Monthly Archives: July 2015

T-Mobile’s Travelers Are Reforesting Haiti

Gamification found footing in T-Mobile’s corporate travel program. Yes, travelers get badges and points for complying with corporate policies, but that’s hardly the point. And yes, the compliance push has saved money. But that too isn’t what’s really important. More meaningful is converting some savings into jobs for the impoverished and new lungs for the earth.

To pull off the “greenification” program, T-Mobile worked with Travel and Transport to adapt the TMC’s Points 2 Points gamification platform. It partnered with conservation organization Eden Reforestation Projects for work in Haiti, where 97 percent of forests are gone. Delta Air Lines is a program sponsor.

reforestation“It’s more than planting trees,” said Bob Jacobsen, T-Mobile’s senior manager of travel, expense and card. “It’s about employing villagers to plant trees so they can earn money and send their kids to school.”

Corporate users of Points 2 Points can structure rewards in a few ways, notably points redeemable for merchandise. T-Mobile “was no doubt the first” to link travel gamification to philanthropy, said Travel and Transport general manager Michelle Holmes. She noted that there’s now strong interest among others.

Holmes said T-Mobile and Travel and Transport collaborated from the beginning. That meant spelling out the rules of engagement and planning employee communications. A leaderboard shows compliance levels by department and company progress in meeting specific goals.

Within T-Mobile’s Concur Travel booking tool, travelers see information about the program and guidance on how to earn points. They’re encouraged to book air and hotel reservations online, in advance, at the lowest available price and with preferred suppliers, notably Delta. Travel itineraries show points collected and reinforce how to achieve more. “It’s a good way to educate travelers on the basics of the travel policy,” Jacobsen said.

Point accrual ranges from 100 for booking a preferred hotel, for example, to 300 for booking online or picking the lowest airfare. Redeeming 1,000 points means planting 100 trees.

The program launched January 26. An initial impetus was to better engage younger workers at the Bellevue, Wash.-based telecom company. According to Travel and Transport, “two-thirds of millennials are charitable donors and half want to work for a business with ethical business practices.” (Incidentally, Ethisphere this year placed T-Mobile on its list of the world’s most ethical companies.) Overall, T-Mobile has about 8,000 regular travelers.

Points are deposited weekly into individual traveler accounts. “It’s based on completed travel,” Holmes said. “The system really is a piggy-back to the general way we manage corporate travel. It’s a proprietary system in unison with our back-office system.”

At first, travelers viewed performance by logging into a portal furnished by Travel and Transport. The TMC later worked with Jacobsen to introduce quarterly reports pushed out to travelers.

The program so far has saved T-Mobile $150,000. That may not sound like much for a big company. But some of it goes toward true cost avoidance and some for contributions to Eden. At 10 cents a tree, T-Mobile’s forest in Haiti already is more than 90,000 trees strong. That’s making a difference. “My goal for this year is 200,000 trees,” Jacobsen said, which equates to about 109 acres. “I think we’re on track.”

He said achieving that goal would mean mitigating the equivalent of carbon dioxide emitted from 400 transcontinental flights each year for the next 10 years.

Goals also include $500,000 in savings and an “increase in compliance to 85 percent.” Online adoption remains around 81 percent, as measured before the program started.

“One of the lessons learned is that we needed more visibility into the program,” Jacobsen said. “All the messaging was built into the online tool, so if you are not going online you are not seeing messaging about the program. With the quarterly push statements, now they see they can earn a significant amount of points by booking online.”

T-Mobile reported 1 percent to 5 percent improvements for all other metrics. Delta’s share of T-Mobile bookings increased 4 percent.

Eden Reforestation Projects CEO Roger Hoesterey said his organization has about 25 business partnerships. T-Mobile is the only one tying the effort to corporate travel. “It’s super clever,” he said. “Donations to Eden Reforestation Projects to plant trees have actually been a really good investment for them. They are getting more money back than they have given by driving employees to the preferred providers.”

As program sponsor, Delta is kicking in some free tickets as another incentive for travelers. It also will transport some of those involved — including the most compliant travelers — to visit “the T-Mobile forest.” Hoesterey said he’s excited to host so “they’ll see firsthand what it means for people to have a forest where there hasn’t been one.” (He said he’ll make sure that flight’s emissions are offset.)

Meanwhile, Jacobsen said he’s considering working with T-Mobile’s philanthropy department to give travelers the ability to redeem points for donations to other causes.

Jacobsen previously served as president of the Puget Sound Business Travel Association. During that time, the chapter partnered with a local environmental agency to raise $300,000 for cleaning Puget Sound. In 2010, GBTA (then the National Business Travel Association) bestowed upon Jacobsen a Business Travel Service Professional Award. For his more recent work at T-Mobile, Business Travel News this week named Jacobsen a best practitioner.

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Imagine, If You Will, An Ordinary Industry

[CORRECTION, Aug. 21: Our fact-checking process failed to uncover the fact that nine years ago, Lufthansa was not one of the airlines on whose segments global distribution system firms in the United States started paying lower incentives to travel management companies. This article has been updated, and we apologize for the error.]

A month before Lufthansa Group will add 16 euro to fares booked through GDSs, many think the company is bluffing. They expect the parties to settle on terms and return the status quo. But what if they’re wrong and an alternate universe awaits?

First of all, after Sept. 1 Lufthansa’s airlines will be that much less price-competitive for 70 percent of its customers. A 16-euro difference may not be so great in transatlantic business class. Between Germany and the United Kingdom, it’s a different story. There’s no reason the company can’t readjust downward to match the competition where necessary.

Overall, it would be natural for Lufthansa Group airlines to lose some business travel bookings to the competition due to lowest logical airfare policies. One possibility is for clients to book Lufthansa using a partner code. But this plan comes with drawbacks. Service issues can arise in some markets when the traveler’s ticket is not plated on the operating carrier. Certain key functions, like seat assignments, may not be available.

Image: Thinkstock

Image: Thinkstock

Lufthansa vice president of the Americas Juergen Siebenrock told The Company Dime this week that the airline isn’t planning to lose business. Sources said some TMCs and corporate accounts already are booking elsewhere to send a message. One insider’s back-of-the-envelope calculation indicates that if the airline suffers a 3 percent loss of passengers, it will cave.

Assuming that doesn’t happen, large corporate customers will insist that Lufthansa make them whole via negotiated discounts. It may do so. This leaves small, medium and some large enterprises who choose to fly Lufthansa carriers paying the bill.

In cases where business travelers book Lufthansa at the higher price through a GDS channel, Lufthansa would then pay the full GDS rate. The pricing level would go back to where it was before some airlines several years ago negotiated discounts from the GDSs. For bookings on the big U.S. airlines, this meant access to “full content” required travel agencies to agree to an 80 cents-per-segment reduction in the incentives they receive from GDSs.

Step Into The Twilight Zone

All that passing around of money strikes some people as odd.

“It’s time to flush out the extra cost,” said a travel buyer with a large conglomerate who supports Lufthansa’s position but asked not to be named. “It’s an unbundling, not a price increase. How long have we been anticipating this? It’s the beginning of the end of the old model.”

Though it may seem unusual to give two of every three dollars you make to someone else, it’s normal for platform businesses like the GDSs. Also called a two-sided or multi-sided market, this type of business offers value through involvement. Credit cards are an example. Media and computer operating systems are others.

What’s vital in the platform is participation, content and ubiquity. It needs to be a standard. This creates economies of scale. Building such participation in travel is hard. Remember the GDS new entrants?

What’s variable is how much of the funding for the platform is paid by the benefiting parties. “Typically, two-sided networks have a ‘subsidy side,’ that is, a group of users who, when attracted in volume, are highly valued by the ‘money side,’ the other user group,” according to the Harvard Business Review. “The challenge for the platform provider with pricing power on both sides is to determine the degree to which one group should be encouraged to swell through subsidization and how much of a premium the other side will pay for the privilege of gaining access to it.”

Siebenrock said Lufthansa until now has “cross-subsidized” channel costs and “we want to change that.”

Airline direct distribution has expanded over the past two decades. This emboldens airlines in their efforts to cut costs. GDS expenses have come down where carriers have leverage — particularly on domestic segments. In some cases, incentives (subsidies) paid to agencies have dropped as well. But the trend in incentives for the three big GDS companies is that they’re on the rise.

Lufthansa is proposing to remove its cost of participating in these platforms altogether. Then the clients become the “money side.” Take a look …

Distribution Models

The way it works (U.S. example, for illustrative purposes only):
• The airline pays the GDS a discounted rate of $3 to $4 per segment, or up to $8 for a nonstop roundtrip but something like $12 per trip on average
• In exchange, the airline lists all its fares and inventory in the GDS (“full content”)
• The GDS pays the TMC around $2 per segment (or more for online travel agencies and big TMCs)

All of that is not unusual for multi-sided markets. One side is often subsidized.

Another way it has worked:
• The TMC pays the GDS
• The airline offers an incentive to the TMC

It’s not clear if anyone in corporate travel does this now. There’s some evidence that online travel agencies have or will pursue such a model with airlines. This is in part because they make their money on lodging and packages, and so their ability to provide a full experience means they need air even if it’s a loss leader.

The way Lufthansa proposes it would work:
• The client pays an extra 16 euro per ticket
• The airline pays the full GDS price

Presumably, in this scenario, the GDS pays the TMC a higher incentive.

One way it could work:
• The airline pays the GDS substantially less per segment
• The TMC accepts no incentive

Again, the most important element of platforms like GDSs is participation. Platforms can handle exceptions, but only to a point. Air Canada in 2006 stopped listing all its content in the GDSs. To this day Amadeus and Sabre do not access Air Canada’s lowest fares. With Travelport, full access comes only with the use of its alternative Agencia application. Some TMCs in Canada use solutions like BookingBuilder to access content on the largest domestic airline’s website. These alternatives work, but TMCs don’t like their agents using more than one interface.

“I would definitely give up GDS revenue, which is small potatoes in the grand scheme of things, for a guarantee of full content from airlines,” according to David Elmy, president of The Travel Group. “The revenue sharing idea was never a travel agency initiative; it was a scheme invented by the three GDS systems to outbid each other for agency business. We were content with neutral costs (i.e., our segment production subsidized our GDS contracts.)”

It’s not a popular position among TMCs, including several U.S.-based ones recently asked to react. Elmy isn’t alone in Vancouver.

“If we have to give up a couple bucks for full content, that’s worth it,” said North South Travel general manager Liz Fleming. “It takes five times as long to book on the web. Even BookingBuilder takes more time. And all that will be way worse with Lufthansa. Air Canada is pretty far ahead with an API, etc. Lufthansa has nothing.”

One TMC executive who asked not to be named said even the Air Canada API — a new form of connectivity which is easier to update than traditional GDS connections — can be unreliable.

As for whether Lufthansa has an API, Siebenrock was not able to answer. A spokesperson has not provided clarification. Previously, Lufthansa officials have said they’re “open” to providing an API. Clearly it’s not complete. If the airline builds such functionality, companies like BookingBuilder, nuTravel, Farelogix and Pass Consulting stand ready to help customers connect to their airlines and get their data too.

Absent an API to which agent interfaces and corporate booking tools might connect, the alternatives to paying the higher fare simply are not viable. Predictably, Concur announced this week that Lufthansa would participate in its TripLink program. “It is going to take some time for this relationship to materialize,” Siebenrock said of the partnership. “Second half of next year you’ll see some concrete tool come out. Some of our partners also have taken some time to get the Concur relationship set up.”

If Lufthansa really wants to change the competitive dynamics of air travel distribution — and, in particular, for business travel — the program due in a month is only the beginning.

Down the road, in theory, businesses fed up with paying more for the Lufthansa carriers in their preferred channel may try to take control through their own GDS contracts. Or they may push their agency partners to a lower-cost model that works.

That just doesn’t exist yet in this realm.

“By gaining the freedom through those new contractual relationships, we now have the ability to develop and to innovate those portals or other solutions,” said Siebenrock. “You have that freedom and the customers are asking for it. At present, the aim is to really go through the long-term vision and see if a partner or corporate customer agrees with it. And then sit down and ask, ‘What does this mean for our relationship and how can we build onto this?’ But it is something we have to develop. It is not in place. Discussions are ongoing and we are getting some good feedback. ‘Let’s talk. Where is this going, what does it mean for us?’ But nothing concrete at the moment.”

Strange that Lufthansa didn’t create a real alternative before announcing the program.

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Study Shows ROI On Travel Illness Prevention Programs

When moral or legal obligations aren’t enough, proving the ROI of risk management isn’t easy. A new study offers travel pros some data to make the case for a “return on prevention.” The research finds that measures like pre-travel medical checks and malaria prevention pay back.

Belgium-based research and consulting firm Prevent in January released the study, sponsored by the International SOS Foundation. The foundation is a “fully independent, non-profit” charity founded by International SOS. Examining a large oil and gas company’s programs, Prevent found that every dollar invested in pre-travel medical checks returned at least $1.60. A dollar invested in malaria prevention returned $1.32.

prevention

These savings represent cost avoidance for medical treatment and evacuations, as well as salary, administrative and productivity costs associated with lost opportunities.

“The conversation around travel risk tends to be headline-driven,” said International SOS executive vice president Tim Daniel. “Planes getting shot out of the sky are newsworthy but not easy to prevent. There should be a shift to things that are perhaps more mundane but may have a better ROI. When you look at how many people really do get killed by terrorists, it’s a lot fewer than car accidents and malaria.”

A recent BCD Travel report on risk management echoed these sentiments.

“Despite better awareness, travel risk management is still seen as something more relevant for programs characterized by frequent trips to high-security-risk destinations rather than an approach that should be applied to all types of trips,” according to BCD. “They also understand the need for good health and safety in the permanent workplace. However, they don’t always connect the dots to appreciate the much greater health and safety risks for employees on the move.”

Depending on where and when they’re traveling, employees risk exposure to “infectious diseases, extreme climates, unsafe or poor quality food and water and sexually transmitted infections/diseases,” the Prevent research noted. “A number of these environment-specific risks can exacerbate low-grade medical problems, which would otherwise not be a problem in developed areas.”

Circumstances sometimes warrant costly evacuations.

“Besides the cost of medical care, cost of repatriation, and cost of relocation, the evacuation means the failure of the assignment for the worker and the loss of the investments engaged in it by the company,” according to Prevent. “As the cost-benefit analysis is based on a business case, only tangible costs for the company are taken into account. Costs for the individual and the society in general such as pain and suffering, loss of production in case of premature death and cost to the social security system are not considered. However, it must be kept in mind that the suffering and death of an employee also has intangible costs for a business in terms of internal and public image.”

The studied energy corporation employed about 120,000 people working in roughly 85 countries. Fifteen thousand of the firm’s employees were either expats or frequent travelers. The company’s highest-risk destination “is Sub-Saharan Africa, followed by North Africa, Russia and Caspian area, Southeast Asia, the Middle East and parts of South America (Amazon basin). But it should be noted that in a very developed country such as the United States or Australia, very remote operations are conducted far away from any type of medical infrastructure.”

After the company more than a decade ago suffered a series of malaria-related fatalities, it employed fitness-to-work and malaria prevention programs. Employees receive education, medication, a curative kit, mosquito nets, insecticide sprays and repellents. Researchers estimated that this reduced malaria-related deaths by 70 percent.

“These are not cheap programs to implement,” said Daniel. “There’s management time but also the time of the employee doing the screening process and third parties that may need to be paid.

“On their own, it’s difficult for travel managers to move these conversations forward,” he added. “So if you want to tackle something like a fit traveler screening program, you probably need to work with other departments. The study provides the business underpinning that lets a manager go to colleagues to show there’s an ROI and this isn’t something the industry is making up.”

Because travel patterns and volumes vary, Daniel said he’s encouraging corporate professionals to apply the study’s methodology to their own organizations.

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Grasping At Remedies For The Hotel Data Normalization Headache

Hotel data normalization. Sounds deadly boring, right?

Mention the concept to corporate travel people, and the feeling is more like frustration. Grasp Technologies is testing a remedy that executives claim could actually make the process a snap. They’re not the only ones. Cornerstone Information Systems also has something up its sleeve.

Image: Thinkstock

Image: Thinkstock

Hotel booking data tends to be a mess when it comes out of the back office. Duplicates are rampant because of variations in how a given property’s name can be listed. Some have tried to “key” their reports off the hotels’ phone numbers, but those change. And there’s no standard, updated database. Trying to collect data globally, perhaps from multiple GDSs, and accounting for “passive” records entered manually compound the headaches.

Grasp’s Supplier Normalization Accuracy Platform produces master property identifiers and chain codes by cleaning, matching and validating phone numbers, addresses, geo-coding and latitude/longitude.

“We’re enriching it on the fly, then it’s a scoring thing,” said president and CEO Erik Mueller. “Once it’s validated by enough sources, we give it a score and then go with it.”

“Should this automated process fail to match to a master record with a high degree of accuracy, a new property master is created and queued to our Master File Maintenance team for review the following day,” according to company material. Then it’s “either manually matched to the appropriate master and deleted or the Master Record is then accepted and cleaned to reflect the most accurate and up-to-date data available from the property location manager.”

SNAP is in beta with two of Grasp’s clients and Mueller said a formal rollout should happen by year-end. Pricing is not set but will likely be based on a flat monthly fee with no transaction limit, plus a setup fee.

“We’ll expose it as a Web Service that anyone can hit, an open platform for normalizing data they can feed in to,” said Mueller. “Eventually TMCs will be able to use this to fix data in their back-office accounting systems. The idea is, in the next releases we can push corrections down to back offices of people who want to subscribe to that. Everyone brings it in and cleans it, but our goal is to get it clean at the source.”

Cornerstone Information Systems normalizes hotel data on a regular basis. The company is aiming to offer it as a discrete service via an API by year-end. “It’s an expensive process to maintain if you are doing it right,” noted CEO and co-founder Mat Orrego.

What A Mess

Companies use booking data for policy compliance, supplier negotiations, contract performance and duty of care. Air data tends to be clean because it’s gone through the GDS/BSP process. Hotel data is a different story.

“It’s all a mess, but it’s really a mess when, for example, you’re trying to figure your average nightly rate,” said Balboa Travel COO John Cruse. “If a room rate changes though a stay, the hotel segment in the GDS may show only the highest rate. We’re extremely challenged to take the unstructured GDS data. We get into the same problems when it comes to reporting.”

Balboa is a Grasp client, though not for the new service. “Balboa does it by hand today and they deserve props because they’re one of the most obsessive about data,” said Mueller. “Any time a new property comes in, they validate it themselves. Hopefully this will replace that.”

Ovation Corporate Travel this year created a new normalization process using a proprietary algorithm.

“It had been a mess,” said Ovation Travel Group partner Michael Steiner. “We put a lot of technical resources around that and developed a completely automated process. It employs some third-party and internal functionality to compare each hotel booking. It looks at all the elements — property name, chain code, city code, address, phone. We’ve gone to an accuracy rate of 99.7 percent and saved enormously on labor. In the past, we were around 90 percent and had to get to 100 percent by putting a lot of arms and legs on it.”

TMCs do some things on the front end to improve data quality. Scripts can help standardize manually entered passive segment data. “That’s pretty good,” said Atlas Travel COO Lea Cahill. “But then you add in global data and phone number changes. Our data people believe it would be great if all the GDSs used the same unique property codes.”

Mid-office tools like Cornerstone’s can apply rules to further clean data before it hits the back office “so you don’t have to normalize,” said Orrego. “It’s better to do your data transformation on the front end versus the back end.”

Travel Incorporated CIO Linwood Hayes said it helps that his firm built its own back-office system. Still, he said, “We have to do a lot of quality control.”

“It is hard to have clean data,” said Christopherson Business Travel COO Matt Cameron. “We have some manual systems we run to match duplicates and clean them. It’s not automated, so we sort of plug along. It’s not a great solution but it’s better than anything we could get.”

Before the new service, Grasp’s answer was “still somewhat labor-intensive,” said vice president and chief sales officer Dave Lukas. “We were refining it, and asked, ‘Why isn’t there someone out there doing this? There’s no one, so let’s make it.’ ”

The only other off-the-shelf normalization service sources could recall was provided by TRX. A press representative of TRX parent Concur this week said “resources” for commenting were “tapped out” ahead of the GBTA convention.

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Visa, United Add Key Piece To Ancillary Reporting Puzzle

It was a long time coming, but standardized, global credit card reporting on ancillary airline spending is finally in place — at least for United Airlines’ corporate accounts using Visa cards. The airline in April began sending data through Visa using defined category formats that identify things like bag fees, upgrades and inflight WiFi.

Using spending data on optional airline services during contract negotiations is largely an unfulfilled wish for travel buyers. Tracking such data has never been easy.

To get an idea, travel managers sometimes try to scrub data themselves. They may get help from their TMC, expense management firm or another third party. Functions within self-booking and expense tools that ask travelers to indicate the optional services they purchased aren’t exactly airtight.

“Your airline can give you a report of all your ancillary fees, and they can break it down,” said TCG Consulting senior director Jim Coufal. “If you ask, they’ll give it to you. But you’d have to do it carrier by carrier.”

Buyers for years have clamored for a streamlined way.

American Express tracks U.S. airline ancillary fees as part of client reporting, according to a spokesperson. Delta Air Lines said it began working with Amex on that in 2010. It’s not clear how the Amex ancillary fee tracking differs from that of Visa, which claims it’s the first payment company to offer the capability globally.

Image: Thinkstock

Image: Thinkstock

As Visa worked with United and other carriers, there were lots of moving parts to consider. “This is a complex ecology in terms of processing,” said Sameer Govil, Visa senior vice president of merchant solutions. “ARC, IATA, ATPCo, etc., all have skin in the game.”

At least on Visa cards, Govil said that more than half of U.S. airline transactions today are the non-transit sort. “Our processing frameworks in use for the past 10 or 20 years weren’t built to process ancillary data,” he said.

That meant info on bag fees and the like came through from airlines resembling traditional airfare transactions, except they totalled maybe $5 or $35.

Between 2010 and 2013, Visa worked with ancillary classifications created by the Airline Tariff Publishing Company and the International Air Transport Association. It built onto those during a “hectic round of discussions behind the scenes” with various industry constituents, Govil said.

The result last year was an airline ancillary record, available globally but likely to first get traction this year in the United States, according to Govil. “It’s a change that is quite fundamental to the processing framework,” he said.

On the airline side, though, Govil suggested the change isn’t dramatic. “They have to ensure that they are at least submitting data on these ancillary transactions that conform to the new format,” he said. “Hopefully they clean up their systems and process transit transactions as transit records and ancillary transactions as ancillary records.”

According to an April Visa blog post, the change means transactions would be listed in English, for example “Airline Air WiFi.”

Visa created around 20 ancillary fee classifications. Because those classifications map to a two-digit data field, “theoretically we can recognize up to 100 types of ancillary transactions,” Govil explained. More can be added as airlines think up new ways to charge passengers.

It gets more complicated than that. “The Visa standard supports two levels of data,” said Jennifer Watkins, ARC director of credit card services and fraud prevention. Derived from ATPCo, “they support a group code, what they call an attribute code. They also support subcodes, and there are hundreds of them. That gets down into a lot of detail on what that ancillary service is.”

As the settlement mechanism in the middle, ARC receives daily files from global distribution systems, including the ancillary codes it helped define. It then outputs those codes to credit card companies in a standardized format. (ARC is not involved in ancillary purchases outside GDS channels.)

Watkins said ARC supports Visa’s standard but sees room for improvement. It’s got a project to output all those ATPCo-defined subcodes. She added that ARC has been working with Visa, airlines and corporate travel departments “about what they needed to see to manage their travel.”

All Aboard?

Visa wants its standard to be used around the industry and believes other card networks are considering it. “There isn’t anything Visa about it, so to speak,” Govil said, reiterating the roles of ATPCo and IATA codes. “Airlines, processors and industry bodies are also pressuring [other networks] to do the same; it’s the right thing to do.”

At MasterCard, T&E group head for global commercial products Richard Crum said the company intends to support coding standards for ancillary charges. “There have been many conversations and some progress but, at the end of the day, it comes down to the willingness of airlines to share data,” Crum added. “It’s not yet clear how or when this might be done.”

Govil expects U.S. carriers to lead in adopting Visa’s global standard. In addition to United, “other major airlines have projects underway,” he said. “We believe by the end of 2015 or soon after a lot of airlines, particularly in the United States, will be processing transactions using the new standards.”

A Delta spokesperson confirmed the airline worked with Visa on this project. While Delta isn’t yet sending ancillary fee data using Visa’s new standard, it will be “soon.”

Govil also said that Visa has been working with corporate card issuers to recognize ancillary records and provide correct, detailed statements to cardholders.

“All issuers have to make sure they have fields in the database to take in that data,” said U.S. Bank senior vice president Mary Miklethun. “We do have it in our pipeline to make all those updates. Only once Visa established the standard can you do the work against that standard.”

Then there are expense management firms. “The big entities — Concur and Oracle — have projects underway in terms of getting them to change their current reporting and processing systems,” Govil said. “We are working closely with our commercial card team as they interface with these expense management providers.” Concur would not comment for this article. Oracle could not be reached for comment.

Committing To Transparency

For some travel buyers, ancillary spending represents a small fraction of their air travel costs, so tracking it isn’t worth the grief. For others, it’s a big deal.

Meeting the challenge requires collaboration, and the airlines obviously are key players. Some see good reason why they may be hesitant. “Once they release the data, then the airlines should fully anticipate that the corporations will use it as a negotiating tool, and that’s exactly what they don’t want to see happen,” said GoldSpring Consulting partner Colleen Black.

TCG Consulting’s Coufal doesn’t think airlines are intentionally evasive when dealing with clients on this topic, but agreed that keeping ancillaries out of the equation disadvantages the buyer. “Unbundling came in and now we are negotiating on pure fare,” he said. “Now you are not discounting those fees, so you are paying full price for that kind of stuff. That’s why corporations have an issue with it, because it’s 10 percent or 15 percent of the cost.”

United global accounts director Cyndi Hunter has heard those and other frustrations. For years she has advocated for better ancillary fee reporting, dating to her Continental Airlines days before the United merger. She said the airline is committed to “transparency.”

That not only helps United’s corporate clients, but also the airline. Up to now, “the fee information that the end customer received varied based on the data passed through by the issuing bank,” Hunter explained. “Generally, ancillary fees were grouped into one total charge, requiring us to use other accounting measures to provide specific fee information to our corporate customers. Having this information provided on credit card statements will reduce the need for the other accounting processes we use today.”

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Virtual Payment Attracts Competition In Cindy Allen’s PayForTrip

[UPDATE, Feb 3, 2017: We published new information related to this article here.]

Late of Concur, Cindy Allen and Kathy Burns are looking to cash in on growing interest in the benefits of virtual cards. Their newly unveiled firm, PayForTrip, is the first startup from Allen’s Team Catalyst Holdings. Burns is PayForTrip’s chief commercial officer.

PayForTrip will hire a CEO, but for now, programming work is the priority as the company aims to begin testing for its first client within about a month.

PayForTrip intends to further automate the connection between TMCs or corporate travel departments and the virtual payments process. Partner StoneEagle Services since 2001 has processed virtual payments. It uses patented technology to connect to credit card networks and authorization software. StoneEagle’s process is “PCI-certified [and] SOC2- and SSAE16-audited annually.” Allen worked at StoneEagle for 14 years before joining GDSX (later bought by Concur) in 2008. Her husband is COO of StoneEagle, which serves the insurance, auto, financial and healthcare industries.

PayForTrip users will resend or request virtual cards on demand, according to its website. The service will offer a client portal with “100 percent access to virtual card processing, [the] ability to define and schedule data exports and dashboard views.”

New competitors see opportunity in the growing market for virtual cards. There may be a chance to innovate, compete on price or leverage domain expertise and relationships.

Existing virtual payments firms addressing corporate travel include Conferma and CSI globalVCard. Global distribution systems, booking software developers, travel agencies, payment networks and banks also are angling for a piece of the business. Partnerships abound.

What’s best for corporate clients depends on several factors. For example, do they want to use their existing banks? Where are they issuing the one-time use cards?

Conferma’s platform brings together banks and travel players. Providers like Amadeus e-Travel, Carlson Wagonlit Travel and Sabre sit on one side. On the other, Conferma’s participation deals with banks now are growing especially quickly, said finance director Stuart Birkett. Conferma is “more than doubling year-on-year in terms of our volumes,” he claimed.

CSI Enterprises vice president of travel Juliann Pless said globalVCard works with such TMCs as Adelman Travel Group, AmTrav and MacNair Travel Management, but also sometimes the end client. Its latest partner is agency technology developer MagnaTech Travel Management System. CSI doesn’t offer a list of banks like Conferma; rather, it issues cards through preferred partner Regions Bank.

“Last year at GBTA we had one customer, one TMC,” said Pless. “Now there are over a dozen TMCs we’re integrated with, and we have about 25 corporate accounts.”

Allen said a PayForTrip mobile app would be a natural, but it’s not slated for the initial release.

Conferma and CSI see their mobile apps as key components of the offering, particularly as troubles at the hotel front desk linger. The apps allow travelers to show the front and back of virtual cards, in the event that a hotel failed to receive (or keep track of) the fax generated by the single-use card process. The apps enable faxes to be resent, as well. Conferma’s Birkett said the app is “contributing to increasing acceptance. As much as anything, it can give the traveler piece of mind to know that while this is a new way of paying, they still have the card.”

The CSI globalVCard app predated Conferma’s TripPay on the Android and iOS platforms, and also includes functions for card program managers.

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Price Assurance Firms Go Global, Add Features

Price assurance remains an active area of development for corporate travel. Madrid-based Trappit now is challenging Yapta on the global stage for airfares. It’s got a hotel product in the works, too. Hotel-only provider TripBam, meanwhile, rolled out some significant enhancements during the past few weeks.

The basic idea is to continually check already-purchased seats or rooms against newly published rates, and cancel/rebook if appropriate. There are several considerations.

TripBam’s latest developments focused on preferred property relationships, negotiated rates and commissionable rates. Its clustering concept enables program managers to highlight preferred properties when re-shopping a booked non-preferred. TripBam founder and president Steve Reynolds said one client recently increased usage of preferred properties by 25 percent.

Another new service helps TMCs and their clients maximize commissions. Using TripBam to replace less lucrative bookings has earned Balboa Travel “tens of thousands” in incremental revenue since the start of the year.

“Most negotiated rates are net of commission, but even in the large corporate market, we’ll find commissionable rates that beat net,” said Reynolds. “There’s an assumption that a 20 percent discount, and maybe I’m getting breakfast, is the best rate. But you can often find a rate better than your negotiated rate that’s also commissionable and comes with those amenities. Travel buyers may feel like we’re kicking the teeth in on their hotel programs, but they can show executives more cost savings and more revenue. Commission revenue to a travel manager is gold.”

The spending still is counted in preferred hotel relationships, he noted.

TripBam also recently released a “last search” option that scans for distressed inventory rates at the traveler’s booked hotel within the day before check-in. The company also enhanced its email templates to “improve traveler acceptance of lower rate offers.” And it created attachment messaging to prompt travelers to add a hotel booking after they’ve purchased air travel.

Balboa Travel has been “all in” with TripBam since January, said COO John Cruse. Clients need to opt in for the service, and he said it’s now applied to about three-quarters of the TMC’s hotel bookings. “The ROI has been demonstrated, 100 percent,” said Cruse. “Before, I didn’t understand that hotel rates change so often. So now we keep taking snapshots through the life of that PNR, which also opens a whole new world on reporting. Customers are surprised and happy.”

Balboa uses internal processes for airline price assurance.

Yapta formally launched its RoomIQ hotel price assurance service in February. Facilitating “the opportunity to move from a non-preferred hotel to a preferred hotel” is on the company’s development roadmap, said president and CEO James Filsinger.

Since launching its FareIQ airfare product in 2012, Yapta has saved clients more than $13 million. On average they save $260 on adjusted itineraries. Yapta is currently operating at U.S. points of sale only, but could expand internationally as early as next year, said Filsinger. One of Yapta’s investors is Amadeus. Filsinger said an imminent connection between the two companies’ technologies opens the door to a stronger position in Europe. Yapta already connects to Sabre and Travelport’s Apollo.

“It could end up that our hotel product goes international first,” Filsinger said.

TripBam recently expanded into the United Kingdom through a partnership with London-based TMC Business Travel Direct.

Manuel-Martinez

Trappit board member Manuel Martinez

Newcomer Trappit offers a Yapta-like service in “any currency,” its founders claimed. Its Airline Reservation Price Optimization system launched in September 2013. Spain’s IA Grupo7 is among the corporate travel agencies that use it. Trappit said several large corporations do, as well.

Trappit’s hotel tool is developed and tested, “but not commercialized yet,” according to Manuel Martinez, a member of the company’s board. He said execs are debating whether the service should be for consumers or businesses. TripBam and Yapta also faced such crossroads in their early days, and wound up going business-to-business. Other players addressing consumers, at least for hotel, include Germany-based DreamCheaper and TripAdvisor’s Tingo.

Like the other B2B services, Trappit takes into account cancellation penalties and booking fees before recommending a new price. The firm charges 25 percent of the savings. Trappit announced in December it had raised investment of more than 700,000 euro.

The company claimed it cuts airfare spending by up to 30 percent for nearly one-third of flights, and can reduce by 10 percent the total amount billed by a given travel agency.

“The savings shown by Trappit and proven in live customer relationships sound very interesting to the corporate world,” according to consultant Winfried Barczaitis, based near Cologne, Germany. “There are very rare opportunities where you can save another approximately 10 percent without any influence on quality of travel. The corporate customer has to agree with its TMC a reasonable transaction fee, as the transaction has to be touched again. Normally even a doubled offline fee should cover the additional cost for the TMC and still the savings potential should be positive for the corporate customer.”

Related to that, Yapta is working on automated re-ticketing for itineraries that meet the right criteria — thus reducing the number of changes that incur an agency fee.

Trappit’s Martinez is excited about the potential value in the firm’s business intelligence.

“After managing through our system thousands of fares to be able to provide cheaper offers, our system has developed great intel on the behavior,” Martinez said. “We can provide outstanding information to the corporations and travel managers, or to the travel agencies. We have a fantastic view of behaviors and offer guidance on how the air ticket portfolio in that corporation has been managed — the opportunities that have not been taken, and the reasons.”

Trappit has 27 employees and expects to generate about 1.5 million euro in revenue for 2015. Building from Western Europe, officials expect soon to offer services in Eastern Europe, the Middle East and Latin America.

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What To Know About The Chip Card Shift

A liability shift in October will transfer responsibility for covering U.S. card payment fraud to the party with less secure payment technology. Cards with chips are considered safer because they generate a unique code for each transaction, making counterfeiting seemingly impossible. Merchant locations without terminals capable of reading chip cards will be on the hook when fraud occurs. If issuers haven’t provided chip cards to consumers, it’s still on the issuers. Most corporate card providers already started moving accounts to chip cards.

Maybe these new cards will be the last generation of physical payment. Emerging alternatives, including virtual cards and mobile solutions like Apple Pay, may start to obsolete old-school plastic. But not yet.

Image: Thinkstock

Image: Thinkstock

A GBTA Foundation/U.S. Bank February survey of 148 travel buyers found that more than nine in 10 use a corporate card program. Twenty percent use single-use virtual accounts. The survey also found that 64 percent of represented companies use a Central Travel Account (also called ghost or lodge accounts).

Migration to EMV chip technology is not mandated. For the foreseeable future, new readers will read old mag-stripe cards and new cards will have mag stripes that work in old readers. Count on that only in the United States. In many other countries, the switch to EMV technology happened years ago. U.S. travelers using mag-stripe-only cards elsewhere run into problems.

As they make the shift to chip cards, banks and corporate program administrators are providing instructions to cardholders. But many don’t read them and may encounter difficulties, especially the first time using new cards.

The liability shift affects only in-person (card-present) transactions. So, not most typical corporate travel purchases. Air tickets purchased through a travel agency or corporate booking tool, for example, often use a lodge account or a card on file. Same for hotel reservations.

But there are plenty of places where a business traveler needs to pay in person, and usually does so with a credit card. Those include restaurants, taxis, sometimes hotels (where cards are swiped at check-in) and even airport kiosks (for seat upgrades, perhaps).

These points of sale aren’t necessarily more vulnerable to shenanigans than other merchant locations. But travelers still need to know the proper procedure when using new chip credit cards.

First they should understand which type of card the bank issued. Chip-and-PIN means users input a personal identification number rather than signing during a transaction. Chip-and-signature means the user signs rather than inserting a PIN. Some chip-and-signature cards also have PIN capabilities. U.S. Bank issues such cards to corporate accounts, to cover cardholders in places where signatures aren’t accepted as authentication.

“One of the key criteria in all the sourcing we are doing on p-cards and travel card programs is to have PIN-and-chip, not signature-and-chip,” said Jim Coufal, senior director of TCG Consulting’s global payment and expense management practice. He, too, noted the problems experienced by international travelers — at unattended train station kiosks and gas stations, for example.

Regardless of the authentication method, users must dip their card in a chip card-reading terminal and keep it there for the duration of the transaction, rather than a quick swipe. In an August 2014 usability study, MasterCard found that 27 percent of participants removed cards too soon during their first transaction with a chip card. Eight percent made the same mistake on their second try.

The U.S. Department of Defense’s experience highlights some of the migration challenges corporate card programs may face. According to DoD’s most recent travel newsletter, Citi began issuing chip-and-PIN cards to DoD travelers in February. As a first step, users have to call and activate the new cards. For DoD, travelers also need to update their Defense Travel System profiles. That means inputting the new card’s expiration date and, if replacing a lost or stolen card, new card number. “Failure to take this simple step means that a commercial travel office is unable to issue an airline ticket without speaking to the cardholder first,” according to DoD. “This leads to a cardholder being charged a CTO fee and could potentially earn a higher-cost flight/ticket.”

Migration Status

American Express expects “the majority” of its cards will be chip-and-signature “by the end of 2015,” according to a spokesperson. Amex issues chip-and-PIN cards in several countries where infrastructure can support them. In the United States, the spokesperson said, issuers, acquirers and merchants have more work to do “to ensure the usability of chip-and-PIN functionality.”

At MasterCard, “most, if not all, issuers are fully engaged,” according to Richard Crum, group head for T&E global commercial products. “EMV is part of their sales and implementation and onboarding processes for new or converted corporate card programs.”

A Visa official couldn’t say how far along issuers are in converting to chip corporate cards, given that each “is on a different timeline.” The official noted that Visa supports issuer choice regarding signature- or PIN-based authentication.

U.S. Bank officials said the company accelerated the migration to chip-and-signature/PIN that began last fall. It remains on track to switch all corporate travel cards by October. The bank, which issues corporate cards on both the Visa and MasterCard networks, plans also to replace all one-cards and purchasing cards by the end of 2017.

On the merchant side, the Payments Security Task Force in May estimated that “at least 47 percent” of U.S. terminals will be chip-enabled by the end of this year. The group represents eight financial institutions that account for about half of total U.S. payment card volume.

Smart Card Alliance executive director Randy Vanderhoof said many merchants that haven’t started migrating won’t meet the deadline. He said that’s due to long queues at the acquirers and payment systems providing the necessary hardware and software.

That’s not such a big deal, added Vanderhoof, who also serves as director of the EMV Migration Forum. “There will be a large number of merchants in a similar position and so the fraud migration to the least secure parties in the payments transactions are going to be minimal at the start and will increase over time,” he explained. Plus, restaurants and taxis aren’t prime targets for fraudsters, “compared to larger general merchandise chains, convenience stores, jewelry stores and supermarkets.”

Speaking during his group’s April 29 webinar, National Restaurant Association vice president of payments and financial services Jim Higgins said restaurants are migrating slower than other merchants. He pointed out the problem of bringing chip card readers to diners at their tables, where payment transactions often occur. “There’s other technology emerging for mobile payment, making it unclear if we use NFC or QR codes and how to get that into a table delivery format,” Higgins said. “Maybe we use a tablet that can handle EMV cards.”

The issue also may affect travelers at airports. American Airlines’ kiosks, for example, “do not process the chip-equipped cards,” according to a spokesperson. The carrier has no plans to update them. A United official said that carrier “will be swapping out our credit card readers for the new chip technology,” but didn’t provide details on when.

Additional info: MasterCard vice president for go to market strategy Jan McGrath shared some consumer research during the National Restaurant Association webinar. In a survey of 2,200 participants completed at the end of March, 69 percent indicated they were aware of EMV. That was up from 60 percent in 2014 and 50 percent in 2013. One-third said they would change banks if theirs didn’t offer chip cards (up from 9 percent in 2013). Forty percent indicated they’d rather shop at merchants which accept chip cards. MasterCard also found that 62 percent of participants preferred chip-and-PIN. The rest favored chip-and-signature.

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Despite Published Info, Apple Pay Still Not Available For Corporate Cards

[UPDATE, April 8, 2016: We published new information related to this article here.]

Some travel managers and TMCs are fielding questions about when Apple Pay will be available for corporate card users, but don’t trust the website.

At press time, Apple showed five institutions as providers of corporate cards supporting Apple Pay. They weren’t exactly commercial payment heavyweights, but it appeared to be a start. The Company Dime contacted all of them, and it turns out that none really are enabling corporate cards through the service.

When Apple Pay launched last autumn, interested financial institutions started with consumer cards. For corporate, processors and payment networks have some work to do.

At MasterCard, “we expect the process to begin before the end of the year,” said group head of global T&E products and solutions Richard Crum. Amex and Visa did not comment.

The website confusion might be related to product definitions at the card issuers, which provided the info to Apple. A few of those listed do issue small business cards compatible with Apple Pay.

But corporate cards are a different breed. They have more functionality, better data reporting and several ways for clients to configure liability. Available credit oftentimes is based on the corporation’s credit rating, not the individual cardholder’s.

One of the five entities to indicate “corporate card” for the Apple Pay site is Boeing Employees’ Credit Union. It has a relatively new business product line targeting smallish businesses. It includes small business cards issued on the Visa network. Director of payments Ken Myhra said the credit union is looking to evolve that program “more toward the true commercial card.”

BECU has $13.5 billion in assets and 940,000 members. On Feb. 3 it went live with Apple Pay across all its card types — except small business credit and debit cards, which got going in the first week of March. “They were eligible but there was just some extra work to do on the brand issuer side,” Myhra said.

Same deal for corporate cards, but that work isn’t done.

“Each of the networks is going to have to identify how they deal with this concept of tokenization — replacing the 16-digit account number with a unique token — and their approaches won’t likely be the same,” said U.S. Bank senior vice president Mary Miklethun. “Visa and MasterCard have to establish standards for how it will work and neither has done that yet. We don’t yet know when those standards will be released. And then the processing platforms, whether Total Systems who we work with or First Data, have to comply with those standards before the issuers can begin to support it.”

A Bank of America Merrill Lynch executive was quoted in May saying the company may be equipped to offer Apple Pay on corporate cards this year. Global card and comprehensive payables for global transaction services head Kevin Phalen “agrees that it is now looking like a 2016 event,” according to a spokesperson.

From a wider consumer perspective, awareness about Apple Pay is high, according to payment consultancy First Annapolis. Its first-quarter 2015 poll of 1,434 smartphone users found that about one in five iPhone 6 users have used Apple’s payment service. “While early adoption of Apple Pay may not be as high as many expected, usage will likely continue to increase as the upcoming launches of other mobile payments solutions (e.g., Android Pay, Samsung Pay, CurrentC) expand the merchant acceptance base and broaden the availability and visibility of mobile payments in general,” according to First Annapolis.

At the moment, few travel merchants accept Apple Pay (JetBlue does, for onboard purchases). Most corporate travel is booked in advance and/or through centralized means anyway.

For some travel and card program managers, it’s first things first. “We have not explored this option yet,” said Yasuo Sonoda, senior global manager for travel and card services and procurement analytics at VeriSign. “Chip and PIN/signature is our target.” (Incidentally, the same goes for Target. The company won’t yet follow other big retailers in accepting Apple Pay until it finishes readying itself to accept chip cards.)

Additional info: Visa officials did not respond to inquiries. An American Express spokesperson wouldn’t comment on Apple Pay but indicated that the corporate card division “is committed and investing in mobile wallet platforms so that when these platforms reach broader scale our corporate card members will have the ability to use them.”

Many financial institutions already offer Apple Pay in the consumer world. Check out the long list of Visa issuers doing so here.

The Apple Pay site, which isn’t meant to be comprehensive, previously showed six entities as offering Apple Pay on corporate cards. Apple would not comment for this article.

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Digging Deeper For Fare Bundles

JetBlue last week began selling bundled fares in a new three-tier structure. The content is accessible in global distribution systems, but most corporate self-booking tools don’t yet fully display the options. AmTrav last week claimed its homegrown booking tool was first.

Hooking up the new content isn’t about connecting to an API or building an alternative mechanism, said AmTrav CEO Jeff Klee. It’s a matter of digging deeper and “making extra calls — not just the calls for the lowest fare that everyone makes. Instead of relying on the high-level GDS shopping calls for everything, we access a lot of the lower-level data that’s more buried in the GDS.”

JetBlueGiven how JetBlue “files the fares with the fare basis codes, there’s a way we can make a request to the GDS,” Klee explained. “For this JetBlue passenger we want this type of fare, which we know maps to what they call the Blue Plus bundle.”

Blue Plus is the mid-range option, including a free checked bag. Top-tier Blue Flex includes two checked bags and complementary expedited security screening. The tier level dictates the fee for cancellations and changes and the rate of loyalty program point accrual.

According to JetBlue’s website, a one-way nonrefundable fare between New York JFK and San Francisco for next Monday morning was $440 in the base Blue category. For the same flight, the Blue Plus fare was listed at $454 and the Blue Flex at $539. A premium Mint seat on that flight was listed at $1,099.

Deem users also see JetBlue bundles. A company official said the system’s low-fare search logic (furnished by Google’s ITA Software) initially turns up JetBlue choices. After a traveler selects a JetBlue flight, “Deem will verify in the GDS with a pricing request,” according to the official. “If the GDS has a block in place for the new fare types, the user will be prompted that there is a fare increase and will be allowed to proceed with the higher fare. They will also be notified if this increased fare places the flight out of policy for them.” Deem also updated bag fee displays to account for JetBlue’s fare structure; in the lowest tier, the airline for the first time isn’t allowing free checked bags.

NuTravel expects its self-booking tool to handle full JetBlue fare bundles as early as the end of this week. “If an online booking tool already displays fare bundles like American or Air Canada, etc., this is a no brainer,” according to nuTravel CEO Carmine Carpazano.

Meanwhile, Concur is “actively assessing what product modifications will be needed to support JetBlue’s new fare structure,” according to senior director of travel product management Katherine Sullivan. “JetBlue has taken an approach that is different than most suppliers by utilizing a buy-up versus a true fare family strategy (aka Branded Fares).”

Concur sells JetBlue’s first tier. Sullivan said timing on modifications necessary to accommodate the two pricier levels is to be determined, but the company is shooting for this year.

A Sabre spokesperson said GetThere “can support the lowest available non-refundable and refundable fares for Blue and Mint fares. Our corporate solutions team is exploring enhancements to make additional fares available to travelers.” Amadeus also is “in discussions” with JetBlue regarding fare bundle displays in the Amadeus E-Travel Management self-booking tool, according to an official.

AmTrav’s Klee said the JetBlue fare restructure “was a good test” following a few years of updating architecture. AmTrav accesses American Airlines’ fares bundles in a similar way.

“It’s been a priority of ours for a while to create parity with the airline websites,” Klee said. For example, AmTrav used Travelport’s Universal API to claim firsts in providing Delta and United upsell options.

As in those cases, corporate travel policies may be a consideration. But customers haven’t yet requested controls for JetBlue’s new fares. “If you allow someone to spend up to $25 or $50 above the lowest logical fare you’ll be covered here” by JetBlue’s mid-range bundle, Klee suggested. “If you are buying up because you’d have to pay for a bag anyway, we think companies may want to allow that. If I’m wrong, we’ll allow companies to configure whatever policies they want.”

While JetBlue lists fare bundle info in GDSs for travel agents, Sabre and Travelport indicated the carrier could do more to enhance displays. They cited potential use of Sabre Branded Fares and Travelport Rich Content and Branding, respectively. The Amadeus official said the company’s GDS accommodates JetBlue’s fares through the Amadeus Fare Families and FareXpert products.

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Airbnb Plans Better-Curated Business Listings

Airbnb has set up a pilot program in San Francisco to “help hosts tailor their listings to business travelers.” It’s now gathering “business-ready” property information.

Among the qualifications, the property must be listed in its entirety, keys must be available at all hours on check-in day, pets and smoking are not allowed and the host must have accepted at least three bookings in the past. In addition, the host may not cancel “confirmed listings within seven days of reservation” and must respond to customers within 24 hours at least 90 percent of the time. Meanwhile, the property should be rated at five out of five stars among at least 60 percent of guests for cleanliness, accuracy and reviews. Airbnb could not immediately be reached for more details.

Would-be business-ready hosts also must upload to Airbnb pictures of required amenities. These include toilet paper, clean towels, fresh linens, shampoo, coffee and tea, smoke and carbon monoxide detectors and a laptop-friendly work space. The company plans to “periodically” check with guests on whether they’re getting the required service levels and amenities.

If not, “the host will receive a one-time warning,” according to the site. “After a second report, the business-ready classification will be removed until after three bookings have met the required service and amenities standards.”

Though nowhere near as formal as a hotel franchise agreement, the business listings program augurs an increase in Airbnb’s attractiveness to corporate clients.

“Airbnb is a little bit of a sleeper at the moment for our core client base in that it definitely has interest and is getting some use, but it’s at the fringe of what most of our clients are looking for,” said American Express Global Business Travel vice president, digital traveler Evan Konswiser. “For the business traveler, it doesn’t make complete sense just yet. However, there are things that Airbnb can do and things the market will evolve to be like that will likely change that in the coming months and years. It’s having more penetration in the extended-stay corporate model. So I think that’s where we’ll see it have the first impact.”

BCD Travel director of emerging technologies Miriam Moscovici said the market continues to learn about which travelers are most suited for Airbnb. “A longer-term stay, or conferences, tight markets or different types of travelers traveling for a different purpose, all might need different accommodations,” she said. “That’s barring the risks of a host not showing up or a person not being able to access ‘technical support’ for something going on in a unit.”

Aside from the smoke and CO detectors, the new criteria do not address some of the risk concerns.

TD Bank Group manager of corporate travel strategic sourcing Samantha Barrett-Wallis outlined some of these during a June Association of Corporate Travel executives online conference. “There’s no concierge, somebody out there that you don’t know has a key … who knows whether the building is up to code,” she wrote. “We’re mute on the issue in our policy, but as you can see, it has me concerned.”

About a dozen travel managers with companies based in the eastern U.S. time zone since May told The Company Dime that their travelers have not shown interest in Airbnb. But some West Coast companies do use it. Sources said it was too soon to expect Airbnb to have an impact on hotel rate negotiations.

Smith Travel Research senior vice president Jan Freitag in a May interview said general managers running traditionally business-oriented hotels do see an “impact on the margin … but overall they were not too concerned.”

“Thus far, hotels have largely adopted the strategy of ignoring the platform, or hoping regulators will solve the problem for them by requiring health and safety compliance, and to charge taxes on listings,” according to a GrantThornton report released in March. “Greater regulatory oversight is likely inevitable by 2020, but it is unclear to what extent this will slow the growth of the sharing economy. Many hoteliers also believe that sites like Airbnb operate in a fundamentally different niche to theirs: it’s not for business travelers, they argue, it’s just for students looking for a spare sofa, or people willing to share a room. But if hotels do not adapt by 2020, we believe they will face significant disruption.”

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Coupa, Chrome River Bag Millions

June was a huge month for two of Concur’s California-based competitors. Coupa raised $80 million at a valuation of $1 billion. Chrome River picked up $100 million, declining to disclose its assessed worth.

Enterprise tech is attracting venture capital as established and new providers exploit mobile and cloud technology. The moves also reflect a competitive expense management software marketplace following SAP’s $8 billion deal last year for the market leader.

Chrome River and Coupa are spending on sales, marketing and global expansion as they chase opportunity amid the shakeup.

Operating in a business where one can ill-afford complacency, they’re also investing in their products. Mobile, especially, is a differentiator. Usability is paramount. Business intelligence requires funding.

Nine-year-old Coupa’s spend management and e-sourcing solutions compete with companies like SAP’s Ariba. Coupa has about 400 employees, up from 300 last fall. It claims more than 500 clients, including about 120 for the expense service. It integrates with travel partners including Orbitz for Business.

Released in 2011, Coupa’s expense system has the same look and feel as its invoice and purchase order automation. For customers using multiple modules, data integration can help identify new areas for sourcing or change end-user behavior. Let’s say an employee submits an expense that by policy should have been processed via purchase order. Coupa’s systems can present the appropriate policies and procedures. “These users don’t remember policy,” said Coupa vice president for product management Donna Wilczek.

Meanwhile, VentureWire reported that Chrome River is targeting $25 million in revenue this year, up 50 percent. Founded in 2007, it has about 380 clients, including a whopper announced in March: $140 billion food and agriculture firm Cargill.

In addition to opportunities among Concur’s client base, these players agree with SAP’s CEO that “there’s lots of greenfield here.” Chrome River’s investors told VentureWire that about 65 percent of large enterprises use homegrown expense systems or manual processes.

Other firms are attracting new capital, as well. Expensify last fall added about $3.5 million in funding “to ramp up its sales and marketing,” according to TechCrunch. Deem a year ago raised $50 million in “expansion” capital. The 15-year-old company last week announced mobile expense management and automated receipt processing.

Of course, financing does not equal execution.

“While securing new venture capital sounds exciting, company founders and leadership teams can quickly lose control of their organizations to new investors,” according to Certify CEO Bob Neveu, responding to the Coupa and Chrome River news. “We use a blend of financing methods to expand our team and invest in growth.”

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