Partnership Travel Consulting's Menkes discusses:
- Why he bought Fare Audit
- Services Fare Audit brings to PTC
- Future enhanced offerings
Partnership Travel Consulting, a travel management consultancy headed by Andrew Menkes, on Jan. 1 acquired Fare Audit, Inc., a corporate travel audit firm founded in 1987 by Martin Morrison. Menkes now is the president of Fare Audit in addition to serving as founder and CEO of PTC. BTN senior editor Donna M. Airoldi spoke with Menkes about his reasons for the purchase, Fare Audit's offering and future plans. The interview has been edited for length and clarity.
BTN: What prompted you to buy Fare Audit?
Andrew Menkes: Marty and I have known each other for two decades. When he shared with me that he was looking to sell, I offered to find him a buyer. The two buyers I found did not make a good-faith offer. When he told me he was thinking of just retiring … I said, I think I have a buyer for you. He said, who? And I raised my right hand.
Having worked with [Fare Audit] in terms of several clients over the years, I knew their workflow. I knew the value they provided, and I knew that lots of PTC clients would want to have the ability to audit, they just didn't know Fare Audit existed. [There was] no marketing, no sales. To prove my point, I popped up something short on LinkedIn. And while on vacation the first week of January, I picked up two new accounts for Fare Audit. I knew in my heart of hearts that he was sitting on a great business model that was one of the best kept secrets in the industry. That's what prompted me to make the offer. [Financial terms of the sale remain undisclosed.]
BTN: What does Fare Audit do?
Menkes: The name doesn't adequately describe it, which is what they really audit is the [passenger name record]. … Prior to departure, and depending on the client, prior to ticketing, the audit system will look to see if that PNR is in compliance with policy.
Let's start with airfare, which is how they came up with the name. [Say] your policy is that you have to take the lowest nonstop flight within two hours of departure. If your PNR has you booked on a 12 noon flight, let's say from Kennedy to LAX, the audit looks between 10 a.m. and 2 p.m., two hours before and two hours after. The auditor, via the technology, looks to see is there a lower fare in that policy window of two [hours before and two hours after]. If there is a lower fare than what was booked, there's a unique remarks field where the [travel management company] has to put it in: 'I offered the 11 a.m. on JetBlue. She declined it.' In that case, the TMC passes the airfare audit because they documented that they offered it. But if there is no documentation that they offered it to you, then it's considered a fail for the TMC on that PNR.
The other side of that coin is if it's done online by the traveler, there is no TMC. The traveler is supposed to put in remarks why they didn't take the lowest fare. If they didn't take the lowest fare but didn't document it, we don't contact the traveler, but we put it in the report for the travel manager.
BTN: That's for booked air fares.
Menkes: Booked, but not necessarily ticketed, because they're ideally going through the TMC.
BTN: What about non-TMC bookings?
Menkes: The other thing that we're now doing, because of the synergy with PTC, is we're able to audit [website direct] fares. You may have booked the lowest fare within policy within the GDS content, but PTC's audit system, which is now within Fare Audit, also goes to the airline's website for the exact same flight date and seat category [and] cabin. We have seen instances where the airline fare for business class was $3,000 to $4,000 lower than what was ticketed. But we can catch it the same day it's issued.
BTN: What about the hotel side?
Menkes: Usually in December, but even in January for a corporate account, if they give us their list of all their preferred hotels for 2025 by season and by room type, Fare Audit can access the GDS for four different dates in the year—winter, spring, summer, fall—to see if that client's rate code is showing as available. If it fails, Fare Audit emails the property to fix it. The second time [it happens], we tell the client [and ask,] 'What do you want us to do?' And that's where the client might want to contact the [hotel] and say, 'Hey, two fails, you need to fix it or you're out of the program.' The other area that we cover, which isn't too well-known, is a squatter audit.
BTN: Define squatter audit.
Menkes: When a hotel that you did not accept puts in the GDS your unique company code, it looks like they're one of your preferred hotels in the online booking tool, in the GDS, and that's called a squatter, because you did not ask them to be in your program. The first part of hotel is the annual sourcing validation, which is: Of the 200 you pick, are your rates loaded? And we have some clients that ask us to run it every month. You check right away, and the rates are there, but what happens in February, March and beyond? So, we have clients that ask us to do either four times a year or 12 months out of the year to make sure the rates are still there.
The balance of hotel is what we call a compliance audit. Say [a traveler] books himself from Kennedy to San Francisco, and he's there for four days, but there's no hotel in the booking. We call that either an unattached hotel or hotel leakage. That rate has always been around 50 percent of all corporate bookings have unattached hotels. What Fare Audit does is, when we get your PNR, the same moment it's booked, [the traveler gets] an email that [says] he has this trip to L.A., but there's no hotel. Company policy is that he's got to book his hotel through the online booking tool or the TMC. We can then check his record the day before departure to see if he did it, and then report those who did and those who didn't.
The second example is, you book Kennedy-L.A., but you book the Hyatt, and it's not preferred. You get an email: 'We see you book the Hyatt Hotel in Hollywood. It's not a preferred hotel. The Hilton is preferred. It's 0.3 miles away. It's $50 less per night for a four-night stay. That's a $200 incremental cost. Please change to the preferred hotel.'
When it refers you to which hotels are preferred based on the city, it will look for five miles in L.A., one mile in San Francisco, a quarter of a mile in New York City. It's not just a random radius for every city. The client determines the radius based on the city metrics. if you booked it non-preferred, it recommends you to a preferred in the same category.
The last example is, the client has [last room availability]. And when we audit the PNR, it's the preferred hotel, but it's not the preferred rate. In that case, our system emails the national account manager and says, 'This account has LRA, please fix this rate.'
BTN: In addition to auditing direct website fares, what else is or will be enhanced for the product?
Menkes: The other [new] audit that we do is compensation for delayed flights to Europe. That's in the PNR audits page. That's an EU law that's been around for a while. If your flight's late by more than three hours, the airline has to pay you.
BTN: Do you audit only corporate clients, or do you do so for TMCs, too?
Menkes: We do audit TMCs for that lowest airfare quote and booking the right hotel. But we don't take TMCs as clients for audit other than for the big TMCs. We can audit their hotel directory for the year. … But if an agency says to us, 'One of my clients wants to be audited, can we pay you to do the audit?' I say, no, the client has to pay us. We can't be paid by the TMC to do the audit. The only work we do for TMCs is rate validation that their consortia rates are in fact available for sale for the current year.
BTN: How does Fare Audits make money?
Menkes: There is a monthly fee plus a per-PNR fee, but it's not tied to savings.
BTN: Anything else new coming this year?
Menkes: Sometime this year I think we'll move from GDS to some carrier direct APIs.
BTN: But you'll still audit the airlines you don't have the relationships with via the GDS?
Menkes: Yes. For the major [global] airlines and the larger TMCs, we're going to work on APIs instead of the GDS.