To run a travel department using ARC's Corporate Travel Department designation, travel managers do not need to be longtime agency operations administrators or experts in the complicated processes of ticketing and settlement. But they do need to be into control. Few travel managers embody that characteristic as much as Wal-Mart global travel services director Duane Futch, who this spring addressed the Universal Air Travel Plan's Airline Distribution conference in Dublin.
During a speech in which he assigned Wal-Mart partial or total credit for, among other things, ending Northwest Airlines' doomed 2004 plan to add surcharges to global distribution system bookings and getting American Airlines to pick Shanghai over Beijing for its new China service from Chicago, Futch outlined some of what the world's largest retailer has done with its control.
"We have developed what I call a leading-edge method of connecting our offices," Futch told more than 200 attendees from more than 40 airlines. "Through [Sabre's] GetThere electronic self-booking tool, and the Sabre global distribution system, the bottom line is, we hold one ARC number. We have several pseudo-cities that we have created for each of the countries that we are doing business in. And that country maintains its own database of associates and individual profiles. It's very simple. They book in their own country. That record is then transmitted to [Wal-Mart headquarters in] Bentonville, Ark., where it goes into our systems there. It is e-ticketed there and then transmitted back to the local country and paid for in that local country currency through our UATP relationship.
"In addition, if an office is closed and an associate needs help, based on our worldwide presence, what we are getting ready to do, we can tap into each of those pseudo cities, or those records, find out where that individual is, or what they need to have done, and that other office can make that happen. Or, we have a relationship with American Express for after-hours service."
Futch supports the complete listing of airfares and inventory in the GDSs, going so far as to say the company would even pay Ryanair's GDS bill if the airline would participate. "But there are some exceptions," he said. "If you have web-connect capability, we can go out and scrape on your Web site and pull you back in. The whole key is that we have to have control of our data, and we have to know where our people are at."
Citing the importance of long-term relationships, Futch said the UATP contract is "the longest-running identifiable, active contract at Wal-Mart. That agreement was signed March 17, 1969 with the Walton management company. It was signed by our founder, Sam Walton. The contract only had one modification in that entire history: to change the name to Wal-Mart."
The company's "vision statement" with regard to travel is to deliver travel inventory at the lowest possible cost. "We at Wal-Mart are seriously into business metrics," said Futch. "Average cost per ticket? Forget it. That is not a serious metric that I look at. That fluctuates so much, everyone wants to add this or that, or charge extra for an aisle seat ... that just does not work for us. My true business metric, the one I look at every month when I get my P&L, is 'What does it cost us to produce a ticket?' Then I benchmark that against all the other folks out there [including] the travel management companies. I can tell you now that we are substantially less in our cost to produce a ticket than anyone could ever believe, because of our technology now, the way we do our business and the contracts we have."
Wal-Mart likes the simplicity of having the lowest possible number of providers for a given service. "I want one settlement engine: ARC. I want one payment plan: UATP," Futch said. "We can't have fragmentation in the settlement process. It costs money to have all those different cards (Amex, Visa, MasterCard, etc.) and we don't want that. We want one form of settlement, and that's all there is to it. Very simple with UATP. Its seamless."
Futch said Wal-Mart has "very good" relationships with American Airlines, British Airways, Delta Air Lines, Northwest Airlines and others, but the company also operates an internal airline with 22 jets, which it calls Wal-Mart Aviation.
Sustainability issueshave been top of mind for the giant retailer, which now is working to incorporate that thinking into its travel program.