Last weekend we left off with a mention of Oct. 19, 1987 or Black Monday—the day the Dow Jones Industrial Average fell 22.6 percent and triggered concern over a second Great Depression. I fully expected the stock market crash to reverberate through the business travel world in 1988, ushering in broad stroke travel freezes. I found a few localized drawbacks for travel, but they were largely tied to downturns in the oil and gas industries, which I remember well even as a teenager, since I grew up in Oklahoma. It wasn’t pretty.
But as I pored through the BTN archive this week, I’m not sure I found a single mention of Black Monday in 1988’s issues. One reason was that, although it would take two years for the Dow Jones to fully recover from the crash, the index clawed back 57 percent of its losses in only two trading sessions. In terms of business travel, corporations apparently swatted financial caution away like a pesky fly—unlike in 2001 after the dot-com bubble and very much unlike 2008, after the housing crisis opened the door to the Great Recession. Dare I even mention the Covid Crisis here? It wasn’t really the same kind of issue, but I digress…
What I did find, however, were a number of articles addressing the rate at which companies were hiring dedicated travel managers, and the push toward the increasing professionalism of the role, with a focus on effective policy, cost savings and supplier negotiations. It made me think that perhaps caution was not being thrown to the wind, afterall. Businesses were looking to dedicated travel managers to tighten up travel reservation processes and take control over what could be seen as abuses of the company dime.
Yet the dedicated travel manager role largely emerged from the service side—the job was often envisioned as more of a juiced up travel arranger, and many posts were filled by former travel agents. Every dedicated travel manager interviewed in 1988 for the following focus article were women. Today’s travel manager demographics look sort of similar: at least two-thirds of travel manager roles are held by women, according to BTN’s latest surveys. (Interestingly, this was not the case when travel was managed through purchasing, but that is another story that still reverberates in the industry today.)
Reading through the archive 1988 articles (and somewhat between the lines), I got strong whiffs of the Dolly Parton, Jane Fonda, Lily Tomlin movie ‘9 to 5,’ about three women whose talents and ideas were largely underestimated within their large corporation, but each of whom (hilariously, in the 1980 screwball comedy) proved her corporate aptitude and strategic value.
Likewise, in 1988, the travel manager role seemed largely designed as a business support function in the service of travelers, but without much decision-making power. Despite the lack of decision-making power initially baked into the travel management role in many companies, BTN reporter Steven J. Stark sussed out the many ways travel managers were proving their strategic mettle.
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Yes,
more and more companies are coming around to the view that some big savings on
travel can be had. And yes, more of them are hiring full-time, dedicated travel
managers for the job. Further, travel managers themselves, for the most part, feel
adequately recognized for their efforts.
But
while many managers have dramatically changed their companies’ travel
operations and helped instill an attitude that their task is an important one,
a final hurdle—and it’s a big one—must be cleared before they reach travel
manager nirvana: getting total control over the travel function.
Although
travel managers enforce policy, negotiate with suppliers, plan meetings and
arrange incentive trips, most don’t have final say on travel policy decisions.
The need to obtain approval can cause delays and headaches, travel managers
say.
“It’s
time consuming, considering I know what I’m doing, and I generally have to
explain what I want to do,” said Debbie Quirk, travel manager at O’Connor
and Associates, a private Chicago investment firm. “I could handle it
myself.”
“I
do have to report to someone, so it’s not total control,” said Jenny
Reilly, travel coordinator at New York women’s clothing store chain Ann Taylor.
“I have input to policy, but upper management ultimately has
responsibility. It does at times create some hindrance.”
“Management
really controls the philosophy of travel, so I’m not in total
control,” said
Kimberly Kelley, travel manager for Cincinnati-based U.S. Shoe Corp.
“Sometimes it’s a problem because there’s no real direction. You just work
around that.”
Kelley
said her department is not “mandated,” meaning employees use it only
as a service. But that could change, she said, if the company sees that she
is making progress on cost savings. Then, she said, “Maybe they’ll see
direction and purpose as a necessity for a major corporation.”
Some
companies do give travel managers a wide-open field, however. When New York
advertising giant J. Walter Thompson Co. sought to bring travel costs under control
a few years ago, it wanted a travel manager with experience. It found one in
Antje Hennings, a 20-year industry veteran who had been travel manager at
Western Union for five years.
“This
was the first time I could actually start a travel department,’ Hennings said.
“I got the challenge of actually doing it my way, picking the computer
system, hiring everyone.”
But
despite the fact that most of these travel professionals still yearn for that
sort of ultimate responsibility, the majority genuinely like their jobs,
deriving pleasure from being able to see the fruits of their labor so tangibly
as travel costs spiral downward. And most of them feel adequately compensated
for what they do, according to Business Travel News’ Travel
Manager Salary & Career Survey (BTN, Sept. 28).
“I
like being a travel manager,’ said Quirk of O’Connor and Associates. “It
can be frustrating, but it’s never dull or boring. Someone is always going
someplace different. I find it challenging to find the lowest fare.”
Travel
management at O’Connor has come a long way since 1986. Back then, the person
who handled travel arrangements also waited tables for employees at breakfast
and lunch. But the 10-year-old firm and its travel expenses were growing fast,
so the call went out for a travel manager. Enter Quirk, a former travel agent.
Now,
Quirk handles just about every aspect of the company’s $850,000 annual travel
budget. She is in charge of all reservations—airline, hotels, rental cars and
corporate apartments—for headquarters and four branch offices. She also
negotiates with suppliers.
For
all this effort, Quirk said she sometimes feels undercompensated. “I’d
like more for what I do, for my responsibility,” she said.
Although
O’Connor currently has no formal travel policy, Quirk said she hopes to write
one soon, since the company is growing so fast.
It’s
no surprise that U.S. Shoe’s Kelley loves her job. After all, she’s known
travel is her calling ever since she got out of high school, when she began
attending a vocational school that offered travel classes, while putting
herself through night courses at the University of Cincinnati.
She
parlayed the education into a job at the Cincinnati office of travel agency T.V.
Travel Inc. The job at U.S. Shoe materialized three years ago when the growing
company decided to consolidate and control travel costs. U.S. Shoe’s 1987
travel budget was about $6 million.
“I
think it’s important for companies to find someone with a travel
background,” Kelley said. “It helps to know both sides of the fence.
It helped me in negotiations with suppliers. When you sit down with your travel
agency, you have a better idea of things.”
Kelley
said she enjoys the travel business and is comfortable in her position. A frequent
attendee of National Passenger Traffic Association seminars, Kelley is active
in Ohio Valley Passenger the Traffic Association, where she also is secretary.
Another
former travel agent is Reilly of Ann Taylor, which spends about $500,000 a year
on travel. Before Reilly arrived two years ago from Mercury Worldwide Travel,
reservations were being handled by the president’s secretary. “It
eventually got to be too much, and they decided they needed someone,”
Reilly said.
One
of her first moves in the new job was to set up an outplant operation with
Mercury. She also has begun attacking frequent flyer abuse and obtaining
management reports from Mercury, which tracks airfares as well as airlines, hotels
and rental cars. She intends to use the information in negotiations with
suppliers. Reilly said she does not feel undercompensated for all that work—but
that could change over time.
“I
feel it’s adequate enough based on what I’ve read in surveys. Because of the
volume that we have, it’s fine now,” she said. But if travel and
responsibilities increased, she added, “Naturally, I’d want something
more.”
While
many travel managers are former travel agents, many others are given the job
after succeeding in another area of the company’s operations.
Shirley
J. Sexton of National Data Corp. in Atlanta, a computer services company that
spends $6 million annually on travel, had been accounts payable manager before
becoming corporate travel coordinator in 1983.
“That’s
why I was hired as travel manager,” Sexton explained. “I noticed a
lot of abuse and a lot of opportunities for management to control costs. I gave
[senior officials] management reports and analysis to show them the dollar
impact that could be added to the bottom line.”
Sexton
must continually work to control costs; National Data was expected to have
increased its travel expenditures by $500,000 in 1987. But as Sexton continues
her role as accounts payable manager, she spends only 35 to 40 percent of her
time on travel management.
“I
deal with vendors, set policy and assist meetings,” she said. “I
can’t dedicate as much time as I would like on travel.
“It’s
an ever-changing industry and it’s something you have to keep on top of. There
are a lot of opportunities to recommend cost-saving factors, and to me a lot of
that is job satisfaction.”
Although
Sexton said she considers herself well-compensated, she added, “I don’t
think corporations recognize the importance of the travel managers’ position
within the company for cost containment purposes. But I think that is changing
day by day.”
Here’s what travel managers were dealing with in the industry in 1988…
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Amid the traditional post-holiday
round of airfare reductions, Continental Airlines unveils a program that lets
frequent flyers buy first-class seats at full-coach prices.
Hertz and Avis bow to pressure
from a group of state attorneys general and cancel plans to break out airport
concession fees from advertised prices. Car rental executives fear the industry
is on the verge of becoming government regulated.
SatoTravel, worried it might be
losing its grip on government travel contracts, lodges a protest over the Fifth
Army’s $86 million award to Ask Mr. Foster.
Hertz is caught billing clients and insurance companies for accident repair work that was never
performed, forcing signatures on phony body shop invoices and an assortment of
other unsavory practices.
With industry attention focused on
a binge of triple-frequent-flyer-mileage offers, the Internal Revenue Service
for the first time says the awards are taxable income. But it stops short of
taking steps to collect.
System One files antitrust suit
against United and Covia, charging them with trying to dominate the CRS
industry by putting outrageously restrictive provisions in travel agency
automation contracts, and by taking harsh punitive actions against agencies
that switch from Apollo to System One. The same week, United wins a $423,000
breach-of-contract judgment against Austin Travel, which had dumped Apollo for
System One.
Travel managers blast Delta for
starting the triple frequent flyer mileage craze and inducing travelers to
evade policy in order to pick up more mileage on the carrier of their own
choice.
Boston Logan International
Airport becomes the first to increase landing fees as a way to
reduce congestion. Fees for small aircraft are hiked to induce them to land
elsewhere; commercial carrier fees are cut.
National Car Rental launches its
Emerald Aisle, the industry’s first service that lets travelers pick up their
cars while avoiding the dreaded rental counter. Within a year, Hertz, Avis and
Budget follow suit.
Northwest becomes the first U.S.
airline to ban smoking on all domestic flights.
American Airlines, Hilton,
Marriott and Budget plan to form a new type of CRS, called
CONFIRM, that will let travel arrangers book complete travel itineraries with a
single transaction. Plans call for a 1991 start-up date.
A task force of state attorneys
general decides to formulate sales and advertising guidelines for the car
rental industry, to be patterned after similar measures adopted for the airline
industry a year earlier.
DOT unleashes a probe to find
out whether financially ailing Texas Air carriers Continental and Eastern are
fit to operate flights safely. Later, the two airlines are cleared.
Lifeco and Rosenbluth both agree
to link their reservation systems with Diners Club’s TRACS expense-accounting
system. They say corporate clients will be able to merge booking and expense
data to gain more complete control over travel. Months later, both agencies
acknowledge that few clients are taking advantage of the set-up.
USAir and four European
carriers by half of Apollo from United for $500 million.
Carlson Travel Group buys Gelco
and sets plans to merge it with Carlson’s Ask Mr. Foster unit. The move helps
boost AMF into a virtual dead heat with American Express in terms of air sales
volume.
Hertz calls on states to outlaw collision damage waivers; within weeks most car rental companies
join Hertz in condemning CDW.
After merging
with Pacific Southwest, USAir cancels PSA contracts providing corporations with
volume discounts.
Defense Department extends temporary freeze on many travel expenditures, rocking many travel agencies that
depend on huge government contracts.
Thomas Cook completes groundwork for a franchise network, and a handful of pilot members are signed
up by year-end. Then, an ownership change at Thomas Cook poses technical snags
that delay a full-blown effort until mid-1989.
American International Rent A Car
president Nick Yebba scolds his competitors for advocating a ban on CDW but
refusing to take the step themselves without government intervention. The
competitors tell Yebba to take a hike.
To the dismay of many, the results
of DOT’s 16-month investigation of competition in the CRS industry contain no
recommendations for action.
United’s John Zeeman angers and
worries travel agents by predicting that airlines one day will commonly award
commissions and discounts to corporations, rather than agents.
American Airlines lowers travel
agency overrides by subtracting paid commissions from the total volume on which
the overrides are based. “We were paying twice,” American says.
Heritage and Crimson form a
marketing partnership to combine their purchasing power and to capitalize on
their differing customer bases. It’s not technically a merger, but most see it as sign of consolidation.
Eastern Airlines decimates service out of Kansas City, one of its key hubs. It
also comes to light that Eastern is offering huge ticket discounts to Southeast
companies that switch to travel agencies that use System One.
National Car Rental CEO Vince Wasik heads
a group that buys a majority stake in the company from PaineWebber. General
Motors becomes a significant minority shareholder.
California passes landmark legislation requiring car
rental companies to include all mandatory charges in price quotes and
advertisements. Buy a key provision of the bill—the elimination of CDW—is
defeated at the 11th hour.
American Airlines and Pacific Bell agree to a direct corporate discount. Both parties insist
the pact applies only to groups of at least 10 employees traveling to meetings; they both acknowledge they can’t track compliance. American is hounded by questions about the deal for the rest of the year, but
renews it in December.
Illinois is the first state to ban the sale of car rental collision damage waivers.
Ramada considers and later rejects
a $368 million buyout bid from Chicago’s Pritzker family.
Lifeco Services hires merger whiz
Morton Ehrlich from TWA to become its new president.
FAA cuts sharply the number of
hourly landings allowed at Chicago’s O’Hare International Airport, which has
been plagued by a growing number of errors by air traffic controllers.
Texas Air and SAS ink a marketing
and code-sharing accord in the most far-reaching partnership to date between a
U.S. and a foreign airline.
Texas Air agrees to sell its
Eastern Air-Shuttle to developer Donald Trump for $365 million.
Grand Metropolitan sells
InterContinental Hotels for $2.25 billion to the Seibu/Saison Group of Japan.
USTravel Systems scores one of the
biggest of its many acquisition coups by picking up Connecticut Travel
Services.
Budget Rent a Car agrees to a
complex, $333 million deal that will take the company private after a two-year
spin in the public realm. Ford Motor puts up most of the financing.
Continental leads major airlines
in eliminating three- and seven-day advance purchase discount fares, dealing a
severe blow to corporate cost-cutting strategies.
Tandem Computers travel manager
Ruthanne Mulvihill starts a boycott of Continental in response to the carrier’s
Cash Back program, which pays travelers cash awards for company-sponsored
trips. However, the boycott is not
cleared by Tandem management, which quickly ends the protest; the airline later apologizes for the promotion.
Pan Am Flight 103 is bombed by
terrorists over Scotland, sending ripples of fear throughout the business
travel community. Tektronix Inc. later decides to cease requiring employees to
fly Pan Am to Europe, while IBM tells its travelers to stop flying U.S.
carriers from Europe and the Middle East.
Texas Air drastically pares its
Continental/Eastern sales unit.
Meeting Planners International is
rocked by results of a study it commissioned to uncover reasons for high staff
turnover. The study severely criticizes the management style of MPI executive
VP Doug Heath. Nevertheless, Heath wins a contract extension.
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Elizabeth West is the editorial director of the
BTN Group. She has reported on the business travel and meetings industries for
24 years. Beth was editor-in-chief of Meeting News from 2006 to 2008 and
director of content solutions for ProMedia Travel from 2008 to 2011, when
ProMedia was acquired by Northstar Travel Media and merged with BTN. She became
editor-in-chief of BTN in 2015 and editorial director of the BTN Group in
2019.
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Credit: BTN recreated the timeline in this article from a list of industry
events compiled by editors of BTN’s 1989 fifth anniversary retrospective: Jim
Alkon, Jeanette Borzo, Judi Bredemeier, Mary Brisson, Barbara Cook, Richard
D’Ambrosio, Shann Davies, Larry Kilman, David McCann, Laura Koss, Don Munro,
Imitiaz Muqbil, Jody Oesterreicher, Magdalene Ruzza. Thanks guys!