Business Travel News - September 8, 2008 - (Page 6)

NEWS TAG Merger Adds Fuel To Tzell’s Acquisitive Fire BY SETH HARRIS PROFILES IN TRAVEL MANAGEMENT Bayer Team Tasks Two TMCs With Global Coverage Bayer this year implemented a two-agency travel management folks really wanted to make global travel management configuration follow- sure that procurement got the message and they ing a 14-month sourcing initiative in which trav- did,” said Paul Lang, Bayer corporate and busiel management and procurement teams stan- ness services manager of travel services. “Even dardized agency sourcing for though this is a procurement efthe company’s five regions and fort and we’re sourcing, the servbalanced technology, service ice and technology components and price measurements. are more important in the seWith BCD Travel in North lection of the supplier than the America and some support pricing.” and fulfillment services for an The team adopted a call cenin-house agency in Germany, ter site visit matrix and develand Carlson Wagonlit Travel in oped a 73-field number rating EMEA, Asia/Pacific and South system to quantify the service America, Bayer has implementand technology components of ed consistent service-level the equation. Pricing bids were agreements, standardized given regionally based on a transaction pricing and encomstandard definition of transacpassed 80 percent of its global tions developed by Bayer, so travel volume under the first “there was really no misunderBAYER’S PAUL LANG phase of the rollout. The restanding on the supplier side,” Service, tech more important maining 20 percent, which reLang said. sides in smaller countries, will At least two representatives be incorporated in a second phase. from the Bayer project team were present on call Bayer’s 2007 travel volume includes $56 mil- center visits. Call center locations were chosen lion in U.S. booked air volume and $169.16 million by each agency. in U.S. T&E expenditure. The TMC sourcing team Each region’s procurement and travel manhad five procurement representatives, including agement representatives made individual rectwo from the central procurement organization ommendations to the steering committee for apin Bayer’s Germany home office, six travel man- proval. Bayer’s analysis also focused on whether agement representatives and an auditor. The the TMC in each country was wholly owned, a joint venture or an affiliate. In the case of franchised operations, Lang said, “We know from exCOMPANY: BAYER perience that sometimes there is conflict between HEADQUARTERS: LEVERKUSEN, GERMANY the owner of the franchise and the company. 2007 U.S. BOOKED AIR VOLUME: $56 MILLION There is not much continuity and standardization when you have too many franchises. That team reported to a steering committee com- was a big concern in a couple of countries in prised of the global heads of procurement for South America and Europe.” Bayer’s four lines of business. Regional service-level agreements were apBayer’s travel management and procurement plied to the agency contracts, including the fivestructures differ across regions. For example, U.S. year deal with incumbent BCD Travel. Some key performance indicators attached travel management reports through procurement, while the Access the 2008 Business to the SLAs are data formatting Travel Buyer’s Handbook and consolidation and timeliness German travel team is separate see btnonline.com/handbook of reports. Country-specific SLAs from central procurement. Melding procurement and travel manage- can be added to contracts if deemed applicable ment philosophies, the project team used a by local Bayer leadership, according to Lang, who weighted equation to measure the four finalist added, “We have encouraged them to not get TMCs. Service and technology accounted for 40 carried away with too many metrics.” percent each and pricing was 20 percent. “The —Seth Harris Tzell Travel Group and Travel Acquisitions Group last month announced a merger through which Tzell will operate as a stand-alone unit within the TAG portfolio, with Tzell executives assuming TAG’s operational leadership. Tzell president and CEO Barry Liben is now CEO of TAG and Mike Batt, who was CEO, retains the role of TAG chairman and will focus on the franchisee business, Liben said. Other Tzell executives, including senior vice president Jerry Behrens who will manage vendor agreements, vice president of sales and business development David Holyoke and CFO Willie Lynch, now hold similar roles in the broader organization. Details of the merger agreement were not disclosed. Liben said JPMorgan Chase’s private equity investment firm One Equity Partners, coowner of Carlson Wagonlit Travel and a Travelport investor, has a stake in the deal. TAG’s business units include leisure divisions, franchisor operations under the Travel Franchise Group banner, which includes Travel Leaders— the rebranded Carlson Wagonlit Travel Associates—and ProQuest Travel Group, which houses some corporate travel management operations. In March, TAG—formerly Carlson Leisure Group—acquired Coral Gables, Fla.-based TMC TraveLeaders and began an aggressive shift toward corporate travel through technology investment and M&A activity (BTNonline, May 12). The combined organizations handle about $2 billion in sales. Company-owned and franchise operations have nearly $7 billion in annual sales. BTN’s 2008 Business Travel Survey shows New York-based Tzell processed 648,949 ARC air transactions worth $531.1 million in sales in 2007. The super regional Tzell acquired 11 U.S. agencies in 2007 and several others in 2006. Last summer, Tzell’s management bought out the company from Irish travel holding company CNG Travel. Tzell’s new relationship will open international doors. The company launched a U.K. office earlier this year and has 35 U.S. branch locations. “We have a bigger appetite now,” Liben said. “Certainly, we are going to be much more active in an area where we stayed away from beforehand.” Regarding agency partnerships, Liben said, “We are looking for more than affiliations in the future. We’ll be looking to put our own flag in three or four other cities.” At least one will be in Europe and Asia each by early 2009. ■ sharris@btnonline.com ■ 6 Monday, September 8, 2008 www.BTNonline.com Business Travel News http://btnonline.com/handbook http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - September 8, 2008

Business Travel News - September 8, 2008
Contents
Inside Track
Profiles In Travel Management
BTN Research
Aviation
Meetings Today
Lodging
Asia/Pacific
Washington Wire

Business Travel News - September 8, 2008