PwC Takes On ARC's CTD Designation

<B>PwC Takes On ARC's CTD Designation</B>

By Megan Hjermstad

PricewaterhouseCoopers this month received Airlines Reporting Corp. accreditation for a Corporate Travel Department--the first large company to do so. PwC, which was ranked second among BTN's Corporate Travel 100 (BTN, Aug. 28), with a 1999 U.S. booked air volume of $370 million, affirmed the viability of the CTD option for companies with travel volumes of any size.

"A prestigious firm like PricewaterhouseCoopers sends a clear message that the CTD option is something everyone should take a look at," said Barry Lemley, ARC director of accreditation and database management. Lemley added that PwC should further promote the practice because many companies also rely on the consulting firm for advice.

The CTD program has seen slow but incremental growth in the past six to nine months, as ARC has been out talking to more industry players. PwC is the 58th company to become a CTD and ARC is looking to double that, with roughly 60 companies, including some among the Fortune 100, in various stages of the process. Fairfax, Va.-based American Management Systems, with approximately $17 million in U.S. booked air volume, also is set to receive CTD accreditation in December.

Meanwhile, Washington, D.C.-based International Monetary Fund currently is determining whether its requirements match up with ARC's CTD requirements. Caro Cook, IMF senior transportation officer, is investigating the CTD in addition to putting her agency business out to bid in anticipation of another commission cut and ensuing agency fee hikes.

Andrew Menkes, the first travel manager to receive ARC accreditation, said the addition of PwC to the program is "wonderful; it adds credibility to the program. It will cause the major corporations to realize it is a best practice, given the way the industry is moving toward transaction fees." Menkes said the only thing that will be different for PwC is the flow of volume: "It shouldn't be different for them in terms of incremental cash flow."

According to Stephen McCarthy, president of The Corporate Travel Department Co., the San Ramon, Calif.-based consultancy, the percentage of savings is the same for any size corporation. McCarthy said CTDs can expect to save $80,000 for every $1 million spent. "The savings will be reflected in the volume no matter what the size," said McCarthy.

Mark Williams, Americas travel leader for PwC, said in addition to cost savings for the company and its clients, he anticipates having more control and getting better data by having a corporate ARC identifier. Williams also foresees that the CTD will facilitate opportunities for direct connections.

McCarthy said that indeed the CTD arrangement allows companies to own the relationship with airlines, hotels and car vendors, which really is what the vendors want.

Williams hopes to streamline reporting by implementing the Interactive Agent Reporting electronic sales reporting system. Currently, more than 90 percent of CTD locations are reporting sales using ARC's latest IAR electronic sales reporting technology.

PwC, which last year consolidated domestically with American Express, may continue its relationship with the agency. Williams is uncertain what role Amex will play, and whether it will provide dedicated labor or the labor will be brought in-house.

One misconception with the CTD is that the corporation has to eliminate the agency entirely. "The CTD option does not mean having to insource everything," said Lemley. "It is a factor in the overall process." As agencies have unbundled services, companies can pick and choose which services to outsource, such as online fulfillment.

Williams said PwC by the end of November will select a company to do online fulfillment, although it is a couple of weeks away from making a decision on an online booking system. The company is considering TRX ResAssist in addition to GetThere and Sabre BTS, which are being tested in New York, Toronto and London.

McCarthy said hearing PwC talk about why they made the decision and the parameters within which it was made should increase understanding in the industry. He added that ARC has been very helpful in moving the process along, but is not providing enough communication and education about the CTD option. In fact, a recent Corporate Travel Department Co. survey found that 47.2 percent of the 882 corporate travel manager respondents are aware of the CTD program, compared with 25 percent who are not. However, only 25 percent said they understood the CTD program and its values, compared with the 42 percent that did not.

To help communicate and promote the program, ARC recently created a CTD advisory board, consisting of a dozen representatives from ARC-accredited CTDs.

"What we found in this market is a lot of networking goes on," said Lemley. "In its official capacity, the board will meet with ARC at least twice a year and act as a sounding board. In its unofficial capacity, the board will act as a source of information.