rebate
and increase the rebate from Dinova.
Use It For Meeting
Meals: Meritor increases credit limits on the T&E card to accommodate
procurement of food and beverages for meetings; alternately, travel managers
could mandate meetings cards and aggregate that data to enhance their managed
dining programs.
This report originally appeared in the November 2015
edition of Travel Procurement.