Travel Related Articles

By David Grossman, Special for USA TODAY

Some companies are finding that it pays to be their own
travel agents during the recession.

"Every company is looking for the benefit of lowering
expenses," says Teresa Asbery, senior manager for travel
administration for Wal-Mart Stores.

Wal-Mart (WMT) is one of 129 companies and
organizations, such as universities, that have established
fully accredited in-house travel agencies to better manage
their business travel and reduce costs.

Enlarge Courtesy of Kathy Hall-Zientek

Kathy Hall-Zientek, manager of the in-house travel
agency at Moog, Inc., watches as Krista Tortorice
books a reservation.

That lets them buy airline tickets and arrange hotel rooms and rental cars just as a regular travel agency does.

It also lets companies collect commissions on bookings, and in many cases, avoid paying booking or
transaction fees to an outside travel agency.

And more companies are looking at doing it, says Mike Premo, a vice president at Airlines Reporting Corp.,
which does accrediting for travel agencies and serves as a clearinghouse to settle booking transactions.

Premo says the idea is more attractive now because the difference in cost between handling travel in-house and
having an outside travel agency do it has narrowed, as more volume discounts on airfares and room rates are
available.

"It's been incredibly good for us, in terms of cost-saving," says Belinda Borden, manager of the University of
California Travel Center, whose 11-member staff is based at UCLA but books travel across the state system.
"Since we've become (a travel agency), we've never cost the university a penny. We're totally self-supporting."

Same as a retail agency

The key for a business becoming its own travel agent is to get accredited by the Airlines Reporting Corp. as a
corporate travel department and get an ID number to account for transactions. Any organization, large or small,
can do this, Premo says.

An accredited corporate travel department can perform all the same functions as the nearly 20,000 traditional
retail travel agencies — though it's prohibited from selling travel to anyone outside the organization. Premo
describes a retail travel agency as a seller of travel, while a corporate travel department is a buyer of travel.

"The basic idea is that the corporation can get the same sort of travel agency identification number and authority
to process ticket sales through the airline reservation systems and through our settlement system," he says.
The cost is small: a $2,000 application fee and $160 to renew annually.

The first corporation to do it was Republic National Bank, now a part of HSBC, in 1998. Andy Menkes, who was
Republic's global travel manager then, says the concept was simple: "I'd rather pay a fee and collect all the
commissions myself as a corporation."

Retail agencies already pass on most commissions to their corporate customers. But many companies prefer
to receive airline and hotel commissions directly.

"We wanted a direct flow of the money," Menkes says of Republic's reasoning for becoming the first corporation
to do this. "We wanted to be able to audit the flow of funds."

'Mix and match' as needed

Another reason to bring travel operations inside: Some companies are concerned that their travel information or
records could be lost or hard to access if their travel agency is sold or they switch agencies.

"There is enough flux in the industry that agencies do get bought, sold and merged," Menkes says. "In addition,
corporations change agencies from time to time for various reasons."

Menkes now is CEO of Partnership Travel Consulting, which provides advice to companies on how to become
their own agents.

With interest on the rise, 30 organizations have joined the recently formed Corporate Travel Department
Association, according to the group's chairwoman, Kathy Hall-Zientek, who manages travel services at Moog.
Among its members: Macy's and the Massachusetts Institute of Technology, in addition to Wal-Mart and the
University of California.

Not every company that's become its own agency has a full-service operation with reservations, accounting,
ticketing, 24-hour support and negotiating hotel rates. Some still hire an outside travel agency to augment the
in-house operation, Premo says.

At the University of California, for instance, the in-house travel agency is joined by two outside agencies in
providing travel for the state system. The in-house operation is writing about $12 million a year in airline tickets,
roughly 25,000 tickets a year, Borden says. That's out of about $250 million the university system spends
annually on all travel, including airfare and hotels.

Wal-Mart's Asbery says a company can "mix and match" tasks as it needs.

"It's an opportunity to control the program as little or as much as they want," she says.

"It's not for everyone," Premo says of in-house agencies. But, he says, more firms are saying, "This actually
makes sense for us."

Read previous columns

Send David your feedback: David Grossman is a veteran business traveler and former airline industry executive.
He writes a column every other week on topics of interest and concern to business travelers. E-mail him at:
travel@usatoday.com.