Monthly Archives: August 2016

Amid Growing Travel Risk Management Awareness, GBTA Upsizes Assessment Tool

Denver — Companies trying to manage travel risk sometimes don’t know if their efforts suffice. Once they know where they stand, there’s much to do to run a solid program. IJet International nine years ago created an assessment tool that helped many understand the first part. The Global Business Travel Association, iJet and a task force of others during the past two years muscled up that tool to delve into the second.

The Travel Risk Management Maturity Model still is a self-assessment. Published in April, version 2.0 gets into lots of detail and generates specific recommendations based on user responses.

“Fifteen years ago when I started this, a company might deal with an issue every couple of years,” said iJet CEO Bruce McIndoe, speaking here at the GBTA convention last month. “In the last five or 10 years the pace has been picking up. Companies are dealing with this more often, fumbling the ball, saying, ‘We need to do better.’ In the past three years it has become an imperative. It needs to be part of the ethos. How do I deal with these [incidents] efficiently? Brussels, Paris, Istanbul — places where we not only have travelers but also people [based there]. The concept of TRM has morphed into people risk management.”

Image: Thinkstock

Image: Thinkstock

Terrorists attacked those three cities during the past year. That’s why more of BCD Travel’s clients are pursuing TRM, said senior vice president Kathy Bedell. She said about 20 percent to 30 percent had been doing so before those incidents. Now it’s 50 percent to 60 percent.

“It was not knowing where to start, not having that education, having so many other priorities until they actually had to face some of the challenges,” Bedell said, also speaking here. “It has become an awareness now.” She added that TRM now is a regualar part of client reviews.

McIndoe explained that TRM3’s first iteration sprung from maturity models for software, program management and engineering. “It’s a quick assessment that you can do in 15 minutes,” he said. “It asks 10 questions, one for each key process area.”

The updated tool has hundreds of questions.

St. Jude Children’s Research Hospital travel manager Marnette Hays was on the task force. She had been working on TRM for years.

In 2007, she said during the GBTA panel, “I started trudging through this. We had processes in place but nothing really consolidated saying ‘if this happens, do this.’ There was no team of people responsible for a program like this.”

Hays said an early challenge was “making it click” for key stakeholders. She “cast a wide net” to involve human resources, risk, legal, finance and the most frequent travelers. At times it was a chaotic, she acknowledged.

By 2014, St. Jude’s “fully launched” the TRM program with a provider, Hays said. The organization requires employee training before they can travel. It regularly sends out updates and convenes monthly meetings with various departments.

“Two years later, going back through the finished [TRM3 revamp], there were a lot of things I noted that we haven’t done,” Hays said. “Even two years in, it’s baby steps. The whole process can be overwhelming. This space is very fluid.”

She said it took her about 45 minutes to go through the expanded assessment. Users don’t have to do it all once; the tool keeps track of progress.

“At the end, my PDF was 40 pages,” Hays said. “It breaks down every question, every answer and recommendations of what I need to do.”

As users complete each area they receive a score for it. They can benchmark against like companies. Falling short in any one area holds them back from achieving a higher overall maturity rating. As before, the maturity scale goes from 1 (“reactive”) to 5 (“optimized”). At the top level, TRM is implemented throughout the organization, and there’s continuous improvement.

To go from level 3 to 4, for example, “you need to interact with others in the company: security, legal, insurance, operations, HR and so on,” McIndoe said. “When the travel manager does it all themselves, those are the programs that struggle to get traction.”

Here are TRM3’s 10 key process areas and a small sampling of questions for each:

Policy and Procedure
Education and Training
Risk Assessment
Risk Disclosure
Risk Mitigation
Risk Monitoring
Response and Recovery
Data Management
Program Communication
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Travel Friction And The Diminishing Returns Of Cost Savings

Programs like Rocketrip, Upside and TripActions offer new ways for travelers to save their companies money while earning something for themselves. In some cases they earn such benefits by accepting a lower-quality travel experience. But what are the human and productivity costs of these tradeoffs?

Recent studies tried to get at the influence of business travel on employee stress. Business traveler wellness has become a big focus for some. The latest research comes from American Express Global Business Travel, ARC and travel data firm tClara. To quantify friction and understand implications, they polled more than 700 frequent business. Connecting flights take more physical and mental toll on travelers than nonstops. Same for coach class instead of premium, or five-star hotels versus less comfortable ones. Intuitively, travel managers understand the challenge, according to tClara managing partner Scott Gillespie. In practice, there’s little science behind it.

“The way you save money on travel typically adds friction,” Gillespie said. “Trip quality is positively correlated with all the good things you want out of a travel program other than cost: retention, recruitment, willingness to travel, health and safety and trip outcomes. Yes, you’ll pay more but you’ll get more.”

As a starting point, Gillespie suggested a straightforward exercise: identify the company’s road warriors from the past three years (those away from home at least 35 nights in a year), ask human resources how many of them left the company (attrition rate) and understand the high cost of replacing them. Then ask budget holders if they’re OK with those figures.

tClara managing partner Scott Gillespie

tClara managing partner Scott Gillespie

There are lots of reasons why employees may jump ship. “Today more and more companies are deploying analytics solutions to predict retention, correlating factors such as compensation, travel schedule, manager and demographics to understand why certain people are less engaged than others,” according to a 2015 article by Josh Bersin, founder of the Bersin research firm now part of Deloitte. “But the answers are hard to find.”

Gillespie and Amex GBT VP digital traveler Evan Konwiser presented related findings last month during the Global Business Travel Association convention in Denver. The linkage between travel and retention, Konwiser said, “is so completely obvious yet so not understood in the executive ranks — even at companies with mature, strong travel programs.”

One goal of the research is to arm companies with data so they can make better decisions on travel policy. In the view of Konwiser and Gillespie, most travel policies today are too broad. They often don’t account for how much someone travels or their unique needs. Bigger people, for example, are less comfortable in cramped airplane seats than their more diminutive colleagues.

“It’s incredible to me that while lots of companies have detailed policies, a manager who travels 100 days a year has a crappier policy than a director who travels twice a year,” Konwiser said.

He pointed to one survey finding: 83 percent of travelers said a new employer’s travel policy would be equally or more important than their pay and responsibilities. “Think about the amount of time and attention our HR teams spend putting together a package of benefits for job offers, and think about where travel policy falls in that,” Konwiser said. “It’s kind of amazing when you look at that figure and then know what a rare occurrence that is.”

Should every traveler have his or her own customized policy? Gillespie thinks so. “Let them pick what is important to them,” he said, acknowledging that companies shouldn’t lose sight of costs. He admitted that achieving such granularity, informed by emerging HR and sales productivity data analytics, is years down the road. “We are very early in working with companies in how you have policies that are more nuanced.”

There’s a big picture for travel managers, too. Gillespie said focusing solely on cost annoys suppliers who want credit for the quality of their products. It also “limits your career potential,” he said. “If all you do is focus on savings, it’s not a very strategic role. You are adding some value, yes, but selling yourself short because you are focused on a very tactical objective.”

Feeling The Burn

The ARC/GBT/tClara research found that 15 percent of respondent travelers felt burnt out. Nearly half of those said travel impacts their health, happiness or personal relationships. They are less willing to travel, less likely to adhere to policies when they do and getting a smaller return from their trips. “If someone told an HR manager that 15 percent of their travelers are about to walk out the door, that is cataclysmic, particularly when they are the revenue drivers of the company,” Konwiser said.

Those not experiencing burn-out were more likely to stay in five-star properties and fly in business class. They generally had a more positive view of company policies and took more effective trips. Trip quality and travel culture matter more than trip quantity, according to the study.

Among all respondents, half wanted to travel “significantly less.” Half said they feel more stress in the days before a business trip and aren’t as effective during or after them. Just over half said they struggle to stay healthy while traveling. Nearly seven in 10 said they sleep much better at home. Sixty-four percent said they could find a good job elsewhere that doesn’t require a lot of traveling. Eighty-four percent would be interested in a job elsewhere with a similar amount of travel under “a very attractive travel policy.”

When asked which among 24 possible policy improvements they most wanted, respondents offered no consensus. The most popular option was nonstop flights when available (selected by 18 percent). That was followed by business class for flights over six hours and choice of “better” hotels (each 13 percent). For whatever they selected, 65 percent of respondents said policy improvements would have a very or extremely positive impact on whether they would stay with current employers.

Just Rewards

Travelers no doubt view discomfort or inconvenience differently when they volunteer for it.

“When employees get to keep half of what they save, they’re motivated to spend company money as carefully as their own,” Rocketrip asserts on its website. “They go above and beyond to spend below company policy and save in extraordinary ways.”

Careful spending pleases CFOs. But just how far above and beyond is appropriate before such behavior becomes self-defeating? Rocketrip indicates clients can decide “which cost-effective options employees can choose and which are out of policy.”

Officials from Upside and TripActions in June interviews also emphasized employee choice. TripActions co-founder and CEO Ariel Cohen said business travelers “should be professional enough” to make the right decisions. Upside chairman and CEO Jay Walker suggested most of the tradeoffs are “at the margin. You shouldn’t do anything to make your trip less successful. In many ways, the least effective use of an employee’s time is to pretend to be a travel agent.”

Konwiser said it’s early days in determining exactly how rewards programs should fit in corporate travel.

When travelers decide to save company money by choosing a less desirable itinerary to earn a gift card or some other reward, “you have now taken a friction point that has negative consequences on the company in exchange for personal profit for the employee,” he said. “That is a weird juxtaposition. Taking coach on your flight to Europe saves $2,000 and the employee gets a $400 gift card but the company doesn’t have the benefit of someone who slept the night over the ocean. The company clearly was willing to make the trade-off, and spend the money in order to make that employee better off on the job.

“It doesn’t mean these programs don’t have significant role in the industry,” Konwiser continued, “but travelers making these decisions for themselves can have complicated and adverse consequences.”

Even if it’s their choice, the tensions from more stressful travel may catch up with frequent travelers. Then you have burnt out employees and everybody loses.

Additional info: MMGY Global in May conducted the study for ARC, GBT and tClara. It collected 757 responses from workers who spent at least 35 nights away on business during the past 12 months. The report also referenced stats from the ARC/tClara Trip Friction database. It included information on 110,000 travelers randomly picked from 50 large firms. The top 10 percent on average spent 267 hours in flight in the prior year. Of those, 236 hours were in economy class and 147 were outside normal business hours.

CWT’s Travel Stress Index calculated that travelers during trips on average “lose” 6.9 hours during which they can’t work or rest. The company found that the most common “stress triggers” were lost or delayed baggage, poor/no Internet connection, flying in economy class on medium- and long-haul flights and delays.

In 2015, researchers from the University of Surrey in the United Kingdom and Sweden’s Linnaeus University published “The Darker Side of Hypermobility.” The study spelled out the physiological, psychological, emotional and social ramifications of frequent travel. “Increasingly, business travelers are forced to take economy class, exacerbating physical and mental fatigue and the overall severity of the physical toll,” according to the authors. “This ‘creeping tiredness,’ repeated jet lag and accumulation of travel stress may turn chronic, and has been described as frequent traveler exhaustion.”

FlightGlobal this week announced it acquired airline marketing intelligence firm Diio, including Diio’s stake in tClara. Gillespie retains his pre-existing stake in the partnership. FlightGlobal also acquired FlightStats.

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Teleconference 1 (Beta): Airline Direct Distribution

Airline Direct Distribution
Sept. 8, 2016
The Company Dime welcomes expert guests including American Airlines managing director for distribution and data commercialization Cory Garner, ARC president and CEO Mike Premo, WestRock corporate travel manager Karen Hatch and World Travel Inc. president Dee Runyan to decode the status quo on airline direct booking in business travel.

Music: “Funkorama” Kevin MacLeod (; Licensed under Creative Commons: By Attribution 3.0
Here are the slides. Here’s info about upcoming episodes.

Thanks again to our speakers and attendees!

Airlines have been selling their own seats since time immemorial. Four decades ago, indirect distribution via travel agencies and reservations system technology took off.

teleconference-logo-webTwo decades ago, the Internet brought us both supplier websites and online travel agencies. Yet, the epic distribution showdowns that resulted haven’t toppled the industry’s framework for business travel distribution.

Nowadays, at least two serious efforts that support non-GDS distribution are underway. Lufthansa’s GDS distribution fee and Concur’s TripLink are programs that specifically impact business travel. Airlines are applying GDS bypass more broadly as well, such as AA’s NDC-compliant, Farelogix-provided direct connection with Priceline.

In the past we saw various airline programs fail to disrupt distribution. We saw would-be GDS competitors G2 SwitchWorks and ITA Software go by the wayside.

Is it for real now? Where’s it all going? How can business travel professionals prepare?

We discuss that and more in our beta Teleconference.

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New American Express GBT CEO Doug Anderson Declines Comment On Report Of KDS Acquisition

[UPDATE, Aug. 30, 2016: American Express Global Business Travel today announced an agreement to acquire KDS. The transaction is expected to close in the fourth quarter. More information here.]

Former Carlson Wagonlit Travel CEO Doug Anderson has taken the same role at American Express Global Business Travel.

According to a prepared statement, American Express Global Business Travel chairman Greg O’Hara credited Anderson with the respect of the industry, strong leadership capabilities and business travel knowledge. He said the company’s mergers and acquisitions activity “is ramping up quickly” and its “infrastructure transformation” is nearly complete.

In an interview Monday afternoon, Anderson declined to comment on a rumor, published by Deplacements Pros, that GBT is buying KDS. KDS is a partner of Carlson Wagonlit Travel, which owns a small stake in the Paris-based online booking tool provider. American Express GBT has suggested it would like to own an OBT, or at least control one.

American Express Global Business Travel CEO Doug Anderson - Photo courtesy of The Rezidor Hotel Group

American Express Global Business Travel CEO Doug Anderson – Photo courtesy of The Rezidor Hotel Group

With Anderson’s appointment, interim CEO O’Hara returns to his role as chairman of the board. He filled in after Bill Glenn resigned as CEO four months ago. It was around that same time that CWT announced Anderson would be replaced by former Travelport executive Kurt Ekert.

Like Ekert, Anderson said he thinks global travel management companies could do a better job of servicing small and medium enterprises. “There’s an opportunity for whoever it is that gets there first with the best answer,” said Anderson. This would be a more standardized approach than what attracts the large market, he said.

Anderson also said there’s still room for growth among very large clients that have yet to consolidate travel programs. “I think the days of hard [policy] mandates for many companies are starting to come to an end, but the traveler convenience and efficiency available on the back of a professionally managed program — as well as the cost savings and preferred supplier concentration — create a tremendous amount of value for all constituents, not just the corporate client but the traveler as well,” he said.

Anderson said he was contacted about the opportunity at GBT less than three months ago. He received an offer a little more than a month ago. He said the turn of events wasn’t quite a shock, but he admitted to some surprise. He made respectful comments about his former firm, but said the health of GBT’s balance sheet is “a differentiator,” allowing it to invest.

CWT appointed Anderson CEO in 2008, a year after he joined the company as CFO. At that time, O’Hara was a CWT board member and said, “I can’t think of a better person for this position.”

During Anderson’s CWT tenure, the company struck a preferred supplier deal with American Express Global Commercial Card (2008), created a specialist energy, resources and marine division (2010), launched the mobile CWT To Go platform (2011), acquired WorldMate (2012) and bought TMCs in Europe and Latin America. In 2014, parent Carlson acquired full ownership by buying JP MorganChase’s minority stake.

Anderson also serves as chair of the GBTA Foundation Board Of Trustees.

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After Reservations System Switch, Southwest Can Be More Creative On Corporate Deals

[UPDATE: Feb. 8, 2017: Southwest plans to complete by May 9 the second “foundational release” of the new Amadeus Altéa reservation system. That would cover passenger check-in and boarding, baggage check-in and other operational functions. The initial release in December 2016 allowed for domestic U.S. ticket sales. The airline described that as a “virtually flawless” transition. Future phases would add various “revenue enhancements” and support for further international growth. Sabre executives on Feb. 7 said they expect the current reservations platform services provided to the airline to end during the second quarter.]

Southwest Airlines will cut over to a new reservations system beginning in late 2016. This will enable new capabilities and accelerate the transformation of an airline company that continues to outgrow its roots.

Southwest has been talking up the possibilities of the move to Amadeus Altéa from a basic system hosted by Sabre. Cowen analyst Helane Becker called it a “game changer,” partly because it will enable adjusted “ancillary offerings.” Southwest will consider code shares, seat assignments, red-eye flights and other departures from its original business model.

Change at Southwest also is highly evident in the corporate travel market. The airline is now open to new ways of negotiating with clients. Its approach to distribution has evolved toward increasing accommodation for corporate needs. Long gone is the limited, unflinching philosophy of Southwest’s early years.

Southwest already offers some companies volume-based, point of sale discounts. Senior national corporate relations manager Silke Koehnecke in an interview last month said more options will be possible.

Southwest AirlinesAsked about client requests for bulk purchasing and pay-as-you-fly arrangements, she said, “We get a lot of those. We don’t have the capabilities to do those today, but with increased functionality we can take a fresh look at whether or not those are the right things to do. If you are going to do something like that, you have to make it simple. A lot of the programs out there are really complicated. We have to make sure we make smart decisions about which adventures we want to take with our customers.”

For existing client contracts, Koehnecke said Southwest loads negotiated rates in all distribution channels, including global distribution systems, corporate booking tools and its own direct-booking portal, Swabiz.

The development of Swabiz is a microcosm of the airline’s greater path. When Swabiz launched in 2000, Southwest was militantly protective of its content. The only other real option for managed travel was limited access through the Sabre GDS. The cheapest web fares weren’t — and still aren’t — available in that channel.

Because of the restrictions, Swabiz became an alternative for companies beyond the target small and medium enterprises. Southwest doesn’t charge transaction fees for Swabiz. Some large-market buyers like that such direct bookings are invisible to their contracted or prospective preferred legacy carriers.

All this enabled Swabiz to become a popular airline corporate booking portal. Yet, critics spoke out against the airline’s approach because it just didn’t satisfy the corporate market. The industry had to develop extra layers of integration to bring Southwest’s content into the channels corporate buyers emphasize.

Southwest eventually came around, several years ago offering corporate booking tools the option to connect directly. Now, tech firm BookingBuilder is planning to end support for the “punch-out” it had created between online booking tools and Swabiz.

“At this point, the vast majority of users now take advantage of the direct connect, so we are dropping support for our solution over the next few months,” BookingBuilder CEO Seth Perelman said two weeks ago. Southwest distribution manager Eric Hall confirmed the online booking tool punch-outs “were not utilized by corporations/agencies and the volumes were very low.”

Southwest also has loosened up on its distribution philosophy in general. Along with the Sabre GDS, it now lists in Travelport (though with an extra cost). Last year it struck a deal for distribution through Amadeus corporate channels.

Linked to the likes of Concur and Sabre’s GetThere, Southwest’s direct connect gives users access to the carrier’s full inventory, including its cheapest fares not available in GDSs. Because it’s in their booking tools, travelers can comparison shop. Keeping as many bookings as possible within a designated channel is strongly preferred by corporate travel managers. It makes it easier for their agencies to help them manage.

So Long, Swabiz?

Not so fast.

Southwest in January said 61 percent of Fortune 1000 companies were enrolled. Travelers from companies with active accounts still can visit the site directly.

Koehnecke acknowledged that some companies moved away from Swabiz in favor of accessing the airline through the direct connect. The portal “may not be growing at the rates it once was,” she said. But Koehnecke added that some have since returned and “we continue to help large programs onboard new Swabiz accounts.”

Given the other options for the large market, though, Swabiz (like other airline portals) again is mostly suited for smaller travel programs.

“Swabiz is past its time,” said Grant Caplan of Travel Consulted. He said that while many of his clients have credentials for the portal, they generally don’t use it. Because Southwest’s cheapest Wanna Get Away fares are in corporate booking tools via the direct connection, he said, “other access points as just as good.”

However, those options do cost more.

“The challenge with Southwest, with all the costs associated with bringing them into booking tools, is you lose the benefit of the discount because typically the agency has a fee and [the booking tool] has a fee,” said TCG Consulting senior advisor Barry Rogers. “One customer said it will cost them $30 per transaction and in the end they decided to do it: ‘It won’t save money, it will cost money, but we want people to book everything in our tool, not theirs.’ ”

Koehnecke said that’s a decision each company makes for itself. If cost is the most important criteria, she said, Swabiz is the best choice because users don’t incur any fees (though TMCs may charge customers for booking in Swabiz on their behalf). They get exclusive Swabiz offers. There are some travel management functions, including reporting. “The recent addition was fare basis codes to make it more tangible for reporting purposes, particularly for larger companies,” Koehnecke said. “On our roadmap is making reporting even better, making it more user-friendly.”

Swabiz also provides car and hotel bookings. Clients can specify which suppliers. For car rental, they can load their corporate rates. There’s also a meetings component. “In the past few years there has been a big wave of enrollments from SMEs,” Koehnecke said.

“But if reporting and one-stop shop and getting travelers corralled into one area is a need for you — and you want functionality and fares — we have an option for that too, that is the direct connect,” she continued. “If you prefer the GDS, we have an option there for you as well.”

Koehnecke said Southwest expects the Amadeus transition to have no customer impact in any of those channels. The airline already uses the new system for international operations.

Additional info: GetThere, via its direct connect, this year “added the capability to cancel Southwest flights online and use Residual Travel Funds from Southwest for payment,” according to a Sabre official. According to a Deem spokesperson, its direct access into Southwest “includes full tracking and application of unused tickets, ability to change your trip and automate the exchange process, and more importantly an auto check-in feature that assists travelers with the 24-hour check-in process.” Concur documentation shows its direct connection has many of the same functions.

BookingBuilder’s change only is for corporate booking tool connectivity. “We will continue to support travel agencies across the world for their various technology needs in the manner that we always have,” according to vice president Greg Dahlke.

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TMCs Diverge On Signing EU-US Privacy Shield

A few dozen companies committed to upholding European Union law when handling its citizens’ data under the new Privacy Shield framework created by the U.S. Department of Commerce and European Commission. One of them is travel management company World Travel Inc. of Pennsylvania.

The framework may not be a permanent replacement for the Safe Harbor regime a European court dismantled last fall. World Travel views participation as a way to do right by clients. Hogg Robinson Group is finalizing an application on behalf of its offices in North America. However, not all TMCs see the need. American Express Global Business Travel and BCD Travel have no plans to take part. There are several ways to commit to legal protection of European personal data.

Regulators designed the Privacy Shield “to provide companies on both sides of the Atlantic with a mechanism to comply with EU data protection requirements when transferring personal data from the European Union to the United States in support of transatlantic commerce,” according to a Commerce department statement.

The self-certification program began taking on business signatories Aug. 1, after EC three weeks earlier deemed the framework adequate. Key components include a code of conduct, oversight and enforcement, an ombudsperson mechanism and other safeguards and limitations.

Participants must develop Privacy Shield-compliant privacy statements. They accept the possibility of U.S. regulatory enforcement and European investigation. The framework requires adherents to limit gathered personal information only to what’s relevant for the purpose. It necessitates redress measures.

According to a prepared statement, World Travel agreed to the framework “purposefully as an early adopter” to help assure multinational customers of its commitment to data privacy. The company also uses the EU model clauses and is certified in Payment Card Industry (PCI) Data Security Standards (DSS) and the AICPA’s Service Organization Controls (SOC). HRG officials mentioned PCI DSS and also the International Organization for Standardization’s 27001 information security standard.

Privacy comes up in “every” request for proposals from “savvy multinationals,” said World Travel Inc. executive vice president and corporate counsel Maribeth Minella. “It’s a litmus test. It’s not entirely clear whether the Privacy Shield is ‘the answer.’ We’ll have clients who say the Privacy Shield is great. Some clients will have different perspectives.”

According to BCD Travel EVP for technology, products and innovation Russ Howell, “We hold the view that it is still uncertain whether the Privacy Shield will present a reliable and long-term basis for data transfers from the EU to the U.S. Therefore, at this time, BCD Travel does not intend to certify under the Privacy Shield framework.”

BCD Travel is working with the European national Data Protection Authorities for approval to use binding corporate rules, a framework American Express Global Business Travel already uses. BCD also uses the model clauses, “robust” contractual clauses and “other data transfer and consent agreements.”

“We don’t plan to certify for Privacy Shield at this time, because the binding corporate rules we operate under provide for international transfers in a much stronger and, at this point, less uncertain way,” according to a GBT spokesperson. “Filing for Privacy Shield certification would at best duplicate the protections currently provided by the BCRs, and at worst could conflict with them.”

World Travel typically is pulling in customer data for business transacted by its partners in European nations. BCD, HRG and GBT have their own operations in both regions, and serve larger clients.

Charles Denyer is a Washington, D.C.-area cybersecurity expert and auditor with NDB Accountants & Consultants. He worked with World Travel on PCI compliance and other matters. Denyer said that relative to a general program like the Privacy Shield, applying for BCRs is more granular and exhaustive. The requirements are more stringent. BCRs are reviewed by each EU Data Protection Authority. As such, it’s more an option for large multinationals.

Concern For Legal Challenges

EC’s endorsement of the Privacy Shield is subject to review by the member nations’ DPAs. They said they would not challenge the framework for at least a year. In the meantime, privacy advocates could claim that it does not fully protect European citizens from surveillance by U.S. public entities. Experts are blaming legal uncertainty for weak initial support.

Denyer was skeptical of the skeptics. The Privacy Shield process, he said, is very similar to that of Safe Harbor. “They both revolve around policies, procedures and processes,” he said. “The problem with Safe Harbor was it was somewhat vague in its interpretation. This has more clarity on safeguards, and clearer guidelines in the documentation. If anything, the process is now more streamlined.”

He does question the whole notion of self-certification, which privacy advocates also attack.

BCD noted that it also plans to comply with EC’s General Data Protection Regulation (GDPR) enacted in April, “which we believe will be more impactful than the Privacy Shield.”

GDPR takes effect in 2018. Until then, World Travel’s Minella acknowledged, the Privacy Shield could be a placeholder.

“The driver of complexity is there are so many applicable laws out there,” said Minella. “To meet the highest standards is a lot of work, but it’s a good exercise. For any company thinking seriously about data security, it makes sense. To me, it’s a riskier proposition to do nothing. You need to be able to put something in front of the client, and if you can’t, you end up having to explain yourself.”

More than 4,000 companies had self-certified under the defunct Safe Harbor program.

Additional info: Minella said her opinions do not represent company positions and should not be construed as legal advice.

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GBTA Airline Request For Proposals Template Aims For Better Total Value Comparisons

The Global Business Travel Association’s aviation committee last month released a new airline RFP toolkit. The committee wants it to become an industry standard like GBTA’s hotel RFP. Getting there will take some work, but the initiative looks like a step forward in comparing various flavors of airline pricing.

The committee started by dusting off GBTA’s eight-year-old airline RFP template. Consultants and TMCs created several variants. These evolved to account for alliance/joint venture contracting, ancillary fees and fuel surcharges. The many versions led to inconsistency and inefficiency, said CWT Solutions Group air project manager Robyn Gilmartin.

The committee feels a more standardized way would help airlines quantify soft-dollar items. That would allow them to better differentiate offers to specific clients. In turn, buyers would have a better handle on how the total value of each airline offer stacks up.

Neil Hammond of GoldSpring Consulting said he’s been testing the new RFP template for client bids. “I am pretty encouraged,” he said. “It definitely has led to accuracy and efficiency gains. There has been more structure added to the value components and there are some specific data fields that have been added to what I previously have seen out there. But we have not reached the end of the road on the potential.”

Image: Thinkstock

Image: Thinkstock

The toolkit’s project plan, along with a timeline, serves as the roadmap. It lists various tasks, the expected duration of each and the responsible parties (the buyer, bidding carrier, consultant and/or agency).

During a session at the July GBTA convention in Denver, senior global travel manager for Hilton Worldwide Teresa Amos said buyers should start with a bidders meeting. Amos urged buyers to square away legal documents early on. “When you do the first round,” she said, “everyone should come to the table with their A game.”

The toolkit’s “go-to-market” RFP guidelines include templates for components like non-disclosure agreements and intent-to-bid forms. They suggest the information buyers should submit to bidders.

The guidelines also give bidding airlines some pointers. For example, don’t use soft benefits like upgrades in lieu of “hard, real savings.” Offer discounts as broadly as possible. Favor upfront discounts so negotiated fares appear to travelers and arrangers. Offer point-of-origin pricing so clients can book fares regardless of the point of sale. Provide “continuity of employee-traveler frequent flyer status” to ease the transition.

The real action is in the proposal template. That’s where bidding carriers spell out the contract terms they’re offering.

They can list all “standard and proposed” fees impacting total cost. The long list can include charges for ticketing and reissuing, checked bags, preferred seats, inflight Wi-Fi, food and beverage and the infamous “carrier-imposed” fee.

Bidders also can show if they’re throwing in rule waivers, upgrades, lounge access, a “corporate recognition program” and other components.

An architect of the association’s 2007 template, Barry Rogers said most buyers don’t make decisions based on value-adds. “They are focused on the discounts,” said Rogers, senior advisor for TCG Consulting’s global air practice. “I just don’t see ancillaries as part of the decision process except in very rare situations when the pricing and coverage are close.” Even so, he said he views the new toolkit as “nice, incremental” progress from the original.

One addition is a “class of service mapping” tab that would help buyers understand how their historical data matches up with new offers. That became more important as airlines merged, formed alliances and JVs and realigned fare coding for other reasons.

Another tab includes a listing of various “requirements” that airlines can opt to honor. Many are common, such as providing account management and access to all fares and inventory. Some items are emerging, like carbon offset programs.

Others are rarely offered. Discounts “on the entire fare ladder” and refunded taxes from unused nonrefundable tickets, for example, “really are just client wishes,” Hammond said. He’s already seen airlines responding to the new standard come back with “quite a few ‘Nos.’ ”

Next Steps

The toolkit doesn’t get into the analytical step of comparing offers. “All the consultants will retain their own proprietary software to do that,” said Chris Jones, general manager of Delta Air Lines global corporate sales, also speaking at the GBTA convention.

The idea is that a standard RFP document facilitates standard airline responses. Those are more easily inspected by buyers and their consultants.

“Once the airlines know there is one document that they’ll see regardless of who sends it, they will be willing to invest in the automation to fill these out and upload directly to the various consultancies’ tools,” Gilmartin said.

That kind of work already is underway. Gilmartin said CWT built automation with some airlines that use Sabre’s Prism. They output from their contracting tool into CWT’s modeling software. She said some airlines now are doing the same with other consultants. Jones said Delta is one of them.

“That would make that process more efficient and more accurate,” Hammond said. “Once a contract is modeled in Prism, it would be much easier for an airline to spit it out in the format that is needed. That is the step I am looking for. Then we are much closer to a world where we can take that output and I can upload it into my technology.”

TCG’s Rogers had a similar take. The toolkit is designed to scale up or down, but he doesn’t see smaller-volume buyers using it and analyzing results themselves. Since larger buyers usually lean on consultants, he said “the most reasonable goal for this is to standardize what various consulting groups are doing.”

Though Advito global air practice leader Olivier Benoit recommended buyers use consultants’ analytical software, it’s not essential, especially if the new toolkit is broadly adopted. “The comparative process will be much easier,” he said in Denver. “When comparing airline A’s proposal to airline B’s, you will at least at the starting point have the same data points and definitions.”

An American Airlines official said the carrier supports GBTA efforts “to streamline the corporate RFP process. We welcome anything that allows us to spend more time focusing on a customer’s unique commercial needs.”

The aviation committee acknowledged the need for follow-up industry education. It intends to incorporate feedback and update the documents as necessary.

Additional info: Another component of the toolkit is a “carrier data pack.” Buyers would populate that with their travel data from the prior year. Airlines that use Prism for corporate contract modeling probably wouldn’t need it. American, Delta and United, for example, often get the info from client TMCs. Rogers, though, suggested data provided by clients can serve as a “double-check.” He said airlines’ Prism data doesn’t always capture everything.

Airlines responding to the standard document can explain contract language. They also can define geographies, which they demarcate more differently than one would think. Color-coded text throughout delineates pre-formatted language, areas for buyers to customize, spots for more consideration and suggested best practices.

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Stats Show Outage Won’t Cause Corporate Payouts Under Delta Guarantee

Delta Air Lines’ operational woes this week appear to be behind it, but financial ramifications still need tallying. The airline’s clients wonder if compensation for their organizations will be part of that. FlightStats data seem to indicate that the answer for now would be no.

The U.S. airline industry has envied Delta’s operation for years. The emboldened airline last year introduced and this year expanded a performance guarantee. If Delta during a calendar year lags both American and United in punctuality and flight completions, clients get paid.

Delta’s 2016 completion factor will take a big hit from its computer meltdown. This week it cancelled more than 2,000 flights, topping the 1,437 it cancelled in the first five months of this year combined. Delta achieved a 99.61 percent completion factor through May, according to U.S. Bureau of Transportation Statistics data.

Image: Reuters/Tami Chappell

Image: Reuters/Tami Chappell

Delta’s year-to-date completion factor through Wednesday was 98.72 percent, according to info from FlightStats. The gap is smaller than a week ago but Delta is still clear of American (97.63 percent) and United (97.45 percent).

Said another way, Delta’s 2,000-plus cancellations this week plus its five-month total to start the year still is less than AA’s January-May cancellation count (5,307), though a few hundred above United’s (3,047).

Meanwhile, FlightStats indicated that for 2016 through Wednesday, Delta’s 84.15 percent on-time rate still topped United’s (82.19 percent) and American’s (79.39 percent).

Delta itself said it still leads the two rivals in both categories after a hellish three days. That it does “says more about the sorry state of ‘competition’ in the service reliability and quality dimensions than anything else,” said Bob Mann, president of aviation consultancy R.W. Mann.

This week’s episode reminded corporate clients of Delta’s performance commitment. Some wondered whether it was too risky given that seemingly anything can go wrong in air travel.

Care USA travel and administrative services manager Ellen Moens was forgiving, and even appreciative. “I think Delta is doing a good job under extraordinary circumstances,” she said. “This has revealed some things operationally that they need to improve, for example backup systems. Things will go wrong as we rely on technology and it maybe took longer than it should have to recover. Their communication was really good, especially to travel managers. It was better than what I’ve been hearing from travelers, which I appreciate.

“You do hold them accountable, but we have a longstanding partnership with them where they are supportive of our work around the world,” Moens added. “Things like this will happen.”

The airline said it took several actions to address the disruptions with clients. They included personal correspondence from leaders, “proactive calls to impacted corporate accounts” and, in some cases, reaccommodation by the carrier’s Delta Private Jets subsidiary.

Delta president of international and EVP of global sales Steve Sear in a video posted Thursday said Delta “in the days ahead” would reach out “to share additional details on an account level.”

Regeneron Pharmaceuticals senior manager of travel and meetings Cindy Shumate said Delta’s overall performance shouldn’t be judged by “an exceptional” event. “Did the incident cause a lot of disruption? Yes. So that has to be acknowledged,” she said. “I believe that Delta is all over that remediation — as would be any of the other major carriers.”

If it came to it, would compensation doled out to individual passengers impact performance guarantee payouts? In any disruption scenario, is it reasonable for the traveler’s employer to collect compensation since it paid in the first place?

In this case, besides waivers on itinerary changes, Delta is giving $200 travel vouchers for cancellations and delays exceeding three hours.

“If an individual traveler is entitled to service recovery due to a cancellation or delay, the compensation would go to the individual that has experienced the inconvenience,” according to Delta. “The terms and conditions for Operational Performance Commitment payouts are not tied to nor impacted by compensation at the individual traveler level.”

Moens characterized those vouchers as “at least a gesture.” Because travelers suffered through the disruptions, “I have no problem with them keeping the voucher.”

Others see it differently. One travel buyer at an Atlanta-area midsize firm wasn’t as happy as some others with Delta’s efforts to recover and communicate. She suggested the airline figure out a way to compensate employers of inconvenienced business travelers. “The $200 is going back to the corporate traveler,” said the buyer, who requested anonymity because she was not familiar with her company’s policy on comments to the media. “One can argue traveler centricity, but they were traveling on business, so perhaps Delta should find a way to route the ‘credit voucher’ back to the company.”

A travel manager at an Atlanta-based multinational that restricts public comments by employees on confidential supplier partnerships shared a similar sentiment: “It lends itself to deducting any payment that was made as alternative compensation. However, that is problematic for the corporation. They gave it to the individual; it is tough to make sure it is used for corporate business.”

Meanwhile, has Delta’s unbending approach to interlining now caused it to lose some goodwill? The airline has stopped coordinating with several carriers, notably American last year. “Does the pain of a situation like this really justify the cost savings?” asked the midsize buyer. “It’s really important to be able to endorse tickets to another airline. All carriers should agree to it.”

Additional info: According to FlightStats data for the past 30 days, Delta didn’t have the most cancellations among big U.S. carriers. That was Southwest with more than 3,000, bedeviled by its own computer failings.

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‘Team Value Quest’ Dares To Quantify The Merits Of Travel Management (Phase 1)

Denver – A crew of Global Business Travel Association members seeking designation as Global Leadership Professionals last year set out to quantify managed travel’s impacts. Known as Team Value Quest, the group designed a 90-question survey tool that could be used to grade travel programs.

In piloting with 32 organizations, the study squad determined that duty of care, hotels and travel management companies were the areas in which programs were most mature. Areas of opportunity, they found, were in corporate social responsibility, dining and ground transportation.

It’s not clear whether the resource will become available to the wider travel management community. Producing results requires manual analysis and GBTA’s resources are tied up in other initiatives. “It was a cool project and there’s a possibility down the road that it could turn into something,” said a GBTA press official. “It’s a resource thing. We have several tools we’re overhauling that will come out in November.” A new sustainable travel self-assessment is one of them.

For now, the GLP group provided GBTA members a list of tips for program optimization.

That the full project may not come to fruition is a disappointment to participants here at a GBTA convention session last month.

Image: Thinkstock

Image: Thinkstock

Patricia Husted, global travel manager for Rheem Manufacturing Company in Atlanta, attended the session and came away with the impression that the value estimator tool would soon be available to buyers. “I couldn’t wait to get my hands on it, ” said Husted. “You could tell from the comments among the audience that there was an excitement to it.”

Briefly made available to The Company Dime, a link to the survey itself has been taken down.

Managed travel professionals are seemingly always on a mission to measure program value. About seven in 10 measure both overall program performance and savings, according to a GBTA/Sabre October 2014 survey of 341 travel managers in North America.

It’s not so challenging to assess what the team called “external” value. Cost avoidance and savings from negotiated deals or policy controls are good examples.

Internal areas like traveler satisfaction, sustainability or risk management are more difficult to evaluate. “Any travel manager spends a lot of time on this,” said team member Joanne McNellis Coelho, global travel director at Wyndham Worldwide. During the convention session, she said the profession was still missing “the ability to quantify a travel program in its totality.”

The tool would offer program managers a “one-size fits all” assessment that uncovers areas of opportunity. It could be used in business cases to senior management.

After researching existing resources and consulting with experts, the team built and weighted survey questions mapping to various aspects of managed travel. For example, creators deemed the TMC relationship more important than airport parking programs.

Considering their share of business travel spending, some were surprised airline programs did not show as much maturity as some other areas. That included team member and Lockheed Martin senior global travel manager Mark Stansbury.

Participants “might have agreements with airlines but they may not be as developed” as they could be, he said. For example, the survey asks users whether they negotiate ancillary fees, fuel surcharge rebates and joint-venture agreements. It asks if they secure “corporate recognition” so travelers without loyalty status still are recognized as employees of a top client.

In general, the tool’s output would help describe to senior management “where we sit,” said Veritas global travel and meetings director Claire Blades, who tested it. “Not every company sees the value of the managed travel program.”

Team members said the resource assumes a travel program is in place. “Why do we have managed travel programs out there?” Lockheed Martin travel manager Joseph D’Abate asked rhetorically. “That more fundamental question goes beyond the tool. It needs to be first acknowledged that managed travel provides value. The tool can help in identifying where.”

Some potential users expressed interest in benchmarking by size or industry. Team members gently advised against that, partly because of low sample sizes. They also warned off comparing scores between companies because there are too many variables. The amount of internal support, number of department staff and company size all can make comparisons unjust.

It may not be possible to produce a resource that accounts for all variations. Team members suggested something like that could be contemplated in a next phase if another GLP class picks up the project. Another possibility would be the development of specific program recommendations as part of the output.

Also a member of the team, Carlson Wagonlit Travel business development director Daniele Gadbois said the project has something to offer suppliers, too. “It’s relevant to both buyers and suppliers, and built with both in mind,” she said.

If it happens, the next phase ideally would automate tabulation and scoring, which GBTA did manually for the test group.

Additional info: Williams Company director of aviation and corporate travel Nick Verdea also earned GLP status for his efforts on the team. Most of the 32 pilot companies were U.S.-based. Policy types among them were roughly evenly split between “mandates” and “guidelines.”

GLP group projects are meant to “help further the industry,” according to GBTA. “This program provides corporate travel professionals an opportunity to utilize the various skills, knowledge and expertise they have gained during the GLP program, put it to practical use and then in turn share that knowledge with their peers in an effort to help better the travel industry.”

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Still Fringe For Many Clients, Airbnb Presents Travel Management Companies Revenue Opportunity

It’s a classic tale of challenges and opportunities. And disclaimers.

For when the three biggest travel management companies help clients use Airbnb, they say, they’re not endorsing it. Whether to use it is up to clients. TMCs are simply capturing data. Well, they might be marketing it, too. And they could soon be booking it. In any case, it will generate revenue.

According to an Airbnb spokesperson, TMCs will make money through “revenue-share deals for company referrals and booking fulfillment.” The representative said some such arrangements are already in place.

American Express Global Business Travel, BCD Travel and Carlson Wagonlit Travel last month announced cooperation with Airbnb, initially on capturing booking data for joint clients. Officials with the TMCs declined to specify compensation frameworks.

In addition to potential revenues for referring new clients to Airbnb’s business program, sources said TMCs could charge clients data consolidation fees and/or booking fees.

For the TMCs, the moves are opportunistic and also part of an effort to stay relevant. Airbnb may not be a good fit for any given client, but many TMCs have some clients using it. Concur said spending on “home sharing” among expense clients grew 56 percent year over year in the first quarter.

AirbnbSupport for Airbnb among clients remains mixed. Some want it in their programs. Many don’t know. Is it time to decide? Not necessarily.

Whether taking a position on Airbnb is a matter of relevance for corporate buyers depends on company culture. Their commentary shows a wide range of perspectives. Quite a few still say travelers hardly want it. On the other hand, Airbnb presents options when cities are otherwise sold out. Does it represent leverage with hotels? Hard to say, but buyers might explore that. For many travel managers, the list of opportunities is shorter than that of challenges. Potential problems center on safety, product consistency and process integration.


Efficiency of process is an issue. None of the three TMCs is enabling agent bookings quite yet. Airbnb first revealed in May that it was building that functionality. Agent-assisted bookings presumably would come with full-service fees. Airbnb indicated it is “working with its TMC partners to be included in new booking tools.” BCD Travel talked about potentially integrating Airbnb content into its mobile app.

Travelers obviously can set up their own Airbnb profile and book on its site. Reimbursement is easy for Concur clients that use TripLink.

Many corporate buyers worry that enabling “direct” bookings with Airbnb undermines hallowed consolidated purchasing practices. They prefer comparison shopping. Agent assistance is one approach, but it’s not cheap. Sanctioning off-channel bookings and trusting travelers to do the shopping across multiple channels could require post-booking audits.

As a “disruptor” itself, Salesforce likes to support disruptors, said Americas travel manager Ryan Pierce last month at the Global Business Travel Association convention in Denver. He said Salesforce helped Airbnb build its business programs. To be sure travelers are spending wisely, Pierce said, he reviews emailed confirmations for each of their Airbnb bookings. Pierce had expected this to be overwhelming but instead, he said, “I find it informative.” He can check the types of accommodations and rates. “We prefer [travelers pay] less than what they would find with one of our preferred hotel properties,” Pierce said.

Such a post-booking check could result in refunds. Airbnb hosts can choose from a few options for rules on those. Cleaning fees are not charged on canceled stays but Airbnb’s roughly 10 percent service fee is not refundable. At least publicly, that is.

Ideally, Airbnb could be weaved in with self-service channels that show other lodging inventory and apply policy and spending controls on the front end.

Egencia noted that agent-assisted bookings on Airbnb through TMCs are an encouraging first step. In an emailed statement, the company wrote that “in considering connecting with sharing economy providers, it is vital that we create a seamless online experience that … enables the best rates to compete in one display and saves travelers from spending time consulting multiple sites.”

When Airbnb announced the biggies, BCD Travel was most specific about the potential to integrate Airbnb content for self-service. This would be through its TripSource mobile app. BCD Travel vice president for product strategy and innovation Torsten Kriedt said the company is assessing demand for such integration. “Booking on Airbnb’s site is super cool,” he noted. “Some of the richer, more personalized experience would be lost.”

Carlson Wagonlit Travel expects agents to begin booking for client travelers starting in October, using their own profiles on Airbnb’s site. Travelers may be guided there as well. “Over time, we’d love to figure out a way to better integrate that content into those travelers’ search options within the booking path, but it’s not going to happen in October,” said CWT president for hotels Scott Brennan. The TMC is first working on the “mechanism” to enable agent bookings via a “punch out” to Airbnb.

American Express Global Business Travel vice president of digital traveler Evan Konwiser said bookings could become part of the partnership as it evolves.

Much easier than bookings is integration of post-booking data. So for interested clients that are part of Airbnb’s business program, these TMCs will take in data from Airbnb on bookings for spend management and duty of care. This process seems similar to what Airbnb already was doing with the likes of iJet and International SOS, but it goes further. “The ISOS feed reports on duty of care, and a person’s location,” noted an Airbnb official. “The feeds to TMCs provide detailed reporting back to companies around travel spend by location and department. By including our reservation data inside this TMC data, companies can now include Airbnb in their reporting.”

TMC comments about this development sound a lot like Concur’s rationale for TripLink: corporate travelers are making these choices; let’s at least capture the data.

BCD Travel vice president for product strategy and innovation Torsten Kriedt

BCD Travel vice president for product strategy and innovation Torsten Kriedt

“Not having the data is a gap,” said BCD’s Kriedt.

According to CWT’s Brennan, “This is about making sure data is captured and stored the same as we would for any other hotel stay, so we have access to that info if we need to tell a travel manager where employees are staying.”

Kriedt acknowledged that any TMC or travel risk management player could incorporate the Airbnb API for these purposes.

“We haven’t had corporate customers come to us and ask for support on Airbnb,” said John Cruse, COO of BCD Travel affiliate Balboa Travel. “Some companies are using it. Some don’t necessarily want to sanction it.”

While there are early adopters, the hesitation is palpable. One concern relates to product consistency. Airbnb offers certain commitments with its “business travel ready” listings.

“I do think more can be done” said Konwiser. “The business product is definitely a meaningful step. We know business travelers crave consistency. Business hotels have beaten consistency to death. It will be interesting to see how that evolves and which additional boxes they tick.”

Airbnb continues to demonstrate flexibility with the business community. For example, it changed its traditional receipt, which doesn’t break out charges per night. “Over the past six months, our teams have completely redesigned our receipt to be more business-friendly,” according to the Airbnb spokesperson. “It now specifically calls out the nightly charge and includes other items and services needed by business travelers, like cleaning fees. We also provide a per-person average daily rate in our internal dashboard.”

Process efficiency and the traveler’s experience are top of mind for travel buyers, but safety is even higher. For many of them, it’s difficult to get used to the idea of relying on user ratings as a proxy for the vetting they do in the hotel RFP process.

Speaking at the GBTA convention, William Blair travel analyst Meghan Hartsell said her firm examined Airbnb and “decided we weren’t quite ready.” Contrasting the assessment with her company’s approval of Lyft and Uber, she said, “it’s a little bit different when you’re in a car awake for a short time versus when you’re in someone’s house with eight hours at your most vulnerable.”

In Salesforce’s Airbnb policy, “you can’t have shared rooms,” said Pierce. “To pick an Airbnb property they do need to have so many reviews. We prefer they do the ones marked for business. If someone has a bad experience, we know there’s a business line available for just business customers as well, and a support and account management team so I know who to go to.” Airbnb, he claimed, has “come a long way in listening to and addressing concerns about duty of care.”

Further demonstrating its flexibility and desire to attract business travelers, Airbnb indicated it had created an “elevated business travel-specific customer service line and account management that ensures travelers have the help they need.”

Some travel managers worry that a stranger has a copy of the apartment key; others are trying to live with safety concerns.

Hewlett Packard Enterprise director of global travel, meetings and events Sean-Michael Callahan is in the latter camp, according to his comments at GBTA last month.

“We have a very mandate-oriented environment at HPE. Last year we kicked off a new ideology … around employee experience. We’re trying to do what they’re already doing. We’re using ride sharing and the Airbnbs of the world, so why not fold them into the program and get smarter about it? We’re looking really hard at Airbnb right now because especially in compressed markets, we think it’s a viable option. We’ve gone through iteration after iteration with Airbnb around security and making sure properties that would be in the portfolio available to our travelers are business-specific, or owned by business professionals [who] have a home that would be relatively commensurate to what a hotel would be.

“We’re dealing internally with a very mature travel base. Our demographic is heavily loaded on folks that have been with HPE for longer than 20, 25 years. So their expectation is mahogany and sedans, and a really antiquated (to a large degree) view of travel. It’s getting them past the sense of security that you get when you go to a hotel lobby. It’s not always much different than picking up a key and going to an Airbnb property. We’re going through a lot of internal change and we have people spending a significant amount of money on Airbnb outside policy. If we don’t bring that in, we won’t be able to manage that spend.”

Airbnb’s trust and safety team works with business clients on their concerns.

Also commenting at the conference, Amazon North American travel manager Shannon Wilson said her firm’s business assurance team vetted the option. She said Amazon and Airbnb established communications protocols for emergencies. Approving Airbnb was a matter of adapting to traveler behavior, Wilson said.


While Airbnb acknowledged economic models for TMCs, officials from the TMC trio declined to detail how they would cash in.

“We have a commercial agreement with Airbnb and I wouldn’t comment on the details,” said CWT CEO Kurt Ekert. “There’s an economic incentive to do business with anyone we engage with.”

BCD’s Kriedt said pricing had yet to be determined. “First movers will have a different commercial treatment,” he said.

The TMC officials also didn’t have much to say about how supporting Airbnb might impact their hotel relationships. Presumably it offers some leverage, particularly on volume for the longer stays which are typical of Airbnb business users. Concur said home sharing draws an average stay of five nights, versus three in hotels.

“I wouldn’t call it major leverage, like a company is going to [threaten to] move all its business to Airbnb,” said Kriedt. He suggested it might help them assess what their average nightly rates should be.

CWT president for hotels Scott Brennan

CWT president for hotels Scott Brennan

“Personally I don’t see it as a major leverage point for clients or CWT,” said Brennan. “As Airbnb has shown in the consumer side, in many ways they reach out to a different consumer than the traditional hotel brands. So there’s an element of incrementality. I think you’ll see the channel shift won’t be as large as overall traffic gains.”

Konwiser was more certain about the influence on competition than leverage. “I do think a lot of hotel companies are trying new things and the pace of innovation has picked up,” he said. “They’re more dynamic. They’re adopting technology. They have better food now.”

According to Choice Hotels International chief commercial officer Robert McDowell, “We look at Airbnb as a potential competitor down the road, but we also look at how they’re connecting with customers, their seamless platform, their visual photography, easy consumer journey. As a supplier we continue to look at this because we can learn a lot from what they are doing and how we have to evolve in the marketplace.”

The impact may be more tactical and about choices, rather than leverage. Airbnb presents options around so-called compression. The term describes the rate environment at extremely high-demand times, such as during big events in a particular city. Travel managers often cite such situations as potential uses of Airbnb.

“We’re going to Comic Con or something where cities are completely sold out, so we have people asking us whether they can use Airbnb,” said Sony Pictures Entertainment travel services director Gary Stevenson during GBTA. “Just recently we worked with risk management and some internal teams to say, ‘Because the city is sold out and there’s low hotel availability, we’ll allow it in this instance.’ But it will still be sort of ‘buyer beware.’ There’s no way to vet those properties in the same way we do with preferred hotels.”

According to CBS Corporation vice president for travel services Hal Rudy, “We’re not advocating Airbnb at CBS because of the risk, so we’re gun-shy but I just feel sometimes we’re forced to look at it because of the event pricing. Right now we’re saying no, but I don’t know if that’s going to change as Airbnb is becoming more accepted. Event pricing is not helping.”

National Hockey League director of NHL Club business and analytics Alex Townsend-Mitchell was more pointed: “Hotels should at least see it as a somewhat viable threat going forward.”

It’s during city sell-outs where hotel firms are feeling the competitive impact most, according to hospitality experts.

“If we cannot continue to make our business stay more differentiated, which we have, it will be a real risk for us in the long term,” said Jeremy Welter, EVP for asset management at Ashford Hospitality, during the Revenue Strategy Summit conference in July. “It’s compression. Big city events. We had an impact where we were [too] aggressive with one of our hotels during the Super Bowl. We made an assumption of compression. We saw it in Philadelphia when the pope came to visit. These were mostly cost-conscious folks, and we could not get the compression we normally get in the market with a citywide event. So I think we need to be cautious in pricing inventory, and maybe a little more conservative in locking in groups instead of hoping for last-minute, high-rate transient demand.” Ashford owns Hiltons, Marriotts and other branded properties.

That’s not the first thing hoteliers will tell you about Airbnb, though. They rightly point out that in many jurisdictions, its legality is under review. That alone is a deterrent for conservative corporations.

About Those Non-Endorsements

So are TMCs putting their seal of approval on an unproven — and controversial — new model?

It may be up to the corporation to say yea or nay, but as one travel manager pointed out, the fact that their company’s TMC has announced its support will be an argument for travelers bent on using Airbnb.

“We’re enabling Airbnb for clients who have specifically requested it,” said CWT’s Brennan. “So if the client has told us they decided Airbnb is an acceptable option, then we will turn it on for them. Otherwise we won’t. We don’t want to provide inventory that may make travel managers uncomfortable.” He said that after the partnership announcement, a few clients asked to sign up and others “called in to ask how they make sure they don’t end up on the list.”

In its announcement, Amex GBT referred to Airbnb as “preferred” accommodations; Travel Weekly reported that the company considers Airbnb a “preferred supplier.” Konwiser declined to reinforce the notion. “I don’t know how you define that,” he said. “It’s an interesting phrase. We’re not counseling clients on whether this is the right option for them.”

“I wouldn’t say we have officially endorsed Airbnb,” said BCD’s Kriedt. “We’re not booking it at the moment.”

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GBTA Sustainability Committee Prepping Assessment Tool, Car RFP Questions

[UPDATE: October 19, 2016: GBTA Foundation’s updated car rental request for proposals template now is available. Meant to become an “industry standard,” the document includes a new section on sustainability. Car rental bidders are asked to describe sustainable development policies, environmental certifications, external audits, fleet gas mileage and commitments to help clients reduce carbon footprints. They also are asked to provide CSR, sustainability and emissions reports, as well as contact information for environmental officers. The RFP template is available for download here.]

Denver – Travel management pros interested in sustainability initiatives often feel overwhelmed. They don’t know where to start, who to engage internally or how to involve suppliers. The Global Business Travel Association’s North America Sustainability Committee is preparing two new resources meant to assist.

To help buyers better address sustainability in car rental requests for proposals, the committee is creating a set of standard questions. A new self-assessment tool, due in November, will benchmark sustainability program maturity levels.

GBTA is building the assessment tool in partnership with BCD Travel. “It is to help buyers and suppliers — but mainly buyers — understand where they are,” said Bernard Harrop, head of sustainability for the GBTA Foundation.

Users will answer questions and receive scores of one, two or three. Linked material will show how the organization’s program can achieve a higher score. “Sustainability is not a project you can complete in one year,” Harrop said here at the GBTA convention last month. “It’s a lifetime occupation.”


Image: Thinkstock

The new resource will update a benchmarking tool developed by GBTA’s Project Icarus.

Mondelēz International head of Americas travel management Jorge Gomez is embarking on a travel sustainability effort and spoke at the GBTA event. He, too, stressed continuous improvement.

“It took me a while to get started, it was intimidating,” he said. “You need a well-defined charter from the beginning. But you take little steps to get to the bigger steps. You need to focus geographically but also by subcategory of travel. If you try to do everything at once you are not going to do it.”

Mondelēz aims to cut 15 percent of its travel carbon footprint by 2020, in line with its overall sustainability goals. Gomez is starting this year with air travel. The company is on track to reduce carbon emissions from business flights by 15 percent, slash as much as $20 million in spending and cut trips by at least 25 percent.

Driving To Green Goals

Expected soon for members, the updated car rental resource mimics earlier work by GBTA on hotels. “You can add it to your normal RFP to get the right kind of data you want,” Harrop said.

He said suppliers usually receive different sets of sustainability questions from buyers. The buyers don’t always pay attention to many of the answers. Standard, relevant and meaningful questions mean suppliers don’t have to “reinvent the wheel every time,” said Harrop.

Car rental is an area in which several companies have made progress greening their travel programs. It’s easy to direct travelers to more fuel-efficient vehicles. It’s easy for them to understand why.

It is part of Wyndham Worldwide’s internal travel sustainability program. The company in 2014 negotiated with Avis Budget to achieve carbon neutrality on its 18,000 to 20,000 annual car rental days, according to global travel director Joanne McNellis Coelho. That includes carbon offsets and using smaller vehicles.

Wyndham policy allows for intermediate car rentals. Pop-up messaging in the booking tool, though, suggests travelers choose compact or sub-compact cars.

“Probably no one really noticed at first,” said McNellis Coelho, who also chairs GBTA’s sustainability committee. “My plan was to make changes that didn’t require any approval. No one cared if I added a pop-up to the booking tool. Through the power of suggestion, it started to make a difference.” Now, 35 percent of the company’s rentals are compact or sub-compact. Wyndham now has been carbon neutral on business rentals for two years.

Travelers can link from the booking tool to public transportation information. Messaging informs them when Amtrak is preferred over flying or driving.

McNellis Coelho said Wyndham includes sustainability questions in all RFPs, communicates green tips to employees and, with the help of its TMC, tracks emissions from air flights, car rental and black car trips. The company last year also was a launch customer for United Airlines’ carbon offset program.

She noted that Wyndham between 2010 and 2015 cut business travel emissions per employee by about 32 percent, to 0.243 metric tons of carbon dioxide equivalent. That’s despite headcount jumping more than 40 percent to 37,700. On an absolute basis, business travel emissions in that time dropped 36 percent.

T-Mobile also added car rental to its travel sustainability drive, which focuses on reforesting Haiti. Travelers get points for certain behaviors — booking online, in advance, with preferred suppliers, etc. Points translate to trees.

The company already partnered with Travel and Transport and Delta. This year it added Enterprise/National. The rental company plants a tree for every T-Mobile rental day, according to senior manager of travel, expense and card Bob Jacobsen. Similarly, Hyatt House properties near T-Mobile headquarters in Bellevue, Wash., plant a tree for every one of the company’s room nights.

In about 18 months since starting the program, T-Mobile planted more than 350,000 trees, offset 7 percent of its air carbon emissions and saved more than $800,000.

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Experts See Artificial Intelligence Boosting Travel Management Innovation

Denver — Artificial intelligence could propel travel management past other disciplines on service innovation. According to experts, this is because of its data and people.

American Express Global Business Travel’s Evan Konwiser said business travel firms have the info to make AI useful. Others don’t. Among these data are user profiles, history, preferences and loyalty. Content, rates and negotiated contracts play a part. Big data concepts manage the interplay. Konwiser said all this will “drive incredible innovation in our space.”

He argued corporate travel providers and clients are well-positioned to take on the “Herculean” challenge. Co-panelists at the Global Business Travel Association convention here last month agreed.

In travel, “we kind of give ourselves a hard time about lagging behind,” said Sabre Labs director Mark McSpadden. “Here, travel is uniquely positioned. In consumer electronics, I have no humans to fall back on when that bot doesn’t do well. Travel, I think, will become the poster child for these types of interactions.”

artificial intelligenceMcSpadden had outlined the interactions in a primer on AI. They boil down to three categories: at the point of booking, for service and support, and for merchandizing. He said Pana, Hyper, Lola and other startups exemplify the first category. The second category could appear on platforms like Facebook Messenger. FCM Travel Solutions recently released such a service. The third, said McSpadden, remains untapped because it requires critical mass on one of the first two.

The first category is about making requests “in natural language” by voice or text, McSpadden explained. “The interesting thing we’re seeing here is there’s a ton of context. They’re saying, ‘I’m going to a conference and I need a flight’ or, ‘I need to meet with three clients and do this.’ That’s significantly different from the amount of information we’re getting now from booking tools.”

Panel moderator Tony D’Astolfo of Deem chimed in on the status quo with corporate booking tools. “You go to the second screen to find purpose of trip,” he said.

“Yes, and that’s very general,” agreed McSpadden.

In the second category, itinerary management could adopt “conversational service and support.” Sabre Labs is working on a related proof of concept on Facebook Messenger. “I text in ‘Where is my hotel?’ and it gives me the hotel address,” McSpadden said. Sabre provides a leading itinerary app in TripCase.

McSpadden also went beyond these traveler use cases.

“We’re not spending enough time on this — AI will affect assistance for corporate travel managers as well. To let them know if they’re falling behind on obligations for contracts, or spending more in certain locations. The intelligence piece is a [matter of] when to bubble up information for you. It’s more than basic reporting. It’s knowing ‘I need to send the travel manager a message now.’ That’s the kind of intelligence humans have. We know when to bubble up information to a boss or a peer. That’s what we’re looking at these systems to do for corporate travel managers.”

Playing Leapfrog

AI is “in the immediate future,” said BCD Travel director of emerging technology Miriam Moscovici. Mentioning Evature, she noted that natural language parsing for online booking tools is not new and “hasn’t quite picked up.”

“I think we’ll see more of it in what we call bots,” she said. “We all use bots today. Any TMC has the mid-office. We automate things to happen based on the itinerary. You book to a dangerous place and we can send your itinerary to the security department, or remind you to check in with the CDC. I think you’ll first see bots reaching out to warn you on a security issue and engage you right there without having to get a human on the phone.”

Gant Travel president Patrick Linnihan said TMCs will soon exploit a combination.

“We track why people call us,” he said. “You will see AI inside TMCs delivering on that question it seems that 30 percent of people ask at the end of each month: ‘Can I have the invoice for my trip?’ Will it take over? No. But you’ll see the hybrid of the AI agent in the months ahead.”

Konwiser said the “dirty secret” behind the Panas and Hypers is that they use human agents.

“Because these channels exist and we have humans to fall back on, we’ll see applications have an impact in the near term,” Konwiser said. American Express GBT is spending “a lot” of money on this concept, which is “extremely important to the foundation of the business.”

Konwiser, GBT’s VP of digital traveler, continued.

“The real opportunity [is] to change the service experience and perhaps the call-center business model. Then we’ll leapfrog a lot of other industries that don’t have access to that kind of user data. The leisure travel industry [may] know one search you made on their website. They don’t know all your trips, why you want to travel, your preferred suppliers, your policy, your budgets. We have work to do, but the sky will be the limit.

“As it turns out, humans are pretty good at responding to chats. I have 8,000 agents in 40 countries around the world answering the phone, emails, instant messages, texts. Tapping into that network is a huge priority for us, and layering on AI.”

BCD Travel recently held a summit with purveyors of AI travel applications. Pana’s Devon Tivona said there that AI is in one of several historical “investment blooms,” Moscovici reported.

She suggested this bloom will sustain itself because the channel it uses, the smartphone, is ubiquitous.

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GBTA Speakers Attempt To Answer Virtual Payment’s Questions

Denver – Despite its headaches, travel management pros who use virtual payment say it’s too beneficial to pass up. Speakers here during the Global Business Travel Association convention last month raised, and attempted to answer, the many questions.

Virtual payment is a popular option for travelers without corporate cards. It cuts accounting reconciliation times and protects against fraud. Various controls allow managers to authorize each single-use card’s spending limit, dates and vendors.

Al Mazzola, director of travel services for Sykes Enterprises, said his monthly hotel reconciliation workload used to be three or four days. All charges went on his card, resulting in giant monthly statements. “All I’d see is Holiday Inn Chicago or Marriott somewhere,” he said. “We had no idea who the traveler was.” That meant lots of calls to hotels to get folios. After implementing virtual payment, that task now takes 90 minutes.

virtual payment

Image: Thinkstock

“I love the virtual pay system; I would never go backwards,” Mazzola said. “But I certainly feel the pains of it.”

Virtual payment for transient business travel still is pretty new. Reliance on faxes would be comical if it wasn’t so annoying. All the systems in the chain — GDSs, hotel property management systems and others — aren’t yet on the same page. Hotel staff don’t always know how to handle arriving guests paying with virtual cards. Turnover doesn’t help.

“How frustrating is it when you get a phone call from a client or employee standing at front desk of a hotel and they are not allowed to check in?” Mazzola said. “It seems like a lot of responsibility is put back on travel managers.”

Speaking from the audience during another session, Mazzola asked hoteliers, “What’s the hold up? Two major hotel chains have come out with instructions and policies for all their owners and franchisees and we have no problem with acceptance, yet many hotels out there can’t do the same thing.”

Others speaking from the audience said they also love fast reconciliation but dread giving time back talking to hotel desk clerks.

Choice Hotels International developed a virtual payment solution without faxes. At check-in, front desk staffers see the type of payment and instructions. “If we have a transaction failure on a virtual card, nine times out of 10 it’s because that hotel hasn’t yet seen a virtual card transaction,” said global sales vice president Tim Oldfield. “Training needs to continue.”

That’s what Sutherland Global Services realized. The company has been using virtual payment through Conferma for about a year for travelers with hotel stays of at least seven days. Global head of travel Joseph Monaghan said the initial success rate was about 50 percent. “I’ll take responsibility for that because we didn’t really communicate to hotels like we should,” he said. Now, the process almost always works, monthly reconciliation fell from a week to an hour and there’s been no fraud detected. The previous central bill setup, he said, suffered fraud every few months.

Hotels don’t want archaic faxes involved in virtual card transactions any more than their clients. But they are PCI-compliant. “They are analog and not digital, and you can’t hack a fax,” explained Conferma North America general manager Luis Yofe.

There are snags. Fax numbers often are incorrect. When they are correct, authorization forms get sent over. Companies like Riot Games developed a form specific to them. In some cases, though, hotel chains insist on using their own. “Marriott doesn’t work with us,” said Riot Games’ travel manager Sean Parham. “They always want their form.”

Christopherson Business Travel client consulting services manager Greg Ross said his company uses an automated faxing system via online booking tools and the GDS. In cases where chains require their own forms, he said, “we can send out a fax 20 times, but it means nothing.”

Process Not Present

In any industry, a “card-not-present” transaction is just that; a physical credit or debit card is not presented when the transaction occurs. In lodging, that includes single-use virtual card transactions. Because virtual payment has worked well in other parts of the travel business, buyers wonder why not theirs.

“Hotels have been accepting these type of one-and-done cards for years,” said Choice global account director Diane Lovett. “Online travel agencies have used them forever. In the corporate space, there is no single identifier like there is for the OTAs. Nothing is uniform.”

In a follow-up conversation, Best Western Hotels & Resorts director of travel industry relationships Sandra Taylor explained: “Leisure bookings for most hotel brands are limited to specific rate plan codes that are synonymous with virtual card payment. It is very easy to isolate leisure bookings by the rate plans. Corporate travelers have access to all published rates in self booking tools — BAR rates, rack rates, AAA rates — and also their TMCs’ rates and their own negotiated rates. We can’t isolate to just one set rate that would always be a virtual card.”

As leisure-oriented rates bleed into corporate travel, travel managers wonder about apparent discrepancies. Prepaid rates are one thing, but “certain hotel chains have come out with nonrefundable, non-cancellable reservations, and if you cancel you get charged anyway,” Mazzola said. “If that can happen, then why is [virtual payment] such a mountain to climb?”

Riot Games’ Parham reiterated his confusion regarding Las Vegas, where all hotel stays require a deposit. “What’s the difference?” he asked. “Why can’t GDSs and banks get together and decide that we have a specific code we put in, maybe ‘VCC,’ and you charge that card and we don’t have to send you a fax? If it’s so easy for a deposit why can’t we make it simple for virtual?”

What about online check-in? That occurs all the time without guests standing at front desks and presenting credit cards. Why does that work but virtual payment doesn’t always?

In response, Doreen Burse, Marriott International vice president of global sales and corporate accounts, said online check-in oftentimes is connected to the loyalty program and travelers tie individual cards to their memberships. “But we have explored that too, as a sales organization, asking, ‘Well, wait a minute, you can do this here … How do we bridge that gap?’ ” she said.

A big challenge is the hotel industry’s fragmentation. That means lots of different systems.

“We are making combinations that nature never intended: card-not-present transactions transmitted through a GDS to guarantee a hotel and pay for it,” said Conferma’s Yofe. “The ecosystem needs to come up with and accept standards. Nobody has the power that IATA has [in the airline industry] to impose standards and a deadline.”

Though not a rulemaking agency, Hotel Technology Next Generation has done some work in this area. It published technical specifications in spring 2015. In October, it jointly issued a handbook with Hotel Electronic Distribution Network Association.

The specs are meant to end the faxing and provide consistency regardless of which property management systems hotels use. For the specifications to have any legs, GDSs must play along.

Last week, an Amadeus official said the company is “fully ready to implement” HTNG’s standard but hasn’t seen the industry rally behind it. “Indeed there is now a separate standard-setting exercise launched earlier this year by HEDNA,” the official added. “We are fully active on both forums and would encourage other industry participants to get involved – especially hotel groups.” Like others, Amadeus also offers its own virtual payment solution.

An official at HEDNA did not reply to inquiries.

A Sabre spokesperson said the company continues supporting HTNG messaging standards. It’s developing new solutions based on them “that will seamlessly integrate into the agencies’ existing workflow,” according to the spokesperson. “We are working with hotel partners around delivery timeframe.”

Travelport’s eNett unit furnishes virtual payment. The company developed its own structured codes before HTNG issued guidelines. “Travelport is aligned to the HTNG virtual card principles and, whilst recognizing differences in technology, hopes that the other GDSs will also adopt them,” according to a spokesperson.

Asked about progress since October, HTNG COO David Sjolander last week said, “There are other changes in payments, but not specifically around virtual cards.”

Best Western’s Taylor said so-called “switch” companies like Dhisco (formerly Pegasus, and Thisco before that) adapting HNTG’s specs “will increase speed to market for many hotel brands.”

Show Them You ‘Mean Business’

Buyers might try to educate hotels during pre-bid meetings and address virtual cards in contracts. Testing also is important, at least with heavily used hotels. Another tactic is to call hotels before travelers arrive to make sure relevant faxes are on hand and match up. Travelers could be urged to carry printed authorizations. Buyers sometimes need TMCs to step in and call the hotel.

Some companies bent on using virtual payment for lodging may ditch properties that don’t cooperate. Christopherson’s Ross said one virtual card-using client “is to the point now that if a hotel won’t accept the fax, she’ll go down the road to one that will.”

Mazzola said his “best advice” is to “put pressure on the hotels, speak to individual properties and put a stop-sell on those properties if you need to so they know you mean business and they need to do something to correct the problem.”

An audience member challenged him “to be fair” by acknowledging the need to “engage the entire pipeline,” including GDSs and other tech intermediaries.

“No doubt, yes,” Mazzola replied. “But until the technology is there, what are you going to do if the front desk says, ‘We have no payment, no room for you’?”

At Choice, to stave off any lingering problems, the hotel company is looking to provide an 800 number for travelers. “If there is an issue at the property, typically the traveler calls the travel office and the travel office reaches out to our inside account management team or possibly the seller and there is a delay,” Oldfield explained. “We are equipping our central reservations office with an ability to walk the hotel through that.”

None of the other big chains have announced any initiative like Choice’s. Some prefer an industrywide approach using the HTNG standards. “It’s not that hotels don’t want to do it, but we also don’t want to take a Band-Aid approach. We want to do it right,” Taylor said. “If there had been collaboration with the industry first, this probably would be a moot point. Hoteliers want to solve for this as much if not more than anybody else.”

Marriott’s Burse agreed, saying customized solutions for a single lodging chain are “probably not sustainable. This is an industry need that has risen to a higher priority.”

Earning more sales by easing the process is important. Burse said the “bigger strategic issue” is not falling down when a traveler who booked with a virtual card is trying the brand for the first time.

Some point to the promise of mobile apps from solution providers. Travelers equipped with them can show front desk staff images of the virtual card. In some cases, if need be, they can use the app to request another faxed authorization.

Monaghan said using Conferma’s app has cut down on problems for Sutherland.

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