San Diego—The National Business Travel Association kicked off its International Convention & Exposition here last month by naming Michael McCormick as its new executive director and COO and ended it with Hilton Hotels director of global travel management Craig Banikowski becoming the new NBTA president and CEO.
In between, speakers and attendees discussed topics including a passenger bill of rights, association merger possibilities, fraud detection, private aviation and unbundled fees during what NBTA said was its third-largest convention ever, with 5,600 corporate travel professionals including 1,240 travel buyers.
McCormick, who came to the San Diego convention in advance of starting his new role under a three-year contract term Sept. 8, is building a strategic plan that will focus on the association's globalization, expanding its product and service offerings and growing NBTA's membership, which has hit record levels.
One of the areas of investment priority under McCormick will be the building of an international infrastructure to support NBTA's global ambitions. "You can't run a global organization from a central point," he said. "You need strong people on the ground in the regions managing the business, setting the tone, adapting the message for the local market. We are going to have to make those investments to be successful."
McCormick said he plans to run the association as a corporation, dovetailing the attitude brought to the organization during Kevin Maguire's presidential term, which ended last month. "I bring a different perspective because I am going to look at this more from a corporate point of view, like we're running a business," McCormick said. "This isn't a turnaround effort. This is building on a leadership position."
McCormick previously was executive vice president of Cendant's Hospitality & Leisure Group, which now operates as Travelport. While at Cendant, he served as president of the Lodging.com, Thor and WizCom brands. Prior to Cendant, he was COO of PhoCusWright, president of Biztravel.com and vice president of global supplier relations for travel management company Rosenbluth International, where he worked for 11 years.
He was selected from a 25-person candidate pool of association executives, business travel industry professionals and others, according to NBTA Allied Leadership Council president and Dav El Chauffeured Transportation president and CEO Scott Solombrino, who headed the search committee.
The hiring was unanimously approved by the search committee of Solombrino, Carino Collection's Joe Carino, Banikowski and board members and travel buyers Dianne Bradley of Tokyo Electron, Gary Polito of Bose and Shelly Lewchuk of Canadian Natural Resources.
McCormick replaces Bill Connors, who left the association this spring.
Banikowski, who ran unopposed, took over from University of Texas travel manager for intercollegiate athletics Maguire, who remains on the board as NBTA chairman and past president
(BTNonline, Aug. 17). In addition, Monsanto travel manager Jim McMullan began serving a two-year term as association vice president.
"I'm not opposed to a passenger bill of rights," said Continental CEO Larry Kellner, fresh off the latest tarmac fiasco that left 47 passengers stranded overnight on a runway in Rochester, Minn., on a Continental Express flight operated by ExpressJet. "What I'm opposed to is a passenger bill of rights that writes rules nobody can follow." With pressure from Washington mounting and NBTA reversing its formerly anti-bill-of-rights stance, Kellner—during a general session panel discussion that also featured Southwest CEO Gary Kelly—said, "Our performance in Rochester was unacceptable," but he noted that bill of rights legislation would not have changed the outcome.
Kellner said that although the carrier has processes in place to handle such situations, "what we found in this case is, those processes didn't work, and we're going to have to go back and rework those."
Kellner stressed that safety is the carrier's first priority, and noted that "only the pilot in command can deplane an aircraft, and so ultimately, that authority rests there."
Citing Continental's internal policy, Kellner said passengers are allowed to leave the plane if stranded on the tarmac for more than three hours "if we can do that safely. We're not going to put people out on a tarmac where there's lightning. We're not going to put people out on a tarmac where there's rain. If we can't get to a gate and we can't do it safely, we're going to take the PR hit, rather than ever encourage our people to take that risk."
Kellner said Continental developed a process at its hub in Newark to allow customers to deplane at the three-hour mark without turning the plane around to get out of line and back to the gate. "We have very few people who want to get off," Kellner said. "They're not happy about the delay, but they also need to get to San Diego or Vegas or Seattle, or wherever they're going, and so you've got that constant challenge."
Kellner noted that flights that experience such extreme tarmac delays are a tiny fraction of daily arrivals and departures, and he encouraged caution for legislators in implementing any bill of rights legislation. "We would not oppose legislation if we thought it was legislation that we could implement, and made sense, and didn't put stuff in place that we couldn't do, but we want to be very careful not to put legislation in place that causes people to think that there isn't any distinction between customer service and safety."
Southwest's Kelly seconded Kellner's sentiments: "I, for one, would be concerned about adding other layers of regulation, like Larry said, that can't be easily executed, and can actually conflict with safety."
With the conference getting underway, NBTA on Aug. 23 in an e-mail dispatch to attendees and members left little hope for meaningful discussions on a potential merger with the Association of Corporate Travel Executives—even though leaders from both organizations were in attendance. NBTA in the memo said leaders had yet to enter merger discussions, claiming the ACTE board "has refused to enter the financial due diligence process." The sentiment of the message was verbally rebroadcast in general sessions by Maguire and Solombrino. So far, the associations' attempts to combine have been fraught with starts and stops. After a handful of board members from each association earlier this summer reached an agreement that failed to get sufficient votes from the ACTE board
(BTNonline, June 22), ACTE in the weeks before the NBTA conference countered with a proposal that it claimed could gain the support of its board and international members
(BTNonline, Aug. 17).Though private aviation remains saddled with perceptions of corporate excess, the NBTA aviation committee during the convention unveiled a white paper to help corporate travel buyers navigate general aviation options to deploy private aircraft as a business tool.
The white paper detailed guidelines on which aviation options are ideal for various companies. For companies that would log less than 50 hours per year, the committee suggested using charter or jet cards; between 50 and 150, a fractional ownership program is likely to work best; a joint ownership option would be most effective for companies using aircraft between 150 and 200 hours; and if a company would require even more flight time, the best bet is to own its aircraft.
During an educational session, Mike Nichols, National Business Aviation Association vice president of operations, education and economics, said those guidelines serve purely as rules of thumb, as each option comes with limitations and costs and different companies use general aviation for different business missions.
Clamping down on travel and expense fraud could be a solution to help travel managers meet cost-cutting objectives from their management, expense tool supplier executives said during an educational session on fraud detection and prevention strategies.
Fraud detection catches not only egregious examples of T&E fraud—employees trying to expense their cigarettes, home patio furniture or a $5,000 family trip to Legoland—but also the more frequent instances of employees adding small padding to their expense reports, said Christopher Juneau, senior director of segment marketing for expense management supplier Concur. He pointed to a business traveler behavior survey last year that showed 10 percent of business travelers admitted to always padding their expense reports, and about half of that subset said they regularly added $50 or more to their reports.
The numbers could be higher this year, he said. "These are difficult economic times, and data shows that in difficult times, we get increases in fraud activity, employees trying to fudge or push their expense reports," Juneau said.
Cutting out those instances could go a long way in helping to meet the 15 percent or more mandated reductions in T&E expenses some travel managers are facing, he said.
Detecting fraud, however, is nearly impossible in a non-automated expense environment, said Craig Fearon, senior product direct for expense applications at expense management supplier CyberShift. He said he still sees even some large companies auditing by having 20 to 30 employees sit in a room and manually review mounds of individually filed expense reports.
"In a manual environment, there's no ability to trend or report on data, because you're dealing with a single piece of paper," according to Fearon. "You can get summary-level data, but you can't get down to the granular level that you need for an auditing environment."
Expense management suppliers, however, are reporting that the economy has motivated several companies to move away from manual expense reporting environments. Expense management tool ExpenseWire, part of Rearden Commerce, reported prior to the convention that despite the overarching cuts in T&E spending, the monthly amount expensed by its current customers has grown by 30 percent in the past year and its customers' report submissions have more than tripled since the middle of 2008. "Our high penetration affirms that the small business market is increasingly gaining confidence in software-as-a-service solutions," according to ExpenseWire CEO Andrew Vaeth.
Business travel buyer members attending the convention elected to three-year terms three NBTA directors at large out of a field of six: Thomson Reuters director of travel services Sharon Fogarty, MillerCoors manager of strategic sourcing Pamela McTeer and Atmel Corp. corporate travel manager Mark Ziegler.
Travel supplier members selected Concur's Juneau out of 11 candidates to serve a two-year term as allied member director at large.
Former U.S. president Bill Clinton as part of his address to convention attendees said the government should not be making policy concerning private business travel spending. "Let me point out first of all that this is an optional expense, and in hard economic times businesses will cut where they have to cut, but there is no point in going beyond that because people that have business enterprises are not in the habit of throwing away money," said Clinton. "They are going to invest in their employees traveling because they think it makes the enterprise more productive, more profitable and the government either in law or rhetoric shouldn't be second-guessing those decisions."
If every air traveler from professional services giant Deloitte purchased Wi-Fi access on every flight, it would cost the company about $700,000 per year, said Deloitte airline programs and customer service manager Katina Tryforos during a session on managing airline ancillary fees, citing the results of an internal study. Limiting such access to travelers with flights of two hours or more would cut that figure to between $400,000 and $500,000.
Tryforos noted the complexity of formulating and enforcing policy around ancillary charges for Wi-Fi access and checked-bag fees, given the difficulty of ensuring such use is for business purposes, and the problems associated with settling and accounting for such fees.
Airlines Reporting Corp. vice president of marketing, sales and customer care Michael Premo pointed to the Electronic Miscellaneous Document, a standardized filing that links to an electronic ticket and can account for unbundled or a la carte charges, as part of a potential solution for the settlement and reporting of baggage and other ancillary fees. He warned, though, that securing industrywide buy-in for Electronic Miscellaneous Documents and integrating the necessary technology will be complex.
"Implementing will not be a simple matter, as you need carriers, global distribution systems, back-office vendors, bank settlement plans or ARC and other third parties," Premo said. "We will be ready to support the EMD by about this time next year. It's not at all clear the status of the other parties."