Monthly Archives: May 2016

‘Book Direct’ Perception Challenge Trumps Rate Access Problems

Most of the recently announced members-only rates from major hotel chains are available in managed travel channels, but that’s not the whole point. Business travelers may still think they can get better rates elsewhere.

Absent strong policies related to hotel bookings, travel managers need to wield all the communication and engagement tools at their disposal to educate employees about what’s in their companies’ best interests. They’re not going to get any help from the multi-brand hotel companies. They might even expect harm.

“I don’t know how to respond to this challenge fully,” lamented Hess Corp. global travel manager Nicki Leeds in an email exchange. “In the oil and gas industry, safety trumps everything. How do we convey to the traveling population that ‘we really need you to book through the right channels or we’re not able to locate you’? As catastrophic events continue to happen in the world, I’m able to drive those messages home in a more realistic way. But it’s a challenge because current ads would convince travelers to book direct and they think they are doing something good by saving the company money.”

windmillThe advertising has hit close to home for Leeds.

“I was in the elevator this morning,” Leeds said during a May 24 Association of Corporate Travel Executives webinar. “Our elevators have advertisements and there is an ad for Marriott about getting the best rates and all these additional benefits by booking direct. I nearly had a meltdown in the elevator. I asked communications to suppress that message and then I thought, ‘I’m curing the symptom instead of attacking the cause.’ ”

It’s hard to imagine how to address the cause. The hotel companies are obsessed with reducing the power of online travel agencies — the primary target of the book-direct campaigns and member rate programs.

Perhaps most frustrating, the real impact of these rate programs pales in comparison with their effect on perception. Yet, business travelers who think they can find lower rates outside the preferred system are probably wrong.

Part of the trouble is that the messaging comes from very large chains. About 58 percent of American Express Global Business Travel client global hotel spend is on chains that have introduced members-only programs. It’s closer to 70 percent within the United States, according to GBT vice president for hotel value and revenue management Wes Bergstrom.

With the exception of those from Choice Hotels, the members-only rates “are in GDSs today and we see that as a good first step,” Bergstrom said. However, “quite a bit needs to be sorted out to make this an easy process.” While online booking tools pull rates from the GDSs, in some cases there are limits on the number of rates they can load. “By adding incremental rate codes it can clog the system,” he said.

The target is moving. Many of the rates are “capacity restricted,” meaning they’re often not available midweek, he said. The rates tend to be between 3 percent and 7 percent off the best available rate, said Bergstrom. “Most corporate negotiated rates are better, and in many cases they’re including amenities or other benefits,” he said.

“There’s a conflicting message,” Bergstrom concluded. “A lot of it really is extra noise in the system. There’s a problem in the communication. We still think there’s quite a bit of uncertainty as to what these rates mean.”

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

Advito, Cisco Aim To Revive Virtual Conferencing’s Connection With Travel Management

Integration between immersive remote conferencing systems and travel providers was popular several years ago. Marriott and Starwood installed some telepresence rooms. Sabre explored and its GetThere unit built booking systems for conference facilities. American Express Global Business Travel and Carlson Wagonlit Travel partnered with a Cisco reseller.

It all fizzled.

Last month, BCD Travel announced its Advito consultancy and Cisco had agreed to collaborate on collaboration. A lot has changed since the turn of the decade. “It doesn’t take telepresence-level investment anymore to drive effective collaboration,” said Advito managing director and BCD Travel senior vice president April Bridgeman.

The high-end technology is cheaper and better than in the past. The cloud facilitates interoperability between system types and devices. People are more accustomed thanks to widespread webcams and video calling via Facetime, Hangouts and Skype. More workers are remote.

Cisco Systems business development manager Sam Chon said some of the earlier initiatives were “well-directed” but ahead of their time and too expensive.

Now, Advito and Cisco will work together to enhance mutual clients’ use of the technology. They’ll also help create travel avoidance strategies and assess the ROI of collaboration options. Bridgeman said the idea is to make “staying home” successful, partly by identifying the right kind of travel to replace. Decision trees could help travelers choose whether to stay or go and direct them to either a virtual tech or travel booking system.

Cisco

Image: Cisco

“Virtual conferencing does save a lot of money but I haven’t seen a lot of good analytics on that,” said GoldSpring Consulting’s Kevin Iwamoto. “To me that’s the real opportunity — hiring a third party like a TMC partner to come in and provide those analytics as part of their scope of services.”

Advito also wants to help clients adopt organizational inventory management systems. These could come from Yarooms or other scheduling software firms. “It’s easier to stay if it’s super easy to book those assets,” said Bridgeman. “A lot of companies still make it difficult.”

Another step that companies have explored but never quite nailed is bringing decisions on video versus travel to the point of sale. Bridgeman said that following a 2014 partnership announcement, recent integration by Concur and RouteRank could grow this more dynamic approach.

That was part of the plan for the Sabre GetThere Collaboration Suite. According to Harman International senior director for global corporate travel Sally Abella, GetThere discontinued the program. Harman had been using GetThere’s capability to book conference rooms as well as travel. Now, employees book rooms in Microsoft Outlook. When logged in to GetThere, they see messaging promoting videoconferencing as an option.

Some companies program their booking tools to prompt travelers about whether they have considered remote conferencing. Cisco itself drastically reduced travel costs from internal meetings largely with an awareness campaign. Employees use Outlook to book the facilities, and decisions are in the travelers’ hands.

“By the time I go to the booking tool, I have made the decision to travel,” said Cisco’s Chon, himself a frequent traveler. “We’re trying to get ahead of that curve and make it apparent to the traveler — before that decision to travel — that there’s a different way to organize the collaboration session. We’re trying to give them a moment of pause. If you look at the overall number of trips, it’s clear some are not worth the money.”

Advito also is hoping to involve more corporate travel professionals in their firms’ virtual conferencing efforts. According to an October 2015 Advito survey of 442 travel managers, three-quarters work at companies that deploy videoconferencing. One-quarter use immersive systems like telepresence. However, the survey found 64 percent of travel professionals had little to no influence on virtual collaboration.

Traveling And Not Traveling … Hand In Hand?

Point-of-sale integration between virtual and travel options may not be required for a travel avoidance program, but its absence helps keep TMCs on the sidelines. A big reason for the earlier flameout in collaboration is the conflict between traveling and not. It’s one thing to accept that fears of tech replacing business travel were overblown. It’s another to promote cannibalization.

Former TMC manager and association head Paul Tilstone, now a consultant with Festive Road, experimented with telepresence in its early days.

“The role of the TMC in working with videoconferencing has remained at [a] strategic level, where a TMC’s consulting division can analyze travel type, risk and any other influencing factors and make recommendations for greater VC investment,” according to Tilstone. “Strategic thinking about the part travel plays in facilitating meetings hasn’t taken root in any scale and the ability to compare productivity/cost saving metrics for videoconferencing use against travel are just not available at the point of booking — something which would really bring the two together.”

Tilstone called it “a little disappointing” that other companies have not adopted the approach taken by Ikea, in which “the reason for the meeting determines the meeting methodology, and only once that is complete is the need for travel determined.”

Accenture, EY and many other companies have pushed virtual conferencing, both for cost savings and carbon management. In some cases, they’re doing so without the enthusiastic support of their TMCs. EY global head of travel, events and meetings Karen Hutchings late last year told Business Travel News that a TMC had said it would not support telepresence because it generates no money. Hutchings could not be reached on short notice for an update.

According to Tilstone, “The TMC business model somewhat gets in the way of any further move towards this utopia as any move away from travel transactions tends of course to reduce income to the TMC. If greater incentives were in place to reward the TMC at the point of sale or at a strategic level to move towards VC then it would provide a more interesting opportunity, but this requires the TMC to move more headlong into the consultative space rather than operational processing.”

Some discussions about revenue models have contemplated TMCs making money based on savings achieved for clients, though that can be difficult to calculate.

While Advito’s advisory role on virtual conferencing strategy may be clear, Bridgeman had to resort to the hypothetical when considering how BCD Travel could profit. She said she could imagine the TMC charging transaction or subscription fees to help travelers make the “stay or go” decision at the point of sale. Or the company could become a reseller of remote conferencing solutions.

“This is long-term,” she said. “It’s not that we’re looking to do something like that next year.”

Additional info: Officials with American Express Global Business Travel, Carlson Wagonlit Travel and Sabre could not be reached for comment. Representatives at the three Marriott and Starwood properties to first install telepresence tech several years ago all said the systems had been removed.

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

Private Air Subscription Model Gains Interest, Poses Challenges

[UPDATE, June 7, 2017: Surf Air acquired Rise, a fellow provider of private air service. It intends to link its California flight network with Rise’s Texas-focused operation. Surf Air will do away with the Rise brand name, and indicated “no immediate changes to either companies’ flying experience.” An “enhanced” booking platform is in the works. To fund the acquisition, Surf Air raised an undisclosed sum of equity financing from various private investors.]

Private air transport companies come and go. A new crop is focused on the members-only, all-you-can-fly model. Some travel management pros are interested in the concept, but they raised several points of consideration.

Of course, such options must be safe and not prohibitively expensive. Since booking them almost always requires direct channels, what role can travel management companies play? Isn’t submitting the expenses complicated for travelers?

The user benefits are apparent.

To help bring prices within the reach of more business travelers, some shared-use membership programs use turboprop aircraft rather than glitzy business jets. That usually means flying to general aviation terminals or alternate airports, potentially closer to the office or home. Those facilities incur lower operating costs for service providers than big airports. They may come with less traffic or faster security processing.

Users pay initiation and monthly fees but incur no other charges. Customers typically can book a predetermined number of reservations each month. Once they actually fly, they can book additional trips up to their allotment. Corporate membership programs can include a pool of flight passes or allow name changes on those allocated to individuals.

private-air

Born in 2013, Surfair operates 90 scheduled daily flights around California and to Las Vegas. Of 3,000 current members, 1,500 are from about 200 corporate accounts, according to CEO Jeff Potter, a former Frontier Airlines CEO.

Individual Surfair memberships are $1,950 a month. A corporate program runs $1,000 a head per month, with a minimum of four employees. Executives and other air commuters who pay a lot for commercial service and/or deal with more than their fair share of travel frustrations seem most suited.

Some travel managers said the model could apply for frequent travelers on specific routes. “Conceptually, the process is interesting,” said a travel manager at a Bay Area multinational who asked not to be identified. “It’s a ‘status’ thing to be able to fly a personal aircraft.”

Another global buyer, also requesting anonymity, worried about making the right economic decision: “If companies are allowing this, are they putting parameters around it? My concern is that while $1,500 to $2,000 is not a huge amount of money, how do you ensure that a traveler will fly enough to maintain ROI?”

Surfair vice president of member acquisition Justin Hart said a traveler flying twice a month on a route operated by the company could save money versus commercial before factoring in time savings. He noted that last-minute commercial fares are high enough in some markets that just one flight a month on Surfair is cheaper.

Riot Games global travel wizard Sean Parham agreed that’s the case in some markets in which Surfair operates, but not all. Five employees at his Los Angeles-based company live in the Bay Area and commute weekly. They use Surfair for the convenience, but on their own dime. Parham said it’s too much to justify as a reimbursable expense, particularly since there are plenty of commercial options between the two markets with relatively low fares.

Parham is considering a corporate account that would at least give these individuals a discount on their own out-of-pocket expense.

To maximize their investments, Hart said some companies empower admins to determine who can book when they want and who needs permission. In that way, admins can see when employees should use the company’s Surfair membership.

Potter said more than half of the roughly 1,500 Surfair members not tied to a corporate account get reimbursed for individual subscriptions.

Reimbursement is different, since air travel purchases traditionally tie to individual trips. Surfair looks for workarounds. For example, Hart said Surfair enables companies to import information into expense systems. Some users choose to expense the entire month’s fee as one line item. More integration work is underway.

Another concern is buying in to and familiarizing travelers with a program that may not have legs. The subscription approach hasn’t always worked. Surfair’s founders subsequently also founded a similar service in the Northeast. Beacon operated for only a few months between Westchester, N.Y. and Boston before folding. In Canada, Chrono Aviation on its website advertises a monthly membership program for unlimited flying between Toronto, Montreal and Quebec City. It, too, has been discontinued. Company president Vincent Gagnon said that “Quebec people are not ready.”

There also are smaller-scale disruptions to consider. For example, if there is a mechanical issue, a back-up aircraft may not be readily available.

Can TMCs Join The Club?

Another rub is that private air membership services, like most other private air transport, require direct bookings through a website, mobile app or phone call. That keeps data outside of travel management company and corporate self-booking channels.

Marc Casto, president and COO of San Jose, Calif.-based Casto Travel, said his company has clients that make use of the Surfair model and it’s well-received. “That said, integrating them into a managed travel program is a bit more challenging as it is not part of a central reservation system,” Casto said. “Generally speaking, all services are provided only for key principals so it is managed individually rather than on an enterprise basis.”

Hart said Surfair is working with clients on connecting to their T&E systems. He also said agencies can earn commissions on the monthly memberships they bring to Surfair.

Startup Instantair also will rely on direct bookings through its app when it starts scheduled, all-you-can-fly service later this year between Amsterdam and Frankfurt, London and Paris. Inspired to get into this game by Surfair’s success, the company also is talking with TMCs. “You can say we make it so easy to book a flight that you don’t need the agency,” said co-founder Alexander Janssens, “but we cannot always go around the agency because a lot of companies use their agencies for booking hotels, etc. So we are looking to integrate into their current systems.”

Instantair has been customizing plans for corporate accounts with fewer than 500 employees.

Asking The Safety Questions

The new membership programs stress their adherence to safety standards. Proper vetting is top of mind for travel program managers and their companies’ risk and HR departments.

Risk concerns rise when the seller and operator are different entities, often the case in the private aviation market. Smaller facilities conjure up perceptions of lax security.

“When you hear ‘cheaper,’ you have to ask, ‘Why is it cheaper?’ ” said iJet COO John Rose. “What are the safety records of those companies, the airframes they are using and the training of the pilots?”

He didn’t suggest that any particular private transport company or the facilities they use are unsafe. They abide by “strict” U.S. regulations, he said. But as more of these services emerge, diligence is required. Just as companies need safety assessments of commercial airlines around the globe, Rose said he is seeing “the same type of need around private air transportation now that it’s carried down to the next level of being mass-marketed and more affordable.”

The bigger safety issue for Riot Games’ Parham is keeping tabs on travelers. “I don’t have any way to feed [flight itinerary] data into International SOS,” his company’s travel risk management provider, he said.

Additional info: Other all-you-can-fly private air transport clubs are popping up. Among them, in Texas, Rise for the past 10 months has offered members unlimited flights on scheduled weekday service between general aviation terminals at Dallas Love Field and Houston Hobby. The price of a corporate membership depends on how many employees are included. Users book through the Rise website. A mobile app is forthcoming. Rise director of communications and business development Angela Vargo said the company already has flown members on 10,000 trips. Of those, 80 percent were for corporate travelers.

In the Southeast, My Sky’s new membership program initially will serve Atlanta, Charlotte and Jacksonville. Owner Elliott Mintzer said it should be ready for the summer after pre-enrolling a sufficient number of members. Mintzer said the benefit of corporate memberships is name interchangeability.

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

Travel Tech Vet Creates New Online Booking Tool

[CORRECTION, May 25, 2016: The original version of this article omitted and misstated facts about the background and accomplishments of Rastko Ilic from tech firm Thomalex. The version below is updated.]

Building a great online booking interface is hard. Dealing with multiple platforms in the mobile era adds complexity. Making a buck on bookings may be the biggest challenge of all. Business travel entrepreneurs typically can map all that out. If they don’t have industry experience, though, they can stumble in integrating with external systems in the business travel world. Application programming interfaces are making things easier, but not easy, and not necessarily cheap.

A new provider is applying its leader’s experience with integrating travel tech in an effort to crack the online booking tool space. For an area that has lacked innovation, the entry of ResVoyage from 12-year-old travel tech firm Thomalex provides more evidence of life in the booking tool market.

Pass Consulting and NexTravel joined the business during the past couple years. If the simple existence of new providers is not an enticement for buyers to consider them, change in the traditional supply base could be. Market leader Concur has new ownership and has had service issues. Sabre’s GetThere is subject to a new overall strategy. Amadeus is sunsetting e-Travel in favor of the iFAO Cytric system.

online booking

Image: Thinkstock

No wonder a recent discussion in the Global Business Travel Association hub had several travel managers asking for a list of current providers (see list below).

Miami-based Thomalex builds middleware technology that connects to and from global distribution systems and others. President Rastko Ilic started the company in 2004 after four years at Pass Consulting and nine at Amadeus. At Pass, he helped build technology later acquired by Farelogix.

Three years ago, customer interest drew Thomalex into the corporate booking tool arena. The idea was to create something which was cost-effective, flexible and customizable for small and medium travel agencies and clients. “We developed something that would be in a different category from Concur, GetThere and E-Travel,” said Ilic.

Last year as it put a wrap on development, Thomalex enlisted Canadian marketing company Peel Solutions, which promptly contacted around 100 travel agencies in North America. They signed two of them, Winnipeg’s Canada One Travel and Time Travel in Montreal. Clients of those agencies now are signing on to the booking tool.

“The booking part is only the common denominator,” said Peel Solutions president Michael Benitah. “It’s the other functions that differentiate a tool like this — the reporting, the expense limiting, the respect of hierarchy. What ResVoyage did that not a lot of companies do was, instead of seeing what’s on the market and saying, ‘Let’s do that extra step,’ they said, ‘Let’s do 100 steps from there.’ Potential clients and agencies are surprised with how far it can go and how simple it is to use.”

Still, he said, online booking is not a new service and the most common reaction from North American agencies has been that they already have solutions.

Time Travel CEO Alexander Detre said he’s been watching the booking tool market since 2000, and ResVoyage is “ahead of the game.” One of his large, global clients is using the tool and two more customers are testing it.

“I always looked at Concur as the Mercedes of the industry,” said Detre. “I’m calling ResVoyage the Rolls Royce. The biggest difference is the customization — they’re the only ones I have seen that are so customizable. I’m a small global agency, but I can make myself look like a large global based on what they can do tech-wise that Concur won’t.”

Being small always offers the advantage of being responsive, noted Ilic. Implementation can take as little as a couple weeks. He also touted the price — $3.50 per transaction after a $2,500 setup.

Like Pass Consulting, Thomalex can offer its code to clients that want to build their own interfaces. Expense system integration and merchandizing opportunities also are on the horizon, said Ilic.

Online Booking Tools In North America

ProductLaunchedMobileN. Am. HQ
Amadeus Cytric1996iOS app; Android appChicago
Amadeus e-Travel Management*1994iOS app; Android appChicago
Concur Travel2000iOS app; Android appBellevue, Wash.
Deem2000iOS app; Android appSan Francisco
KDS Neo2013iOS app; Android appPrinceton, NJ
NexTravel2015iOS app TBANew York City
NuTravel Enterprise1996Mobile webPort Chester, NY
Pass Consulting Victor2014Based on client demandMiami
Thomalex ResVoyage2016Based on client demandMiami
Sabre GetThere1995Mobile web, apps TBASouthlake, Texas
Notes: Updated May 2016. In addition to standalone systems, travel management companies including AmTrav, EgenciaHogg Robinson and Short’s Travel Management offer proprietary booking tools. Popular solutions in other regions also include Serko in Asia and Egencia’s Traveldoo in Europe.
* To be phased out in favor of Cytric

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

All The Rage: Rewards

Business travel startups are huge right now. New-entrant corporate booking tool NexTravel is working on its mobile app. Artificial intelligence and text bots are making a go of it. Agents are going virtual.

Also hot? Rewards.

The notion of the incentive program isn’t new, but it’s rapidly attracting automation. Rocketrip was the first in a club that during the past year added a few members: TripActions, TravelBank, TravelPerk and Upside. “I guess they’re onto us,” joked Rocketrip founder and CEO Dan Ruch.

He claimed progress into the more managed end of the market through travel management company partnerships. The newest startups may be more attractive to companies that do not already manage travel. This isn’t to say they don’t have experience with the broad range of the business travel market.

Now in beta and called Upside, the spin on Jay Walker’s new TMC is rewards. Presented during the travel booking process with opportunities to be flexible — on choice of supplier, airport, hotel location and more — users earn gift cards in exchange for helping their companies save money. According to Upside, here’s how it works: “Just answer a series of questions about your upcoming trip and choose three airlines and three hotels you’re willing to use. We’ll then create a custom trip for you filled with savings and rewards.

“Your company will save 10 percent to 20 percent versus published prices, and you’ll earn an average of $150 in major-brand gift cards for helping save money.”

rewards

Caption: Thinkstock

Upside guarantees its claim to the lowest rates with a generous offer, at least in the beta. “If you book a trip in the Upside beta that is higher than the same trip on another website, send us an email with a screen-grab of the lower prices and we will send your company a check for double that price difference.”

Upside at the moment is targeting late summer for full availability. The company declined to make available CEO Walker for an interview.

Menlo Park, Calif.-based TripActions did not respond to requests for information, but it’s in the enviable position of having a potential client and partner speak for it. TripActions “is definitely a disruptor in booking travel,” according to Xilinx global travel manager Jean Sloan. “It’s a great option for the smaller company that does not have a rigorous managed program and wants to save money on their business travel spend.”

Sloan explained that the TripActions app checks booking requests against market pricing and offers a “gamification approach” for travelers to take the cheaper choice. She said if the traveler can be flexible, “considerable” savings is available, particularly on lodging. Reporting and risk management support are available.

“Also, there is no license fee nor a transaction fee,” according to Sloan. “We are considering beta testing with one of our small divisions in the near future.”

ExpenseBot has chatted with TripActions about a possible partnership. “I’m a big fan,” according to ExpenseBot CEO Ed Buchholz. “They’re blending an unmanaged travel approach with managed travel capabilities and are sure to speak to the needs of a considerable portion of the midmarket.”

TripActions last year hired as client engagement adviser Ron Wagner, a travel management veteran formerly of BCD, CWT, iJet and others. According to its website, TripActions is focused on “mobile booking, live itineraries and 24/7 phone support.” A sensibility about behavioral science drives the rewards component, employing positive reinforcement by aligning the financial interests of employees and employers, according to the site. TripActions already has Android and iOS apps.

Less info is available about TravelBank. Parent Travelator Inc. is registered in California. Its site promises to “give your employees the freedom of choice to book business travel wherever they want.” It indicates there’s a benchmarking component, harking back to Google’s travel program — a forerunner for all these startups.

TravelPerk is banking on a similar concept. “When a travel manager or employee goes to search for their required trip, we not only display available results, we also create a budget for their trip in real time,” according to its site. “This dynamic budgeting algorithm is a revolutionary way for your company to manage business travel costs in a way that is always fair to the employee who is traveling.”

Clients have the option to share savings with employees.

TravelPerk is incorporated in the United States but based in Barcelona and registered as a travel agency in Spain. According to its site, it makes money on commissions (like most of these new companies, presumably). TravelPerk claims that “hardly anyone” offers more travel inventory. It integrates with Expensify.

“There is still lots of venture money out there,” said Atmosphere Research Group’s Henry Harteveldt. “Travel is an attractive area for investment but the more sizable opportunities in leisure have been addressed. There’s massive consolidation on the online travel agency side, with meta search, etc. So consumer is, for the most part, the very thin part of the long tail. Corporate travel is still in the thicker part and folks are looking at this because they haven’t seen all that much innovation. Whether all these new companies really do have anything different from how the rest of the TMCs are doing something remains to be seen.”

Meet The Establishment

The new providers appear more attractive to less managed programs. Companies with preferred rates and suppliers are going to be a hard sell for travel services looking to make money only on commissions.

All the attention has Rocketrip’s Ruch “personally thrilled.” He said it helps validate a concept that in days past was taken only lightly. Perhaps gamification was the wrong label. “I don’t really count what Amex did with Badgevillle or Concur with Price To Beat as real efforts,” Ruch said. “They were feature-driven.”

Three-year-old Rocketrip now is the budgeting system behind Concur’s offering and the pair have a robust partnership, said Ruch. His company also works closely with TMCs — he named American Express Global Business Travel, Carlson Wagonlit Travel, Frosch and Travel Leaders. This level of collaboration signifies a move upmarket from where Rocketrip started. It may now be part of the establishment, but Rocketrip still has clients that take a more open approach to travel policy. Ruch refutes the notion that rewards programs are best applied in smaller companies or unmanaged travel programs.

He claimed an advantage in being agnostic about the booking channel, which one would think startups calling themselves travel agencies could not do. “They’ll have a challenge in disrupting what Amex or CWT or BCD have built,” Ruch said.

He said 95 percent of Rocketrip’s clients already have a TMC. The solution integrates with Concur Travel and, to a lesser degree, other booking tools. Gerson Lehrman Group and OnDeck Capital are examples of companies using the Concur configuration. Most Rocketrip clients spend more than $1 million annually on travel and Ruch said one client spends about $300 million.

Whether bookings are in a managed system or on the open market, Rocketrip works by creating a trip ID and a budget. Travelers earn gift cards based on savings or actions relative to policies like booking the lowest fare, purchasing in advance, taking connections, riding the rails instead of flying, sharing cars or trading down on class of service.

Any corporate incentive program draws questions. How are the tax implications handled? Aren’t we just paying employees to do what they should anyway? Will they travel more or longer to earn rewards?

Ruch is accustomed to these concerns. He said “some of our clients will gross up payroll because they believe the employee shouldn’t feel the burden, but most of our clients include tax withholdings on the next payroll run.” He repeated the second question: “Do they want to reward employees for doing what they should anyway? The answer is no. We should not reward what they should do anyway. Rocketrip was never about that. It’s about rewarding employees for unexpected behavior. That’s what makes a deployment complex and high touch. The first hard part is determining how you know what they were going to do. From there, the motivation is to change behavior. It might not mean complying with policy.”

As to the last question, Ruch said his data shows client travelers haven’t increased travel in order to earn more. Still, Rocketrip offers controls to monitor behavior or set limits.

Consultant and gamification expert Tom Ruesink said Rocketrip “has done a good job” recognizing the existing programs many companies have, and integrating with them.

Ruesink is skeptical about the focus on rewards. Not that badges are the way to go, either, but he suggested old-fashioned recognition can serve the purpose of gaining traveler buy-in on company programs. “From a gamification purist’s standpoint, rewards are one of the last things you focus on,” he said. “It doesn’t necessarily get at the recognition part or support overall company goals. ‘How am I a part of this program?’ That’s where I think there’s a long way to go. I’m amazed there isn’t more ‘thank you’ type recognition. You see very few companies really recognizing the traveler for sacrifices they’re making.”

There are practical matters, too. Ruesink said the concern about traveling extra is a real one for customers. “Do you see an increase in trips instead of travel avoidance and videoconferencing?” he asked. “That saves more money.” He questioned how a rewards program is applied fairly when most of the population already follows policy or buys intelligently.

Harteveldt said it’s possible the sprouting startups represent a fad. “There’s so much stupid money out there,” he said. On the other hand, frustration with travel policy is a powerful force. “There’s a new generation of companies that are looking for different ways to manage travel,” he said. “People don’t like being told what to do. You need both the carrot and the stick, but corporate travel has focused a lot on sticks. There will be room for both of these types of approaches.”

Additional info: In the beta program, Upside is offering web chatting powered by Intercom as well as in-house telephone support. For air travel, only single person, roundtrip, domestic flights are available in the beta. Gift certificates are to be delivered by email two days after the trip takes place.

Upside has hired a number of industry veterans. Formerly of Hertz and Radius, Brian Butler is director of travel partnerships. Ex-American Express Global Business Travel exec Jonathan Hamblett is vice president of supplier relations. According to job postings, Upside is using Concur’s Compleat mid-office technology and Sabre’s Trams back-office. Mobile apps on Android and iOS are on the way.

TripActions CEO Ariel Cohen is on the agenda for a Silicon Valley Business Travel Association event in June.

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

Virgin Deal Could Make Alaska More TMC-Friendly

[UPDATE, Jan. 19, 2017: American Airlines as of Feb. 1 will cease code sharing on several Alaska Airlines’ routes. Affected markets include: Seattle to/from Chicago O’Hare, Dallas/Ft. Worth, Newark, Los Angeles International, New York JFK, Philadelphia, Phoenix and Washington National; LAX to/from Baltimore/Washington, Portland, Ore., Salt Lake City and Washington National; and Portland, Ore. to/from Chicago O’Hare, Dallas/Ft. Worth and Washington National. Effective June 2, AA will stop placing its code on Alaska’s flights to/from Anchorage and LAX and Chicago O’Hare. According to AA, Alaska will stop placing its code on AA flights to/from LAX (18 routes), Seattle (eight), San Francisco International (seven) and Portland, Ore. (five). An Alaska official wouldn’t say when those take effect.]

[UPDATE, Dec. 6, 2016: Alaska Airlines said the U.S. Department of Justice approved the Virgin America acquisition after Alaska agreed to “limited changes” to its American Airlines codeshare pact. Alaska said it expects the transaction to close “in the very near future.” DOJ said Alaska must “significantly reduce” AA code sharing to “ensure that Alaska will have the incentive to vigorously compete with American as Virgin does today.” More specifically, DOJ said Alaska and AA would be prohibited from sharing codes on routes where Virgin currently competes against AA “and on routes where Alaska would otherwise be likely to launch new service in competition with American following the merger.”]

Alaska Airlines has a lot to sort out if its proposed acquisition of Virgin America is approved. It’s already thinking about working more closely with travel management companies.

Alaska in the past had account managers for some of the bigger TMCs but more recently focused its business travel sales efforts directly. “As we expand our national footprint we know we’ll need robust relationships with the TMCs,” said SVP Joe Sprague. “We’ll assess from a sales structure standpoint if we should have people dedicated solely to the agency side.”

According to an Alaska financial filing, “traditional” agencies accounted for 23 percent of the airline’s 2015 ticket distribution, down from 28 percent in 2011. Alaskaair.com accounted for 60 percent last year.

Alaska also will reconsider the agency role in its small business program, currently only accessible on the carrier’s site. EasyBiz was one of the first Web-based corporate booking programs when it launched around 2000. It targets businesses with at least five frequent travelers or those spending at least $20,000 annually. Both travelers and their companies earn reward points in the Mileage Plan loyalty program. EasyBiz provides some reporting and traveler profile capabilities. Sprague said Alaska sometimes offers discounts within EasyBiz. Those usually apply for customers with large volumes of simple itineraries on just a few routes.

Alaska - Virgin America

Image: Alaska Airlines

Virgin’s Elevate Inc. also is for companies that spend at least $20,000 a year. They earn back 2 percent redeemable for future travel. That rises to as high as 4 percent when spending hits $100,000. The program allows for direct or TMC reservations.

When asked if EasyBiz one day would include the TMC channel, Sprague noted that Alaska has experimented in a few cases. “We would be open-minded on that,” he said.

Virgin also sold about 60 percent of its 2015 tickets directly through its website. Virgin likes using GDS technology, too. It signed up for Travelport’s Rich Content and Branding solution to better display its products to travel agencies. It also became the first airline to use Sabre’s Customer Data Hub and Customer Experience Manager to better understand customers. In June 2015 it began using Electronic Miscellaneous Document functionality as a means to sell ancillary services via GDS channels. Those channels, according to a Virgin financial filing, “generated average fares 41 percent higher than those generated through other channels in 2015.”

In addition to its approach to TMCs, a larger Alaska would have to decide how to structure or revise its corporate sales force, contracts, underlying technology and loyalty programs. Alaska’s Mileage Plan still is based on miles flown. Virgin’s Elevate program is based on dollars spent on base fares.

Like Virgin, Alaska uses the SabreSonic reservations system. “That is good,” said Atmosphere Research Group’s Henry Harteveldt, “but they may be using Sabre in different ways. While not quite as dramatic as [res system integrations for other airline mergers], it is nonetheless moving reservations from one partition of Sabre to the other. It is not a risk-free endeavor.”

The company also would have to overcome challenges in integrating cultures and products, and determine how best to grow partnerships with American Airlines and a bunch of foreign flag carriers.

Corporate Relevance

At Sea-Tac International Airport, Alaska accounts for about 42 percent of all enplaned passengers, according to the Port of Seattle. It flies nonstop from there to 80 destinations. Outside Seattle, Portland, Ore., and Anchorage, corporate travel isn’t a big part of Alaska’s revenue mix, according to Sprague.

Even so, Alaska’s 22-person corporate sales team also is present in the Bay Area, Southern California and New York. “We call on a lot of companies based in New York even though our flight presence is limited — at least today, it will change over time — to a couple of flights to Newark and one to JFK,” Sprague said. “There is an element of wanting to have some options.”

He added that Alaska structures corporate deals in the typical way — upfront discounts for volume or market share.

“Because Alaska is so strong where they fly, companies that need them tend to really need them,” said TCG Consulting partner Barry Rogers. “So they generally have pretty high marketshare requirements on standalone agreements.”

Not so at Virgin America, according to Rogers. “They do corporate discounting, and they tend to not be real aggressive in terms of marketshare requirements,” he said. “They tend to contract with companies with travelers that just like the product.” Rogers said TCG has many such clients that have preferred deals with American or United.

Virgin America is a favorite among many business travelers. They make use of the long-haul, point-to-point operation connecting primary business markets. They come back for a well-liked product and an ethos befitting its famous umbrella brand.

Some travel managers think that’s OK. “It is a market disruptor so it made sense to try to give them some business just to help keep them in operation,” said a travel manager at a multinational company with a big Portland office, requesting anonymity due to an existing Alaska Airlines contract. Virgin’s flexible ticket transfer policy and change fees well below those of the Big Three don’t hurt.

Virgin’s eight-member corporate sales team has attracted as clients big companies in financial services and the tech sector. According to Virgin, first-quarter volume among the 10 largest accounts jumped 27 percent.

Portland-based Schnitzer Steel Industries travel program manager Steven Bossard said adding Virgin to his company’s Alaska deal “should enable us to get our negotiated discount/rate on some additional routes up and down the West Coast, and San Francisco to the three major cities on the East Coast (Boston, New York City and Washington, D.C.).”

That’s an exemplar of how Alaska and Virgin become more relevant to corporate buyers. California is the linchpin. “Virgin is not a hub-and-spoke network,” said TCG’s Rogers, “and that complements Alaska without a lot of overlap.”

“For the business traveler, fundamentals still rule,” said Harteveldt. “Route networks, nonstop flights, on-time performance and the loyalty program.”

Friends And Foes

Buying Virgin puts Alaska in more direct competition against United, especially in the Bay Area. According to San Francisco International Airport, a United hub, the airline in 2015 held a 44 percent market share of combined domestic and international seats. Meanwhile, Alaska and Delta are about done as partners. They square off in Portland and Seattle for corporate business and their rivalry up and down the West Coast only will intensify. Last week, Delta said it is expanding the Shuttle brand there.

American Airlines, on the other hand, could further assist Alaska’s corporate sales. The carriers already share codes and offer reciprocal lounge access. Executives at the two are contemplating a deeper relationship.

To compete against major global alliances, ties with international carriers also are important. Alaska and Virgin each have several. The newest is Alaska’s code share and frequent flier program partnership with AA Oneworld partner Japan Airlines, set to take effect June 29.

Sprague said Alaska in the past year or two strengthened the global network it can offer to Seattle companies. For example, a pre-existing frequent flyer program partnership with Emirates expanded to include code sharing. Icelandair also came on board as a codeshare and frequent flyer program partner.

“Virgin America has had similar a similar approach in San Francisco and Los Angeles, and our partners also serve San Francisco and Los Angeles,” said Sprague. “There are opportunities to grow the bases of operations and jointly serve corporate customers.”

Following The Cult

An obvious challenge Alaska faces is retaining Virgin’s culture and its fans. “As a New Yorker, I grossly underestimated just how strong of a cult-like following Virgin has built out there,” said J.P. Morgan analyst Jamie Baker during an Alaska conference call last month. “Does your analysis still assume that you retain 100 percent of the Virgin loyalists? It really seems to me that you might want to be modeling for some spill there.”

Alaska CEO Brad Tilden acknowledged the “strong allegiance” from Virgin’s customers and employees. That was part of the attraction. “We’re going to go into this with a humble approach,” he said.

Product integration would be a tall task. Disparate fleets make it complicated. Virgin only flies Airbus A320-family airplanes. Alaska flies only Boeing 737s, putting aside regional subsidiary Horizon Air. Inflight, Virgin created a unique experience. Design and style are paramount. Seating is less cramped than on larger competitors. There is an inflight entertainment system with on-demand food and drink ordering and even mood lighting.

Schnitzer Steel’s Bossard said Virgin “definitely raised the bar of expectation when it came to domestic flights. Without Virgin America, what airline will push a product with these kinds of things in mind?”

He likes both airlines. “Virgin America has the hip and sexy vibe of Los Angeles and San Francisco,” he said, “while Alaska has the more laid back and friendly attitude of Portland and Seattle.”

Sprague said Alaska is “going need to figure out what the right product mix is, and for sure keep alive some of the more popular features they have.”

Harteveldt said “there is no question” Alaska would have to explore a response to premium lie-flat transcon seats offered by American, Delta, United and Delta and JetBlue. “Maybe Alaska also can leverage a premium transcon product from Seattle to New York and Boston.”

Additional info: Alaska and Virgin America this week received second requests for information from the U.S. Department of Justice’s Antitrust Division. The airlines still expect the deal to close “no later than Jan. 1, 2017.” Harteveldt said if DOJ doesn’t block the merger, it later might tell Alaska to carve out certain legacy Virgin America routes from potential codeshare cooperation with AA. Alaska expects a single operating certificate from the U.S. Federal Aviation Administration at least a year after the merger transaction closes.

Alaska Airlines is usually at or near the top of the punctuality rankings. It was tops among major carriers in the 12 months through March 2016, according to the U.S. Department of Transportation, and second overall among the 13 U.S. carriers covered in DOT reports. This month, it won a ninth consecutive J.D. Power customer satisfaction award.

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

Hogg Robinson Centers On Payments For SME Growth In North America

[UPDATE, Jan. 25, 2017: HRG apparently released a new app sometime in the last few weeks. It’s available on Android and iOS, and offers typical TMC app features like itinerary sync and touch-to-call. “This app is only available to existing HRG clients who have the app enabled in their technology configuration,” according to the iTunes store. The iOS app reached version 1.01 on Jan. 13 after some bug fixes. An Android download site indicates the app was added in December. It makes a reference to Fraedom, suggesting the app was based on tech from the payment and expense-oriented subsidiary, as anticipated in this article.]

With a spate of acquisitions, U.K. travel management leader Hogg Robinson Group entered the United States on its own a decade ago. As its partnership with the predecessor of BCD Travel dismantled, HRG had to rebuild in the largest business travel market. The moves didn’t set the world on fire. Some accounts left. A major recession hit. The most interesting thing HRG did in the region was a big but challenging travel and expense deal with the government of Canada. This did little to excite those in U.S. corporate travel.

HRG’s performance in North America has been up and down. With a fair amount of executive turnover and a shifting strategy on mobile, the company hasn’t achieved the kind of leadership position to which it is accustomed in some other markets. HRG is addressing those matters now with new blood and an upcoming mobile app. More interesting is its ambitious bet on competing with Concur.

HRG’s Fraedom subsidiary (formerly Spendvision) offers expense management technology and a little-known bank card platform that HRG sees as the path to signing small and medium enterprises. HRG also believes it has an advantage that the other expense providers do not — a travel management company.

After acquiring full ownership of Spendvision in 2012, HRG announced Fraedom more than a year ago. As a brand, it has taken arrows. This may not matter so much as it’s a behind-the-scenes provider anyway. Roughly four in five clients access the technology through a partner.

HRG-financials

HRG’s revenue from North America peaked in 2012 after weathering the 2008-2009 recession. Eighty percent of the 2013 dip was related to a restructuring of HRG’s loyalty business in Canada, according to the company. Whitman Howard analyst Andy Smith said “the U.S. doesn’t feature that highly” in HRG’s financial discussions. Canaccord Genuity’s Matt Walker said HRG’s organic annual U.S. growth of 3 percent to 5 percent since 2006 was higher than in other regions. Going forward, he said, HRG is “probably right” to expect “good growth” in the U.S. for its Fraedom division.

According to an HRG presentation in March, Fraedom serves 135,000 clients, processes more than 400,000 transactions per day and has 365 employees. It generated revenue of £22 million in fiscal 2015, up 14 percent year over year.

“We’re not some startup that doesn’t make money,” said HRG CIO Bill Brindle. Underlying operating profit last year was £3.2 million, up 10 percent.

Direct customers include De Beers, Deloitte, Mitsubishi and Staples. It’s the company’s partner network, though, which executives see as unique. Partners largely are financial institutions like Barclaycard, BMO and Suntrust. A relationship with Visa offers access to more than 100 more banks under the card network’s IntelliLink spend management service.

Concur and other expense management systems import card data from banks for mutual clients, but “we go a step further and integrate with the bank’s processor,” said Fraedom CEO Kyle Ferguson in March. “We control the provision of credit, we can issue virtual cards, can produce cards, increase or decrease limits, cancel cards. We believe that puts us in a unique position.”

So does BMO. The bank is replacing its internally developed card management platform with Fraedom’s. This is the technology that allows users to see statements. It enables administrators to issue cards, close accounts and execute other functions. BMO is replacing platforms because its expertise is not in developing technology, said BMO Financial Group vice president and head of North American corporate card products Steve Pedersen.

Kyle Ferguson

Fraedom CEO Kyle Ferguson

Complementing that, BMO then offers clients the Fraedom expense management capability. “We’re here for the cards, not to compete with Concur,” said Pedersen. “I’m agnostic. But not everyone wants Concur. It has elaborate capabilities and there are costs to that.”

Pressed by financial analysts in March to differentiate Fraedom from Concur, HRG chief David Radcliffe claimed an advantage in owning the travel operation.

“Concur doesn’t own the travel system,” Radcliffe said. “There have been instances with Concur where they have had some difficulty controlling service delivery when outsourcing.”

Both Pedersen and Radcliffe referenced their existing partnerships with Concur. But given its card management technology, there is potential for Fraedom to become a more important partner to banks. A combined travel, payment and expense capability from a business bank could be attractive to small and medium enterprises.

“We do referrals,” said Pedersen. “I could see an evolution where we offer a travel capability in our portal. We’re not there yet.”

Fraedom isn’t in a rush. Card payment is disrupting checks as expense automation disrupts spreadsheets, and the markets are huge. HRG execs described an addressable B2B payments market growing to $2 trillion by next year.

They expect 60 percent of Fraedom’s revenue ultimately to come from the Americas. Payments revenue will grow about twice as quickly as expense revenue, which also will grow faster than travel revenue. On payments, the company takes a small fraction of the merchant fee. For expense, it charges a per-user fee. In travel, the technology is free but Fraedom makes money on commissions.

Financial analysts who follow HRG are interested in but guarded about Fraedom.

“It’s a good thing they’re doing it,” said Whitman Howard’s Andy Smith. “The core business of corporate travel management is — I won’t say under pressure, but — doesn’t seem to be growing as much. [There is] cost cutting as people move from call centers to online. So certainly this is diversifying the income stream. It makes sense but whether they can monetize it remains to be seen. Fraedom is still a small part of the group, and it’s taken a long time to come to fruition.”

Canaccord Genuity’s Matt Walker called Fraedom “quite an interesting” proposition. “A lot of the reason American Express did travel was as a retention tool for corporate customers using Amex cards,” he said. “Fraedom’s banking partners also could use this as a retention tool.”

Walker said he wasn’t sold on how much of a competitive advantage owning the travel component offers over, for example, Concur partnered with BCD Travel.

Fraedom’s payment platform “sounds genuinely innovative and valuable to us,” according to Michael Donnelly of Panmure Gordon.

WIIFM?

Larger clients may ask what’s in this for them. They represent the bread and butter for the biggest piece of HRG. Brindle in April said there’s no shift in strategy there.

Like for every TMC, though, big clients bring mixed blessings. HRG recently lost Novartis to Carlson Wagonlit Travel (a decision made in 2014 but not implemented until this year). On board since HRG first invested in the United States back in 2004, Disney has recently considered other providers. Condé Nast is another larger client that recently went out to bid.

One of HRG’s challenges is that its answer on mobile has been evolving. Here again the investment in Fraedom could pay off. A new downloadable mobile app is in the works, continuing a turnaround in thinking on mobile technology. HRG earlier had prioritized mobile-enabled websites rather than downloadable apps, unlike competitors including CWT and Egencia. HRG had tried to keep to a mobile-web strategy because of the difficulties and expense in maintaining and updating apps. Those still are challenges. Corporate customers in the past limited downloading, but Brindle said companies now are more relaxed. Meanwhile, he said, the advantages of using the device operating systems — for example, for the camera or offline processing — have grown.

The new app also could help HRG match up with Concur, which embraced downloadable apps earlier than just about anyone in corporate travel.

When it comes to development, HRG now has a “mobile-first” approach to travel, payment and expense, executives said.

Meanwhile, former American Express Global Business Travel and BCD Travel sales exec Mary Ellen George-Hess recently joined HRG as senior vice president of sales in North America. Her job is to reinvigorate the brand and get the company in the door of more large-corporate clients. She’s also hiring.

HRG’s next earnings statement is due out next week.

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

Explainer: IATA’s New Distribution Capability

The International Air Transport Association’s New Distribution Capability has been in the making for about five years and many still don’t get it. Depending on your interpretation and where you sit, it’s either a promising or unsettling development for business travel distribution.

NDC is neither a new airline reservations system nor a massive database of traveler information. It’s not meant to remove distributors from the chain. It doesn’t represent a brand new airline pricing strategy. Rather, NDC is a standard. It is based on XML, a language for structuring and sharing data (a follow-on to HTML, used to build web pages). XML is a successor in travel to the Edifact international data exchange standard that has facilitated messaging between industry parties for decades.

IATA positions NDC as a better way for airlines to send data to partners like global distribution systems. The goal is to overcome the industry’s “current distribution limitations.”

Said another way, airlines for a while have been interested in customizing and better presenting offers. Regardless of where customers shop, the idea is to match a traveler to the right set of products and services at the right price. In that sense, NDC is an evolution of yield management. The concept isn’t new, but some travel buyers are wary of anything that helps airlines extract more money from customers.

Last September, consultancy Festive Road published a report, commissioned by IATA, to find out what travel buyers know about NDC. Among 17 interviewed business travel managers, there was, at that time, “a considerable knowledge gap” that led to “a sense of unease,” according to the report. “The main concern by travel managers is that airlines will increase the practice of price and content variance by channel.”

NDC

Image: Thinkstock

As for offers tailored to travelers’ characteristics and purchasing patterns, Festive Road found a mixed reception. The travel managers were optimistic that it could increase value for travelers. But they expressed concern about them straying from policy.

“Travel managers have a right to be concerned about how they will be sure travelers have the ability to do a like-for-like comparison,” said Henry Harteveldt of Atmosphere Research Group. “There will be many shades of gray here. There’s a possibility that while the intent is to make things more straightforward there may be some complexity that arises.”

From the airlines’ perspective, NDC promises efficiency. Not every airline is buying into the voluntary initiative, but many see it as the best path to displaying and selling their products the way they want in indirect channels. That includes GDSs, and therefore corporate TMCs and booking tools. Within the standard there are components related to shopping, booking and servicing, payment and ticketing, and other functions. NDC also would let airlines request offers and other services from interline partners, and then manage the resulting bookings.

Jim Davidson is CEO of Farelogix, a central player in NDC development. He explained NDC the context of a new Farelogix-Airline Tariff Publishing Co. partnership for distributing ancillaries.

Traditionally, airlines file fares, fare rules and optional services through airfare publishing firm ATPCo. ATPCo, Davidson said, in turn sends a feed of that “raw data” to various distributors and others with pricing engines — GDSs, online travel agencies, ITA Software, Farelogix, whoever. “They take a feed of all this raw data and through the engine make pricing and then hook on availability and schedules,” he said. Those are separate processes executed by each distributor. Bringing ancillary products into the mix requires individual implementations with airlines. Those take a while.

Using NDC, airlines that sign on to the new partnership (none announced yet) would pull the ATPCo raw data feed through the Farelogix merchandizing engine. That’s where actual offers and prices are assembled. Those are spit out through an NDC-compliant application programming interface and prepared for display in various channels.

A GDS need only connect to that API to grab many airline offers at once, Davidson said. “Rather than one airline being able to put their fare families in a GDS and that GDS sends it through to Concur, all airlines can do that, at the same time.”

“The airlines,” Davidson continued, “will simply say, ‘Instead of you guys doing my offer, my offer will be delivered to the GDS. I will unplug my Edifact and plug in my NDC API. That way I maintain one API across my internal and external links. You guys get really good at connecting to that the way you are really good at connecting to Edifact.’ That’s the definition of NDC. That’s where you’ll get scale.”

Davidson noted that NDC is based around XML today, but maybe it’ll turn to other languages in the future. From his perspective, it doesn’t matter. “What matters is a centralized point for the offer,” he said. “The technology that comes out of that end will evolve over time.”

New Kinds Of Control

A key point of NDC is that the airline would control and customize the offer based on knowledge of the customer.

The upside for airlines is they can be the ones responding to shopping requests coming from travel agents. The downside for GDSs, Davidson said, is “they’re not the center of the universe in terms of creating the offer.”

The Farelogix-ATPCo offers engine would show how NDC can furnish a one-to-many approach. There already are plenty of airline-specific implementations of certain functions.

United, for example, is selling Economy Plus seats through Amadeus using NDC. According to IATA, NDC is well-suited for the task because United “dynamically prices each individual United Economy Plus seat.” Similarly, Sabre is selling American Airlines’ Preferred and Main Cabin Extra Seats using the NDC standard.

Many other deployments and tests are underway at Air Canada, British Airways, Emirates and Qantas, among others. Lufthansa has said NDC will play a role in its development of direct connections.

How does any of this help the corporate travel crowd? NDC program director Yanik Hoyles said the standard would actually support comparison shopping — and therefore transparency — because distributors can better aggregate content.

“Of course the buyer still retains the capability to filter what they want to give to who — more choice, more real-time access to the airline perhaps,” Hoyles claimed in an informational video on IATA’s site. Rather than more noncompliance that some fear, the result “probably will be less out-of-policy bookings.” He also said that because corporate channels would “capture more information on more components of travel,” managers would have better reporting.

“It will enable them to shop based on value not just commoditized price and schedule,” Hoyles added. “And if the travel agent channel provides similar features as the richness of the airline channel today, there will be a much more consistent shopping experience.”

Atmosphere’s Harteveldt agreed that NDC has great potential for selling to corporate travelers based more on value than current processes. He also said airlines will abide by the wishes of clients with preferred agreements. “Say a company wants XYZ optional products included; that will be presented,” he said. “If they tell the airline, ‘When our travelers are shopping through the corporate booking tool or if they enter our number on your website, do not show them’ business class or first class, or lounge passes, or extra legroom or premium economy seats or whatever, the airlines will listen to that.”

But, Harteveldt added, when there is no preferred agreement, “all bets are off.”

IATA’s report on 2015 NDC testing said work continues with travel agencies on integrating content from NDC and non-NDC sources. IATA said this year it would focus on gathering feedback from corporate buyers and travel management companies, and connecting them with IT providers to support NDC projects.

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

How Far Is Too Far For Hotel Attachment?

By all accounts, hotel attachment is an important indicator. Roughly speaking, this is the percentage of bookings for trips of more than one day that contain a lodging component. A higher ratio means better data for negotiations and risk management. If the hotel booking is made with the air booking, there may be transaction fee savings. If it’s commissionable, that helps fund travel management services. It can increase preferred supplier utilization. Travelers have only one contact to make in the event of changes or disruptions.

Definitions of attachment vary. Some buyers view it as the percentage of multi-day bookings that have a lodging reservation by the time the trip happens. Others are looking at the percentage that have a lodging component included when the air portion is booked. Some track the percentage of lodging purchases (as per payment or expense data) made through the preferred travel management company and/or online booking tool.

How ever they measure, many corporate travel managers are not satisfied with their rates.

One large, multinational consumer products corporation has taken the extremely rare step of declining to ticket airline bookings until they have an attached lodging component. That is, unless they’re same-day trips. The company has moved its hotel attachment rate close to 100 percent. Is this realistic for others?

attachment

A travel manager for this corporation agreed to share details on the condition of anonymity. It’s worth noting that this company’s travel program is a bit unusual. It’s more generous than many on classes of service and allowing upgradable coach fares. It’s less cost-conscious than some on agent assistance.

Where this company should not differ from other corporations is in its commitment to employee safety and security. The company was not willing to enable real-time tracking due to privacy concerns. Its CEO asked the travel department to suggest ways to improve visibility on traveler whereabouts. That chief executive then signed off on a pre-trip policy that, while carrying drawbacks, increased visibility.

Travelers who submit multi-day itineraries without lodging get emails asking them to make a hotel booking or provide additional information. If travelers are using convention rates, they’re asked for details. The travel department then creates a passive segment attached to the GDS passenger name record. If travelers are staying with friends, the same process occurs (though without address or phone info). “At least we know they’re in a city but not in a hotel,” said the company travel manager.

The manager admitted that in some cases there’s no way to validate that the traveler is being truthful. At least if there’s a question of liability, the company is making its best effort.

That doesn’t make it an easy effort.

“We’ll chase them down” the manager continued. “Or, they’ll call us and get mad that they have no ticket and the airline price has doubled.”

Drawbacks, Alternatives

Impressed with the rare mandate, half a dozen consultants and a handful of travel managers and TMC personnel noted a lot of drawbacks. They suggested some lighter steps that could improve attachment.

One sacrifice in the unnamed company’s approach is that holding off on ticketing an air trip could result in higher fares or diminished seat inventory. Another is that sometimes traveling colleagues prefer to iron out lodging later in the planning process.

Partnership Travel Consulting’s Andrew Menkes offered a less aggressive alternative: “You shouldn’t be able to depart until we know where you’re staying. But I wouldn’t hold back ticketing. You can mark a passenger name record for followup, say a few days before the trip, to make sure there’s a hotel.”

KesselRun Corporate Travel Solutions managing partner Michael Brennan said the unnamed company is “coming at it with the best of intentions, but to hold up ticketing to me seems a little too cumbersome.” He suggested companies may do better by maximizing rebooking technology from the likes of TripBam and Yapta.

“There’s always that delicate balance of control and policy and compliance versus creating employee dissatisfaction,” said Eric Jongeling, director of Carlson Wagonlit Travel’s Hotel Solutions Group in the Americas. “It could be that this would suddenly make someone noncompliant to policy around advance-purchase for air.”

Meritor global travel and meetings manager Jack Reynaert had the same concern. “We audit daily all bookings where air is overnight, and no hotel is booked,” he said. “Our attachment is over 95 percent and over 75 percent of air bookings are greater than seven days prior — which is our goal, as further in advance runs a risk of change fees. Don’t delay air bookings. That can really cost you bigger bucks than missed hotels.”

BottomLine Group consultant Al Norman said he likes the intent of the unnamed company, and has never seen a client go so far. Some, he said, require travelers within booking tools to indicate where they’re staying or mark a reason code. “It will still let them finish the booking so you don’t lose the air,” Norman said. “I’ve also seen warning emails — a pre-trip audit solution that copies your boss and puts pressure on why didn’t you book the hotel. Even if the approval isn’t forthcoming, it might let it go because you don’t want people pushed off the flight.

“I would be nervous about recommending [the unnamed company’s] approach to a client because of the downsides, but maybe it’s an education program,” Norman added. “You turn it off but threaten to turn it back on.”

According to BCD Travel, Hitachi Data Systems grew its attachment rate to 93 percent from 53 percent over an 18-month span. This helped save $1.9 million. An awareness campaign informed travelers of the travel program’s benefits and let them know that the travel department would consider any rates they found elsewhere. The company also asked employees who booked a multi-day trip without a lodging component to explain why using reason codes. It requested that employees include their travel itineraries with expense reports.

Christopherson Business Travel found that 99 percent of multi-day business trips require a hotel. CBT’s hotel attachment solution is much like the unnamed company’s in that overnight bookings with no lodging prompt emails to travelers. These messages ask them to add or request a hotel booking, create a reminder to book later or indicate they’re staying with a friend. The company also offers dashboard reporting on the overall attachment rate and upcoming trips that require but are missing lodging.

Travel Consulted’s Grant Caplan said some of his clients have considered the more aggressive approaches, but rejected them.

“Several didn’t feel they could get enough internal support,” said Caplan. “A couple thought it was too heavy-handed even though it’s very common that with airlines you don’t buy anywhere but the TMC. There are some practical issues. Take your conference hotel booking, which is one of the only good reasons to not book through the TMC. You have to educate on how to get a passive [segment built into the PNR] by emailing the agent. I have some clients that are getting very good at that. Some also are using email parsing tools.”

In addition to the direct benefits, Caplan described a more “subtle benefit of getting people used to stewarding money better, and helping them know they’re being watched without saying so.”

In a February guest column for Business Travel News, American Express Global Business Travel director of consulting Cicily Robinson predicted a greater emphasis on hotel attachment as more companies seek insight on the total cost of travel. She expected more adoption this year of tools that notify travelers when they don’t book a hotel or force them to do so, perhaps even before making the airline reservation. “In doing so,” Robinson wrote, such companies “will go beyond having the right policy. They will drive better understanding, make attachment easy for travelers, yield immediate savings and reduce obvious risks.”

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

Book Review: Travel Management 101

Former BCD Travel research director Claudia Unger points out that 76 U.K. universities offer a combined 450 tourism-related degrees, none of which focus on corporate travel. If a new program started, her recently published book could fit on the reading list.

“Corporate Travel: Hiding in Plain Sight” (CreateSpace Independent Publishing Platform, 2016) is written at the 101 level in academic textbook style with a conversational tone. Travel management veterans likely won’t learn much. Newbies will. So will senior executives who may not have an appreciation for the field’s intricacies.

Before working in corporate travel, Unger was a lecturer at Regent’s University in London, where she helped with the curriculum for a master’s tourism program. Her book is an overview of the strategic function that is travel management. It mentions dozens of the discipline’s issues and considerations for practitioners.

Claudia Unger

Claudia Unger

It takes a little while to get there. Unger first presents readers with sections on the history of travel and commerce. She then echoes other cheerleaders on the global economic importance of business travel. That starts to get into the reason behind the book’s title. Unger contends the industry doesn’t get its due for facilitating the movement of millions of businesspeople spending billions of dollars every year. At the same time, she argues, because travel costs are roughly 2 percent of company revenue, and because much of travel management is behind the scenes, the travel manager is often “sidelined.”

That’s why Unger sought to depict the travel manager’s job. It’s far more complex than most realize. “On a normal day, a travel manager might deal with a volcano eruption, reporting tools and supplier visits,” she writes. “Never a dull moment.”

She covers the basics: the role of a travel manager, how that person fits into the corporate structure, the nuts and bolts of travel programs, what a travel management company does, the trip “lifecycle” and so on. Unger also makes a few understatements in generalizing certain aspects of travel management. On policy, for example, while there are mandates and there are guidelines, it’s usually not black and white. Planning and booking trips through corporate channels should be quick and easy; however, “in practice that’s not often the case.”

Mostly at a high level, the book notes the reasons for and approaches to corporate social responsibility; demand and behavior management; data collection, key performance indicators and analytics; and trip disruptions, duty of care and travel risk management (it’s “not scaremongering”).

Unger wades a bit into why sourcing is so complex and why it’s “joined at the hip” to travel policy. She also broaches expense management, saying it “needs to be spearheaded by the travel manager.” The book emphasizes communication as a key travel management task. Without communication and constant reinforcement, for example, a travel policy “might as well never have been written.”

The book has some practical pointers. For example, don’t rent cars in India and China. Instead, get a driver. It also provides simple definitions for various travel industry and general business terms. Neophytes will learn the differences between reservations, booking and ticketing.

Unger touches on what she describes as the “trending topics” of 2016: the sharing economy, traveler engagement, personalization, distribution channels, virtual payment, virtual collaboration and predictive and prescriptive analytics. Other timely discussion points relate to negotiating hotel rates (hoteliers are pushing for dynamic pricing, i.e., percentage discounts off the “best available rate”), car rental companies’ inability to follow through on actually raising corporate pricing and open booking (which she believes is “likely to make a return when advances in data capture and standards are in place”).

The book suggests some trends to watch in the future. “The days of one-size-fits all are gone even in corporate travel and the smartphone is doing a fair bit to ensure personalization comes sooner than later,” Unger writes. She also shares a common view that “the model of calling an agent to book a trip are likely soon to be over.” There’s more to come on mobile bookings, traveler tracking (including GPS-based geofencing) and “smart everything” — self-driving cars, wearable tech, etc.

Complicated Questions, Simplified Answers

The book, Unger writes, “may not give you all the answers.” She makes clear when she is making assumptions or providing her opinions. There’s a stated bias in favor of her former employer BCD Travel (and sibling consultancy Advito). BCD is the book’s primary source.

As with many a primer, the book’s generalizations and areas of emphasis can be contradictory or off-key. That can be a bit of a disservice, if it misleads or confuses. The International Air Transport Association’s emerging New Distribution Capability is one example. Lots of people in corporate travel circles have trouble grasping exactly what’s proposed, the airlines’ motivations, how it will work and why they should care. In one chapter, Unger writes that the “big worry” with NDC is “that airlines determine prices based on the value of the travelers (i.e., the more you travel, the better your status, the better your score — and the lower your airfare). It is feared that this is a move against transparency — something corporates are fighting for.”

That concern is certainly out there. In a later chapter, though, discussing the challenges of comparing trip options and various add-ons, Unger writes, “Luckily, through NDC initiatives currently ongoing, there is hope that apple-to-apple comparisons are soon to be possible.”

Another example is meetings, conferences and events. Unger points out some similarities and differences with corporate travel, and how the areas can be complements. But she spends more ink on holographic meetings (a cool reality in tomorrow’s world, for sure) than on strategic meetings management (today’s disciplined approach, mentioned just once).

There are some other shortcomings. More real-world examples would help show how principles are applied. A more varied set of travel management data sources would paint a clearer picture.

She also seems to suggest that attending “fun” industry conferences is a crucial part of the job, even alluding to the industry’s “conference season.” Travel managers, she writes, are “very, very popular at all sorts of industry events.” While that’s true, and something college students or young professionals may like to hear, it’s not exactly the proper message for a discipline trying to be taken more seriously.

Additional info: “Corporate Travel: Hiding in Plain Sight” is available as a 200-page paperback here.

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

Podcast 11: James Filsinger, Tom Botts, Chris Vukelich, Flo Lugli and Mitchell Stern

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

Our eleventh episode features the second installment of a panel discussion recorded last month on hotel pricing and the lodging request for proposals process. The first part is here. Our expert guests were Yapta president and CEO James Filsinger, Miraval Group SVP and CMO Tom Botts, industry veteran Chris Vukelich and Navesink Advisory Group’s Flo Lugli.

That’s followed by an interview Jay Campbell conducted in March with Mitchell Stern, manager of travel services at education company Pearson. They discussed the importance of communications, proving the value of the program, policy, service versus cost and tech integration.

Download the audio file here.

Here’s more on our guests…

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

Hyatt Makes U-Turn On Member Rates In Global Distribution Systems

Hyatt Hotels Corporation has reversed its plan to keep new loyalty program members-only discount rates out of global distribution systems. A spokesperson declined to address why the company quickly overturned its original statement that travel agents would have to use its website to book the rates.

“Many of our members book their travel through our valued agency and corporate partners,” according to a prepared statement. “The discount has always been available to these agencies, and we have taken steps to make it seamless for agencies to book it for our members and their clients.”

The official had been asked specifically whether and why the new rates were made available through GDSs, backtracking on the original plan. “We are not sharing specifics in an effort to maintain our competitive advantage,” the representative wrote.

Sources including the American Society of Travel Agents Hotel Distribution Advisory Committee reported that the Hyatt rates are now in the GDSs using a new rate code. Availability in corporate booking tools remains open to question, possibly pending some programming. The booking systems would need to find the rates but also qualify the guest as a loyalty program member.

Hyatt

Hyatt CEO Mark Hoplamazian

Hyatt isn’t the first hotel chain to create confusion about new pricing and distribution initiatives.

When announcing its members-only rates last Tuesday, InterContinental Hotels Group seemed to be intentionally vague about how travel agencies could access them. A letter from an executive to clients later surfaced, appearing to show the plan all along was to include the rates in GDSs. The next day, a press official clarified that they would eventually be listed in those systems and also be fully commissionable.

Some believe that in floating the possibility of paying reduced commissions on its member rates, Hilton is (or was) gathering intel. That company also has declined to answer pointed questions about which corporate distributors can access the rates.

Are these companies testing the waters? Is one department not communicating well with another? Is the battle with online travel agencies creating a tunnel vision that leaves the rest of the indirect distribution channels to the side?

On a conference call last week with financial analysts, Hyatt president and CEO Mark Hoplamazian said the company tested the rate program for a year in eight U.S. markets and one Australian market. Enrollment in the company’s loyalty program doubled in those test markets.

“We’re trying to make sure that this isn’t in essence cannibalizing bookings that would otherwise be made by our Gold Passport members, and what we found is a clear majority of the bookings relate to either new members or previously inactive Passport members,” Hoplamazian said. “So it is having the intended effect of bringing more people into the program and increasing their activity base.”

He also said there was no impact during the past eight months on revenue per available room in those markets. “In several cases the index for individual hotels was up,” he added.

Given the 180 on GDS participation, apparently decisions about which channels would access the rates were not considered as carefully as the impact on loyalty and average rates.

Experts: Little To Fear On GDS Participation By Big Hotels

Some in corporate travel had worried that, in addition to Lufthansa, hotels moving desirable rates outside preferred channels could be the beginning of the end for said channels.

While recording last month for The Company Dime’s podcast, expert guests doubted any big chain would dump GDS distribution.

“There’s a reason there are still only three GDS companies,” said James Filsinger, CEO of Yapta. “It’s hard. They provide an invaluable service that’s difficult to replicate.”

Industry veteran Tom Botts said he was “not ready to predict the imminent demise of the GDSs. But I think it’s going to be great to see them spending more time as a result of this trying to improve their hotel programs — which have always been the proverbial red-headed stepchild.” Formerly of Denihan, Starwood and Delta Air Lines, Botts is now chief marketing officer at luxury retreats firm Miraval Group.

Other panelists pointed out that GDSs already have been working hard to generate more business with hotels.

Recently retired from Egencia after a career including positions at British Airways, Hilton and Travelport, Chris Vukelich said he doesn’t think the GDSs are going anywhere. More from Vukelich:

As focused as I was on reduction of the cost of sale in the airline business when I was at British Airways, I was never naive enough to believe the whole world would book direct. Travel management companies have a place — they help you influence policy, they provide spend reporting and they let you know where your people are when something bad happens in the world. The TMC infrastructure is built around the GDS.

I think airlines will never be satisfied with any cost and they want it to be zero, but they’re pretty happy as to what they have achieved over the years with the ongoing battle. There will be a similar balance struck in the hotel business, where the cost of GDS gets to what people perceive to be a reasonable level. You have to fish where the fish are, and the higher-yield fish (whether for airline tickets or hotel bookings) are swimming in an ecosystem powered by the GDS. I don’t see them disappearing, and I think anyone who predicts that is not correct.

Navesink Advisory Group’s Flo Lugli, a former Wyndham and Travelport exec, said she suspects discussions about the appropriate price for hotel distribution are underway.

“Most of the brands have clauses in agreements requiring them to offer GDSs all their publicly available rates,” she said. “There’s a gray area now about whether these discounted [member] rates are publicly available. If I was a hotel I’d argue they’re offered to a closed user group. If I was a GDS, I’d argue that since you can sign up instantly, you can receive them and they’re not closed.”

These may or may not be issues for Hyatt. As long as they can access the rates when needed, corporate travel buyers and their travel management company partners may not care.

Additional info: Two of Hyatt’s leaders, senior vice president for global digital Ellen Lee and global head of technology Alex Zoghlin, more than a decade ago co-founded “GDS New Entrant” firm G2 SwitchWorks. Travelport acquired that company’s technology in 2008. Lee is quoted in Hyatt’s original announcement of the member rates.

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

Book Review: A (Nearly) Complete TRM Resource

Fortunately for traveling businesspeople exposed to a world of danger, risk management is embedded in corporate travel’s consciousness. It’s a tricky area that touches many other business disciplines. Travel risk management approaches depend on culture, risk tolerance and many other factors. Threats, social stigmas and legalities vary around the globe. New technology constantly emerges to help both criminals and those working to mitigate, monitor and manage risk. There are some fundamental principles to consider when choosing service providers, but the whole area is a moving target.

Charles Brossman covers much of it in his new book “Building a Travel Risk Management Program: Traveler Safety and Duty of Care for Any Organization” (Butterworth-Heinemann/Elsevier 2016).

A former travel management company manager, Brossman lays out when, where and why corporations are liable for their travelers’ misadventures. He details best practices for creating associated travel polices and crisis response protocols. He features pointers for individual travelers and education for their managers. Case studies, case law and several scenarios (real-world and hypothetical) provide backstories and finer points on many of the issues.

Where the book misses an opportunity is getting input from more specialist firms in the space. Among TRM providers, iJet International is featured almost exclusively.

Charles Brossman

Charles Brossman

To be sure, iJet is a global leader. It built the TRM3 model, which probably is the best related roadmap and self-assessment tool. Founder and CEO Bruce McIndoe was as good a choice as any to pen the foreword. Not including iJet source material would make any effort incomplete.

But where are the other voices? Out in the market there are several established TRM companies. International SOS, Anvil Group, Europ Assist and NC4 are some. Other than a passing mention of another (Drum Cussac), they’re conspicuous by their absence. These experts would offer insight overlapping much of what Brossman included. They also would have brought more wisdom. That would have made for a more well-rounded narrative and a better lay of the land, especially for the uninitiated.

Asked this week why other TRM providers were not included, Brossman provided a written statement: “Clearly there are multiple best-in-class TRM providers available to buyers in the market, and there is no one perfect solution that everyone should use across the board, because every company is unique. However, just as Six Sigma has been adopted across many industries as a standard for quality management, I evangelize the TRM3 model because it provides a comprehensive and broad scope, a solid framework, and is built on continuous process improvement. I believe in it. Regardless of who created the TRM3, if we all work toward the same standard, all ships rise.”

Waking Up To The Challenge

Brossman cites lots of other sources — experts from academia, governmental and nongovernmental bodies, international labor organizations, traditional security firms and travel management industry players.

The result is an extremely detailed resource for companies looking to develop or improve their TRM programs. Topics range from policy design and preparation to medical evacuations and even the macabre task of repatriating mortal remains.

If you are looking for a quick primer, this book isn’t for you. As Brossman admonishes readers in his introduction, “No shortcuts.”

However, he does cover the basics, like defining “duty of care,” “standard of care,” “duty to disclose” and “duty of loyalty.” Included are such obvious steps as training everyone throughout the organization.

Brossman highlights common mistakes to avoid. The most notable is assuming your organization doesn’t travel to dangerous places. Another is relying on news to assess risks popping up around the world. Instead, use “intelligence,” which takes the news and layers on analysis, context and advice.

The book lists risks that many generally have thought about, like the air quality on airplanes. Some of the specifics are lesser-known, like the types of chemical insecticides used on those planes. Checklists run down the risks inherent in air travellodging and ground transportation — and tips on avoiding them. You’ll find the inevitable discussions on Airbnb, Lyft and Uber.

It also delves into several other complex topics. What are the special considerations for women, LGBT employees or those with disabilities? Citing a former FBI chief, the book explains why a woman, alone at a night in a U.S. parking lot, should run and scream for help when confronted by a man in a van. In a similar circumstance in Mexico City, she should probably comply.

Various corporate insurance options are covered. So are recommendations for engaging and aligning managers and senior executives.

“This book is supposed to be a wake up call to say, ‘You have to be organized within your company,’ ” Brossman said during a follow-up interview. “All companies should follow the same path.” Just how far down that path they go depends on the specific company’s circumstances.

Picking Through Policies And Providers

Though it doesn’t name them (other than iJet), the book explores various types of TRM service providers. The author is no fan of tools and services that tackle one aspect of TRM but claim to cover more. “Cheap” and “safety,” he writes, don’t mix well. “Contrary to what some technology providers in the market tend to believe, TRM isn’t found holistically in a piece of software.”

The means to track and communicate with travelers is not enough. “A collaborative collection” of suppliers is the better bet for a legitimate TRM program. “This will require a noticeable investment,” Brossman admits, “but consider the cost of not being prepared and being found negligent.”

Bringing it home to travel management pros, the book digs into how they should construct policies and source suppliers. Some of it may be a bit too idealistic for many organizations.

For example, Brossman asserts that the “most effective” TRM driver is nonreimbursement for bookings outside authorized channels. On the surface, that sounds like the solution to noncompliance. In practice, few companies actually go that far. Another suggestion is to ban “personal extensions or side trips.” There are logical reasons for this, but business travelers extend trips all the time.

On sourcing, the book notes that “savvy” travel buyers ask about safety in hotel requests for proposals. Well they should, but RFP responses on criteria other than price and amenities oftentimes are ignored.

The book also dissects what TMCs should and should not do in the context of TRM. Of utmost importance, they should standardize and aggregate travel data to whatever extent possible. Brossman explores the nuances and shortfalls of GDS data, passive segments and PNRs. He concludes that properly prepping data for export to a TRM platform “is by itself a monumental task.” Many can relate.

It’s no surprise that a TRM advocate looks down on open booking. “With so many variables around GDS-booked segments, passive segments, variable mobile phone and e-mail address formats, etc., within a managed TMC environment,” he writes, “why would anyone choose to believe that data collection for risk management purposes would be any better via open booking applications?”

TMCs also should provide pre-trip and quality control mechanisms. They should help clients assess TRM maturity, source a TRM provider and install and maintain the platform. Some TMCs have a degree of in-house expertise and capability; others rely on partnerships. Either way, the book contends that no TMC on its own can offer a complete set of TRM services.

Brossman maintains that TMCs should not manually disseminate risk alerts to travelers. Doing so is prone to error; automated systems that email affected travelers are preferable. Moreover, when agents manually send such info, they’re assuming “major liabilities.”

Some experts insist TMCs take on a shared duty simply by handling travel reservations. That’s of concern especially in Australia. (Aussie Tony Ridley, another TRM expert, has shared that view. He also co-authored a book on the subject). Brossman said it’s an arguable point. Laws around the world, he said, are inconsistent.

Brossman admits the high degree of subjectivity around other TRM issues. One example is the question of traveler tracking versus privacy rights. The book doesn’t get into the debate. Brossman again pointed to the many differing laws out there. It’s a perfect example, he said during the follow-up, of the critical need to include legal counsel when crafting policies and procedures.

It’s also a good example of where insight from more TRM providers might have been helpful.

The book is a worthy resource for those interested in the ins and outs of TRM. It’s a commendable effort, but next time Brossman should pass the mic around.

Additional info: “Building a Travel Risk Management Program: Traveler Safety and Duty of Care for Any Organization” weighs in at 222 pages. It’s available on the publisher’s site, as well as from Amazon and Barnes & Noble.

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