Jack Reynaert is a travel management lifer. His father managed travel for Ford Motor Co., so the work is in his blood. With a career that spans airlines, car rental companies, global distribution systems and travel management companies, Reynaert now carries the torch as global travel manager for commercial vehicle supplier Meritor, headquartered in Troy, Mich.
About 2,400 of the company's 8,600 employees in 19 countries travel. Reynaert is behind those travelers all the way, with a program management model he calls a Corporate Travel Department hybrid. "It's more than having an ARC number and working as a rent-a-plate," he said about his program.
Meritor partners with Direct Travel for certain agency processes. "We get key TMC services like midoffice and backoffice and debit memo management. The TMC has economy of scale for all that," said Reynaert. Internally, however, he runs what feels like an in-house agency for Meritor travelers, but it goes beyond travel. The team manages everything from bookings—mostly through an online booking tool but also via live agents—to servicing travelers while they are on the road, administering payment card programs and supporting travelers through the expense and reimbursement process.
He's done it, he said, by taking control of his travel management strategy and, even with a midsize travel program, forging direct relationships with suppliers, including tech providers like Concur and Travelport that most similar-size programs would access through their TMCs. The payback for forging this path, he said, is autonomy, agility and better service for his travelers. It also gives him more control over Meritor's bottom line.
Meritor has specfic commercial agreements with Direct Travel to cover costs for key services. The partners account for hotel commissions, GDS commissions and airline overrides. Meritor's share of those monies—combined with payment card rebates, dining rebates through Dinova and other revenue streams like value-added tax recovery—fully cover the costs of running the program. Plus, he said, pushing all Meritor travel through his internal team realizes additional service and savings. "You have to look at the service our agents provide and how that also avoids fees," Reynaert said, citing voided tickets, negotiating through no-show fees with partner hotels or expediting new payment cards to travelers whose numbers get compromised on the road. "Our team understands all the extenuating circumstances, and when talking one on one, many of our travel partners are very willing to work with us to manage those kinds of costs."
On the service side, Meritor travelers have a one-stop-shop to call for help, rather than calling around to multiple suppliers when they need assistance. "If our services weren't all encompassing, travelers might not be able to exercise some of those benefits," said Reynaert. "Ultimately, if you can service your travelers to that level, they remain focused on why they're traveling and not focused on the mechanics behind their travel."
Digging into Details
Meritor's self-sufficient framework allows Reynaert to dig into program details that he might not control in a traditional TMC relationship, in which GDSs, booking technology and other program elements can feel more like a package deal. "Some TMCs fight to be more in control; I think all travel managers have experienced that at one point or another," said Reynaert. "Direct Travel has been a great partner in supporting our strategy."
That strategy involves a data-driven approach to globalization and favors the support of multiple TMCs over a single provider. Brazil and Europe are carveouts for local and regional TMCs; travelers in India, Singapore and Japan have access to optional TMC services in market. In some regions, Meritor skips TMC support altogether. This may be where Meritor's program offers its most interesting departure from the norm.
In Australia, Canada and Mexico, Reynaert has tweaked his Concur booking tool settings to create a U.S. point of sale instead of working with a local TMC. He has shared the model with peers. "That hasn't made me popular with some TMCs, but it's a practical solution that simplifies our program in certain regions and definitely drives savings," said Reynaert.
In Australia, for example, TMC fees on international flights could climb as high as $200. By giving travelers Meritor's established U.S. point of sale through the Concur booking tool, Reynaert bypasses those fees but keeps travelers in the program. "We don't get the point-of-sale discount [from a TMC]—that's usually 1 percent or 2 percent or maybe up to 5 percent—but because we don't have to pay the fees, we still come out ahead," he said.
At the same time, Reynaert readily admits that U.S. points of sale have some drawbacks in foreign markets. The most obvious is the absence of local content. "Local low-cost airlines, in particular, may not be in the GDS, and there are web fares that may not be available to a U.S. IP address," said Reynaert. That reality could result in paying higher fares because the most economical options may not be presented at the point of sale.
What's Travelfusion?
For corporate buyers who don't live and breath travel, the name Travelfusion may not mean much. It's a travel content aggregator that basically works as an intake valve for many travel suppliers that don't participate in larger global distribution systems like Amadeus, Sabre or Travelport. These may be low-cost carriers or independent hotels that prefer to operate and distribute their content in market. It also could be larger suppliers that have differentiated their channels and offer certain fares or opportunities only in low-cost channels. GDSs tend not to be considered low cost, so a content partnership with a GDS may not deliver this specialized content. It's becoming more common for travel management companies to consume aggregated in-market content from providers like Travelfusion. It's less common for a corporation to get this content via a technology relationship as Meritor does. But here's the real point: If you don't know the sources of your travel program content, it's time to find out. Who knows what you could be missing?
For that reason alone, most companies would default to a TMC to ensure access to local content. Instead, Reynaert leaned on his Concur relationship to pipe content into Meritor's booking tool via aggregator Travelfusion. With that in place, said Reynaert, "we've also seen our average ticket price go down," in the Australian market. "It's kind of a double win."
Australia offers an easy case, but Reynaert points to Switzerland and Japan as two other markets with similarly high airfares and commensurate TMC fees that could benefit from such tactics. He's quick to note, however, that a U.S. point-of-sale model in foreign markets realizes more than savings. It also delivers no-cost servicing flexibility for travelers in these locations.
Reaching Beyond Savings
To understand the service benefit, travel buyers need to know a bit about airfare payment and settlement methods. There are two major payment and settlement companies working within the managed travel ecosystem. Airlines Reporting Corp., or ARC, settles payments for U.S. point-of-sale purchases. The International Air Transport Association's Billing and Settlement Plan is the other major provider for airfare purchases globally.
By leveraging a U.S. point of sale in foreign markets, Reynaert also switches settlement providers from IATA's BSP to ARC, where settlement times frames are different. "ARC's settlement times are 5 p.m. the next business day following the transaction," said Reynaert. "That's a time frame when a lot of things can happen: The client changes the meeting. Employees are trying to align their flights. Travel plans can change. They have to go to a Plan B even though they've already booked their flights. From a service perspective, if we can turn around and void that ticket or avoid a cancellation penalty, that's really going to help us."
Reynaert said such changes happen as often as 25 percent of the time on the 75 percent of Meritor's travel volume that goes through the ARC settlement process. The more volume Meritor can drive through the U.S. point of sale, the more benefit it can derive from ARC's longer settlement window. While it's not a reason to push a solution to a market where it's not a good fit; it adds to the overall appeal—both for travelers and for Meritor.
For now, Reynaert has implemented the U.S. point of sale as the go-to travel management model in Australia, Mexico and Canada, but it's also an option for travelers in India, Japan and Singapore. "We want to deploy the model where it makes sense," he said. In the three Asia locations, travelers have the option to use a local TMC but may find better choices through the U.S. point of sale depending on where their travel is taking them. "We can steer them to the best channel based on our data," said Reynaert.
A Common-Sense Alternative
ARC EVP & chief commercial officer Lauri Reishus sees potential for other travel buyers in Reynaert's outside-the-box thinking. Especially for midsize companies pushing into global markets, Meritor's model offers a common-sense alternative to contracting with TMCs for locations where travel volume may not be vast but where travelers should still benefit from being part of the managed program. "What I like about Jack's program is the transparency and simplicity he is bringing to the table," she said. "As the [managed travel] industry becomes more global, you begin to wonder how much complexity is a legacy of the way we have always done things. Jack is pushing the envelope and doing so with full transparency to his TMC and airline partners."
Reishus reflected on ARC's own recent growth as a sign of travel suppliers' increasingly global view. "For decades, we had about 150 airlines participating in ARC because it was limited to those with service in and out of the U.S. In the last few years, we've added about 100 airlines with no U.S. service, but they want access to the U.S. agency community." Reynaert's approach to ticketing and processes operates with a similar global viewpoint, said Reishus. "I don't know if other buyers will adopt it, but it's definitely thought provoking."
For Reynaert, it's a model that works and a tool that he can implement efficiently in the right markets. It's enabled by his direct technology relationships, which are key for his entire program. "It's like a lot of these new technologies like Yapta or content providers like Booking.com. You can rely on your TMC as a reseller, or you can go direct. You can do the same with all the technology providers," he said, "and build a program that offers the best end-to-end experience."
Will other buyers go this route? Can they? "There are a lot of skilled individuals our there who know all these elements and could experiment with similar strategies," he said. Even so, it feels like a risk, as it is a road less taken. It wasn't an easy model for Reynaert to sell internally to Meritor, but his experience led the way and he proved it could work. "I am fortunate to work for a company that supported this vision," he said. "My goal is to drive costs down and drive service up. I want travelers to get the most value from the travel dollars in their budgets and to offer a program that keeps them focused on their business purpose."