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One of the trailblazers of global travel
management and the architect of the follow-the-sun concept of having one
agency, one global distribution system, one online booking tool and one credit
card, with operations consolidated through international service centers, Bob Feltre recently retired as head of
travel procurement for General Electric. Feltre, who worked for GE for 36 years
and spent more than 20 of those driving multinational travel management
efficiency, spoke with BTN editorial director David Meyer.
When I first learned of the follow-the-sun concept, I heard soon after
that the agency in question actually was following you.
When we started it 20 years ago, there was not a lot of
globalization. The agencies were still in their infancy. We leveraged all of GE's
spending across the globe to get prices that are not available otherwise. That
is what allowed us to go global as fast as we did. It was not easy.
We were using Carlson [Wagonlit Travel], and about 15 years
ago I also did the Sabre contract rather than just using the travel agency.
That really took the veil off of what was behind the agency's operational
strategy. We took that contract over and used Sabre as our engine to drive the
global expansion. We would tell Sabre and Carlson what we were looking for and
together they would figure it out.
The two big themes that I have seen in 20 years were the consolidation of suppliers and the embrace of technology in this industry. When Sabre introduced their BTS online booking tool and mentioned that deals were going to be loaded into the computer, we jumped at that. That really changed the industry and how I could negotiate contracts: I could build complexity into the deals.
When you started your globalization effort, all you had was a single
agency. How did you get started?
We built on the success we had in managing
travel in the United States. A lot of the financial people, CFOs and the layer
just underneath them, had experience with GE travel operations in the United States
and asked if we could bring that to them. So the door was already opened, and
we kind of planted the flags with Carlson. Before we would open up the shop [in
other countries], we would make sure they had Sabre in there, especially when
we consolidated. Initially in Europe, we did it country by country. We saw how
expensive that was and how hard it was to drive the standardization we were
trying to drive. We talked with Carlson about establishing a regional service
center, and we picked the place, which was Warsaw, Poland. We also got Sabre
involved, which at the time was a small player in Europe.
What year was it when you first had the one agency and one global
distribution system scenario in place?
It was 1997 or 1998. We did the United States
and Canada first, and then we did all of Europe. And when we saw that was
working, we said 'Let's work on Asia,' which we could never really consolidate.
A couple of countries we were able to bring in, but because of GDS problems and
regulations, that has always been a challenge. We also worked on Latin America
at the same time and it also has been a challenge. Today, there is a big
operation in Brazil, and other South American countries are handled out of a
facility in Mexico, except for smaller countries that today are being handled
out of the United States.
In Latin America, are language differences the number-one problem?
There are language barriers, but I would say the
airlines and the content in the GDS are problems, as is culture. They are very
independent. That was the area we had to leverage most. In the last three or
four years, we have been doing the Middle East and Africa. Part of the
challenge is when you are dealing a lot with affiliates. When you have an owned
agency, it's different from the franchisees or the associates. Until recently,
we did not do the Middle East and South Africa for that very reason. Our
experience is that when you are dealing with associates, it doesn't work.
Was the advantage of negotiating a direct contract with a single GDS mostly a financial one, or were there service advantages,
Both. We were able to really leverage the
service side of it for a cost advantage and for consistency in a better product
for our services. Our focus was to drive the cost of the transaction down. We
didn't think the money was in the travel agency anyway. It was in the travel
suppliers. So we focused on building a process that would allow us to get best-in-class
prices from suppliers.
Were you able to implement follow-the-sun quickly?
That took us a while. With follow-the-sun, in
going from the United States to Europe, we had to deal with some additional
rules and regulations like having to put ticket printers in every country even
though we were centralized. As they matured, we were able to put in place the
same process that we had in the United States. Then we tried to pick off the
countries in Asia that were more readily available to consolidate by country. When
we went to China, we put a center in one spot and all the businesses would use
that center. In Australia, it was the same type of thing. In Russia, we don't
have anything we can call a GE travel center. They are outside what we do, even
though they have some travel agencies that we work with to establish best
How would you advise those looking to manage a multinational program?
Your agency is your partner. I see people look to take bids in this area to save some money, but that is not where the money is. It is with the end suppliers. Use the agency, and build a good trusting relationship and stick your nose into the GDS and find out what's going on. Also use one credit card. For hotel data, the only thing I could really use was the credit card data. We would marry that with the agency data and Concur expense data. I would have 100 percent, or at least 98 percent of the data with the card, but with the agency, I was only getting 40 percent of the hotel data, as travelers were not required to book through the travel agency.
This report originally appeared in the April 20, 2015, issue of Business Travel News.
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