Monthly Archives: February 2016

New Head Of Sabre Corporate Products Enacts Integrated Booking, Mobile And Payment Strategy

Company veteran Yannis Karmis left Sabre in January as the firm reorganized its approach to the corporate market. Led by newcomer Clinton Anderson, the ambitious strategy includes a new path for GetThere but ditches TruTrip. It seeks to solve the tricky issue of out-of-program spend. It aims to deliver heretofore untapped potential in payments and mobile. It’s benefiting from a 40 percent increase in investment this year, a realigned team and new blood.

Anderson joined Sabre from Bain & Co. in 2014 as senior vice president for strategy and business development. Four months ago, the company tasked him with running GetThere, TripCase and Virtual Payments — collectively the Traveler Experience unit.

Sabre Corp. senior vice president of corporate strategy and traveler experience Clinton Anderson

Sabre Corp. senior vice president of corporate strategy and traveler experience Clinton Anderson

Now senior vice president of corporate strategy and traveler experience, Anderson is looking for a new head of sales. The three key products he oversees will be among the first beneficiaries of the nearly 40 user experience and design experts Sabre has hired in the past six months. The plan is to deliver some product enhancements this summer and a fuller offering by this time next year. The long-term strategy also envisions enabling resources from outside Sabre.

“None of us in the travel space has the financial wherewithal to do everything we’d like to do,” Anderson said during a Friday phone interview. “To the degree we can create a platform where we can share and trade functionality and where third-party developers can write to standard APIs, then you start to create what is in a sense the Apple model. Apple sets the requirements, but there’s an open development model. I do believe in the concept of platform. I do believe there’s room for partnership. The old model of direct, head-on competition doesn’t work well in the tech space. Over time, if we create the right platform, we’ll all benefit more with a standard where people can plug in and plug out.”

Anderson mentioned that Sabre’s solutions could integrate with expense products including Concur’s. He named other players as potential partners, including Argo Solutions, KDS and New Zealand-based Serko.

Anderson elaborated on Concur’s efforts to solve for open booking.

“Concur is taking the approach of trying to manage that with a lot of direct connects,” said Anderson. “That’s an interesting approach. It takes you down the path a certain distance, but it’s really hard to scale because beyond the first 10 or 15 airlines, or 10 or 12 hotel chains, how do you ever manage the fact that these purchases can happen at literally millions of different points of sale?”

In comes Sabre’s new approach, tying GetThere with TripCase and Conferma-powered Virtual Payments.

“We have invested a lot of money in a [payments] platform that can be integrated in the Sabre Red Workspace 3.0 agent point of sale,” said Anderson. “We’re now investing to make that available via TripCase and GetThere. This makes the experience easy for the traveler, whether they’re deploying a virtual card, an e-wallet or the old green Amex card or cash. We’re capturing that receipt information. Then we’re standardizing that data at the point of sale and making that data consumable by any of the expense management tools. Now you have an application that can be used by any traveler at any company. Because it’s not a monolithic, integrated offering like Concur has, I now have the ability to choose who my expense partner is and to deploy this capability anywhere on the planet.”

As for the recipient of that data output, Anderson referenced Concur but also “Chrome River, Apptricity, Coupa — any of these players doing a really good job tackling the expense management space.”

‘Mea Culpa’

It’s a bold vision, but Anderson laid it out with humility. He admitted Sabre’s mobile strategy, via TripCase, wasn’t enough to soothe the business traveler’s headaches.

GetThere, he said, “does a really hard thing.” That is, it offers very demanding global corporate clients multi-GDS booking in dozens of countries using dozens of languages and more than 3,000 points of configurability for policy, vendors and rates. However, said Anderson, “If you look at the last two to three years, it felt like to me that we didn’t have a clear strategy for where GetThere was going and how GetThere fit into the rest of the traveler-facing products we had. And because of that, we were responding to RFPs but not thinking about it in an integrated way around a pathway that led to something better and different.”

Anderson also said Sabre has shelved TruTrip, its prior attempt to help clients capture off-channel spending. The solution required clients to be users of TripCase Corporate and their travel management companies to be users of Sabre’s proprietary profiles system.

“It didn’t have a good capture element,” he said. “It was a bit of a limited solution. We had some big global customers who were interested in that. We have told them we’re putting that on the shelf and will come back with another solution we think will work better and have broader application. That was one where we missed it; we were looking at providing a solution and it wasn’t the right one. So rather than continue to spend on a solution that would have no application in the market, I have instructed my team to take those dollars to a more broad solution that would have more ubiquitous application.”

With the new organization and vision in place, Anderson said, “Now, clearly the onus upon us is to execute and prove we can do this. Within a year, we aim to offer an integrated product capability that we think can change the game. What you’ll see coming first [possibly by September] will be some of the basic functionality. We’ve been a little behind [on mobile] so adding air, adding hotel and canceling a trip.”

GetThere will power these booking features in TripCase, not unlike the strategy nuTravel announced last week. Virtual Payments would power the payment functions. TripCase is then seen as a trip management platform.

Anderson said the traditional GetThere desktop product also is benefiting from a multi-device redesign. He said booking efficiency improvements will come soon.

Anderson said clients can expect a pricing model that still emphasizes the original booking. “Booking fees range, depending on geography and volume, from the mid-$2s to mid-$3s, sometimes higher,” he explained. “Rack rate on a Virtual Payment is something like $1.50. I think the final model will look something like a basic booking fee, which is the way the underlying charge will take place, and then if you want to have the full functionality of itinerary management and payments, there will be an additional charge per trip. The incremental function will come in at a much lighter price point than a full booking fee. We think this functionality in the total price per trip will be relatively small compared to a) the price of the trip, b) the ability to manage the data and integrate it into expense, and c) the overall value it generates.”

Those interested in unbundled prices would, he noted, be able to avoid “paying for stuff they’re not using.”

Additional info: John Samuel, who had been leading TripCase, remained with Sabre Labs and now is focused on new projects and leading the overall user experience team. Neil Fyfe continues to lead Sabre Virtual Payments, reporting to Anderson. Karmis joined Sabre in 1999; most recently he served as GetThere president and VP of corporate solutions for Sabre. As part of the realignment, Sabre co-located its GetThere, TripCase and Virtual Payments teams, moving people from three locations on two different parts of its campus into a single location.

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NuTravel Mobile Booking Plan Draws Travel Management Company Interest

Three travel management companies this week displayed varying degrees of interest in booking tool provider nuTravel’s plan to integrate with mobile app developers. NuTravel’s first partner, United Kingdom-based Mantic Point, provides apps to corporate agencies including Direct Travel, Executive Travel and FCm Travel Solutions. Officials with Direct Travel and FCm said they were considering the opportunity; Executive sees the partnership as its answer to client demand for mobile bookings.

Providers like Concur and Egencia enabled them years ago, but not everyone thinks business travelers want to make smartphone bookings. Some cite the “small real estate” on a phone’s screen. Bookings generate revenue. But the functionality during the first decade of mobile computing gave way to hard-to-monetize information and aggregation services. Hence, the mantra of vaunted mobile app developer Roadmap: “Mobile is not about the booking. It’s about the travel experience.”

Nevertheless, TMCs including BCD Travel and Carlson Wagonlit Travel of late have made clear that at least for hotel bookings, mobile is the real deal. This is partly thanks to better application of corporate policies, traveler history and preferences that narrow search results and present a select few best options.

Image: Thinkstock

Image: Thinkstock

That’s what nuTravel is thinking. Chief strategy officer Rich Miller said mobile-booking detractors “may be thinking about air bookings. Mobile tends to be about hotel or car — the last-minute things.” His company plans to release hotel booking capability next quarter. The hope is to roll out mobile air, car and rail booking later this year.

“It’s important that it’s an online booking tool that has policies and preferences already built in so when it’s using that engine to power the mobile piece, preferred suppliers are pushed to the front,” said Executive Travel vice president of business technology Cory Mason. “Whatever the policy is — for example, you need to select the lowest fare — we’ll pull that to the front. That’s one of the great things about it.”

For nuTravel, which also expects soon to deploy its own itinerary app powered by New Zealand-based T&E tech firm Serko, the initiative is part of an open integration philosophy that seeks to expand the potential of its core booking tool. For example, nuTravel integrates its booking tool with various expense management systems. It’s not alone in this approach, although integrations by online booking tool competitors sometimes are more proprietary.

In mobile, the type of client drives differentiated approaches. Roadmap is attracting interest among large corporate customers that not only can afford its product but also value portability. “You want your corporate travel app to operate very agnostic of the booking solution,” according to Roadmap co-founder Jeroen van Velzen. “You want to drive user adoption to your own app and then ‘hand them over’ as seamlessly as possible to your booking channel and tool of choice — especially as we’re seeing new hybrid ways of booking direct, affiliated (models like and old-fashioned (using the OBTs or phone).”

Roadmap also offers its solution to Amadeus for agencies, and that’s where nuTravel competes. Executive Travel and the other TMCs looking at this option are the go-to providers of travel technology for their largely midmarket clients. In some cases those clients want the TMC to provide a custom-branded app.

In light of some of these dynamics, it would appear that competition at the point of sale is all new again.

“My opinion is that the majority of corporate booking will be shifting to mobile over the next four years and thus being where the traveler resides is essential,” according to Travel Tech Consulting’s Norm Rose.

“Mobile is the future of our business,” said BCD Travel CEO John Snyder at a Travelport event in December. BCD uses Travelport’s MTT for its mobile app.

CWT is seeing upwards of 15 percent to 20 percent of some clients’ hotel bookings processed via its mobile app. “In early 2015, CWT launched fully integrated mobile hotel booking in 17 markets, achieving [about] 35,000 hotel bookings and $10 million in sales,” according to a company statement this month.

Commission revenue from mobile bookings is potentially huge for these TMCs. Executive Travel’s Mason also noted value in improved data capture not only to help negotiations and spend analysis but also duty of care.

An FCm official said the company does not exclusively use nuTravel or Mantic Point, but it is looking at the upcoming offering. Direct Travel has talked to both parties. “Our intent is to utilize booking and other services Mantic Point makes available to us via their platform,” noted Direct Travel CTO Darryl Hoover. “Those services may come directly from integration activities with nuTravel or through independent integration activities with other booking/middleware providers.”

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London, China Among International Fare Soft Spots

Businesses are paying less for some international airline tickets than they have in years, according to corporate travel benchmarks. It’s not because airlines have cut published pricing. Instead, they have kept selling more low-bucket inventory closer to departure. That brings down passenger yield, a proxy for fare paid. Some U.S. routes to London and China are showing sharply reduced average fares paid. While it’s not the case everywhere, general trends point to more pricing softness in the coming months.

The strong U.S. dollar is applying downward pressure on long-haul fares to and from the United States. So are pockets of economic sluggishness around the globe and low oil prices. With the cost of jet fuel way down, airlines can afford to maintain or add capacity to fend off competitors. It also means passenger fuel surcharges in some regions are down or gone.

Image: Thinkstock

Image: Thinkstock

“The windfall from fuel savings overrides all that price softness you see,” said Rick Seaney of airfare watcher FareCompare. International fares, after peaking in 2013, “are yielding in all sorts of weird and wonderful ways.” Seaney cited soft European economies and “companies getting smarter negotiating contracts with airlines.”

Advito vice president Bob Brindley said market conditions present opportunities for travel buyers. If airlines offer the right incentives, buyers will shift more higher-yielding business their way. In turn, he said, that gives airlines “more ability to turn off some of those lower-fare buckets earlier than they are today.”

According to Prime Numbers Technology’s benchmarks covering about 95,000 U.S. corporate TMC bookings, the average international ticket price paid in January was $1,734. That had dropped about 7 percent from a year earlier, down for a third consecutive January to the lowest level since 2007.

Travel Leaders Corporate said clients incurred a fourth-quarter average international ticket price of $1,522. That was down about $145 from a year earlier to a new record low among data released by the travel management company since 2011.

American Airlines’ and Delta Air Lines’ best-performing international entity in the fourth quarter was the Atlantic, where yield dropped 9 percent and 5 percent year over year, respectively.

The International Air Transport Association in December estimated 2015 worldwide passenger yield dropped 11.7 percent year over year, and projected another 5 percent reduction in 2016.

In the domestic U.S. market, after a long period of pricing softness, airlines this year have been pushing fares higher.

London Falling

“On the transatlantic, there’s so much capacity and nobody wants to back off,” said Holly Hegeman of PlaneBusiness. “It’s essentially the same thing as the domestic market: lower fares but they don’t want to give up market share. It’s no problem for airlines because fuel is low.”

According to data from price assurance firm Yapta, average roundtrip fares for travel in this year’s first quarter are down on eight of clients’ top 10 international routes. Seattle-London Heathrow is down 55 percent (Delta began competing there in 2014 against British Airways). New York JFK-Heathrow is down 28 percent (see Table 1 below).

According to January ARC data, average roundtrip prices paid for tickets purchased within 14 days of departure fell by double-digit percentages to Heathrow from Boston, New York JFK, Newark, Philadelphia and Washington Dulles (see Table 2 below). Prime Numbers also calculated lower 2015 prices to Heathrow from JFK, Newark, Dulles and Los Angeles (though modest increases from O’Hare, Boston and San Francisco).

“London for sure is down because of intense competition,” Brindley said. “Delta and Virgin are being more aggressive against American and British Airways.” BCD Travel’s 2015 data shows modestly lower average tickets prices to London from Dallas, JFK, Los Angeles and San Francisco.

Industry benchmarks aren’t always comparable. They may differ on date ranges, types of fares analyzed and whether data depicts published pricing or prices actually paid. They can fluctuate wildly one month to the next. A closer look at some stats may uncover discrepancies. Not all are showing lower London fares.

Harrell Associates, for example, breaks down published pricing by class of service. For February 2016, it found the average roundtrip business class fare between Newark and Heathrow slipped 1 percent versus February 2015 to $5,615. The average for economy fares (those “suitable for business travel,” excluding very low-end excursion fares and top-of-the-ladder full coach) slumped by 22 percent to $990.

The class disparity was even larger on Chicago-Heathrow: the average February business fare was flat at $7,237 and the average suitable economy fare jumped 38 percent to $1,557, according to Harrell. A still bigger difference is observed between New York JFK and Heathrow, where the average business fare was flat at $7,345 while the average suitable economy fare shot up 54 percent.

It’s a bit of a mixed bag elsewhere in Europe. BCD’s data showed 2015 prices from U.S. gateways to Frankfurt and Paris generally up by a few percentage points. ARC for January reported the average fare between New York JFK and Paris Charles de Gaulle fell back 14 percent. For February, Harrell determined the average business fare on that route slipped 1 percent while the average suitable economy fare increased 5 percent. Between Atlanta and Charles de Gaulle, Harrell reported reductions of 8 percent and 6 percent, respectively, for business class and economy class. Its data also showed 1 percent increases in both business and suitable economy fares to Frankfurt from both Washington Dulles and New York JFK.

Looking ahead, Air France-KLM executives this month during a press conference said they expect 2016 summer season transatlantic capacity to rise 8 percent. CFO Pierre-Francois Riolacci said growth is led by U.S. carriers “taking advantage of the stronger North American market.” Norwegian Air Shuttle this July plans to launch service from Paris Charles De Gaulle to New York JFK, Los Angeles and Fort Lauderdale. The airline in the past three years began dozens of nonstop U.S.-Europe routes and now claims more of those than any other European carrier.

Riolacci noted that total long-haul capacity in and out of Europe should be up about 7 percent. Turkish Airlines and Middle East carriers will account for much of that growth.

“It’s hard to say if we see the demand catching up with such a big growth in supply,” Riolacci said. “That’s the reason we expect further downward pressure on unit revenue in 2016. It’s also why we believe a significant part of the fuel savings will go away to the market” in the form of lower fares.

As for fuel surcharges, U.S. carriers now call them “carrier-imposed charges” on transatlantic routes. Seaney said they’ve averaged about $450 roundtrip during the past two years and he’s been a bit surprised that they haven’t come down. “The average taxes to and from Europe average around $205 to $210 roundtrip,” Seaney said. Those include about 10 different items. When you add all that to the carrier-imposed surcharges, “you are looking at the mid- to high-$600s even if they charge $1 for the airfare itself.”

Brindley said he’s seen those carrier-imposed charges hit $485 each way.

China, Too

In Asia, passenger fuel surcharges are more straightforward. Certain countries tightly regulate them based on a formula. In some cases, those charges are going away. Hong Kong’s Civil Aviation Department on Feb. 1 suspended them for all flights originating there. The suspension is in effect “until further notice.”

The average fare Yapta clients paid on the San Francisco-Hong Kong route (including taxes and fees) plummeted during this year’s first quarter. Harrell Associates, though, said the average published business class fare between Los Angeles and Hong Kong in February jumped 27 percent while the average suitable economy fare rose 4 percent.

For all U.S. point of sale bookings across the Pacific, BCD Travel tracked a 4.1 percent drop last year in average ticket prices paid by clients, including taxes and surcharges. That was driven by China. Both Chinese and U.S. carriers have been adding capacity between the two countries. United chief revenue officer Jim Compton in January said total industrywide U.S.-China capacity in this year’s first-quarter is up 19 percent. He said demand has kept pace.

The average ticket price paid by BCD Travel clients last year dropped by double-digit percentages versus 2014 between Chicago and both Shanghai and Beijing, and between New York and Beijing. More modest declines were recorded between Shanghai and both Los Angeles and San Francisco. For January, the average ticket price for transactions settled via ARC dropped 11 percent between San Francisco and Shanghai, and 16 percent between Los Angeles and Shanghai.

Despite lower fuel surcharges, BCD Travel has seen a different story in Japan. In 2015 average fares paid by clients to Tokyo were higher than in 2014 from New York JFK, Los Angeles and Chicago.

That may change. As of April 1, Japan Airlines for the first time since mid-2009 will have no fuel surcharges. ANA and United also will drop fuel surcharges for their Japan operations. That doesn’t mean travelers will reap the full benefit, as airlines sometimes raise base fares to offset surcharge reductions.

Houston’s Double Whammy

In Houston, exposure to the oil and gas sector is having wider effects, according to United’s Jim Compton. He noted “a decline in revenue from the broader non-energy Houston market.” As a result, the carrier’s hub has “experienced significant yield pressure.” That prompted to United to shift capacity from Houston to hubs in Denver and San Francisco.

Both Yapta and ARC data show tanking average fares between Houston Intercontinental and Calgary, another energy sector hotbed.

Looking south, Yapta shows fares between Houston Intercontinental and Mexico City also have tumbled. Southwest Airlines in October 2015 entered the Houston Hobby-Mexico City market.

Table 1: Yapta – Average International Airfares On Clients’ Top 10 International Routes

Roundtrip including taxes and surcharges, across all fare classes, for travel within the quarter

O&DAverage Fare Q1 2016Versus Q1 2015
Houston-Amsterdam $4,132-4.2%
Houston-Mexico City$411-35.8%
Houston-Calgary $667-51.7%
New York JFK-Heathrow $3,247-27.7%
San Francisco-Hong Kong $2,576-56.1%
San Francisco-Incheon $2,517+1.9%
San Francisco-Heathrow$2,262-11.4%

Table 2: ARC – Big Fare Falloffs

January average roundtrip fares purchased within 14 days of departure at U.S. points of sale, select routes

RouteJanuary 2016 Avg. FareVs. January 2015
Houston Intercontinental-Calgary$817-54%
Los Angeles-Tokyo Narita$1,966-29%
New York JFK-Hong Kong$3,349-26%
Philadelphia-London Heathrow$3,038-23%
New York JFK-London Heathrow$3,468-18%
Los Angeles-Shanghai$1,903-16%
Houston Intercontinental-London Heathrow$4,110-15%
New York JFK-Paris Charles de Gaulle$3,462-14%
Newark-London Heathrow$3,148-14%
Boston-London Heathrow$3,150-12%
San Francisco-Shanghai$3,318-11%
Washington Dulles-London Heathrow$2,723-10%
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Podcast 8: Sharon Tolliver, Frederic Khalil, Linda Doty and Simone Buckley

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

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New Agency Automation Player Targeting Mid-Office And Point-Of-Sale Advances

There’s a new entrant eyeing a spot in the travel agent technology field. Centered on a rules engine, Fociss Travel System would help corporate travel management companies connect various customer-facing tasks with behind-the-scenes automation. The idea is to make agents more efficient and improve customer service. The first step is a new cloud-based mid-office system “because that’s what so many people want,” said founder and CEO Wade Warren. A key part of his vision is extending the mid-office rules concept to the point of sale. That means a new agent desktop interface.

The mid-office isn’t very sexy, but it’s foundational stuff for TMCs. Quality control and file finishing functions include correcting errors, searching for lower fares and rates than those initially booked, securing seat assignments, ticketing and emailing itineraries. The market niche is occupied by one dominant provider, Concur, and a handful of others. Agency executives would welcome a new competitor, especially if it brings some innovation.

Fociss Travel System founder and CEO Wade Warren

Fociss Travel System founder and CEO Wade Warren

Fociss isn’t quite off the ground yet. Warren, who has had lots of experience with agency automation, expects to start testing with an undisclosed mid-size corporate travel management company next month.

The rules-based engine is being built around custom business logic routines that agency users would specify. That sounds like a selling point of Concur’s Compleat mid-office tool. TMC users of that product, especially those that can afford programmers, do some of their own creative coding.

“In tandem with our proprietary technology, we build lots of corporate-specific rules like policies on how many employees can be on the same flight, or we build in rules to allow the company to know when they hit 20 people going to Chicago, ‘so let’s use the corporate jet,’ ” said Mike Kubasik, CIO at Travel and Transport, a Compleat user. The TMC also has written rules to automate credit card declines, project codes, corporate hierarchy and high-risk travel. It’s constantly writing new ones to keep pace with changes airlines make to corporate contracts and flight disruption waivers.

Cornerstone Information Systems CEO Mat Orrego said application programming interfaces have opened new possibilities in mid-office workflow management. For example, he said the company is working with eNett to batch-process virtual card transactions “without the agent having to touch it.”

The difference between existing systems and Fociss, Warren claimed, is that users will write rules also impacting the point of sale. “A lot of functionality these days is relied on at the mid-office,” he said. “Now we can finish a passenger name record at the point of sale, thus preventing the wait to process at mid-office.”

Intervening rules would ensure agents accomplish certain tasks upfront with customers rather than in batches after the fact — if that’s how the agency decides to play it. Fociss also would bring in virtual card information. It would centralize routines to replace GDS-specific scripts, “thus allowing companywide functionality across all GDSs in use,” Warren said. Agencies also could create special point-of-sale commands to trigger specific routines. A profile module would be wrapped in.

Sources pointed to lots of other possibilities, some handled by scripting TMCs build into agent desktops. Inserting client project codes, for example, often is part of an agent workflow, but sometimes they get it wrong, forget or don’t know to do it. Similarly, agent systems oftentimes consider traveler profiles to determine seat assignments and other customer preferences, but that doesn’t always happen off the bat. Point-of-sale rules could button up these tasks.

SAS is a long-time Concur Compleat user (starting when that product was owned by GDSX before Concur’s acquisition). It operates an ARC-accredited Corporate Travel Department, but couldn’t do so without Compleat, claimed SAS director of travel operations Richard Clowes. He’s happy with the technology and believes the mid-office provides excellent value and justifies the investment. “A new entrant would have to blow me away to really warrant a deeper dive,” he said. “Switching mid-office automation is no trivial matter.” But he sees room to expand the scope. “If you could move some of the post-processing to the point of sale, that’d be extra value,” he said. “Something as powerful as Compleat there would be great.”

At Concur, development this year will integrate Compleat and the Concur Travel booking tool, according to executives. “Clearly we know exactly what the user is doing in Concur Travel. We will see the transaction. Are there ways that we can hand off that information?” asked Brian Hace, vice president of TMC products. “For a Concur Travel user who grabbed a seat but doesn’t like that seat, could the mid-office keep searching for an improved seat? Compleat would kick off a variety of routines on their behalf. Let’s bring forward functionality that either existed and the traveler never knew it or could not activate because it resides in the mid-office.” He said there are more functions coming that will include applying unused tickets.

Hace said Concur also is in the early stages of connecting the Task Manager product to Compleat. Task Manager is meant to automatically assign and prioritize agent tasks based on several factors. “There is a variety of ways to integrate with the mid-office because it sits at the core of every transaction,” Hace said.

The “missing link” at the point of sale, according to Clowes, is business intelligence. Though mid-office systems can check for better rates and fares, using benchmarks during reservation creation would inform the agent and the customer if the pending booking is good deal. “It’s about integration,” Clowes said. “We have access to that information now but it’s a pain to bring it all together and agents don’t bother.”


It also can be a pain to bring together content not available in GDS channels. Warren explained that when an agent working in Fociss searches availability for a given citypair, rules can dictate whether and which direct channels should be checked. Maybe there’s a good reason to do so (think Lufthansa, which surcharges GDS bookings). A Fociss module would grab that information and add it to native GDS content. Warren said it would “feel to the agent just like it’s a GDS response.” That module also would accommodate the direct booking, if that’s the way the reservation goes. Warren said Fociss would handle the daunting task of building and maintaining individual connections to suppliers as necessary.

Following a supplier-direct or GDS booking, PNR data would be stored in the Fociss PNR database. That, Warren said, would dispense with passive GDS bookings. It also means that the mid-office, and any other Fociss module agencies decide to use, would function with non-GDS content sources.

Other mid-office system providers and TMCs also are sniffing around new content aggregation capabilities based on sets of rules. Cornerstone is starting to develop interfaces to alternative sources, Orrego said. He described “a digitized PNR that extends to the rules system of [mid-office tool] iQCX. Then we can take action quickly on that and respond back to the point of sale.” Orrego characterized work thus far as discrete projects rather than a formal product.

Travel agency automation company Agency Technology also provides mid-office solutions, initially for Travelport agencies. It added support for Sabre agencies last year and expects to do the same for Amadeus agencies in the next month or two. According to president Lee Brubaker, the company also is looking at point-of-sale “rule triggers” and “two-way communication” between the agent desktop and the mid-office. Brubaker said his company has, in a few cases, integrated with BookingBuilder.

“More and more, it’s not just about the GDS,” he said. “We are tying in to direct connects to airlines and other third parties. The point of sale is becoming disparate.”


The Fociss point-of-sale interface would replace GDS desktops at user agencies. Warren said “a switch” would allow agents to “select the look and feel of the GDS that they are used to.” They could continue using all the GDS commands with which they’re familiar.

It sounds straightforward, but agents are creatures of habit and may not willingly migrate to a new desktop. Their employers, too, may be hesitant to switch systems. The mid-office is the guts of the operation, and making a change is neither easy nor cheap. (Warren said Fociss will build “wizards” to help convert routines from other providers’ systems.)

Plus, TMCs may not want to move many more tasks from the mid-office to the agent. They would have to work out for themselves how to find an appropriate balance between immediate customer service and agent productivity.

“You create a certain amount of inefficiency by telling an agent right there to stop and fix this problem versus, ‘I will tell you all your problems in batch and you can fix them all when you are ready,’ ” said TripBam president Steve Reynolds. “If I were an agency owner, I would want something that is not disruptive and already fits into our process.”

Warren suggested after-hours service is one suitable area because providers “will want the ability/option to do it all at the point of sale since that’s sometimes a need now/no-wait situation for the traveler.”

What about online bookings travelers do themselves? Many corporate travel agencies support more of those than agent-assisted transactions. Agency mid-office systems can deal with those too. System providers and TMCs also write rules that hit the front end, for example, asking travelers if the trip is for business or leisure.

Warren said self-booking tools “will have a valuable place in Fociss processing paths,” made possible by linking with APIs. These tools could be another data source for the Fociss mid-office, for example, by sending PNR information, trip history and behavioral data. He added that the booking tool also “could choose to use our connector piece for a data source that it’s not already connected to.”

Warren partnered with an enterprise resource planning programmer from outside the travel business. The two of them are self-funding the company. Warren’s partner, who will serve as CTO, isn’t being identified until prior business obligations are fulfilled.

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International SOS Adds Air Safety Ratings

International SOS last month introduced an aviation safety ratings service that flags bookings on airlines deemed risky. Gwendoline Pichon de Vendeuil, group product director at the travel risk management firm, noted growing customer interest following several high-profile aviation incidents in the past year.

For travel management pros, the important thing is knowing the risks before travel occurs. Some companies address it by approving or banning airlines in travel policies and point-of-sale systems.

Image: Thinkstock

Image: Thinkstock

Small domestic airlines in remote regions are of particular concern, especially for energy and mining companies and others that send workers to far-flung locations.

There are lots of resources that can help, including consumer websites, specialist firms, industry associations and governing bodies. The U.S. Federal Aviation Administration assesses at the country level. If a given nation’s civil aviation oversight doesn’t meet International Civil Aviation Organization standards, airlines based there can’t add new services to the United States. That includes codeshare flights operated by partners.

The European Union approach is a bit different. It maintains a banned list of individual carriers (usually, but not always, based on their country of origin). Some travel management companies and corporations use that list as a reference point. An official from Amadeus said the company uses a special symbol in its global distribution system and corporate online booking tools to indicate that an airline is on EU’s banned list.

TRM firms say their ratings go deeper. International SOS, for example, now uses a methodology developed by the International Association of Oil & Gas Producers and U.K.-based FlightSafe Consultants. A five-tier ratings scale accounts for such factors as fleet age, crew training, country of origin and insurance. It is updated monthly. For a flat annual fee, customers get regular reports showing the ratings of carriers their travelers are using. When necessary, an exception report sent in the morning informs clients if travelers booked on higher-risk carriers.

FlightSafe built a precursor to the oil and gas group’s Airline Safety Assessment Mechanism and now licenses information encompassing 1,200 carriers. According to director John Trevett, FlightSafe distributes data to companies inside and outside the energy sector, United Nations agencies and other organizations.

Trevett noted that energy sector companies often have aviation departments that apply ASAM information as part of safety audits. At other clients, travel management, health and/or risk management departments use the data.

Some clients of TRM firm Anvil Group list approved or banned carriers in their travel policies and/or with their TMCs, according to managing director Matthew Judge. He explained that agencies can configure systems to alert agents about restrictions imposed by customers. “If it’s an online booking tool, they may well only display a list of preferred or authorized airlines to choose from for certain destinations,” Judge said.

BCD Travel vice president Torsten Kriedt said there are more troubling aspects of travel for companies to confront than the safety of commercial airlines — safer by far than most other transport modes. But upon client request, the TMC can black-list specific airlines. He said that capability also exists for online booking tools, but “few clients find enough value to pursue that.”

International SOS is providing airline safety rating information only to direct clients. Pichon de Vendeuil said they can use the information however they like, but stressed consistency. TMCs around the world often have their own sources for aviation safety assessments and their own views on airline risk. When clients use multiple TMCs to support global operations, Pichon de Vendeuil  said “they want one report, not six.”

Anvil also provides to customers an airline safety ratings service. It includes safety scores for commercial and charter carriers, more in-depth analyses if clients need them and a post-ticketing alert system. The company bases risk scores on a combination of the EU blacklist, FAA’s assessment, audits by the International Air Transport Association and other factors.

Judge noted how client risk profiles and tolerances vary based on industry sector and areas of operation. “What could be deemed as a higher-risk airline may actually be a far safer option than traveling by road or ship in certain countries,” he said.

That’s one of the rubs with the EU list, according to Tony Ridley, CEO and founder of Australian TRM firm ‎Intelligent Travel. “In Indonesia, pretty much all the airlines are banned according to the EU,” he said. “So in a country of [thousands of] islands, what do they suggest? Take a ferry? More people die on ferries in Indonesia than in airline crashes. Same with the Philippines.”

‎Intelligent Travel also provides aviation ratings. Ridley said the approach focuses on three factors. The first is the airline’s home country. Does it have “some sort of auditable risk standard?” Deficiencies in infrastructure, he said, affect all operators — charter and scheduled. The second is the actual airframe. It’s not just about age. While newer models incorporate the latest safety technology, Ridley said they can be “quirky.” Pilots and crews may not be as familiar with them as with older airplane models. The last factor is the route itself. Beyond those three criteria, he said the rest is “just a guess.”

EU claims assessments are “made against international safety standards,” including those of ICAO, FAA and the European Aviation Safety Agency. It also considers “ramp inspection reports,” and information collected by member states. All member states consult and EU says all decisions to block or restrict an airline, or to lift restrictions, have had “unanimous support.” It points out, though, that the banned list “has no legally binding effects.”

Additional info: FAA in December downgraded Thailand. While its airlines can continue their existing U.S. services, they cannot add more. Those not serving the United States cannot start. In recent years, FAA also downgraded India and Mexico but later dropped the restrictions.

EU updated its Air Safety List in December. It bans a total of 230 airlines, including nearly all from 20 countries. The European Commission in July began phasing in a new safety authorization system for foreign carriers operating to the European Union. Delta and United were among the first 22 carriers authorized.

According to IATA, the global commercial airline industry in 2015 experienced 0.32 jet “hull losses” per 1 million flights. That’s a bit worse than the 0.27 rate of 2014 but better than the previous five-year average of 0.46. Germanwings flight 9525 (pilot suicide) and Russia’s Metrojet flight 9268 (suspected terrorism) are considered deliberate acts and not included in 2015’s accident rates.

FlightSafe’s Trevett said there are five or six accidents each month across the database of 1,200 airlines. He said that figure was double 10 years ago, and double again another 10 years back.

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Rio Tinto Plan Resurfaces Questions About Edicts On Travel Cuts

Rio Tinto CEO Sam Walsh got some attention last month when he said the multinational mining company would cut trips to save money. According to a press official, Walsh “was challenging everyone in the organization to remain focused on costs and that included reducing travel. He asked everyone to consider if that journey, visit or conference is essential and look for alternative ways to conduct our business.”

Such declarations raise questions with which travel management has always struggled. How effective are commandments from on high? Is the top-down, macro view of travel spending the appropriate one? Is corporate travel a controllable cost or an investment in the business? In lean times, how much of a reduction is appropriate and how does a company accomplish that? Which trips should be cut?

A 2010 report from the Global Business Travel Association, American Express Global Business Travel and Vantage Strategy examined the point at which reduced travel is counter-productive. Researchers determined that companies during the 2007-2009 recession on average cut T&E spending “11 percent more than their top-line revenue performance would suggest is necessary.”

“If your revenue already is being reduced because of external business factors, it is appropriate to cut back on business travel,” said Joe Bates, founder of the Institute for Association and Nonprofit Research. “What we found is that companies on average had cut back too far.” Bates spent five years running research at GBTA.

“We can build these models and they can tell us about the incremental contribution that T&E makes to sales and profit, but in the real world, companies are trying manage a plethora of factors that are coming at them in real-time,” said Rockport Analytics managing director Ken McGill. “If these factors tend to be negative when they look around for the prudent levers to pull to manage their business, T&E tends to float to the top. It is a relatively painless thing to cut and has an almost immediate impact on the bottom line.”

McGill also works with GBTA on research. He said private companies under less scrutiny can “withstand the temptation to cut T&E a little more,” but human nature always is a factor. “I would tend to overshoot to the negative side as well,” he admitted.

It’s hard to argue with a company that believes it is acting in its shareholders’ best interests. Survival instincts kick in. McGill said prior industry research may help inform companies facing financial challenges and “perhaps they would hesitate and not overshoot as far.” But extenuating circumstances may force the issue, even when company leaders are aware of the drawbacks.

Adam Sacks, president of Oxford Economics’ Tourism Economics, said such behavior is risky. “Research would indicate that a good executive would bypass those pressures in favor of what is a smarter business decision, which is cut back where you can but business travel tends to be productive at a rate significantly better than the expense, so why cut that back?” he asked. “If business travel produces in times of prosperity, why would it not during times of weakness?” When competitors in a given sector are retrenching, there may be an opportunity to press the screws and pick up market share, Sacks suggested.

Oxford in 2012 issued a report on business travel’s role during times of economic recovery. It found that companies which “spent the most on business travel through the recession tended to post higher growth in profits through the past economic cycle.”

Cutting business travel, then, is penny wise and pound foolish, said Sacks.

More Data For A New Narrative

The 2010 GBTA/Amex/Vantage study followed by a year a GBTA/Amex/IHS Global Insight report on the return on investment in business travel. Some involved in those research projects now say a more granular analysis including a company’s own workforce data would help a lot.

“Whenever I talk to travel managers they still don’t know how to frame that calculation to their company level,” Bates said. “No one has mastered the equation.”

Eudemonia founder and principal analyst Christa Degnan Manning was at American Express when the research studies of 2009 and 2010 came up with sector- and country-specific benchmarks on business travel as a percentage of costs, sales and profits. “There is a huge disconnect between the macro and micro levels,” she said last week. “Executives have to make sweeping decisions in big buckets, but people are individuals. Each person, role and department has its own nuances in how it supports the business. What is the value of an individual contributor really to overall business outcomes?”

Manning said those questions arise now that “a lot of people are starting to realize that cost-myopic travel management” has limited value today.

“The narrative is shifting from cost savings to cost effectiveness,” she added. “That’s how we need to get into the next level of detail on ROI — not so much ROI of travel but ROI of time, and to what extent does travel make you more effective in the time that you have?”

Business intelligence tools and more sophisticated human resources systems can help determine some of the correlations, Manning suggested.

“A lot of what people have been frustrated with by HR or travel management departments is they oftentimes manage pretty simplistically with broad brush approaches, or basic budgets, or ratings on a curve that just don’t match up to the modern workplace,” she said.

The experts advise more surgical techniques. Different types of travel have different ROI. Remote conferencing technology is a fair substitute in some cases. Face-to-face interaction still is best for closing the deal. “What is a critical trip has to be evaluated more individually as opposed to a more categorical cutback,” Sacks said.

Rio Tinto’s press official noted that the company still values travel: “There is clearly a need for people throughout the organization to travel to visit our operations, our customers and for many other reasons.”

Will There Be More Rios Tinto?

Should travel professionals expect other executives to start issuing edicts? Maybe.

Facing a dramatic fall in commodity prices, Rio Tinto is in a particularly challenging business. Its revenue last year was $34.8 billion, down 37 percent from 2014. Today it announced plans to cut $2 billion in pre-tax operating costs by the end of next year. “This is an environment where further decisive action is required,” Walsh told investors. “There is no room for complacency.”

The company also reported $866 million in losses last year versus earnings of $6.5 billion in 2014.

Across industries, economists say, business travel spending correlates with corporate profits. While things are especially bad right now for energy and extraction companies, a variety of economic sources show corporate profits generally trending downward. Trading Economics predicts U.S. corporate profits will fall by about 6 percent over the next four years. The rising dollar and fading oil prices are driving an expected second-straight drop in quarterly corporate profits in the December 2015 period, according to S&P Capital IQ. Bloomberg and others are calling it a “profit recession.”

Nevertheless, U.S. travel suppliers including Delta Air Lines and Sabre Corporation recently reported a continuation of solid corporate travel demand.

Additional info: The 2009 GBTA/Amex/IHS study found that businesses across all sectors in 2008 spent about 1 penny of every sales dollar on business travel. Business travel spending was 2.3 percent of material costs and 5.2 percent of profits. Each additional dollar invested in business travel would incrementally grow gross profit by $20. A 1 percent increase in travel spending would return sales growth of 1.7 percent.

In 2009, an Oxford Economics study co-sponsored by the Destination Marketing Association International and the U.S. Travel Association calculated that every dollar invested in business travel translates to $12.50 in increased revenue and $3.80 in new profits. It also found that 40 percent of prospects become customers through in-person meetings whereas 16 percent do so without them. The 2012 Oxford report, also sponsored by USTA, found that “business travel has yielded $2.90 in profits for every dollar spent.”

According to CAPS Research, based on 2012 U.S. data from about 70 companies, total T&E spending as a share of revenue was about 0.61 percent. Total T&E spending as a share of total spending was about 1.47 percent.

Disclosure: The Company Dime strives for impartiality in all its work. The reader should know that as it relates to industry associations, The Company Dime has a significant partnership with Institute for Supply Management, which is affiliated with CAPS Research.

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Roadmap Dares Corporates To Build Travel Apps

Denmark-based shipping and oil conglomerate Maersk appears to be one of the few companies building its own mobile corporate travel app. In an October discussion with Business Travel News, Mette Christensen, the company’s global head of travel and indirect services, said nothing else out there fit the bill.

The idea prompted a challenge from Jeroen van Velzen, co-founder and CEO of Dutch mobile tech firm Roadmap. “If you were to build our stack delivering the same functionality, you should think of millions of dollars to build it,” he told The Company Dime last week. “But I would ask all corporates not to take my word for it and do try to build it. Those who try will appreciate and understand why it’s so difficult to do right.”

Several travel buyers we contacted agreed with van Velzen, saying it’s just too expensive to build a custom mobile app.

It’s not cheap even when you outsource it. Roadmap charges upwards of 100,000 euros to deliver a travel app to big companies. BP was the first. The apps display no branding other than client’s own. Last year, four organizations signed up, van Velzen said. In this year’s first quarter, five more bought in. He expects another 25 to 30 clients by the end of this year.

Image: Thinkstock

Image: Thinkstock

Van Velzen said these companies are in talent-squeezed sectors where employers must take care of workers if they want to keep them. They also are proud of their brands. “In their minds it would be very weird to communicate with employees through a different brand,” he said. “That’s a no-go for them.”

Roadmap sees customized communication as the key in helping it stand out in a crowded corporate travel app market. Tailored dialogue with employees opens the door to collecting feedback, fostering communities and instructing them about policies.

“You have to explain why you limit my choices or why I am not allowed to do something,” van Velzen said. “We educate travel managers about how marketing works, how dialogue works. It is not a one-way street.” In that way, he said companies can start targeting improvements in specific program areas and customize communications to the individual employee.

Van Velzen said real-time feedback from corporates — “not the TripAdvisor guys” — can help buyers in future supplier contract negotiations and help suppliers improve their products. “They’re missing out on objective ways to measure that,” he said. How, where and when that dialogue occurs within the app is up to the client.

Many travel management companies and various other third parties offer apps broadly to corporate clients and/or consumers. Some are pretty slick, and many have features that Roadmap also offers, including step-by-step itinerary info. According to van Velzen, TMCs are not particularly good at technology and communications.

Roadmap apps fall short of the all-encompassing killer travel app that some clamor for. That is by design. Given the industry’s long history in building booking tools, “we’d be idiots to think we can improve on that,” van Velzen said. The same goes for expense management, though a Roadmap app can inform travelers about expense policies like per diems.

However, Roadmap connects with various systems. Van Velzen pegged the number at 62, including agency mid- and back-offices, global distribution systems, invoicing systems and other administrative systems. Shortcuts and deep links enable connections with airlines (notably for check-in and boarding passes), ground transportation companies or restaurant info, for example.

Travel Tech Consulting president Norm Rose said Roadmap is “unique as far as being a dynamic itinerary that has a plug-and play-platform for any booking tool (or a path including supplier apps) or expense solution.” He added that popular itinerary apps “could morph into a Roadmap-style product, dependent on the flexibility of their overall platform.”

Questioning The TMC Road

In the BTN article, Christensen expressed frustration that Maersk’s TMC had not delivered something “hot.” She even hinted that her company might sell the app to others.

Roadmap has provided apps to a GDS (Amadeus, for its m-Power app for agencies), TMCs (including Advantage Business Travel) and OTAs (including eDreams Odiego), which then provide them to their customers. Van Velzen said the company and some TMC customers now are questioning whether it makes sense for TMCs to spend so much money developing apps when their adoption is relatively low. For example, without naming it, he said one big client TMC — which put lots of marketing behind the app and gives it away for free — reached adoption of 35 percent to 40 percent. He said large corporate-direct clients immediately enjoy 70 percent adoption. Roadmap measures adoption in terms of usage per trip, meaning in those cases 70 percent of client travelers opened the app during their journey.

“Nothing is more important than adoption,” van Velzen stressed, “otherwise there is no mobile strategy.”

Additional info: Maersk’s Christensen declined to comment for this article. The conglomerate has expanded cost-cutting efforts, including travel expense reductions, after revenues fell 15 percent last year to $40 billion due to lower oil prices and freight rates. Maersk recorded a December quarter loss of $2.5 billion, though it was profitable for the year, according to its annual financial report this week.

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Latest Startups Try Texting, With Agent Or Bot

It’s becoming difficult to count on one hand the tech startups going after the “small” or unmanaged business travel market. 30SecondsToFly, Cinch, Hyper Travel, TripChamp and Travo are a few. Hyper, along with shopping services like and Mezi, are bringing a new element to the travel-booking experience. They’re focused on mobile texting as the means of communication between the agent and traveler. It seems cool, but detractors argue it’s a feature, not a business.

The Company Dime booked with Hyper and Mezi. Both used affiliate relationships with Expedia Inc. for hotel fulfillment. Hyper purchased air travel through a supplier website.

The texting was fine, and the agent on the other end was good. It was similar to chat features many consumer websites offer. However, it also required as much time as an online booking and the initial search results were limited to what’s viewable on the small screen. Both initially offered three choices of properties, for example, and finding out rate rules like refundability required an additional text rather than a click or glance.

As compared with a phone call, texting does has the advantage of allowing the user to put it down and come back to it when ready. The agent on the other end, also, can work multiple engagements at once.

Mezi makes its money only on affiliate revenue. Hyper charges $20 per month for a “pro” service offering 24/7 chat access to the concierge. Twenty-five dollars per user also gets businesses “advanced” reporting, “custom” travel policies and expense and duty of care integration. Hyper claims it’s going after more than just the small market.

The founders developed the business idea after their experiences as users of a travel management company.

“Corporate travel management solutions are lousy,” said Hyper co-founder Peter Zakin. “Trying to book a trip on your phone for business is not tenable.”

Corporate booking tools are often criticized for not keeping up with consumer design and capability.

Screenshot 2016-02-01 15.28.20Hyper’s founders said they should not be lumped in with some other startups that emphasize artificial intelligence., for example, has the user texting with a bot rather than a human. Once asked to book a property, the service was unable to get out of its pre-programmed path to answer questions (see image).

Possibly the biggest challenge for these firms is actually reaching customers. When it comes to finding them, small or unmanaged companies are more like consumers than enterprises. Embryonic providers can’t spend millions on marketing like Expedia and Priceline.

“We’ll use a lot of standard tricks of the trade that other mobile-first startups have used,” said Zakin. “We’ll run into some of the same problems as Expedia and Priceline as far as how expensive it is to acquire customers. There’s a new breed of company trying to reconstruct the travel infrastructure inside a company that has synergies with travel, so we see ourselves synching through those types of relationships with a smart partner strategy.”

Expensify comes to mind, though Zakin didn’t name the expense-management upstart.

Finding The ‘S’ In SME

Traditional travel management companies tend to find small clients through word of mouth and sometimes outbound sales calling. Their execs don’t seem very concerned about startups. The smallest end of the market is nebulous, anyway.

“We see these startups as almost R&D shops,” said Travel & Transport president CEO Kevin O’Malley. “They’re trying different things to see if they can disrupt or solve a pain point. The trick is how they convey their value proposition — mass marketing, digital marketing, word of mouth, social media. They have to do it as cheaply as they can, and they don’t have the budget of, say, the online travel agencies. Inevitably, some of them will be successful because the message resonates. Then you’ll see them gobbled up by someone bigger.

“It’s not that we ignore them,” O’Malley continued. “They do get into the ear of our corporate customers along the way. So we’re spending time explaining. There are more and more of these companies.”

O’Malley and execs with the likes of Executive Travel, Gant Travel and Tower Travel Management said they are observing growing demand for text chatting as an option. Some have tested it. They said what’s vital in the corporate world are metrics and storing conversations. It’s getting there.

Carlson Wagonlit Travel senior vice president of global marketing Nick Vournakis said the global TMC piloted a chat service with one of its clients.

“It didn’t create a real compelling experience,” Vournakis said. “The response time wasn’t terribly different. It’s less about the technology and more what’s underpinning it. In my mind, the key trend here is messaging-as-a-service. WhatsApp, WeChat, Telegram. These are channels that especially in the eastern part of the world have a tremendous user base, and they’re not just using it to chat, but also to consume. I think that’s where we’re headed. Ten years from now it’s probably not about answering a phone call.”

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Riot Games Coping With Corporate Travel’s Virtual Card Adolescence

Virtual cards are still a work in progress, but Riot Games travel wizard Sean Parham isn’t ready to give up on them. He’s now on his second try. The intended benefits — reduced fraud, easier reconciliation and a seamless traveler experience including an easier expense process — are just too tempting.

Last year Parham pulled the plug on a program through CSI globalVCard meant to go live on Oct. 1 when Riot Games switched travel agencies to Adelman Travel. He said the credit qualification process bogged down the initiative for months. That was partly because Riot Games is private and doesn’t freely share financial info, and partly because the company found CSI’s process too onerous.

Riot Games travel wizard Sean Parham

Riot Games travel wizard Sean Parham

A few weeks ago Riot Games started another attempt, this time through Adelman, AirPlus International and Wex. Parham said credit approval only took three weeks, but he faces other familiar frustrations.

Even so, travel management companies and virtual card program providers are bullish and point to progress in resolving some of the obstacles.

“In every bid or every discussion with a customer, there is interest there,” said Adelman president and COO Steve Cline.

A primary motivator is partially automating the traditional hotel prepaid process. That’s the reason AmTrav is pushing. President Craig Fichtelberg said the TMC built an API to transfer “the administrative burden” to the virtual card company. To encourage clients, AmTrav will process prepaid virtual card hotel bookings through its website for free.

The rationale behind all the buzz sounds great, but the details can be a buzzkill.

Sources say a big roadblock is getting hotels on board. It’s hard for some properties to distinguish reservations made with physical cards that travelers would present at check-in from those made with virtual cards. Front desk personnel often can’t find or make sense of the faxed authorizations.

Parham understands the dilemma. “If I was a front desk clerk working at the Days Inn, I wouldn’t know what to do about it either,” he said. He also said that in the first few weeks of Riot Games’ new program, not a single hotel booking outside the United States worked properly.

Is the task of engaging hotels on v-cards up to payment companies, travel agencies or end-user clients? “That’s where the disconnect is,” Parham said.

The hotel industry is making an effort toward standardization through the Hotel Technology Next Generation trade association.

CSI SVP Juliann Pless doesn’t see hotel cooperation as such a problem. She said the company, its customers and their TMCs all are communicating their needs to hotels. Pless expects more chains to buy in this year, but acknowledged that training hotel front desk staff is an issue.

An AirPlus official also said hotel willingness is not a very big problem, at least not in the United States and Europe. Elsewhere, the company works “directly” with its customers’ most used chains.

That’s just one hurdle.

One well-known purpose of virtual cards is establishing a preset spending limit. To cover taxes and parking, Riot Games adds 30 percent on top of the hotel room rate for a given single-use v-card. “But we are finding that if the hotel charges the room and tax, and then a separate charge for parking, it is declining and not going through,” Parham said. He’s anticipating a related issue for reservations at Las Vegas hotels, which require a deposit for the first night at the time of booking.

Virtual card companies, though, say such situations don’t need to be problematic. Those interested in v-cards shouldn’t get hung up on the “single-use” concept. Instead, v-cards can be configured as single-stay. The merchant, spending limit and date range remain the same as users conduct multiple transactions. “It comes down to setting up the proper conditions of use at the time of v-card generation,” according to AirPlus.

Conferma director of strategic relationships Paul Raymond said his company has addressed the issue of multiple transactions for a single virtual account number with all its banking partners. He called that a “must-have” in corporate travel. Another example is the traveler who gets snowed in and stays at the hotel for another night. “You need the TMC or card partner to talk with the bank to add additional funds,” Raymond said.

Getting The Fax Straight

Many mock virtual card programs because of their reliance on archaic faxes. They are PCI-compliant, whereas unencrypted emails aren’t, but still present problems. The obvious one is that they can be misplaced at hotel properties. That creates confusion at check-in.

At Riot Games’ main hotel near headquarters in Santa Monica, 21 employees stayed on a recent night. The virtual card program is configured to send a fax two days before the traveler checks in and then on the day of arrival. For that one night, that meant 42 separate faxes sent to the hotel. “Not perfect at all,” Parham said.

Moreover, Parham said the language on fax authorizations is too basic, lacking clear instructions. “From a legal point it doesn’t really have anything on it,” he said. So Parham worked with his legal team and redesigned the fax authorization template himself.

Mobile apps from some v-card providers can ease the pain. They allow travelers at check-in to show or transmit payment details from their device. The AirPlus app also enables a traveler “to generate a new v-card number during their trip at the moment they need it,” according to an official. “This feature is managed by the travel manager and they determine all the conditions of use.”

Some chains have obviated faxes. Built with Travel Incorporated and Travelport, Choice Hotels’ process works for self-booked and agent-assisted reservations for clients with corporate discounts, according to Travel Incorporated senior vice president of business development Tony Peter.

In the United Kingdom, Conferma worked with Premier Inn and Travelodge to dispense with faxes by using web services and XML messaging. Payment info and instructions are sent directly to the hotel’s property management system.

“The initial booking goes through the GDS, and then this supplementary communication goes to the hotel,” Raymond said. “We are trying to make this a ubiquitous solution.” For now, though, most hotels rely on faxes.

When asked about an acceptable failure rate, Parham said he’d be content if 50 percent to 60 percent of hotel transactions flow through v-cards successfully. That’s a far cry from the 90-plus percent he wants for online booking adoption and other travel program components, but “still 50 percent more than before,” Parham said. “The breaking point will be how much time we have to invest to correct the failures with individual hotels.”

Casto Travel president Marc Casto last year said that while clients like the v-card concept, “we have had significant challenges with the hotel using them correctly. They’ll say, ‘We can’t process this until we have that. You want to sit here while I call my supervisor?’ That kind of stuff.” At that time, Casto was seeing an error rate near 50 percent. Contacted this week, Casto said it’s now closer to 15 percent. “Still very significant given the volume that occurs,” he said.

In a 2015 report, BCD Travel estimated that 20 percent of hotel payments on v-cards require a human to step in.

When problems occur, perhaps a bad fax number, Adelman has a protocol in place. “We try to focus on doing everything possible to ensure that the transaction was transmitted correctly and documented correctly,” said CIO Ivan Imana. “At some point there may be some manual intervention required for that failure.”

Jeannie Eisenhart has been poking around with virtual card program providers. The director of talent acquisition and employee services at Crowley Maritme said a beta test with one didn’t allow for changes and cancellations. Agents found it easier to manage those requests themselves. Looking at other options, Eisenhart discovered that integration with the Concur tool isn’t there yet. In another case, too much internal IT work would have been required.

Why Bother?

With his finance director boss asking how long he’ll give it, Parham is going to stick it out for at least 90 days. “In the long-term it may turn out to be still a better solution,” he said. “The situation prior was so much worse than we have now.”

Riot Games has a traditional corporate card program but not many of its 2,400 predominantly millennial employees (average age: 24) have cards. So the company does lots of prepaying anyway.

Then there’s reconciliation. Riot Games has as many as 700 hotel transactions each month. An admin has been spending two or three weeks reconciling them because card transactions don’t return rich detail. Some big chains have committed to providing that detail, but the company’s travelers use plenty of hotels that haven’t. “The admin is going through folios, calling hotels, playing detective every month,” Parham said. “And every month a percentage is not reconciled and goes into the general ledger.”

He’d view it as a win if that admin could spend maybe just one week a month on that task.

Service providers and travel managers who have explored v-cards encourage careful planning and patience. Imana advised clients to be sure a v-card program doesn’t mess with existing travel management automation, including online bookings. “You don’t want to trade one thing for the other,” he said.

BCD Travel’s report cautioned that such a project requires “ample time and resources into getting your program up and running. You’ll need to coordinate with many internal and external stakeholders.”

Pless suggested beta tests with small subsets of travelers before wide roll-outs. She acknowledged that uptake for some clients is slow. “There is a hesitancy to change, especially for a program that has been running smoothly,” she said. Regarding the front-end credit approval process, Pless said the timing varies because each company is different. She said it is usually pretty smooth, but not always.

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Priceline’s Jay Walker Is Back, Targets ‘High Cost’ Of Business Travel

Priceline founder Jay Walker is back, and this time he’s focusing on business travel. His new firm, Flexible Travel Company, right now isn’t much more than some people and a marketing website. But those people are experienced and that website is intriguing. It describes the company as “turning the way we buy business travel upside down.”

Walker “has been working on the ideas behind his latest travel venture since he founded Priceline,” the site explains. “Every business trip he took was a reminder that he had left a big travel problem unsolved – the high costs of business travel.” Walker has been working hard on that problem since early last year, according to the site.

Image: Thinkstock

Image: Thinkstock

Hosted at, the site offers some hints. A “reward system” for business travelers would “out-motivate – but not replace – the giant established loyalty programs offered by airlines and hotels.”

The site lists several open positions for folks who would typically populate the middle ranks at travel management companies, including corporate account management, supplier relations and GDS distribution. As for products and services, there are only vague references to “front-end user experiences” and “direct and indirect online and mobile channels.”

The key personnel already in place certainly know what they’re doing. Inventor and entrepreneur Walker is listed as chairman and CEO. Priceline founding chief technology officer Scott Case is CTO. Also an original Priceliner, former airline exec Tim Brier is listed as “head of travel.”

Former American Express Global Business Travel global vice president Jonathan Hamblett indicates on his LinkedIn profile that he’s VP of supplier relations at Potomac Innovation, apparently the stealth name for Flexible Travel Company.

An existing company of Walker’s, Walker Innovation, in December filed a U.S. Securities and Exchange Commission document indicating it signed a shared services agreement with Flexible Travel. The deal called on Walker Innovation to provide Flexible with a variety of services from strategic planning to legal services and office space “until such time as Flexible Travel has sufficient organizational resources internally.”

SEC documents indicated that as of December, Jay Walker owned 76 percent of Flexible Travel.

Public Internet records show that is owned by Priceline. The URL redirects to

Additional info: We emailed Potomac Innovation this morning seeking more details; we’ll update this post with any additional relevant details.

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