Locally international: Acendas offers global reach but local focus
Kansas City Business Journal – June 1, 2007 by Suzanna Stagemeyer Staff Writer
Gary Davis (left) and Brent Blake, co-presidents of Acendas, have helped the company navigate the path from trip-booking to travel management. The company helps corporate clients book travel, manage expenses and track traveling employees. In an industry plagued by the ease of Internet travel-booking and post-9/11 airline struggles, Acendas has emerged flying first-class.
The travel management company, formed in 1982 as a typical travel agency, had revenue of about $50 million in 2000, when it merged with Travel Quest. Revenue in 2006 reached $80 million; this year, Acendas is holding a $90 million revenue ticket.
Although tiny strip mall travel agencies continued to darken after 9/11, Acendas had circled its employees into a 15,000-square-foot Mission office. Trading the simple trip-booking approach for better technology, specialized agents, negotiated vendor discounts and a unified customer service front, Acendas began offering programs tailored to save money and increase security for corporate clients.
“I chose them because they have a local touch with an international reach,” said Bob Morrie, corporate accounting vice president for American Century Investments. “They could get me anywhere in the world I need to be, but when I call them, they’ll come and visit and solve any problems.”
He switched from a larger national company to Acendas in 1999. For travel-heavy businesses, Acendas’ services take away the need for employees to spend time worrying about getting tickets. Employees with Kansas City-based HOK Sport Venue Event travel three to five days a week, CFO George Valenti said. That travel frequency also makes security key.
On 9/11, many HOK employees were out of the country, including Valenti, who was in Australia with a co-worker. Even then, before the focus on travel security information, Acendas kept the HOK people updated and secured the first available seats to bring them home, Valenti said.
“They took all the work of calling the airlines every 10 minutes to try and get a seat and did everything for us,” he said. “They know what they’re doing, and they bend over backwards for you.” That, Acendas co-presidents and co-owners Brent Blake and Gary Davis said, is what they’ve designed the company to do. The transition started in the late 1990s, before they assumed their current roles. Travel agencies that began making the switch to travel management back then have survived, Blake said. “We didn’t diversify — we focused,” he said.
Acendas, one of less than 100 true travel management companies in the nation, primarily serves clients in the Kansas City region, though the Internet stretches that reach, Davis said.
Acendas leaders knew that the company wasn’t the biggest of its kind and that it wasn’t the type of place to sell maps or luggage. But because of its size, it could offer more personalized customer service. “Mega-travel companies offer different programs off the shelf, and we noticed a lot of clients didn’t like that,” Davis said.
Realizing that travel usually ranks among companies’ top controllable expenses, Acendas devised ways to keep costs down, Blake said. Corporate travel makes up about 75 percent of the company’s revenue.
The problems, he said, are that companies overspend, don’t realize where they’re losing money in travel and need help with crisis management. Some clients use agents to handle booking; others use the company’s software to let employees make arrangements.
Enlisting the Internet and software programs as partners, Acendas, which charges per-transaction fees and commissions, created programs for corporate customers that allow travel booking via an intranet. The program shows green, yellow or red lights next to travel options so users know before they book how closely an arrangement aligns with corporate policy. If a booking doesn’t comply, Acendas alerts the company.
Reminders, weather reports and travel updates can be sent to travelers’ mobile phones or handheld devices.
The program also reminds companies when they have unused non-refundable airline tickets that can be exchanged for discounts. That feature has saved big bucks for companies such as Kansas City engineering firm Burns &McDonnell, a customer for about six years.
“We travel at a moment’s notice, and we cancel at a moment’s notice,” said Denny Scott, Burns &McDonnell’s chief accounting officer. “They’ve been very good at saving us thousands of dollars a year in ticket-exchange programs — that’s a big saver. We also benefit through discounts from their travel networks. … We’re very much true partners.”
In addition to Acendas’ discount arrangements, it negotiates discounts for companies with vendors in cities clients frequent.
Burns &McDonnell pays three full-time and one part-time in-house Acendas agents to handle bookings. When agents have to miss work, Acendas sends substitutes who transition in seamlessly, Scott said.
Depending on client preferences, in-house agents can be on the client’s payroll or Acendas’, Davis said.
For security, a program called People Tracker offers consolidated information about employees’ whereabouts should any trouble come up. The software, which didn’t exist before 9/11, allows companies to know within minutes where their people are and the plan for getting them back, Blake said.
Acendas representatives meet with corporate customers every quarter to seek feedback about how to improve services and to provide companies with travel reports, including how much money they’ve saved, customers said.
Some corporate clients also use Acendas’ leisure travel program. Employees of companies such as Sprint Nextel Corp. and Hallmark Cards Inc. can book vacations over the intranet using Acendas’ services.
Despite a trend of flat business travel growth — down 0.6 percent in 2005 from 2004, according to the Travel Industry Association of America — revenue has climbed each year through organic growth and referrals, Blake said.
Of its 350 corporate customers, the co-presidents said they know the top 25 client contacts by name. The company also has about 40,000 leisure travelers.
With the customer service focus, Acendas has managed a 98.6 percent client-retention rate, Blake said, counting on his fingers the number of clients who had left. Most left because they were acquired by larger companies that had pre-existing contracts with other travel consulting firms, Davis said.
The client retention rate is mirrored in employee retention, which is better than 95 percent, Davis said. All 70 employees have been through a three- to five-interview hiring process and training to provide top customer service.
Despite its tech-savvy offerings, Acendas has no automated attendants — a customer service move, the co-presidents said. “We’re here to develop long-term relationships. We’re not here for a one-time sale,” Davis said. “You think how much time and money businesses spend to get new clients, but they don’t exert the effort to keep them.”