Monthly Archives: November 2015

Moving Comfort From Fee to Fare

[UPDATE, May 25, 2016: Delta now is selling Comfort Plus as a distinct fare type to, from and between certain Asia/Pacific and Latin America markets. For itineraries including those markets, Comfort Plus fares also are available for any associated domestic segments. Exclusions include Argentina, Brazil, China, Hong Kong and Taiwan. In excluded markets, Comfort Plus remains a post-purchase add-on. The airline noted that Comfort Plus “is most easily purchased” when booking in a direct channel, though Delta “remains engaged with distribution partners” to enable such purchases through travel agencies. The airline indicated that these fares are being sold neither through the Amadeus global distribution system in Asia/Pacific markets nor the TravelSky GDS at any point of sale.]

[UPDATE, April 14, 2016: Delta announced that corporate clients and travel agencies now can apply ticket designators to Delta Comfort Plus fares (which take effect for travel from May 16), First Class F-Upsell and Basic Economy bookings. “Agency and corporate incentives can now be easily applied to these branded products,” according to the airline. “Corporate Priority and recognition benefits will also apply.”]

Delta’s premium-economy product no longer will be an ancillary item that travelers only select after purchasing a regular economy ticket. For travel from May 16, 2016, Comfort Plus is its own distinct fare at the point of sale for domestic U.S. flights and services to Canada. That makes it easier for agents and travelers to find and book. It brings premium economy into the corporate discount discussion and prompts another look at class-of-service policies.

Delta says Comfort Plus is for sale in global distribution systems “in the same manner as other fares and will not require updates to travel agency systems.” Corporate travelers using a self-booking tool can find Comfort Plus fares when shopping for premium economy services.

Image: Thinkstock

Image: Thinkstock

Travelers will know the cost upfront rather than adding on the upgrade fee after purchasing an economy ticket. Some loyalty program members still get complimentary upgrades to Comfort Plus (lots of info here) — if there’s any space.

United Airlines and American Airlines don’t sell their premium-economy products as distinct fares. American provides free upgrades to Main Cabin Extra for customers purchasing full-fare economy fares and those in higher loyalty program tiers. Some other loyalty program members can upgrade at a discount. United, too, gives free upgrades to Economy Plus for high-ranking frequent flyers.

By making the product a fare (W class), Delta can tinker more with the price. Managing director of merchandising Andrew Wingrove said the Comfort Plus cost always had been variable, with route-specific prices that differed during peak versus non-peak times, for example. Compared to thoroughly revenue-managed fares, though, upgrade pricing was “not that scientific, which is one of the beauties of making it a fare,” Wingrove said. “It enables it to be a bit more dynamic.”

Does that mean it’ll cost more than before? The Cranky Flier checked out some pricing, and wrote: “So far, it’s mixed.”

Advito vice president Bob Brindley said it may be instructive to look at how airlines price a first class fare versus a first class upgrade. “The first class fare is priced much higher than what the upgrade would be priced at,” he said. “The difference is, you bought the first class fare that’s fully refundable and can have a corporate discount, or you buy the upgrade from the economy ticket that’s not refundable and you can’t discount it.”

In the initial phase, corporate discounts don’t apply to Comfort Plus fares as Delta sorts out ticket designator codes (though they do count for agency incentives and commissions). Wingrove sad the airline is working with GDSs and online booking tool providers to fully apply its new fare basis code structure, which will allow for premium-economy corporate discounts (and wrap in Corporate Priority recognition benefits).

Delta also is working to “properly merchandize” its branded fares by bringing seat maps, product images and descriptors to more points of sale. “We have been working actively with Travelport, Amadeus and Sabre,” Wingrove said. “Later next month Concur will be offering something similar.”

At the same time, Delta’s sales team is preparing to discuss with customers how Comfort Plus ‘W’ class could fit into corporate programs.

Comfort Plus is one of three fare classes in Delta’s economy cabin. The others are Main Cabin and the highly restrictive Basic Economy.

Comfort Plus provides priority boarding, dedicated overhead space and more legroom (but not free Wi-Fi). Now, travelers can book it once for the entire trip instead of securing separate upgrades for each direction. Travel agencies don’t need to process separate transactions for the ticket and the ancillary fee. Refunds now are based on fare rules; Comfort Plus as an ancillary had been nonrefundable.

Up to this point, travelers without sufficient status to get free upgrades to premium economy might have received them through their company’s preferred relationships. Under the waivers and favors umbrella, it had been a manual process before airlines starting bringing in new automation.

“Now that it’s being sold upfront, its good for the corporation in that they can more effectively manage this the at point of sale,” said GoldSpring Consulting partner Neil Hammond. “Introduce it as a policy or not.”

Advito’s Brindley said companies with policies stipulating economy class for flights below a specified length and business class above now have “a third level that you might have to factor in between.”

“When do they allow those fare classes to be booked?” he asked. “In almost all cases, upgrades are not reimbursable. Will they block W class same way they block first class?”

Delta had been using W class for international bookings in joint-venture partners’ premium-economy class. Will Delta extend Comfort Plus as its own fare to routes beyond the United States and Canada? “I’ll never say never,” Wingrove said, “but there are no plans to share at this time.”

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Podcast 5: Lessons From Paris

Join us as we talk to travel management professionals about business travel services, expense management and careers on The Company Dime’s podcast. Continue reading

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Travel Leaders Corporate Asserts Objectivity With New Consultancy

About a decade ago the largest travel management companies created consulting units to help organizations with supplier sourcing and other projects. They targeted both existing and non-clients of their TMC services. Few smaller TMCs have followed but now Travel Leaders Corporate is giving it a go.

The company in September announced Financial Solutions, a “proprietary and customizable offering” that goes “far beyond typical travel management.” It’s targeting midmarket clients with supplier sourcing and program optimization services. The company is looking to generate a profit from the new group by 2017. Execs are projecting that in about three years, the unit will generate as much as one-fifth of Travel Leaders Corporate’s revenues.

Travel Leaders Corporate vice president of growth Parker Schlank

Travel Leaders Corporate vice president of growth Parker Schlank

The consultancy is distinguished for its business intelligence technology and financial expertise, including individuals brought in from outside the travel industry, executives said. The program assigns each client a three-person team. Engagements can last an atypically long two to three years.

Clients testing the program so far have enjoyed business travel savings of up to 7 percent, the company claimed.

Data crunching includes credit card and expense system feeds, back-office and global data, and general ledger information to track savings alongside corporate financial metrics. Key performance indicators on leakage, total cost (including ancillaries) and the impact of market-specific pricing offer “a clearer picture of each travel operation,” according to the company. Clients can view the info on a proprietary mobile- and web-optimized business intelligence interface.

Travel managers speaking during the Meetings Technology Expo in New York this month said integrating these different data feeds is valuable, but challenging. Pearson manager of travel services Mitchell Stern called a related project underway at his company a “moon mission.” The goal is identifying when travelers are booking first-class air travel or $500 hotel rooms outside the preferred company channels. “We’re combining expense, agency and corporate card data to close the loop,” Stern said. “We’re in the infancy stages.”

The new Travel Leaders Corporate service costs “significantly less than a typical consulting commitment,” said vice president of growth Parker Schlank. “This offering is not the type of exercise where we are charging six figures to issue a single RFP and checking the box as complete.”

He claimed that “bringing in financial experts from outside the travel industry has never been done before by travel management companies.”

Independent industry consultants for years have criticized TMC efforts to consult on sourcing as biased in favor of their top suppliers.

“Consultants doesn’t get commissions and overrides,” said Partnership Travel Consulting’s Andy Menkes. “Consulting is the new revenue stream TMCs came up with when commissions went away. Each large one will do airline, hotel and car sourcing. It’s rare, but in some cases they’ll do corporate card. There’s a blurry line between account management and consulting. With account management, it’s expected that it’s included in the base transaction fee.”

Some TMCs argue consulting services shouldn’t be teased out for an added fee. A slogan on Pennsylvania-based World Travel Inc.’s website sums up this point of view: “We don’t look at meeting your program needs as a revenue driver.”

Adelman Travel Group recently combined account management services with consulting services, and even trains its sales department to be consultants. “We’re reviewing information based on trends proactively and then offering solutions based on those trends, as opposed to waiting for the travel manager to come to us,” said Adelman president and COO Steven Cline. “This is part of our standard offering.”

For other TMCs, when the engagement is complicated enough, it’s not included.

Account managers at Tennessee-based World Travel Service Inc. offer consulting but “there are occasions where it’s something a little bigger and we’ll go to Advito,” said president Lamar Shuler. Advito and World Travel Service share a parent company in BCD Travel.

Ohio’s Professional Travel Inc. partners with indirect spend category consulting firm ICS Network for deeper engagements. “They try to see the world from a buyer’s perspective,” said Professional Travel executive vice president Rob Turk. “They add that layer for the midmarket companies that don’t have the bandwidth. And it extends our services to a higher level to compete with the Advitos, etc. Depending on the engagement, we roll it in or we add a separate fee to it. Our account management team has to play that role to a certain extent with the customers they manage, but from a strategic point of view, it’s nice to have a separate team.”

Agnosticism: ‘It’s Our Job’

“When TMCs talk about trying to upsell or cross-sell products within their own customer base it’s difficult,” said Schlank. “They want to homogenize it, and have it be part of the transaction fee. So creating that value proposition was the first key. We don’t have to be their TMC to do that. We’re comfortable being that agnostic consultant without having to own their transient business at the same time. The cost of change is enormous.”

Travel Leaders Corporate president David Holyoke elaborated: “Our approach is to be agnostic. Obviously there’s visibility into things that could be a conflict of interest. This group that supports Financial Services is not part of our standard business offering. They don’t service our corporate customers today.”

Would the consulting group advise clients to pursue a strategy that seems to reduce revenue for the TMC model? Open booking, for example?

“You have to look at it,” said Schlank. “There are industry segments out there where there are opportunities to be explored outside the traditional managed travel perspective. If customers are not getting a reasonable return on the fees they’re paying a TMC, it’s something you have to look at with them. It’s our job.”

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Paris Response: Ready And Able, But Rusty

Annapolis, Md., Trevose, Pa. and Philadelphia – Travel risk management programs worked as designed after Friday’s attacks in Paris, according to executives at leading TRM firms. But they said some clients need more practice and familiarity with systems and protocols. It’s one thing to have in place the appropriate infrastructure; it’s another to know how to quickly use it in a crisis.

The Company Dime visited iJet International and International SOS this week at their operations centers in Annapolis, Md., and Feasterville-Trevose, Pa., respectively. Execs stressed the importance of drills, training and knowing the pre-planned process before an event happens rather than learning as it unfolds.

Image: Reuters/Yves Herman

Image: Reuters/Yves Herman

International SOS EVP Tim Daniel said big companies doing business in very risky places typically have 24-hour centralized security operations centers. But tens of thousands of other organizations don’t. Maybe the point person is the travel manager, HR manager or someone else whose primary job isn’t security or risk. In those cases, Daniel said tools are useful “but the biggest challenge is, do they know how to use them when they need to?”

The most common client request on Friday afternoon and evening was for login/password resets because clients don’t use the systems regularly. In a normal day, about 30 to 40 such requests come in. On Friday, there were about 600.

Daniel said organizations should find reasons to do dry-runs. Maybe a big company event is a good opportunity to make sure the appropriate people know how to quickly access TRM systems and to check that mobile phone numbers are in traveler profiles. “A lot of it is roll-up-your-sleeves stuff,” he said.

Though iJet COO John Rose said the overall response was “the smoothest operation we ever ran,” some clients weren’t on the ball. They didn’t know the immediate courses of action. It wasn’t that the process failed in those cases, Rose said, but practicing would make it better.

He likened that advice to fire drills. No one likes them, but everyone has a pretty good understanding of what to do if there’s a fire.

Rose also emphasized the importance of not only checking in with travelers to make sure they are safe, but also knowing their exact locations. In the evolving Paris crisis, additional attacks that night could not be ruled out. Organizations need to know where travelers are so they can steer away from harm. There are privacy laws to consider, “but there should be protocols,” he said. “When it’s an emergency situation you really need to opt in to tell us where you are.”

Rose said some clients didn’t locate all their people until Sunday afternoon.

International SOS group product director Gwendoline Pichon de Vendeuil said one client had an employee in the Bataclan theatre, a target of the Paris attacks. That person had a mobile device with a tracking feature, but it wasn’t activated.

In other cases, travelers in Paris checked in with friends, family and even their bosses, but not the person or department in their organization who should have received that message. And in general, new employees may not be familiar with their company’s processes. Or a traveler may change plans or cancel the trip without informing the appropriate people. If an employee is out of touch, his or her employer may be left scrambling.

That’s why Pichon de Vendeuil said technology can only take you so far. “It’s a lesson we get often from a crisis,” she said. “No matter how many technical tools you have, if you are not on the grid and people are not aware it’s useless.”

Daniel said that in Paris there was “a small handful” of cases where “personal intervention” was required to physically locate client employees who had not checked in.

Meanwhile, he said International SOS was surprised that some clients didn’t start responding to the crisis until Saturday.

In the field, knowing what to do is a problem for newbies. But Rose said it’s also a problem for frequent travelers who think they “know it all” but often don’t even have emergency contact info with them. Similarly, he said lots of small organizations that never faced a crisis think they never will, though more of them are starting to understand the risks.

American Express Business Travel global client group director Jason Rosencranz said he heard on Friday a wide range of client reaction. “Some of them are right on top of this, amazingly so,” he said Wednesday during a Philadelphia Business Travel Association event. “And others, despite many conversations, there was a panic and a bunch of changing policies that we were happy to implement although we couldn’t necessarily keep up with what department was asking for what activity and in what country.”

Daniel noted that he would expect to see a dip in client travel to Paris, but nothing dramatic. “Our advice is travel can proceed,” he said. He pointed out that travelers may face disruptions as authorities cordon off areas, will see extra security at airports and now must present a passport to board a Eurostar train.

He also explained why the Paris incident was different from, say, a coup in Burkina Faso. There always will be a much higher volume of client employees in Paris. There’s a greater likelihood that employees go onward from Paris, which is a major transportation hub. However, in Paris, there’s a better chance of getting accurate info and receiving assistance from resources on the ground.

“Other than clients who asked for it, we didn’t need to have an incident management team deployed in Paris,” said Daniel. “It was well-handled by the local authorities, who didn’t need our help.

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Real Headaches Over U.S. Federal ID Requirements

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

[UPDATE, Jan. 11, 2016: As of Jan. 22, 2018, travelers from states not complying with Real ID requirements for drivers licenses must use alternative identification acceptable to the Transportation Security Administration. That is, unless their state is working under an approved extension. According to the U.S. Department of Homeland Security, there will be no exceptions from Oct. 1, 2020, 15 years after the law passed. The currently noncompliant states are Illinois, Minnesota, Missouri, New Mexico and Washington.]

If you live in Minnesota, you probably know that your current driver’s license may not get you on an airplane at some point in 2016. Residents in many other U.S. states aren’t facing the issue now, but may before next year is out. A passport is a good contingency, so you might want to be sure yours is valid sooner than later. There’s a good chance passport processing centers next year will face another crunch.

Real-IDAfter the 9/11 Commission submitted related recommendations, Congress in 2005 passed the Real ID Act. Once the law is in effect, U.S. citizens wishing to use a driver’s license to access federal facilities or board commercial airplanes need to be sure it meets federal security standards. Real ID caused a stir last decade before extensions were granted. Absent additional extensions, millions of travelers could be forced to find alternatives.

The U.S. Department of Homeland Security said the commercial flights aspect of the legislation kicks in “not sooner than 2016,” which is pretty vague. It’s working on an implementation schedule that it plans to announce before the end of this year. DHS said it will provide “at least” 120 days notice before making any changes.

Some U.S. states and territories balked at the rules, formalized in 2008. Now, 23 of the 56 are compliant. A DHS official said residents in those areas have until Oct. 1, 2020 to get a new driver’s license or ID card, allowing time for those states to “cycle out legacy” forms of identification.

Among the rest, most secured extensions to become compliant. For 12 of them, the grace period currently runs “until at least January 10, 2016,” according to DHS. They include California, Illinois, Missouri and New Jersey. Another 18 received extensions to later in 2016.

But not Minnesota. It’s noncompliant and working without any current grace period.

Minneapolis-headquartered Carlson Wagonlit Travel analyzed its clients’ business traveler profiles and found 42,000 who reside in Minnesota and don’t have a passport on file. “It’s a steep number if you consider that’s just a CWT number,” said Michael Fagle, the travel management company’s director of communications. “Is the federal government prepared to process that many passports?”

Fagle noted rumors that Congress and DHS will delay implementation to give states more time to work it. “But put yourself in a business traveler’s position,” he said. “That’s no guarantee.”

The travel management company is advising clients to make sure employees expecting to travel in the new year have valid passports or get them ASAP. It’s also been sharing information with elected officials.

In 2009, Minnesota lawmakers passed a law that effectively prevents the state from implementing Real ID. Without some sort of resolution or extension, “drastically increased wait time at the airport could result, negatively impacting the business travel industry, which depends on many of the airport efficiencies that TSA and the airlines have improved upon over the last decade,” according to an Oct. 1 blog post by Shane Downey, director of public policy for the Global Business Travel Association. “Federal officials did visit Minnesota this week to try to persuade state lawmakers to comply with ID card standards required by the federal government.”

Minnesota Governor Mark Dayton last week asked for an extension.

Additional info: Minnesotans have another option. An “Enhanced Driver’s License” that sprung out of the Western Hemisphere Travel Initiative is an acceptable form of ID for boarding a plane. The idea of an EDL, according to DHS, is to provide “a low-cost, convenient alternative for entering the United States from Canada, Mexico or the Caribbean.” Michigan, New York, Vermont and Washington also issue them. In Minnesota, where they cost $15 more than a regular license, “only 7,000” residents have them, according to a September report by the StarTribune.

According to DHS, its secretary is authorized “to grant extensions in cases where the state provides adequate justification for noncompliance. For the duration of that extension, federal agencies may accept for official purposes driver’s licenses and identification cards issued by that jurisdiction. … Extensions are not an alternative to compliance. They are intended to provide additional time to states to implement any unmet standards.”

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Using PreCheck And Global Entry May Be A No-Brainer, Deciding Who Pays Isn’t

Travel managers looking to find a common practice among their peers on whether to reimburse for expedited airport processing are out of luck. Like many things, it’s a judgement call and depends on the organization’s culture.

One-third of 350 corporate travel managers responding to an August survey by American Express Global Business Travel and the Association of Corporate Travel Executives indicated their organizations have no policy on reimbursing “pre-vetting services” like PreCheck, Global Entry or Nexus. Nearly one in five during the past two years introduced more flexibility in policies on such programs. Among those with policies, more respondents expect them to become more flexible in the next few years (14 percent) than less (6 percent).

A Global Entry kiosk at Newark Liberty Airport, photo courtesy of U.S. Customs and Border Protection

A Global Entry kiosk at Newark Liberty Airport, photo courtesy of U.S. Customs and Border Protection

A separate ACTE survey among 255 travel managers in February found that 41 percent of companies reimburse fees for the programs.

Checking with 48 U.S.-based travel managers on the question during the past year, The Company Dime found no consensus. Nearly half said their companies do not reimburse. A small handful said the decision is ad hoc. A few said yes for Global Entry but no for PreCheck, which is included in a Global Entry membership. Fifteen said their firms reimburse anyone who wants to enroll while seven indicated their companies reimburse either those who travel a certain amount or those at a certain level, such as executives.

“We do reimburse,” said Meritor global travel manager Jack Reynaert. “It’s up to the boss to approve it.”

“We reimburse only the top travelers,” said Irena Baranets, travel and expense manager at Health Care Navigator. “We identify them through the reporting and we reach out to them. It’s only a handful of people.”

Expedited airport processing is more beneficial at some airports than others, and the value increases as the programs expand. U.S. Customs and Border Protection this month announced the Global Entry program would be made available to British citizens.

“It saves so much time and aggravation, I’ve been campaigning to make it reimbursable,” said one travel manager speaking on the condition of anonymity since she’s not authorized to be quoted by the media. “I’m getting closer.”

While participation generally is considered a no-brainer among frequent travelers, it’s not so clear for companies asked to pay. One concern for employers is that the benefit would be abused. People who want to use the service for their vacations might like to have their companies pay for it even if they rarely or don’t travel for business.

“It’s amazing what people think a company should pay for,” said another travel manager who was similarly unwilling to be identified. “We need some rules on the frequency of the travel.”

Such a guideline could be based on the number of miles or segments traveled.

Reynaert’s best tip? Buy the Nexus card when you’re at the Canada-U.S. border. It includes PreCheck and Global Entry benefits, and costs just $50 for five years instead of $85 or $100. There are also a bunch of ways to get it for free.

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Direct Affront: Hotel Rates And The Familiar Channel Conflict

It’s tough to know if you got the cheapest hotel rate. A lot of that has to do with timing. Published hotel rates, like airfares, fluctuate. Availability changes based on occupancy. Corporate rates aren’t always as accessible as many program managers would like.

Some big chains also are more actively favoring direct bookers. They offer various enticements, notably free Wi-Fi. Loyalty program members booking directly with Starwood and Hilton get discounted rates. It seems like there’s more of this channel conflict to come.

Rhetoric from hotel executives mostly targets frenemy online travel agencies. Exclusive direct-channel rates often come with restrictions, like nonrefundability, that make them corporate-unfriendly.

Image: Thinkstock

Image: Thinkstock

But there are ramifications for corporate travel. Such offers further fracture pricing in a fragmented sector. Throw in cheap rates, packages and promos from Expedia or Priceline and it’s no wonder travelers are confused.

“I don’t think the confidence level is very high that you are getting the best deal,” said GoldSpring Consulting partner Mark Williams. “In the minds of travel managers, this is much more front and center than it may have been not too long ago.”

The global distribution systems list a lot of hotel properties, but that doesn’t mean they’re offering all the rates all the time. For some, these issues support the premise behind Concur’s controversial TripLink program.

“Increasingly we want to make sure we provide incremental value to customers who book directly,” said Marriott president and CEO Arne Sorenson during a September Bank of America conference. He referenced free Wi-Fi and a mobile check-in option for loyalty program members when they book direct. “There will be more that happens in that space. We could do some other things maybe around the cancellation window. One of those things could be that we sell a room for less.”

A video advertisement played as part of Sorenson’s appearance proclaimed that one can “get the best rates at marriott.com.” (Marriott evidently pulled a similar ad from the same marketing campaign because it offended travel agents.)

Sorenson in late October provided more details on negotiations with OTAs: “We want to make sure we have as much ability to yield our rooms on the various channels so at fuller occupancy times we have the contractual right not to have every room in every channel.”

Hilton had “three pillars” in its recently completed OTA negotiations. “Get rid of last-room availability, have preferential pricing to our most loyal customers” and improve margins, said president and CEO Christopher Nassetta last month. “We are very focused over the next year or two to make sure our customers understand the value proposition we offer them to drive even more of a direct relationship in terms of booking with us.”

Again, these hotel companies are reacting to the power amassed by OTAs. But as rate parity erodes and hoteliers step up efforts to lure travelers to direct channels, the GDSs end up in the crossfire. So do the travel management companies and corporations they serve.

Cost, of course, is a factor. Agency commissions, GDS fees and marketing expenses all play a role depending on the customer segment.

At Tuesday’s Meetings Technology Expo in New York, Travelport chief commercial officer Kurt Ekert noted the massive marketing dollars required to “buy eyeballs” online. A loyal customer coming back to a direct channel on their own, on the other hand, is “effectively a free customer.”

Either way, Ekert said the motivation goes beyond costs. “Many providers want a direct relationship for loyalty and follow-up service,” he explained. “There also is an element of wanting to control the outcome to obtain better marketing efficiency and — look at low-cost carriers — trade-up because they reduce the amount of comparison shopping. It’s good for that provider of the product but not for the end consumer.”

Bewilderment

Most frustrating to travel managers, cheaper rates on hotel sites undermine the credibility of their negotiated programs.

“With the growing rate fragmentation and complexity, travelers are feeling bewildered,” said industry analyst and advisor Henry Harteveldt of Atmosphere Research Group. “If hotels continue this schizophrenic behavior, travelers will feel about hotels how they feel about airlines, which isn’t always good.”

As it is, travelers can find rates on the open market that appear better than those available via corporate programs. But are amenities included? What are the restrictions? There are lots of factors in play.

“Hotels have different types of rooms, with different availability, and they offer packages and have loyalty programs,” said Dr. Bill Carroll, a professor at Cornell University’s School of Hotel Administration. “There are lots of ways to change the deal for the consumer.”

Harteveldt said the issue is biggest for leisure travelers and independent or unmanaged business travelers. More closely managed programs with clout can negotiate good rates including add-ons. “If the company can’t get a negotiated rate, it has to make a decision,” he said. “Book rates available via TMCs or encourage travelers to book directly but follow certain steps” so the travel department doesn’t lose visibility.

Ekert said managers at the largest corporate travel programs also must make some decisions. Hoteliers and travel managers still want “deep relationships” that include corporate negotiated rates. But, he said, “that will have to compete against other forms of content and pricing that are available.”

Ekert suggested travel programs line up corporate rates and prices found elsewhere “and at the point of sale use software to make sure that you are providing the right content to the end consumer.” He described “a simplistic rules engine” to help define search results displayed to the traveler.

“Basically, if you can get a better deal though other channels, you should take it,” Ekert continued. “The question is: how does that balance against commitments made by the travel manager to the hotelier? That is something that has to be thought out over time.” Not addressing the issue leads to “pricing disequilibrium, and that doesn’t work. The travel manager needs to match the transparency that exists on the Internet.”

And soon. Pointing to how airlines dynamically price and differentiate their products, Ekert said “hoteliers over the next five years will take a dramatic step” along that path.

GoldSpring’s Williams also offered some advice: “If I were a travel manager and my management was telling me that one of the goals of the organization is, given our expected service levels for our travelers, to drive every penny out that I could, I would train my travelers to always ask if there is a lower rate available when checking in because the corporate rate isn’t always the cheapest. And I would implement something like TripBam.”

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Thank You

One of our core principles at The Company Dime is that it’s about you, the reader, not us. But last week we celebrated our first birthday, so we hope you don’t mind indulging us as we reflect. Actually, we need a favor. Read on for more details, but to get straight to the point — if you haven’t purchased a subscription, please do. If you haven’t tried our trial, email us to request one. And if you are a subscriber, please spread the word. Here’s a flyer you can forward to your network.

We think our service offers lots of value to travel management and procurement professionals. We charge a very reasonable fee.

TCD-CakeWe’re trying to avoid getting into advertising and the other marketing models that typically generate media revenue. We hope we won’t ever do “custom” publishing. The biggest driver of revenue in the B2B media industry is events. But we don’t want to start a conference that requires sponsors in order to be economically feasible. We want to keep saying “No, thanks” to industry players offering to invest in us. We want to remain your independent resource. We believe the industry needs that.

Most any entrepreneur can attest to the fact that starting a business is stressful. By the summer of this year, we had moved out of the constant-heart-attack phase and into the emotional-roller-coaster phase. We’re hoping 2016 brings us closer to consistent calm. That way we can allow the industry’s constant changes to be what keeps things interesting.

We had a wonderful first year. We’re proud of what we have accomplished. And we’re not finished adding value.

Buyers Council

In April we launched our Buyers Council, an informal networking group that is complimentary for subscribing travel manager/buyer members. We share intel on monthly, optional conference calls and related email communications. The Council offers us invaluable advice. One of the first business questions we raised with the council was, “What should we do if we don’t sell enough subscriptions?” We suggested creating services, like a podcast or an event, that could be sponsored.

Some members balked at the notion. They encouraged us to “keep The Company Dime the clear and impartial reporter.” It was heartening, and we’re working as hard as we can to meet that challenge.

Podcast

We started the podcast in July (without going after a sponsor), and we’ve had some amazing guests and awesome conversations. We’ll be the first to admit that we’ve also had a technical difficulty or two. But we’re having fun with it and feel confident it can only get better.

Ten Cent Tour

Our “Ten Cent Tour” got underway in May in Washington, D.C., and we continued with speaking appearances at seven additional Business Travel Association events. We have another next week in Philadelphia.

David and airline execs from United, Virgin, Emirates and Southwest have some fun at a Chicago Business Travel Association event in September

David and airline execs from United, Virgin America, Emirates and Southwest have some fun at a Chicago Business Travel Association event in September

In September we ran a general session at the Society of Collegiate Travel Management event in Virginia and this week we were at the Meetings Tech Expo in New York.

We really enjoy public speaking. It’s nice to get out of the office. It’s great to meet new people and see familiar faces.

It’s also exhausting and in a lot of the weeks when we had these events, it hurt our productivity on the core product. So we’re going to put the Tour on hiatus for at least the first part of next year.

We will travel to various events, of course, but we have a couple different ideas up our sleeves. You may see us do something entirely new.

A Few Notes About Your Subscription

• We have made one small change to the subscriber agreement, as we have found some folks don’t realize that sharing their password hurts our business. We added a third item here.

• Our paywall provider Tinypass was acquired in August by Piano. We’re told users should expect no real change other than the branding.

• We welcome all of our subscribers to join our LinkedIn group whose members (now 453) are encouraged to engage in discussion about our articles, to challenge us and to post information of their own.

And Thanks

This is a company founded by two guys who are longtime colleagues and friends. When we started The Beat more than a decade ago, we were childless and without mortgages. Worries over its success for the 2005 versions of David and Jay were more akin to an annoying cold than cardiac arrest. We have a lot more riding on this company, but also a lot more experience.

Our biggest challenge might be that media consumers are accustomed to getting their news and information for nothing. We’ll say it again: You get what you pay for.

News is free. Opinion is cheap. Knowledge is priceless. Our commitment is to put every ounce of our professional energy into delivering the intel you need to stay ahead in your career. As always, we encourage and welcome your feedback.

We had a birthday thanks to you, our readers. Together we can make many more. Cheers!

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

‘OK Google, When’s The Next In-Policy Flight To Chicago?’

The next big thing excited travel technology enthusiasts when Concur in 2012 invested in Evature, provider of natural-language search capabilities. The technology hasn’t become, in PhoCusWright’s words at the time, a “game-changing travel innovation.” But there are signs it’s beginning to move from Gartner’s “peak of inflated expectations” through the trough of disillusionment.

For one thing, investment continues to flow into the concept. A new company from Canada, HelloGBye, is set to launch early next year. Expense vendors including Coupa and Egencia’s Traveldoo have inserted natural language capabilities into their mobile apps. An upcoming virtual agent service from 30SecondsToFly is considering an app for speech recognition.

voiceNatural language search uses words input via speech recognition to produce written or spoken results. In the emerging world of wearables, it’s easy to imagine a harried business traveler quickly asking her watch, “Where’s my gate?” or, “When is the next flight to O’Hare?”

“We have found a lot of usage of voice is for things that are on the go and require at-hand information,” said Evature co-founder and CEO Barry Volinskey. “Wearables will push this tremendously. They all have a microphone.”

The company this summer released a software development kit that allows mobile app developers to integrate voice “with four hours of work,” he said. “There’s no downside. The microphone [icon] is minimal real estate.”

The company recently signed a “big” travel client that plans to install the technology in its mobile app. Volinskey declined to provide additional details. It’s already available in the Concur app.

He said about one-third of uses are based on location, such as, “I need a hotel tonight.” About another third are in the planning stage — “I want a flight from L.A. to New York on Monday.” And another third is miscellaneous requests, from “How much does it cost to cancel?” to “How many bags can I bring on board?”

Volinskey said the technology is more popular among business than leisure travelers.

HelloGBye seems to be targeting consumers with its “Speak, Book, Travel” mobile app. The company declined to offer an executive interview after in September delaying its target launch date to the first quarter of next year. Its marketing materials indicate plans to offer more than 800,000 hotels and 300 airlines.

With Coupa and Traveldoo, users can create expense items by speaking them.

“For us it’s a way to get the user to put data into the system in near real time,” said Donna Wilczek, Coupa Software VP of strategy and product marketing. “We have found the accuracy of voice to be so much better than optical character recognition scanning of the receipt. It’s leapfrogging OCR.”

Coupa uses technology from Nuance Communications, which powers Apple’s Siri.

Traveldoo is using Google’s API for a pilot enabling users to speak the amounts of their expenses. “We did things around geolocation, where we can derive the type of expense and restaurant name, etc.,” said Traveldoo co-founder and VP of marketing Olivier Mindren. “Doing this, we realized there was a missing piece for keyless expense which was the amount and currency. We thought voice could be the right one because the way you use it is when you are at the restaurant and they bring you the bill.”

He said the company would decide by year-end whether to expand the program.

‘Siri, What’s Taking So Long?’

“Why wouldn’t everyone have a mic in their app?” Volinskey asked himself rhetorically. “Prioritization. Lack of urgency.”

NuTravel chief strategy officer Rich Miller spent two years earlier this decade at AcuFlight, a defunct interactive voice response company. “In the marketplace four or five years ago, delivering messages to the traveler or delivering information by voice never really took off because the messaging was always making a mistake and the travelers really liked the digital approach better,” he said. “They could read it quickly. Do I think at some point it could come back into play instead of having to type? Being able to say, ‘I want to go LGA to ORD on Aug. 20.’ I do think that’s a possibility.”

“Maybe we are going to see voice and artificial intelligence grow in other sectors, where the money is big, and then those companies will look around for other industries to work in,” said BCD Travel director for emerging technologies Miriam Moscovici.

Nuance Communications, for example, has a division devoted to the healthcare business.

“Maybe for now corporate travel has solved the major needs you’d normally use voice to solve via the mobile apps and self-service tools,” Moscovici continued. “It’s getting easier to just pick up your mobile and use an app to solve your need, and if you have a bigger need you want a human. That lower level used-to-be-done-by-humans stuff is now easier done on the mobile.”

The building blocks for changed behavior are there.

As Miller noted, “People talk to Siri all the time.”

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Meet The People Behind The New Virtual Agents

[UPDATE, Nov. 20, 2016: Deem acquired Cinch parent Olset.]

[UPDATE, July 11, 2016: Cinch pulled its app from the app store to rework it based on feedback from about 1,000 initial users. The service will be re-released “in a couple months,” according to its founder.]

At least two new entrants are looking to crack the small company business travel market using virtual agents powered by machine learning, speech recognition and natural language processing. Behind the scenes, Cinch and 30SecondsToFly at least initially will depend on fulfillment processing from, respectively, Atlas Travel and TravGroup. These travel management companies see hooking up with new tech providers as a way to tap the market for do-it-yourself travel management.

“Agencies or TMCs don’t go away with the Internet because the Internet needs content,” said Lea Cahill, COO of Boston-area Atlas Travel and Technology Group. “There’s still a core of the industry that has to be behind all that. Why shouldn’t it be us?”

Atlas Travel and Technology Group COO Lea Cahill

Atlas Travel and Technology Group COO Lea Cahill

Atlas also supports NexTravel. Meeting the creators of these firms has “changed how we look at things,” said Cahill. “We have our highly managed, legacy business. We have our soup-to-nuts meeting planning division. And of course our vacation office. So why not look at this other sector of online travel companies or facilitators of travel on the Internet?”

Cahill said she and Atlas president and CEO Elaine Osgood do not think they compete with Cinch and NexTravel. “We do have managed small business, so there’s some overlap, but these are unmanaged or self-managed programs,” Cahill said.

Much like other developers in business travel, Cinch and 30SecondsToFly are focused on helping users more quickly get to answers. To do so, they’re employing technology to learn the user’s preferences and over time produce increasingly appropriate results. No matter how well they do that, though, travel is too complicated to be fully automated. “Not everything can be self-serviceable,” said Cahill. “It might be a complicated exchange or an international trip. At some point, you do have to consider agent services.”

At Brooklyn, N.Y.-based TravGroup, director and attorney Shapse Jakob said existing clients will test the 30SecondsToFly virtual agent, known as Claire. Users interact with Claire by phone or text message. It won’t be allowed to run amok. “We’ll be giving our clients something new and exciting that will help them book more easily,” he said. “But also the agents will always be looking and seeing what the client is doing. We’re going to be able to tell if the algorithm is presenting the best possible fare and fare combination.”

TravGroup also is interested in the new revenue stream that could come from supporting non-clients who are attracted to Claire. 30SecondsToFly co-founders Felicia Schneiderhan and Riccardo Vittoria said they expect a handful of small businesses with a mix of characteristics to begin a pilot in January or February.

Claire will manage small business loyalty programs for clients, which the founders believe can save businesses up to 6 percent. It will access TravGroup’s airline and hotel deals. The system is integrated with Concur and Expensify. 30SecondsToFly now is looking for a TMC partner in Asia/Pacific as well as strategic partners to help with marketing. It just received its first round of angel investment.

Unlike 30SecondsToFly, Cinch won’t try to incorporate travel policy — at least initially. Soon going into beta, the Cinch mobile app is designed to cut down dramatically on the time it takes to book air and lodging by learning the traveler’s preferences. It’s using eGlobalFares to ensure a wide range of air content. It’s scouring online hotel reviews to offer positive or negative assessments of specific amenities at half a million properties sourced through various means. Ground transport won’t be in the app when it launches to the public next year, but will be built in later. Part of Olset, Cinch will make its money on commissions.

Olset founder and CEO Gadi Bashvitz based the idea on his struggles as an extremely frequent traveler with a small company. Should he have used a live travel agent? “Maybe,” he said. “We just didn’t do it that way in my company.”

Other than cost, there’s nothing stopping these virtual agents from going out on their own and establishing themselves as travel agencies in their own right. It’s not as if the requisite knowledge, relationships, ARC accreditation, PCI compliance and any number of other aspects of being a TMC are out of reach. Claire and NexTravel already had their own Sabre relationships.

“I don’t know that I have blinders on,” said Cahill. “A customer like [Cinch or NexTravel] could become so successful that they start to take it more in-house. That’s just evolution. With any opportunity there’s risk, and with that there’s risk mitigation. It’s not just a matter of getting more transactions.”

Schneiderhan said 30SecondsToFly is partnering with agencies for fulfillment “in the beginning.” She said the company isn’t sure if it would want to be integrated with an agency of the client’s choosing.

TravGroup’s Jakob said the 30SecondsToFly founders “recognize you’re never going to replace an experienced travel agent.”

However, he said, “they’re trying to close the gap by helping people realize the Internet is a valuable resource. They’re going to invest heavily in all your preferences and nuances. Hopefully their technology will really be able to learn who you are and tailor-make your request.”

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Airfares Are Down In Most U.S. Markets, But Some Pay More Or Get Less

Airfares around the United States generally are falling compared with last year, but exceptions include some pretty big markets. Even where prices aren’t rising, years of capacity reductions in some places mean much less choice, fewer nonstop destinations and lower overall value. This forces travel buyers to rethink their air contracting strategies. Where the loss of air service is extreme, there’s also an impact on local economies. It figures in as businesses consider where to expand. Meeting planners prefer markets with better lift.

Airline consolidation is a culprit. Former hubs in Cleveland and Memphis lost about 30 percent of their flights between 2013 and 2014. When it was a hub for Northwest, Memphis once served about 90 nonstop destinations. Now that’s around 30. After buying Northwest, Delta’s operation now is a fraction of what it used to be. American actually has the most daily flights, according to airport president and CEO Scott Brockman.

Image: Thinkstock

Image: Thinkstock

“Clearly we didn’t have three flights a day between Memphis and Des Moines because Memphis and Des Moines have tremendous business connections,” Brockman said. “It was because of the hub, to connect Des Moines to the southern United States.”

Brockman noted that some companies have left town, purportedly because of air service cuts. “We have heard that as a reason but I take some of that with a grain of salt,” Brockman said. “We are an easy target for someone looking for an excuse.”

“We were very spoiled and now we’re dealing with reality and it’s very difficult to go anywhere without a connection,” said Rebecca Martin, president of local agency A&I Travel Management. “I have great concerns for cities like Memphis and their ability to attract business.”

She said that a few corporate accounts ditched their Delta deals and instead use airline small business programs.

Southwest Airlines came to Memphis in 2013, followed by Frontier a year later. Brockman said all other airlines at the airport “have added either destinations, frequencies, larger aircraft or all the above.”

Such competition has helped push down overall domestic Memphis fares by 15 percent in the past three years, according to first-quarter BTS data. And more downward pressure has come with the arrival this year of Allegiant and OneJet. New-entrant Glo Airlines starts service to New Orleans this month.

New services and lower fares help, but don’t necessarily meet business needs the way the hub once did.

In Cleveland, capacity and frequencies dropped precipitously when United acquired Continental and downgraded the airport from a hub to a “focus city.” As in Memphis, new competition recently has pushed down average prices. Spirit, JetBlue and Frontier each started or expanded operations in the past few years. Traffic data shows overall capacity turning the corner of late. The average first-quarter fare of $385 was down 16 percent from a year earlier.

But dwindling service by the market’s leading network carrier presents challenges. United’s market share has slipped to about 25 percent, according to BTS. Rob Turk, EVP at area travel management company Professional Travel, said the local community is “really trying to support United and trying to rebuild that relationship” but that the airline needs to “step up.”

“People had been accustomed to flying nonstop,” Turk said. “There used to be a lot of markets where you could do a one-day trip, so it has added some cost — hotel rooms and meals — and it’s challenging.”

Where connections now are required, buyers say they’ll look at “the service aspect, type of aircraft, frequency and connecting times,” Turk added. He, too, said customers are reassessing the value of their airline contracts and how their performance is measured.

Barry Rogers of TCG Consulting pointed out how big changes in service levels impact contracting dynamics when carriers base goals on fair market share. “As capacity changes, targets automatically change,” he said. “However, if overall capacity goes down, your preferred carrier’s FMS may actually go up. But it’s hard to get on them because their load factors are going up, so you may end up not performing as well on that carrier.”

Cincinnati is yet another market where there have been significant capacity cuts. At least one Fortune 500 company cited downsizing at Cincinnati/Northern Kentucky International Airport for its decision to bolt.

Despite all the challenges in these markets, many travelers stick with the once-dominant airline. Legacy frequent flyer programs hold plenty of sway.

Getting past reliance on or loyalty to the former hub airline wasn’t easy for the business community in St. Louis, where American bought TWA in 2001. “I think they have come around,” said Lambert-St. Louis International Airport director Rhonda Hamm-Niebruegge. “You’ll find companies that have more than one corporate contract now. Or you’ll find ones that go with whoever is most efficient and cost-effective for them.”

St. Louis suffered its biggest service cuts between 2003 and 2009. A lot of routes went away, including European ones.

Between 2009 and 2014, St. Louis lost another 16 percent of its domestic departures and 6 percent of its domestic seats, though numbers this year are improving. Southwest now controls more than 50 percent of the market. American claims about 10 percent market share. The average fare rose 2 percent in this year’s first-quarter but still was a bit below the national average.

“What was most devastating to our community was that people had lost pride in the airport and in their minds lost sight of the value of a really good asset,” said Hamm-Niebruegge. From the region’s business community, “first I heard, ‘We don’t want regional jets.’ Then I heard, ‘I don’t want to use five airlines, I want one.’ ”

“It was a long education process to get the community to understand that there’s not a person to blame,” she added. “The aviation industry has changed. We were going to have to be a more diversified airport, not just reliant on one carrier.” The airport currently has about 250 daily flights to 69 markets.

“It’s more important to businesses to have the nonstop markets,” Hamm-Niebruegge said. “If that means this week they’ll fly Southwest and next week they may be flying American and then Delta or Alaska, so be it, that’s what they’ll do.”

She said she hasn’t seen any companies skip town, though it’s always a concern. There are many criteria behind business decisions on where to locate offices.

Biggest Service Cuts

 Total scheduled
seat capacity
(Domestic + Intl.)
2015 vs. 2011
Domestic seat
capacity
2014 vs. 2009
Domestic
departures
2014 vs. 2009
Memphis-59%-69%-66%
Milwaukee-32%-12%-42%
Cincinnati-22%-46%-51%
Cleveland-18%-24%-39%
Philadelphia-6%-4%-10%
Kansas City-5%-3%-16%
St. Louis-5%-6%-16%
Pittsburgh-3%+4%-9%
NATIONAL AVERAGE+5%*+6%-8%
* Based on top 79 U.S. airports
Sources: OAG (total seat capacity), U.S. Bureau of Transportation Statistics

Where Fares Are Rising

Fare hikes don’t occur only in markets where capacity is down and lower capacity doesn’t always mean fare hikes.

Harrell Associates data shows sharply higher average business fares in Boston, Charlotte, Cleveland and Pittsburgh. Pittsburgh also saw a modest increase in the average leisure fare, but in the other three markets, leisure fares were down significantly.

By another measure, the U.S. Bureau of Transportation Statistics reported that overall domestic fares in the first quarter of 2015 were up versus the prior year in several top markets, though the increases weren’t as pronounced.

Those with fare growth at 5 percent or above included Charlotte, Raleigh-Durham, Portland, Ore., Atlanta and Minneapolis.

Notable Business Fare Increases

 Avg. one-way domestic business fare
Week of Oct. 26, 2015
Year-over-year change
Pittsburgh$576+24%
Cleveland$624+18%
Charlotte$682+18%
Boston$583+12%
New York$587+4%
NATIONAL AVG.$574-1%
Notes: Based on 278 major U.S. routes. Listed markets may include multiple airports. All fares shown are one way. They include federal excise tax but not fuel surcharges as applicable, segment tax fees or airport passenger facility charges. Business fares are purchased within three days of departure, are refundable and have no minimum stay.
Source: Harrell Associates

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.

Hotels Consider More Cancellation Policy Tweaks

[UPDATE, June 16, 2017: Marriott International on June 15 introduced a new 48-hour cancellation policy at all hotels across all brands in the Americas, except Design Hotels, effective immediately. “Guests will now be required to cancel their room reservation by midnight 48 hours prior to arrival to avoid a fee,” according to a company statement. “This will allow hotels a better chance to make the rooms available to guests seeking last minute accommodations.” A Marriott spokesperson noted that the policy is 72 hours “in a few select locations.”]

Hotel executives said they’re looking at how to combat price assurance systems, but leaders of the latter are undeterred.

“We are looking at and testing a bunch of different options on lengthening [cancel policies] and cancellation fees and other things to address generally tying up our inventory for lengths of time without people having to pay for it,” said Hilton Worldwide president and CEO Christopher Nassetta during the company’s Oct. 28 third-quarter earnings conference call. “It’s for a whole bunch of reasons. Obviously with all these new technologies over the last couple years there are lots of different ways people are trying to game our systems with cancel and rebook when there is no cost to it. That’s what we are really addressing.”

Hilton president and CEO Christopher Nassetta (c) 2015 Hilton Worldwide

Hilton president and CEO Christopher Nassetta
(c) 2015 Hilton Worldwide

Hyatt senior vice president and interim CFO Atish Shah said today that the company continues to look at the situation with “a closer eye.”

Hilton, Hyatt and some competitors announced a standard 24-hour cancellation around a year ago.

An executive at a smaller chain last week suggested tools like TripBam may usher in “the next evolution” in hotel pricing: nonrefundable rates and change fees.

“When tools constantly resell rooms and cancel, that is cost we need to absorb and watch out for,” said the executive. He requested anonymity because the chain only has held internal discussions on the matter.

Nonrefundable hotel rates already are in the market, but few corporate travelers use them.

Industry consultant Scott Gillespie expects “demand-driven price fluctuations” to cause “angst and confusion” in corporate travel.

“The hoteliers’ response of creating longer cancellation periods is really a sign of the shift toward airfare-style pricing of hotel rooms,” Gillespie added. “Yes, the price assurance systems may have accelerated the pace of change, but fundamentally, hotel rooms should be priced in response to the variety of customer segments out there.”

It’s a sensitive matter. Tinkering with these rules means playing with customer service expectations.

“As hotels change their policies, corporate customers will adjust accordingly to take advantage of greater savings balanced against the risk or being stuck with a one-night stay penalty,” according to TripBam president Steve Reynolds. “Corporate travelers need flexibility. The hotels that have the more lenient cancellation policies will obtain a greater share of their business.

“Fortunately for us,” he continued, “the vast majority of our savings is found way in advance of 24 hours before check-in. While the major chains may say they’ve made the change to a 24-hour cancellation policy, we’re seeing cancellation polices all over the map for the same brand or hotel. No real consistency in the application. Hotels offer some rates that require 24-hour cancellation and other rates that are more or less restrictive. Most corporate contracts are still day of arrival.”

Hyatt’s Shah acknowledged that there are different policies “at different properties in different markets.”

Price assurance systems have proven to be a valuable element of some travel management programs. They are among the few new tools buyers can use to keep a lid on lodging costs in a seller’s market.

Partnership Travel Consulting CEO Andy Menkes said hotel companies are pointing fingers in the wrong direction. “The fact that these products have grown in the marketplace is an indication there’s a flaw in the system,” he said. “If employees are being told they need to go through the TMC/GDS system and then there’s a third-party tool that can debunk that system — and say, ‘There’s a better rate at the same property’ — then instead of hotels trying to figure out how to stop these tools, they should figure out how to better serve their corporate clients.”

According to Yapta president and CEO James Filsinger, “What the hoteliers appear to be concerned about is losing customers to late cancellations or having to walk customers, which impacts occupancy rates and planning.” Yapta’s RoomIQ “keeps the traveler at the same property, but ensures they get the best rate. So there’s zero impact to occupancy.” He said the product enables clients to account for any change fees hotels may impose, ensuring that “should hoteliers enact such an unfavorable fee, our clients will still be net positive on actual savings achieved.”

One outcome of stricter cancellation policies is better clarity for each property, said Marriott president and CEO Arne Sorenson last week. He noted that Marriott “followed most of our competitors” at the beginning of this year in moving to a 24-hour cancellation window from a same-day window.

“What we have seen that is particularly gratifying is a reduction in the number of folks that get walked,” Sorenson explained. “In the past, with same-day cancellations, you didn’t know who would show up at your hotel until the day ended. As a consequence, you had hotels all over the place saying we know some percentage of our customers won’t show because they have the free ability to cancel last minute, so let’s do some overbooking to make sure we have guests to fill those rooms in case someone cancels. Because of the 24-hour cancellation rule we got a lot of that walk business down.”

Related

Hilton Ends Test Of Seven-Day Cancellation Rates

Saving Money With TripBam And Yapta Means Considering How Much To Annoy Travelers, Hoteliers

 

This content is protected by copyright. Link sharing is encouraged but duplication and redistribution without permission is illegal.