<B>ACTE Raps To World Beat</B>
<I>Corps. Cut Through IATA Haze, Talk Global Travel Shop</I>
<I>Amsterdam -</I> It is not every day that the exploits of eminent rap artiste Puff Daddy are examined during high-powered debates about the future of travel management. However, Mr. Daddy (or 'Tough Daddy,' as one panelist incorrectly called him) earned a dramatic citation during the session on corporate client identification codes at the Association of Corporate Travel Executives global convention here on Oct. 22-24.
In one of the most highly charged and vociferous pow-wows of the entire event, Joseph E. Seagram & Sons director of global travel management Earl Foster said he would fear for the safety of such celebrities as Mr. Daddy if the International Air Transport Association went ahead with plans to introduce ID codes for corporate clients. (Puff Daddy is on the roster of artists at Seagram's Universal entertainment subsidiary.)
IATA is planning to introduce the codes on a voluntary basis once it has received approval from the the U.S. Department of Transportation--although this now is thought unlikely to happen until some time after the Clinton Administration has been replaced.
The travel management community has been split by the codes proposal, with supporters saying they are the key to gathering fully comprehensive management information; critics believe the data will give too much power to airlines and also would pose a security risk.
It was the security question that particularly worried Foster. "Every travel manager in this room should be terrified of this," he said. "If I were your CFO and you signed up for this, I would terminate your contract on the spot. My chairman is also chairman of the World Jewish League. Guess what? He's a target.
"I've got Puff Daddy. He wants to shoot people; people want to shoot him. I don't want people to know where he is. If it is in IATA, all I have to do is slip someone into the organization--bang, I've got the information," Foster said.
Numerous speakers voiced security fears during the session, from which two key conclusions implicitly emerged. The first is that there is already a great deal of data about corporates flying around various travel industry systems and the ownership and confidentiality of that data is a subject that the industry needs to address, regardless of whether the codes are introduced. The second is that few people, if any, fully understand the technicalities of the codes and the true vulnerability of the information they would generate. More than one travel manager expressed the opinion later in the conference corridors that it is a subject that merits detailed objective investigation, possibly under the aegis of ACTE.
The session started with British Airways senior manager for global dealing Arne Kleversaat extolling the potential virtues of ID codes, which, he claimed, would surpass all other air tracking mechanisms in sophistication and reliability. Advantages include revenue matching of 95 percent to 100 percent of the data, compared with 75 percent to 99 percent matching for other methods, plus availability of pre- and post-trip information. It also would be free and easy to manage. "Security is for us fundamental," Kleversaat said. "We do not want to share our bookings with anyone else in the travel industry."
Cindy Heston, worldwide corporate travel manager for Thomson Consumer Electronics, speaking for the codes, said security is a problem anyway with all the information swimming around Airlines Reporting Corp. and the global distribution systems, and that the codes only would improve her information and administrative processes.
Following Foster's criticisms, BTI UK managing director Mike Platt attempted to find some balance, arguing that the codes could be "the Holy Grail of measurable flown revenue," but that the hidden agenda of data control and security needed to be resolved. "The protection safeguards are not there at the moment," he said. "Can we rely on trust in this area?" Platt added that many large travel agents disliked the codes because they were fearful of losing a major unique selling point: controlling data on behalf of clients.
On the other hand, smaller agents might like it because it arguably gives the corporate buyer the ability to use different agents in each country instead of having to employ a single global entity to ensure data consolidation.
The BTI UK boss concluded by arguing for IATA to provide more detailed proposals on regulation, policing and control, which would allow the introduction of what might prove a valuable new tool. Kleversaat responded by saying BA is committed to work on greater transparency over this issue and to identify any potential security leaks.
<B>Europeans Focus On Delays</B>
European Community director general of economic regulation and air transport Frederik Sorensen told attendees that these are the best of times for corporate traveler buyers, "if you are prepared to pay through the nose."
Addressing a general session audience, which included most of the 300 business travel buyers and 700 other professionals from 25 countries here, Sorensen talked about competition, air traffic control and passenger rights.
He also offered a point of information regarding the debate over the IATA client codes, noting that rules that have been on the books for quite some time now stipulate that corporate ID numbers cannot be included in management information data tapes that airlines sell.
Sorensen said air liberalization is here to stay in Europe but for it to truly succeed, low-cost carriers will have to be strong. He anticipated some mergers among those carriers to solidify their positions. Sorensen said the development of the air traffic control system is lagging behind and "delays are now at an unacceptably high level." To address that, the 15 EU members, plus Norway and Iceland, are "creating an organization that can make decisions effectively for a better system," he said.
Among the steps he intends to pursue to improve the situation in Europe are to encourage moving short- and medium-haul traffic to second-level airports, create a European Air Safety Agency to oversee airworthiness and safety and to promote transatlantic and central European common aviation areas.
Sorensen expects 11 countries in central Europe to sign off on language for a multilateral agreement next month and for the common aviation area to be ratified by next year. Regarding passenger rights, he said denied boarding compensation already is in place, but that the European ministers of transport are committed to changing the current conditions of carriage that hold passengers to a contract, but not the airlines.
<B>Rosenbluth Stirs It Up</B>
What was billed as a 10-minute introduction turned into a 25-minute speech that had attendees buzzing for days about agent shortages, CTDs andHal's loopy delivery
<B>Dwelling On Data</B>
Speaking on a panel that addressed corporate card programs, Visa International's Adrian New gave some good baseline advice: Keep it simple. On information, for example, he said, "Don't ask for eveything, think about what you really need or you're going to drown in data."
Management Alternatives Inc./MSIG U.S. president Carol Salcito advised both buyers and suppliers to do their homework. "We've seen suppliers go in on a bid for a company with which they already do business," said panel moderator Salcito. "Travel managers as well need to be sure they know what's available in terms of such features as liability and insurance, before they attempt anything on a multinational scale."
Speaking to credit losses, which hurt card program rebates, participants said the cultural norm in the United States of paying by check rather than, as in Europe, deducting from a bank account drives higher losses in the United States.
"In the United States, people just leave--much more than in Europe," said Thomas Faller, global travel manager for Asea Brown Boveri. Agreeing that the United States has the worst reputation for losses, Diners Club senior vice president Gene Couch noted that losses are on the rise worldwide.
"Credit card losses are one of the United States' greatest flaws" in T&E management, said Salcito.
<B>Managing Travelers, Not suppliers</B>
The most essential aspect of travel management is not negotiating supplier deals but altering and improving traveler behavior. So said Ericsson Radio Systems vice president of business control and finance Jan Ogrem, one of two finance directors giving their take on travel procurement in a session entitled View from the Top on the Bottom Line. Ogrem said Ericsson is leveraging average discounts of 45 percent on its travel spend, which is just as well considering that travel currently costs the company $600 million per year or 2.5 percent of its turnover--and it's growing 15 percent every 12 months. "The discounts we achieve are not to do with global agreements, they are to do with cultural change," he said.
Senior managers at Ericsson, said Ogrem discuss travel issues "a lot when we get into recession and we have a crisis over savings."
Rockwell finance chief Tom Rosenwald said that in seeking buy-in in Europe for deals mainly negotiated for U.S. travelers, "The key thing is to make them realize that they are doing what is best for all of Rockwell," he said.
<B>ACTE's Global Vision</B>
ACTE's board of directors has decided to establish an office in Singapore and to hire an association management firm, Integrated Meetings Specialists, to support BTI Singapore's Peter Choo, chairman of ACTE's four-person Asia/Pacific council, in producing eight educational events in the next year, with one to be held in Australia, one in Japan, three in Hong Kong and three in Singapore. ACTE plans to grow its current membership base of 70 in Asia today to 300 during the next three years.
ACTE gave its Global Vision Award bowl to eight members of the PricewaterhouseCoopers global travel team, including leader Jim Lennon, for combining and creating procedures for global travel management.