After nine months of preparation, an eleven-member steering committee of veteran travel managers officially birthed the Corporate Travel Department Associationearlier this month with the election of its first board and creation of a list of objectives.
The not-for-profit trade association, incorporated in New York and registered with the Internal Revenue Service, was formed to help the Airlines Reporting Corp. grow the base of designated CTDs, from the current 130 entities with 150 locations, as well as provide a forum for the travel managers to share best practices and benefit from supplier-negotiated pricing just for them, according to the group's first chairperson Kathy Hall-Zientek, manager of travel services for Moog Inc.
The association was formed a decade after ARC accredited Republic National Bank's then travel manager Andy Menkes, now with Partnership Travel Consulting, as the first CTD with the ability to "receive all commissions directly from the suppliers and outsource any and all services to one or more travel agencies or travel suppliers. The difference between a CTD and a travel agency," Menkes said, "is that a CTD is a purchaser of travel; a travel agency is a seller of travel."
At a CTD conference this month in Carlsbad, Calif., participants elected Belinda Borden, travel center manager for the University of California Los Angeles, first vice chair; Angela Francisco, global director of travel, meetings, events and expense solutions for Constellation Brands, second vice chair; Jim Savarin, manager of corporate travel services for Munich Reinsurance America, treasurer; and Teresa Asbery, Wal-Mart travel manager, secretary.
Other board members include Cheryl Benjamin, Dart Container travel manager; Merce Guirado, Grifols corporate travel manager; Cheryl Looser, National Federation of Independent Business corporate travel manager; Paula Murray, Event Solutions International travel manager; Jan Overstreet, Unum Group travel manager; Bill Ustaszewski, Massachusetts Institute of Technology travel manager; and Dona Vinall, Law School Admission Council coordinator of travel and meetings.
During months of teleconferences and meetings, the steering committee identified "help[ing] grow the CTD model and work[ing] hand-in-hand with ARC to do so" as the first priority of the association, Hall-Zientek said. By the end of 2009, she hopes the number of CTDs will grow to 200.
One of several ways the new association hopes to achieve such growth is by "getting more visibility to the suppliers" of the existence of CTDs, Hall-Zientek said. "It's a market where the average airline spend is $1 million to $2 million, so it's not like a huge travel budget, but as a group, it's over $1 billion of volume. So there is some buying power."
A number of suppliers, including travel management companies and technology providers, have expressed interest in "doing special pricing just for CTDs," Hall-Zientek said. "We're interested in developing a preferred supplier pricing."
ARC said the annual airline sales from CTD operations total more than $1.1 billion. Since 1998, ARC has accredited a total of 233 CTD locations. Currently, 150 locations are active and reporting. After CTD applications plateaued in 2006 and 2007, ARC thus far in 2008 has accredited 13 entities and 19 locations with a few more applications pending, which "definitely is an increase," according to ARC vice president of marketing, sales and customer care Mike Premo.
Premo said he "encouraged CTDs to form an association of their own as the people who care most about CTDs are the CTDs themselves. When dealing with the broader community--buyers or suppliers--they're going to pay more attention to Wal-Mart, Moog or other CTDs" than ARC or other suppliers. Premo said he has "felt for some time that the value proposition gap of being a CTD versus being served by a TMC has sort of closed over the past few years" and the "decisions are harder to make" for some corporations. "Whatever the economic advantage ... having the CTD Association as the voice for that is much more meaningful."
The 50 CTDs who met earlier this month also agreed on the need for "some venue to develop best practices and network. It takes someone with a lot of corporate travel experience to start a CTD. It's usually very seasoned travel managers, those at the top of their game. We wanted a venue where we can talk and learn from each other," Hall-Zientek said.
For now, CTDA membership is restricted to ARC-accredited CTDs, but a supplier category may be considered later, Hall-Zientek said. Potential members must submit their ARC-appointment letter along with the application and dues, she added. For the past two years, ARC has actually hosted the annual CTD meeting begun by Menkes. ARC will continue to facilitate, Premo said, but it should be the CTDA's meeting.
Once revenues from the $150 a year membership dues roll in, Hall-Zientek said, the association plans to launch a Web site and electronic forum as the base of that communication. On the "wish list" is a mentoring program to align CTDs by air volume to allow them to discuss best practices or other issues. For now, such mentoring will be offered on an ad hoc basis, but the association expects to formalize that once the Web site is developed. Members also plan to craft educational programs on the benefits of CTDs.
"What seems to lack with the current CTD model is that there is no perfect model," Hall-Zientek said. "One of the biggest things we discussed is that we have nowhere to go to find the right mix" of which travel management functions to insource or outsource.
CTDA secretary Asbery said, "It is my hope that in the coming year we can establish the foundation for the new organization, creating an awareness within the corporate travel community that increases the interest" in the CTD program "and showcases the flexibility and benefits that the accreditation offers to managed travel programs of all sizes.
"Those responsible for travel programs are uniquely positioned to directly impact the expense line for their companies, and, as such, they have a responsibility to explore the alternatives for travel program management offered by the CTD accreditation," Asbery added. "The travel program responsibility can seem overwhelming at times in such a dynamic industry, leaving some feeling that they don't know where to start or who to ask for assistance. I'd like the CTDA to become that resource within the travel industry."
By serving on the board, first vice chair Borden said she plans to further the association's goals of "promoting common business interests, ongoing support and knowledge sharing with accredited CTDs, but also to network with other corporate travel managers and share with them the reasons why the CTD model works for us."
Also at the meeting, ARC gave its third "CTD of the Year" award to Hall-Zientek "in recognition of her contributions to the CTD community and her leadership in the formation of the CTDA." A 35-year industry veteran, Hall-Zientek manages travel for defense contractor and precision control components maker Moog. A CTD for eight years, Moog's 2007 air volume was $8 million but will likely rise to more than $10 million by 2009 due to acquisitions. Previous award winners were former Wal-Mart global travel manager Duane Futch and Apple's Americas travel manager Sherry Reese.