Profiles In Travel Management: Defense Contractor Insources Travel Through Rent-A-Plate Arrangement
Company: Titan Corp.
Headquarters: San Diego, Calif.
Annual U.S. Booked Air Volume: $20 million
Number Of Frequent Travelers: 5,000
Corporations that expand rapidly through acquisitions often find that each organization that joins the fold has a unique travel program with its own policies and suppliers, inhibiting consolidation and effective management of the company's total travel spend. Titan Corp. confronted this challenge by bringing together more than two dozen disparate travel programs through the creation of a companywide rent-a-plate-style travel program sponsored by Westerville, Ohio-based travel agency Travel Solutions.
A defense contractor that is rapidly expanding, Titan tripled its sales and number of employees in the past three years though a series of acquisitions, ending 2001 with 11,000 employees in more than 50 countries served by more than 25 different travel agencies. Titan CEO Gene Ray recognized that every moment the travel program was not consolidated meant wasted money, so last year the company created an in-house travel management firm, Titan Travel, under the sponsorship of Travel Solutions.
Titan Travel's entire travel program is insourced, with the exception of emergency call centers, which are provided by Travel Solutions, and Airlines Reporting Corp. bank settlement, which goes through a Travel Solutions ARC number, but is settled through Titan's own ARC bank account.
"Travel Solutions created the sponsored model so companies have an option that lays somewhere between a rent-a-plate and a CTD," director of travel services Leigh Kramer said. "In most rent-a-plate arrangements, clients use the agency's global distribution system and reporting tools, but we have our own GDS contracts and reporting tools, and payment for ticketing goes directly from our own ARC account to ARC."
Titan's model is similar to an ARC-accredited Corporate Travel Department because it handles so many things in-house, but there are some differences. "Titan is set up operationally just like a CTD," said Tammy Troilo-Krings, chairman of Travel Solutions Inc. and CEO and president of its sister consultancy Troilo & Associates Inc. "But with a CTD appointment, your data is completely exposed to the carriers by virtue of your dedicated ARC number. With the sponsored model, company data is protected because the company uses the agency's ARC number." Titan's use of Travel Solutions' ARC number also limits its liability on ticketing stock.
Mike Koetting, senior vice president at St. Louis-based TQ3 Maritz Travel Solutions, said that any arrangement where a company rents an agency's ARC number could be considered a rent-a-plate agreement. He added that the number of rent-a-plates seems to be dwindling. "We have a shrinking handful of clients using rent-a-plate agreements. Many of those clients are going for full CTD designations or they are opting for full service relationships with the agency. Rent-a-plates were more popular in the past, because companies wanted a measure of control over their travel programs, and the CTD designation was not yet available."
However, Troilo said Travel Solutions has more than 50 clients on its sponsored model.
Titan Corp. began rolling out Titan Travel in January of last year, just two months after Kramer joined the company. The groundwork already had been laid by Ray in late 2000, when he contacted Troilo and Associates to learn more about the company's unmanaged and rapidly expanding travel program. "Gene didn't know much about the travel program, except that they were spending a lot on air travel, and that costs were going to continue to rise as the company expanded," Troilo-Krings said. "They were in a huge growth mode. We figured they were spending $8 million to $9 million in air. Gene thought they were spending $2 million to $4 million."
The first recommendation Troilo-Krings made to Ray was that he hire a dedicated travel manager, advice he followed by bringing onboard Kramer, who for nearly 20 years worked at San Diego-based travel management company Balboa Travel, most recently as director of business development.
Creating an in-house travel department requires especially high levels of executive support because of the substantial investments involved in labor and infrastructure. In 2001, Titan hired 12 call center agents, two operations managers, plus one ARC/reporting specialist and made significant investments in call centers in San Diego and Virginia Beach, Va. The company also bought reporting software from Roswell, Ga.-based Hi-Mark.
With the investment, Kramer said, comes the expectation of significant return. "The goal internally is to have the cost of travel management be significantly less than if we went with an agency," she said, "and we have definitely met that goal. Our internal transaction fees are lower than the industry average, and we don't have any travel agency service fees."
By April 2001, Titan had phased out existing travel agencies and consolidated more than 3,000 new traveler profiles. Immediately after all travel was consolidated, Kramer competitively bid the airline contracts and credit card program, eventually deciding on Diners Club. Titan awarded its car rental business to Avis and San Diego-based RFPExpress helped create its hotel program.
This year, Kramer has updated a new Titan intranet site for travel services, which is linked to TitanNet, the employee home page. Her other plans for 2002 include implementing an online booking tool in the third quarter. "Titan continues to grow and acquire companies," she said, "which means that travel department will continue to grow."