Monthly Archives: June 2017

Concur, Frosch, HRG Sign Up For New AA NDC Program Offering $2 Per Segment, Other Benefits

American Airlines will pay participating travel agencies $2 per net segment booked and ticketed using certified NDC connections at all points of sale on AA-marketed flights. The program requires agencies to cover distribution costs, but comes with a near-term content parity commitment. It also enables new possibilities for corporate bundles, waiver-and-favor management and risk management data.

They’re not up and running yet but the first agency participants are Frosch and HRG, according to American. The airline this week is hosting an NDC meeting near its Dallas headquarters with industry constituents.

Approved “Level 3-certified” New Distribution Capability connections include AA’s application programming interface and Sprk web application. Both are furnished by Farelogix. Some online travel agencies already use both. The airline said Concur would connect to its NDC API. The compensation program is the same whether agencies go direct or use aggregators including, perhaps ultimately, global distribution systems.

The program supports traditional settlement through ARC and International Air Transport Association BSPs. The NDC connection supports the same post-ticket servicing and change capabilities as GDSs offer, according to AA. Corporate clients can configure the content to include negotiated rates or block basic economy. A translation layer makes existing travel agency scripts compatible.

Among the possible NDC carrots are intriguing new features, largely subject to corporate client buy-in:

Fare bundles: Packages of services and amenities customized at the corporate level but also at the sub-corporate level — for example, just for the C-suite.

Flex funds/waivers and favors: Allows travel agents, or travelers using corporate booking tools, to access and apply waivers.

Enhanced duty of care: New types of data returned to clients about day-of-travel flight changes, whether booked travelers actually boarded and overwater flight position.

The optional program could spark the biggest changes to relationships between airlines and distributors since standard travel agency commissions disappeared. It follows the airline’s legal win over Sabre, which is under appeal.

“We’re not announcing any changes in how we work with GDSs,” said AA vice president of sales and distribution strategy Cory Garner. “NDC is too important to let it get confused with a GDS distribution strategy.”

Cory Garner

Cory Garner, American Airlines vice president of sales and distribution strategy

It’s clear the airline wants out of the “full content” provisions in its participating carrier agreements with GDSs. How the economics of GDS bookings look after it comes to terms with them is anyone’s guess.

AA has been using NDC and its predecessor XML protocol since 2008 “and will be doing it for decades more,” Garner said. “Last year, we did 4 million transactions, or about 10 percent of U.S. point of sale travel agency volume, through NDC. That doesn’t account for NDC work we have done [for paid seats] with GDSs. Taking all that into account, about 50 percent of U.S. point of sale agency bookings are being effected by NDC in some form. We now have NDC in over 30 countries. We’re certified to expand to over 150 more.”

AA’s NDC program started with online travel agencies and until recently did not address corporate travel providers. The program, Garner said, unlocks great potential for TMCs to enhance their value to clients:

“We see agencies playing a bigger role in all aspects of the journey, including on day of departure. We’re moving in a direction that uses NDC not just to sell more, but also to provide a level of high-touch and seamless service that no airline has provided before through a travel agency.

“NDC in all honesty has always had a cost savings component to it. But AA’s NDC strategy is so mature at this point that we believe the costs we set out to save have already been saved. That frees us to focus on other high-priority things like how the NDC strategy combines with our overall commercial strategy. NDC from this point forward is a competitive strategy, a way for AA to differentiate itself from its competitors, to offer more compelling products and offer provide a high-level, seamless service that we don’t think other carriers will be able to match anytime soon.

“What we’re interested in is the trajectory. As long as we’re making progress towards a fully realized, end-to-end NDC model, AA will be more competitive than the rest of the airlines out there and that’s the prize we’re after.”

There are no volume commitments and no deadlines for agencies to decide on participation. To be published as part of AA’s ARC contracts with agencies, the incentive and content agreements are subject to change. Any partners who join the program and issue a ticket through it by the end of next year would be guaranteed those benefits through 2020.

AA is using the wholesale distribution model for the new program. That means it is choosing to pay only for “its own costs associated with operating the NDC connection and for any internal development undertaken by American to facilitate integration.” Assuming GDSs offer an NDC connection, this puts TMCs in the position of negotiating with GDSs the fees they would pay rather than receive from them (offset more or less, by the new $2 per segment incentive.)

If they decide to book off-GDS, said Garner, the “financial consequence” will be “top of mind” for TMCs.

Shifting their AA transactions could threaten agencies’ contractual volume commitments to GDSs. “The GDS-agency agreement is between that agency and its GDS, and American cannot become involved in that discussion,” according to AA documentation.

The Stick

The new AA program adds to recently heightened activity in airline distribution. The industry already was grappling with IAG’s program to surcharge British Airways and Iberia bookings through GDSs — itself following the Lufthansa program begun in 2015.

After IAG in May announced its program, which takes effect Nov. 1, AA was quick to point out that bookings with its code on BA and Iberia flights would not be subject to the surcharge. In revealing the new program today, AA made a few points to distinguish it from its partners:

• “Why don’t American and BA use the same NDC solution? Each airline has its own priorities for NDC and determines whether to ‘build in-house or buy from the market’ according to its own analysis. American chose to ‘buy’ its NDC solution by using a third party technology company called Farelogix. Since NDC is a technology standard, regardless of whether an airlines builds or buys its NDC solution, each airline’s NDC will be comparable so that travel agencies need not worry about connecting to airlines with wide variations in NDC technology.”

• “Why is American’s approach to NDC different from its Atlantic Joint Business partners? American and its AJB partners have their own distribution needs and considerations. Like American, British Airways and Iberia’s NDC solutions are built upon IATA industry technology standards.”

Some New Distribution Capability advocates thought it lamentable that British Airways and Iberia tied their surcharge announcement to the NDC program. IATA for years had been trying to say the connectivity standards were not part and parcel of airline cost reduction programs or GDS negotiations.

“For airlines, this isn’t just a transaction fee,” said ARC CEO Mike Premo. “It’s about aggregate revenue, customer loyalty and brand value.”

NDC is a messaging standard. Airline-GDS talks are a commercial issue. But all these dynamics are intertwined. Costs shifts to intermediaries and clients seem inevitable.

American Express Global Business Travel last year introduced a fee program to address similar situations. Carlson Wagonlit Travel today issued an updated statement on the topic: “Distribution dynamics or decisions by other parties that require us to access or book content via independent fare links or other inefficient means drive material non value-added costs. Accordingly, in order to continue to holistically meet the needs of our clients and partners, we may need to implement new/different types of charges in these types of circumstances.”

During an American Society of Travel Agents event in early June, World Travel Inc. president Dee Runyan said the IAG move “affects us, potentially our revenue streams, and for our corporate customer clients a price increase ultimately. For most of us, more than 50 percent of our business runs over an online booking tool. So we turn to them.”

Also speaking at the ASTA event, Deem chief commercial officer Tony D’Astolfo said, “We’re going to figure out a way to bring that content in. If they have an API available to us … it will look just like how we source Southwest today, which is next to everybody else.”

None of the companies listed in IATA’s NDC registry as having full capabilities is a major corporate booking tool developer. Aggregator Travelfusion is listed as such. Its corporate travel software clients include Concur.

Some observers thought it odd that upon the IAG announcement, Concur would state support for NDC, branded fares through GDSs and TripLink. Using multiple channels presumably drives up costs.

“The evolution of NDC itself is probably the biggest challenge,” said Doug Anderson, SVP for the travel product at Concur, during a Wednesday interview.

Mike Koetting

Mike Koetting, Concur EVP of supplier and TMC services

“Every supplier seems to have their own flavor of the standard,” added Concur EVP for supplier and TMC services Michael Koetting. “Our preference, if possible, is for content to be made available via the GDS because we know it’s efficient for the rest of the managed corporate travel ecosystem, particularly our TMC partners. If that content is not available in the GDS and it is relevant and compelling to our travelers, then we’ll do what’s necessary to secure access to it. That includes if it’s NDC content not available in the GDS.”

The TripLink strategy, Koetting said, is in place because “we know that for whatever reason some travelers prefer to book with the supplier and we believe that when travelers do so they should have access to their corporate discount and those purchases should be every bit a part of the managed corporate travel program as a traditional GDS-based booking.”

Even if the content is the same as in another channel, such as NDC? “Even when [for example] there is full content in the GDS, we know — based on Concur, GBTA and TMC statistics — that there are a lot of travelers who book directly with the supplier. There is unique content, there is a perception of unique content or maybe it’s simply a convenience factor.”

AA signed up last year for TripLink. Garner said more on that would be announced soon.

Given AA’s program and IAG’s plan not to surcharge bookings through NDC connections, a burning question is how soon GDSs will hook up to NDC application programming interfaces. IAG told the industry it was “continuing to work with the GDSs on potential NDC connectivity.” None of the three major GDSs is listed by IATA as having full “offer and order” capability.

Travolution quoted an Amadeus official as saying the GDS does not expect to add BA’s NDC pipe until as late as 2019. He said this is because the next version of IATA’s standard is not expected until December.

17.2 And Corporate Travel, Too

Like BA’s last year, AA’s NDC summit is designed in part to increase understanding of and support for NDC in North America. The corporate travel community here lags its European equivalent. NDC supporters reported a lot of improvement in corporate travel awareness following the late May IATA Business Travel Summit in Geneva. Its agenda featured five buyers and there were many more in the crowd. AA managing director for strategic account sales Hank Benedetti spoke.

IAG didn’t show, raising some hackles.

Attendees declined to be quoted because IATA asked that what happened in Geneva stayed in Geneva. A few of them told The Company Dime that participating corporate buyers demonstrated an increased appreciation of NDC’s potential for improving the customer experience through dynamic bundles and other negotiated content.

Farelogix CEO Jim Davidson said he heard some rallying around NDC’s next version, 17.2. His favorite anecdote from the conference illustrated the increased awareness: “I heard corporate buyers talking about a schema version!” Davidson said that as a tech developer, Farelogix takes on the onus of keeping up with all the versions. Garner said AA’s API is compatible with multiple iterations.

By all accounts, the technical issues are the easy ones. More difficult is the question of how GDSs would be paid under new frameworks. Sources said multiple pricing models are under consideration, and they are likely to differ by market. Perhaps it’s based on full content versus non full content versus NDC. Perhaps it’s a more complex version of “home and away” segment pricing. Maybe airlines pay distributors next to nothing on basic economy.

As AA seeks to expand the wholesale model, sources said BA is looking at something very similar.

That NDC and airline-GDS negotiations can be considered separate matters offers little comfort for intermediaries that would rather not spend development dollars incorporating a new pipe when they’re perfectly happy with the GDSs. That is, unless the benefits outweigh the costs.

There are reports of custom fares and features enabled through direct connections, but the Europe-based carriers have not described any financial incentive program for booking in new ways (only a penalty for not).

“We’ll figure it out,” said Direct Travel senior vice president Mike MacNair at the ASTA event. “We have and we will. There are more opportunities for us to charge more for consulting and systems development up front. It’s impressive how this industry adapts and stays relevant.”

Some will emerge as bigger winners than others. Former CWT executive Martin Warner, now a consultant with MW Consultancy, offered his thoughts after the IAG announcement:

“The intermediaries (TMCs, OBTs and online travel agencies) are at different stages of readiness in integrating NDC solutions to ensure travelers and corporates can still see ‘full content’ choice across carriers in the booking/enquiry process. Will clients move if certain TMCs are not ready in time, or at all? Some who do not have independent layers above the GDS may have to simply pass on the [surcharge] to the client until such time that they have integrated capability to view and book using NDC content.”

He wonders how much room is left for cost increases to clients.

“What is the ‘tipping point’ of any increased premium of buying through a TMC rather than direct? If it becomes another $20 more expensive to book via a TMC, does the TMC value proposition get challenged sufficiently that their addressable market size reduces as some clients — both at the low end of managed/unmanaged, and those big enough to re-engineer their managed travel programs — re-examine the ‘prime contractor’ role of the TMC and find alternatives for online/untouched bookings where they consume less of the TMC’s services?”

Concur’s Anderson said another challenge “for most managed programs is in support. How do you support those bookings? That’s still kind of the big piece to work through.”

According to AA, its NDC connection offers full support capabilities for settlement and changes.

“With British Airways’ NDC connection, tickets are issued by British Airways,” AA noted. “American’s NDC issues tickets on neutral ticket stock to facilitate existing industry and agency processes.” Garner explained that when an airline sells a ticket on its own stock, that limits the agency’s capability to interact with the record post-ticketing. Some airlines have established processes to open up those tickets amid disruptions.

“From the beginning, we issue tickets on neutral stock like an agency is doing with a GDS, so the agent is in control at all times,” said Garner.

Additional info: The $2 incentive will result in back-end payments settled as an ARC/BSP agency credit memo. Agencies can combine the program with other AA incentive agreements unless they already are on the wholesale arrangement, as some OTAs are.

The content commitment: “Agent will have access to the best published fares for American-marketed flights made generally available to the public (e.g., through or a GDS), and all schedule information and seat availability related to such fares.”

Ancillary products currently available in AA’s NDC: paid load factor-based upgrades, same-day flight changes, same-day standby, paid seat assignments and pre-order meals. The airline indicated “plans to offer pre-paid baggage and is evaluating a variety of other enhanced functionality and ancillaries to make available via its NDC connection.”

More than 250 people from 20 countries representing about 120 travel agencies, 24 technology companies and seven industry organizations registered to attend AA’s NDC Summit, according to Garner. Speakers included AA personnel as well as AmTrav’s Jeff Klee, HRG’s Nigel Meyer and a representative of a year-old tech firm called AirGateway that offers “NDC-compliant real-time aggregation” to TMCs and others. It adopted BA’s NDC connection last year.

Disclosure: ASTA and The Company Dime have a research and events partnership.


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Nineteenth Century Tech Joins SEO, Data Mining In Business Travel Startup Marketing

Nothing beats word of mouth for business travel providers seeking new clients. Established players count on referrals, with the most gratifying coming from former users recommending them to new employers. New entrants incentivize to evangelize. The lucky business travel startup hooks a big fish corporate account and rides the wave of publicity. Downstream from big corporate, new entrants going after unmanaged business travel are making what resemble business-to-consumer plays. That requires an ad budget.

There is diversity in the approaches.

startup marketing

Image: Thinkstock

“These companies have to do more marketing than trade shows and trinkets,” said Atmosphere Research Group’s Henry Harteveldt. “They start with search engine optimization (SEO), but can’t just do that and search engine marketing (SEM) and a Facebook page. They need to be more comprehensive.”

The throwback in the crowd is Upside’s radio ad campaign. Upside is going after unmanaged business travel. Asked during a recent American Society of Travel Agents conference whether the Upside ads were working as well as those Priceline ran back in the day, Jay Walker, founder of both, said:

“It’s very different. When you have William Shatner telling you that you can name your own price for airline tickets — and of course the vast majority of airline tickets are purchased by leisure travelers — you’re going to have a much bigger uptake. Upside’s radio ads are targeting unmanaged business travelers. There are maybe 10 or 15 million of them and they already have their way of doing things. That being said, it’s going really well. It’s very hard to stand out in the U.S. with any kind of advertising budget. The smallest Pringles variation of a flavor spends $10 million. We are using radio personalities — everyone from Howard Stern to Rush Limbaugh, which is a very broad range — to tell people there’s something new and exciting. Radio is very efficient, and cost-effective. Ninety-five percent of American adults listen to the radio once a week and they listen to it because they want to.”

Darned right it’s hard to stand out. Nevertheless, Walker said, “digital media is also quite good.”

It’s not for everybody, but some startups spend on Google and Facebook. The duo takes in nearly half of global ad spending. They accounted for 77 percent of the nearly $12 billion in U.S. online ad growth last year, according eMarketer data published this week in the Wall Street Journal.

“One thing I can say that we’re not doing is, for example, performance marketing up against the behemoths,” said Choon Hong Peck, co-founder and CEO of ETA Inc. “There’s just no chance we can perform well in that kind of environment.” Big budget advertising also is out for others including Pana and NexTravel (which is focused on midmarket rather than small firms).

Advertising is one of the least effective means of lead generation for TMCs, according to a survey this year by ASTA and The Company Dime. More than 60 travel management company executives participated.

startup marketing

Image: Thinkstock

Where some startups and TMCs meet in digital marketing is on original content. That helps with generating more business from existing clients as well as finding new ones.

“You have to give information for customers to come into your shop now,” said Mike MacNair, a Direct Travel senior vice president, also speaking at the ASTA event. “The ways to do that electronically are more cost-effective than ever before. Having those tools and going back to existing customers to remind them of why they’re managing travel is important. In the SME market, that person wearing multiple hats has no idea how to remind all the travelers why they should be doing this. Infographics, stories, tales, blogs, white papers … they’re all really important to have.

“It’s the triple sale,” he continued. “You should be managing travel, you should be managing travel through me, your people should be using the system I just sold you. It’s a hard sale.”

MacNair and other TMCs like the United Kingdom’s Click Travel for years have blogged about the merits of managing business travel. As with TMCs, some startups do this more than others.

Companies in the unmanaged category, naturally, do not employ a travel person. “They try to inform themselves,” said 30SecondsToFly co-founder and CEO Felicia Schneiderhan at the ASTA event. “They Google ‘how to write a travel policy.’ It’s important that we are present in the results. We have invested a lot of our energy into content marketing and search engine optimization. We have a special advantage in this field. Nils Cartsburg, my CMO, founded his own SEO agency a decade ago.

“This is how we get to the SME market,” she continued. “If we didn’t have this very scalable, very cost-effective channel, it would be very difficult. You can’t throw money at SEO and expect results. It needs to grow organically. SEO is very effective but takes a long time.” just hired an SEO specialist. But like TripActions and others, it also is focused on leveraging networks, contacts and intel to better target potential clients and create referrals.

startup marketing

Image: Thinkstock

“We’re in closed beta primarily with companies in Texas where we get to grab coffee and find out what’s working,” said CEO Daniel Senyard. “It’s direct selling to fill up with companies willing to go along for the ride. We kind of bridge finance, travel and HR. There’s a plethora of conferences we can spend a lot of money going to but we’re zeroing in on micro-communities. Where are the CFOs and HR pros gathering once a month or per quarter to discuss trends or have a luncheon? We think it’s more cash- and focus-efficient to sponsor a luncheon than to go to a big conference.”

TripActions includes spending on SEO and SEM (even on Instagram) as part of its marketing mix, but also commented on local networking. “In markets we’re operating we discovered CFOs have their own communities, their own mailing lists, etc.,” said CEO and co-founder Ariel Cohen. “When CFOs started to see the savings, they started to talk about it in their communities and we started to get inbound requests.”

In the ASTA research, sales was the No. 2 source of new business for travel management companies after referrals. In later interviews, startups generally didn’t talk much about sales teams, with the exception of Pana. Noting that SEO is not a primary strategy, CEO and co-founder Devon Tivona said:

“We look pretty similar to a traditional TMC in our methods. We’re a huge fan of sales and believe in that as a way to grow our business. We leverage a massive amount of data in all our outreach, based on our proficiency as tech people. There’s so much publicly available information about all potential clients out there in the world. I know their last fund-raise, their growth rate, what technology they use, traffic data on their website, their social presence, etc. I have a list of 5,000 companies with seven or eight attributes I’m focused on.

“We do an immense amount of data collection and then when we reach out to a prospect, we demonstrate our knowledge. A typical email might say, ‘Hey I saw you raised a Series A and you likely hired x people and we’ve seen with other clients that travel management at this stage …’ It’s such a higher-level conversion rate versus the blanket email.”

“I think that’s smart,” said Harteveldt. “It shows some ingenuity and allows a company to be more focused and collect the info they need and want, as long as it’s not inappropriate. There’s that proverbial fine line between cool and creepy.”’s Senyard agreed that blanket emails are inadequate. He said he has tried using lists bought from business journals, but they produced a “very bad response rate.”

Another strategy is channel partnerships. Travel and travel tech suppliers, expense management providers, accounting software firms and even banks offer possibilities. TMCs can fit, as well. Some startups use them simply to support customers and provide fulfillment. Others see TMCs as useful for lead generation, or as resellers.

Pana and TripActions work with Bruvion Travel and S.R. Travel, respectively, but are considering adding more. 30SecondsToFly moved from a small corporate agency partner to Christopherson Business Travel.

“We wanted to be a technology company from the get-go,” said Schneiderhan. “We never wanted to be a service company. That’s not what we are good at. It was very important for us to find good partnerships with travel agencies to add what our technology couldn’t provide. Our artificial intelligence cannot replace an agent. We are still far away from that. Working with an agency means we both need to adapt. Our business partners needed to adapt their workflows around how our tools and interfaces work. That’s a risk for us. As a startup, speed means life or death. Partners need to adapt quite quickly.”

NexTravel has added TMC partners since launching with Atlas Travel & Technology Group, including Adelman and W Travel. CEO and founder Wen-Wen Lam said the company is “doubling down” on partnerships. Reseller relationships have allowed NexTravel to defer building up its sales team, though that is in the works.

Upside considers TMCs part of its “ecosystem.”

Disclosure: ASTA and The Company Dime have a research and events partnership.


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Marriott’s 48-Hour Cancellation Policy To Affect 2018 Rate Negotiations

In light of related tests by big chains in recent years, Marriott International’s June 15 introduction of 48-hour cancellation policies at nearly all Americas hotels wasn’t a surprise. That doesn’t make negotiations for next year’s rates any easier.

Like it or not, and most don’t, Marriott’s decision exemplifies the lodging industry’s efforts to better manage inventory and generate additional revenue. Many hotels a few years ago switched from same-day to 24-hour cancellations. The Starwood acquisition gave Marriott more clout to push further. Expect competing chains to follow, though maybe not right away as they try to leverage a competitive advantage.

This development is bad for business travel, restricting last-minute planning and late changes. According to one commenter on FlyerTalk, a 48-hour cancellation is as restrictive as prepaid reservations. “So is the strategy now never to reserve until the day of or day before when it’s concrete?” asked another. “There go any ‘advance’ upgrades.”

And there goes some latitude. Partnership Travel Consulting’s Andy Menkes gave this scenario: “I made a booking for June 3 at a Marriott for $250 a night. On June 1, I see a comparable hotel has dropped their rate to $199; it’s too late for me to make that change.”

As generally used today, popular third-party reshopping tools like TripBam and Yapta won’t help much. They often stop searching at 48 hours out. As such, “their effectiveness is unlikely to be impacted in the short term,” according to GoldSpring Consulting partner Neil Hammond. “If other chains follow suit and the periods are further extended then this may become an issue.”

Corporate negotiated rates often have looser cancel policies, but for 2018 rates that flexibility looks to be harder to come by. It will be especially challenging in markets where travel programs have modest hotel volumes.

“Corporate buyers will just need to do a better job to negotiate same-day or 24-hour cancellation,” according to Advito senior director Marwan Batrouni.

How should they do that? Consultant Mick Lee of Arrow212 said savvy buyers would be more attentive during RFPs — rather than simply “checking the box.” She said they should consider alternatives like Airbnb and review data “to ascertain the locations with the biggest impact to their expenses.”

Marriott CEO Arne Sorenson
Image: Reuters/Fabrizio Bensch

Marriott’s policy also will impact dynamic pricing programs and “hinder the ability of buyers to take advantage of inventory pricing shifts,” according to Lee.

Assessing all of this may take longer than usual. Donna Brokowski, GM of Travel and Transport’s Partner Solutions Group, said Marriott’s new policy could lead to a longer hotel RFP process and a “possible shift away for some key hotels.”

Travel Consulted’s Grant Caplan said companies would have better luck working with individual properties than through brand HQ. That means local relationships are “now even more valuable,” he said.

According to FINRA corporate travel services manager Carol McDowell, the new policy is “a game-changer” that may require strategy adjustments.

Carlson Wagonlit Travel Hotel Solutions director Eric Jongeling expects cancellation policies to be a “key element” in negotiating with and selecting preferred properties. “One of the most important considerations is ensuring business travelers are aware of cancellation policies and ensuring the terms are communicated,” he said. “We expect preferred hotels to provide better terms than travelers can find on their own and this change could present additional opportunity to drive more program compliance if negotiated deals provide greater cancellation flexibility.”

In 2015, Marriott International CEO Arne Sorenson told Wall Street analysts that allowing guests to cancel up until 6:00 p.m. on the day of originally intended arrival “created greater risk of overbooking” and made it “harder to revenue-manage the hotels.” During a conference call last month, Sorenson said the company had been testing a 48-hour window for “a number of reasons.”

He elaborated on the benefit of reduced overbooking after the earlier switch from same-day to 24-hour cancellation — a strategy Marriott copied rather than initiated. “There’s nothing worse for a traveler than to show up at a hotel with a confirmed reservation and not have the room there,” Sorenson said. “We’d like to be full every night without a single room empty and without a single customer walk. Now that’s not necessarily something that we will ever achieve, but I think we’re making good progress on that.”

Meanwhile, Marriott’s move helped raise the profile of last-minute B2C services like Hotel Tonight and Priceline “express deals” among several commenters on FlyerTalk.

Additional info: Marriott International’s policy impacts hotels in the United States, Canada, the Caribbean and Latin America, “across all brands except for Design Hotels,” according to a company statement. “Guests will now be required to cancel their room reservation by midnight 48 hours prior to arrival to avoid a fee. This will allow hotels a better chance to make the rooms available to guests seeking last-minute accommodations.” A Marriott spokesperson noted that the policy is 72 hours “in a few select locations.”


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TMC Vet George Opens North America For Agency Automation Firm Tramada

Longtime corporate travel sales exec Mary Ellen George joined Sydney-based travel agency automation firm Tramada Systems to lead its expansion in North America.

Sixteen-year-old Tramada offers agencies a cloud-based, GDS- and online booking tool-agnostic alternative to back-office systems like Trams or Travcom. This includes business intelligence, though Tramada is happy to export data to its clients’ preferred data visualization and reporting tools.

Begun last September, the U.S. expansion required the company to add integration with Travelport’s Apollo (it already supported Amadeus and Sabre). It also had to adjust for date formats, tax info and terminology. Tramada delivered version one of its U.S. product to clients in April. “What we have found is that 95 percent is universal, and 5 percent requires localization,” said Tramada CEO Jo O’Brien.

Tramada head of North America Mary Ellen George

Tramada is out to help TMCs reduce costs. Its partnership with Onyx CenterSource, for example, streamlines the commission recovery process. “Tramada is like the keeper of the truth,” said O’Brien. “The feed we send to them is accurate and rich, and then reconciliation is automated. We can attribute commissions to each hotel segment. You know who is paying, or not, and you can manage your relationships. Many midsize or smaller TMCs don’t bother because it’s too hard. Often the commissions are small, and they come in bit by bit. One of our clients had a team of five people on this, but in integrating Tramada with Onyx that got them down to one full-time equivalent.”

Tramada integrates with Sabre profiles. It offers a Sabre Red app for travel agents to view customer data and travel histories. The app also applies quality control to bookings. Alternatively, agents toggle between the GDS and the Tramada software.

Tramada connects with mid-office tools from the likes of Concur and Cornerstone, and offers itinerary delivery and other associated services. It partners with Canada-based software provider Magnatech Travel Management Solutions for unused ticket management.

Excluding the “mega” TMCs, Tramada claims 80 percent share of the corporate travel market in Australia. That includes marquee early client Corporate Travel Management, which has a couple dozen U.S. offices following the acquisitions of Montrose Travel, Travizon, USTravel and others.

“With some of the older systems, travel agencies are hanging on as long as they can,” said George. “A lot of the big guys have gone to the cloud but regional and super-regional agencies still are operating on legacy financial systems. This is an opportunity to enable that mid- to large-market travel agency to modernize and up their game.”

George is a veteran of large travel management companies, having served in leadership roles at American Express Global Business Travel and BCD Travel. Most recently she was senior vice president of sales at HRG North America. During her 16 years with the companies that became BCD Travel, George helped create the model for travel agency support of online bookings.

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Research shows companies increasingly are establishing enterprise-wide risk management programs to offer a bird’s-eye view of all types of risk. So far, though, travel risk doesn’t seem to be part of the conversation.

North Carolina State University’s Poole College of Management has an enterprise risk management practice sponsored by Deloitte. Its reports divide risks into three buckets: macroeconomic (i.e., exposure to currency fluctuations or political instability), strategic (disruption, change in customer preferences) and operational (supplier uncertainty, succession challenges).

Traditionally, corporate risk leaders are responsible for one silo and tend to unknowingly “lob” risks to the others, according to Mark Beasley, Poole’s Deloitte Professor of enterprise risk management. Not being a risk expert, for example, the technology lead may create legal, cash management or reputation risks, he said. Risks may fall between the silos or spread across them. Not thinking strategically threatens strategy, according to Beasley.

ERM, though, is a top-down process that offers a more holistic view, closing gaps between departments.

NC State and the American Institute of CPAs has for the past eight years surveyed CFOs or similarly situated business leaders about ERM. In 2016, the poll received 432 responses. Results showed that while growth plateaued in the past few years, the share of surveyed organizations employing a “complete, formal” ERM process was up to 28 percent in 2016 from 9 percent in 2009. For large and publicly traded organizations, the figure was closer to 50 percent.

The research also showed that growing percentages of organizations appointed a chief risk officer or equivalent (42 percent last year), and created a management-level risk committee (58 percent).

Image: Thinkstock

Does travel have a seat at that table?

“If you’re a travel risk manager, you’re going to be at a big company and that company probably already has some sort of ERM process,” said Bonnie Hancock, executive director for NC State’s Enterprise Risk Management Initiative. “So I would think the leader of ERM should be looping in the travel risk manager, and if not, I would want to get connected to ensure that travel risks are getting the appropriate consideration.”

ERM has been around for well more than a decade. The literature on it is extensive and comprehensive, but references to travel are hard to find.

“When we talk about risk and uncertainty, we talk about particular events,” said Hancock. “I think of travel as a root cause of events — the loss of a key employee, or not understanding the culture you’re traveling to and creating a reputation risk. You could see it as a subset of a lot of other risks — geopolitical, succession, etc. Maybe it didn’t rise to its own category, but it is a consideration.”

One of NC State’s surveys asks executives to rank 30 different risks. Among them, several are either related to or broader than travel, including: terrorism, political uncertainty, shifting trade policies, regulatory changes, supplier viability, talent retention, cyber threats and privacy protection. Some of those were among the survey respondents’ top ten risks.

Meanwhile, travel risk management literature in turn scarcely mentions ERM. One exception is Charles Brossman’s book, “Building a Travel Risk Management Program: Traveler Safety and Duty of Care for Any Organization.”

An excerpt:

“Putting enterprise risk into more context with TRM, consider all of the different ways that employee and contractor mobility touches most aspects of a company’s operations, including a company’s approach to risk management. For example: travel to assess the risks associated with expanding operations into a new market; travel to meet with parties being considered for merger, acquisition or partnership, and their impact on the company’s reputation; travel to ensure compliance with legal and environmental requirements involving a project or operation.”

In an interview this week, Brossman said he wasn’t surprised that the authors of ERM literature do not address travel.

“If they don’t mention travel, it’s because they don’t get it,” he said. “The potential risks you put travelers in front of that can affect your business and reputation should be measured in a structured program for both common and strategic business decisions and executive decision support.”

International SOS executive vice president Tim Daniel said the ERM concept was popularized by insurance companies. It’s a big theme for the Risk and Insurance Management Society. Travel is a “narrow focus” in that bigger arena, he said.

“We do see it come up in market development exercises,” said Daniel. “Risk should be associated with opportunity. For example, I want to do business in new markets or existing markets where risk levels are shifting. What do I need to know about? Sometimes there are travel safety challenges.”

If they are on the lookout for “bigger conversations” that may be taking place, travel professionals could find “a place to put their story forward and potentially gain legitimacy,” said Daniel.

Travel Recon founder and CEO Toby Houchens said he thinks the role of TRM increasingly will be explored in the context of ERM. “Everyone agrees there should not be silos,” he said. “There is risk in duty of care, risk in finance. They should be tied together.”

A former travel manager and current member of the Global Business Travel Association’s risk committee, Robert Mintz said ERM could help TRM in its weakest area: training.

“Whether for travelers or an emergency management group, the time isn’t set aside for proper training,” said Mintz. “So [it would help] to have it institutionalized in areas that have defined processes — they have their checklists and they’re religious about it to the point of annoyance. To place travel risk in that larger continuum of IT and HR and executive management (and facilities, physical security and insurance) ensures the seat at the table.”

If the tie between ERM and TRM strengthens, travel risk systems could be joined up with other software to offer the ideal broad view.

“We believe a company needs best-of-breed in different capabilities, but that needs to be tied together with one or two user interfaces,” said Houchens. “Now we’re looking at companies with 10 risk vendors and 10 contracts, and they don’t need them all.”


Book Review: A (Nearly) Complete TRM Resource

Amid Growing Travel Risk Management Awareness, GBTA Upsizes Assessment Tool

Travel Safety As Career Path

International SOS Commissions New Duty Of Care Code As GBTA Preps TRM Tool Update

How To Get Executives To Focus On Travel Risk Management

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Rail Revolution? A Travel Pro Can Dream

[UPDATE, June 23, 2017: Expedia completed its acquisition of a majority stake in SilverRail. Terms were not disclosed.]

[UPDATE, June 16, 2017: Adds information about Amadeus Cytric.]

Announcing plans to acquire a majority stake in rail distribution and IT firm SilverRail, Expedia CEO Dara Khosrowshahi last month said rail was “ready for an online revolution.” It can’t come too soon.

Attempting to integrate rail content into corporate travel programs is not for the faint of heart. The rail sector is fragmented, inconsistent and disconnected. Progress is needed especially in Europe where rail is used frequently for business travel.

Rail’s lingering legacies and some outdated technology are mostly to blame. “Unlike air travel, which was internationalized quickly, or car standards, railways until the advent of high-speed rail were really national affairs,” said Will Phillipson, president and co-founder of SilverRail, during an April interview. “Passenger rail was supported by the state, with a single railway carrier by country. The need for interoperability was non-existent.”

Problems still are apparent even within the same country. “If someone is trying to go down one side of the U.K., go across and up the other side, they need several tickets,” explained HRG global travel services director Ian Windsor. He pointed out that the United Kingdom has 27 train operating companies. “Some offer mobile tickets, some paper, some you have to pick up at the station. Some [tickets] allow you to use the Underground, some won’t.”

Rail content and functionality particularly challenge corporate online booking tools.

“It is more complex than it should be because of the market dynamics,” said Mia Andersson, an associate with the Festive Road consultancy. “Rail content is a key driver of what OBT you will choose. There are many discussions internally in corporates at the moment about the major rail-spend markets and if they can use the same OBT. The answer is a different OBT in each market, but your company wants you to pick one.”

Certain rail processes are easier if travelers book directly, though of course that threatens consolidated data and risk management practices. “Punch-out” solutions from corporate booking and agency systems leverage direct links to local rail companies and may work well from the traveler’s perspective. Single-sign-on brings them seamlessly to these websites. “However, it’s more complex from the corporate perspective when using multiple punch-outs,” Andersson explained. “They need data collection and need to track travelers.”

railAt least in the United Kingdom, HRG’s punch-out to the Trainline intermediary works pretty well, according to Windsor. There is integration with the TMC’s back-office, he said, and “we get management information.”

At FCM Travel Solutions, “we work with several intermediaries,” according to Jordy Staelen, managing director for the TMC in France and Switzerland. “We mainly work with Amadeus, which works pretty well with the French railway. But to issue a train ticket from Italy, we need to connect to another system. We work with SilverRail and Trainline. Sometimes we do a direct connect if there is no other solution. In Switzerland, there is no API to the Swiss railway. It is impossible to automate the connection with them so we just have to go to the website to book.”

Corporate booking tool search displays showing rail and air together sometimes are possible and sometimes not. Amadeus has been vocal about modernizing rail selling and distribution systems. It offers a “modular” technology approach for operators. High-speed service Thalys and Swedish operator SJ are among those deploying parts of the solution. Meanwhile, through a 2016 partnership with content aggregator AccessRail, Amadeus-connected agencies can book 18 rail and bus operators in 26 countries “on the same screen as air travel,” according to the Amadeus 2016 global report.

The Amadeus Cytric corporate booking tool has direct connections with Deutsche Bahn, Evolvi (U.K. rail aggregator), NS International (Netherlands), SNCB (Belgium), SNCF (France) and Trainline. There are punch-outs to SBB (Switzerland), the Deutsche Bahn booking portal and, expected in the third quarter, Renfe (Spain). A connection with SilverRail brings in Amtrak, Renfe, SJ and, planned for the third quarter, Via Rail Canada. Integration with the Amadeus Rail Sales Platform will add another connection to SJ (scheduled for the current quarter) and Italy’s Trenitalia (fourth quarter).

Concur As Microcosm

A look at market-leading corporate booking tool Concur Travel shows the many nuances. It provides access to content from various rail operators, sourced from GDSs and direct connections. Reflecting operators’ range of maturity, features and available services are inconsistent from one to the next. Knowing whether and how one can exchange a ticket can be problematic.

For example, there’s a direct connect to Trainline, a platform encompassing 86 rail operators. Users must contact Trainline directly for changes or cancellations. Sales are “instant purchase,” according to Concur documentation, meaning users can’t hold reservations or use a pre-trip approvals process. Seat maps are not supported. Concur doesn’t provide e-receipts. Its mobile app doesn’t offer Trainline reservations.

Concur also has a direct connection with Evolvi (Concur clients can configure the system for that or for Trainline, but not both). To use it, Concur customers must set up “a private U.K. train booking site set specifically to the train travel booking policies of the company,” according to a Concur user guide. That means no commingled air and rail search results.

The same is true when using Concur to book Eurostar tickets via a GDS configuration. If configured with a direct connection to Eurostar part-owner SNCF (French rail), then users can conduct mixed air/rail searches.

International high-speed rail companies like Eurostar are seen as more advanced than most national railways and more attentive to corporate travel needs. Booking Eurostar through Concur, for example, affords the user lots of conveniences: policy parameters, central billing options, trip cancellations and changes. TMCs can process refunds.

But there are gaps. Users can see Eurostar seat maps, but again only if using the direct connection. In cases where Eurostar assigns seats automatically, the Concur Travel itinerary “will not reflect the Eurostar seat assignment in the expected area,” according to Concur. Instead, TMCs may insert seat info in “an unassociated itinerary remark” that Concur includes at the bottom of the itinerary. Meanwhile, because each Eurostar source (Sabre, Amadeus, Galileo and SNCF direct-connect) classifies train cabins differently, Concur users should be mindful when configuring policy controls.

Concur also has direct connections to SNCF and Germany’s Deutsche Bahn. For both, trips can be cancelled via the Concur connection but not changed. For both, users can see mixed air and rail search results. With Deutsche Bahn, if they select a rail option, they’re taken to the operator’s web portal to complete the booking. Bookings are instant purchase. Trips can be cancelled via the Concur connection but, as with Deutsche Bahn bookings of any kind, the traveler must contact the operator to make changes.

Meanwhile, accessing SilverRail’s API enables Concur to “display rail content in a consistent manner, regardless of rail carrier or point of sale, and provide a simple and efficient user experience,” according to SilverRail. Concur’s SilverRail connection currently gives users access to the Spanish and Swedish rail systems.

Again, these connections do not allow for changes. For Spain’s Renfe, for example, “exchangeable tickets are not supported,” according to Concur documentation. “Renfe cannot change these trips at the train station as [its] reservation system cannot access trips booked outside of their website or internal tools. Concur and SilverRail plan on supporting trip exchange in the future.” Concur also is working to provide mixed air/rail searches including content furnished by SilverRail by early 2018.

For now, SilverRail is the merchant of record for Renfe and Swedish rail bookings. “The TMC as the merchant of record will be supported by the second quarter of 2017,” according to Concur information.

Concur noted that it plans to add more rail operators via SilverRail this year, including Italy’s Trenitalia and Belgium’s SNCB.

That is if Concur’s split with Expedia’s Egencia doesn’t get in the way.

The SilverRail Stretch

The Expedia-SilverRail transaction is expected to close in the middle of this year. Expedia’s Egencia division first connected to SilverRail’s API in 2010 to bring in Amtrak. Last summer, the partnership expanded. The connection now allows Egencia customers to access functions within their programs. Those include e-ticketing, corporate rates, the display of onboard amenities ticket cancellation. Also last year, Expedia incorporated SilverRail into its U.K. point of sale.

In rail, there are few cross-border standards on pricing or distribution. Speaking on May 31 at a Cowen conference, Expedia CFO Mark Okerstrom said one goal is to “standardize rail fares, standardize all of the availability information and ultimately serve it up in a way that either the rail company themselves can transact online or corporate travel firms, like Egencia, can serve it up in their business, or increasingly, online travel agencies like the ones that we own serve that up to their customers.”

On the distribution side, SilverRail’s ambition is to be a GDS for rail, or as Phillipson said, “the ITA Software of rail,” acknowledging that may “be a stretch.” It already aggregates 35 rail carriers.

It has a web-based agent interface but Phillipson said the ideal approach is for TMCs to connect to the SilverRail API, which according to the company provides “a single, integrated service for shopping, booking, and purchasing tickets across multiple carriers.” That allows them to use traveler profiles and natively access bookings.

Travelers can’t make use of some features on certain rail operators’ mobile apps — like calling up a boarding pass — if they initially booked through an indirect channel. On the IT side, SilverRail is pushing airline-like functionality. That would include populating rail bookings with information from travel management profiles, integrating air and rail search displays and multi-modal tickets, facilitating mobile ticketing and boarding pass access, and allowing for exchanges, cancellations and various payment methods across channels.

“Customers have expectations,” Phillipson said, “and those are being led by online tools and services that other modes of transport provide.”

He said work is underway with rail operators “one by one.”

“Railways are entering a precarious place over the next few years,” Phillipson added. “They need to redefine relevance. Many still are living as government-owned monopolies. There’s also competition from rideshare and intercity buses. They have to be where customers are looking.”

According to SilverRail, it also has partnered with Deem, GetThere, KDS, nuTravel and Traveldoo. It claims more than 1,500 corporate customers.

Additional info: There are pockets in North America where rail is useful for business travel, notably Amtrak’s Northeast Corridor. Amtrak participates on the SilverRail platform. It’s also available through GDSs and booking tools including Concur, Sabre GetThere and Egencia. Organizations booking as part of a corporate program only can do so through third parties “but the functionality is basically the same as through,” according to an Amtrak official. “The biggest difference in the booking path is that offers more fare options on the initial search. Our corporate partners can leverage the website and the app to make changes and retrieve travel documents the same as any other Amtrak customer.”

According to Concur, its Amtrak direct connection supports mixed air/rail search displays, corporate discount programs and availability in the Concur mobile app. It provides route maps and cancellations (but not changes, which require a cancellation and a new booking).

Concur also connects directly to Via Rail Canada. There is no integrated air/rail display, though Concur described the Via Rail connection as “a superior experience over current GDS booking and improve agency productivity.” It provides the full range of fares and availability (Concur said GDSs don’t). Users can cancel but not change tickets in Concur. Instead, they have to directly email or call Via Rail.

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Defense Department Seeks Rewards Program Partner For Rebates On Meal Spending

When you spend more than $1 billion annually on dining, it’s wise to sign up for programs that could kick back millions. It’s especially appreciated if the money you’re spending is from taxpayers. That’s why the U.S. Department of Defense Travel Management Office plans to pilot a dining rewards program.

On DOD’s behalf, the Defense Human Resources Activity Contracting Directorate last week announced a request for proposals from vendors for just such a program. They have until July 10 to respond.

The pilot “will enable the DTMO to determine the most effective approach to sourcing, to develop program policies, to leverage purchasing power, and to identify the requirements, technology, and processes to implement an effective enterprise-wide dining program for the DOD military and civilian personnel on official travel,” according to the announcement. “The period of performance shall be from the date of award through 12 months for the base period plus four 12-month option periods.”

Image: Starbucks

The announcement noted that while corporate dining rewards programs can return upwards of 6 percent, DOD’s high spending is expected to earn more. A personal rewards program would also be included, and the contractor would be responsible for helping DOD market the program to travelers.

According to presentation materials from the March 2017 GovTravels conference, in fiscal year 2016 just $124 million of the $1 billion in meal spending was charged using the Government Travel Charge Card (provided by Citi). The proposed dining program — which would track spending through commercial cards — “does not require major change to regulations, measurable workload for services or burden on [the] traveler,” according to the presentation.

Officials hope the added incentives will increase spend on the card, thereby increasing bank rebates as well.

DOD travelers in fiscal 2016 spent more than $2 million at both McDonald’s and Buffalo Wild Wings, according to the RFP. Those were the top two merchants among 100 restaurant companies at which the department’s travelers spent a reported $41 million. Others over $1 million each included Subway, Chili’s, Applebee’s, Texas Roadhouse and Starbucks.

The winning contractor would be asked to include more of the “top restaurants” where DOD travelers currently dine and to “maximize participation” for restaurants located on military installations.

DOD credited the General Services Administration-chartered Government Travel Advisory Committee for recommending in 2015 that government travel programs adopt dining rewards. The committee included Lockheed Martin travel officials Claudia Bonetti and Mark Stansbury. Stansbury is a longtime proponent of the concept.

According to GTAC materials, Anthem director of travel and events Cindy Heston, also a committee member, in March 2014 joined the Lockheed Martin officials in making a presentation about rewards program provider Dinova.

A statement attributed to Dinova VP for enterprise partnerships Chris Froelich indicated the company was aware of the Defense RFP and “looking forward to participating in the process.”

Rewards Network did not respond to requests for comment. It facilitates the IHG “dine and earn” program among others. IHG is a key lodging partner to the Defense Department.


Dinova Boosts Dining Program With Personal Points

Defense Department Identifies Concur As Vendor For DTS Pilot

DOD Piloting New Defense Travel System, Asking For Travel Management Company Capabilities

With Its Replacement Under Consideration, Old Defense Travel System Gets New Lodging Capability

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

United States Requires Virtual Cards In Next Federal Payment Program

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Air Traffic Control Privatization Proposal Could Obstruct Long-Term FAA Funding

[UPDATE, June 8, 2017: Adds Global Business Travel Association statement, at bottom.]

Corporate travel constituents want a greater focus in Washington on FAA funding and the related issue of air traffic control modernization. The Trump administration on Monday proposed privatizing air traffic control. Hardly a new one, the idea drew lots of fresh criticism and questions from members of Congress and others.

Last year Congress failed to settle on long-term funding due in large part to controversy around ATC privatization and now some fear the same may happen again. FAA currently is operating on an extension, set to expire in September.

Sen. Jerry Moran (R-Kan.) on Wednesday asked Secretary of Transportation Elaine Chao whether she would “help us pass an FAA long-term reauthorization without the privatization provisions” if those provisions do not receive enough Congressional support. She said she couldn’t answer the question without consulting the White House.

Speaking during a Senate Committee on Commerce, Science and Transportation hearing, Moran said that “with the administration’s support of this concept, the chances of getting a long-term FAA reauthorization, in my view, have now been diminished.”

He added that Chao and the administration need to determine whether the nation’s priority is long-term FAA funding or ATC privatization, “because those two things may be mutually exclusive.”

Ranking committee member Bill Nelson (D-Fla.) said, “This entire discussion over ATC privatization distracts from legitimate matters that must be addressed by Congress” as part of FAA reauthorization. He cited “growing frustrations” among the traveling public and the need for stronger consumer protections.

U.S. Transportation Secretary Elaine Chao, former Transportation Secretary Elizabeth Dole, Vice President Mike Pence and U.S. House Committee on Transportation and Infrastructure Chairman Representative Bill Shuster (R-Penn.) join President Donald Trump as he signs proposed reforms to the U.S. air traffic control system at the White House in Washington, D.C., June 5, 2017
Image: Reuters/Jonathan Ernst

Eleanor Holmes-Norton has a similar opinion. Washington, D.C.’s Democratic delegate to the House of Representatives on Monday told attendees to an American Society of Travel Agents event that ATC privatization would require bipartisan support, and that seems unlikely. She is instead focused on funding FAA, and completing the necessary legislation this month or next, “so we’re not stuck at the last moment trying to get a reauthorization done.”

Holmes-Norton is not optimistic about that, either. “I don’t even think we’ll get our appropriations through,” she said.

Why do President Donald Trump, House Transportation and Infrastructure Committee chair Bill Shuster (R-Penn.) and many others favor ATC privatization? According to a White House statement on Monday, FAA’s ATC function is plagued by federal bureaucracy that slows implementation of new technology. Advocates think a non-profit, non-governmental entity can fix that. The White House pointed to what it said were successful ATC privatizations in dozens of other countries.

FAA would maintain regulatory and oversight functions. The new, separate entity would be “more nimble” in implementing NextGen ATC technology meant to modernize and relieve airspace congestion, thereby cutting delays and saving on fuel. It would improve safety and “protect access to rural communities,” according to a White House statement. Such an entity would “insulate” ATC from political wrangling and “the crippling effects of budget uncertainty.”

Chao said privatization is necessary “to accommodate the expected dramatic increase in passenger traffic over the next decades.”

Asked for a short answer on the rationale, Chao said: “We can procure new equipment faster. Government procurement rules are very bureaucratic.” Committee members pointed out that FAA is exempt from federal procurement regulations. Chao said that hasn’t made much difference.

Current aviation taxes supporting ATC would go away in favor of system user fees collected by the new entity. It would be overseen by a 13-member board consisting of constituents across the aviation industry, two of whom would be from commercial airlines themselves.

Committee members argued that the United States has the safest aviation system in the world. “Why would we risk that by handing the whole thing over to an untested, unproven entity?” Nelson asked. “Why give away billions of dollars in government assets that would be governed in large part by the airlines?”

Sen. Ed Markey (D-Mass.) and other members wrapped in recent, high-profile airline IT outages. “If they can’t upgrade their own IT systems, if they can’t figure out how to do it for their own passengers,” Markey said, “to give them the key seats on this kind of board — given the record of safety of the existing system — would be sequentially wrong.”

Committee members also questioned why a private entity, run in part by airlines, would protect smaller and rural communities.

Sen. Maggie Hassan (D-N.H.) raised the privatization concerns of 115 mayors who worry that it’s already hard to attract commercial airline service.

Sen. Gary Peters (D-Mich.) said “it seems inconsistent” that the president’s budget cuts the Essential Air Services program while the administration asserts privatized ATC run in part by profit-minded commercial airlines would look out for rural communities.

He asked Chao, “How do you square that?”

Chao responded by saying “they are two separate issues.” While she “can defend” that cut in EAS funding, Chao said “the decision was made when the administration was just staffing up.” She also said that removing ATC from the federal government would mean “budgeting certainty” that would help rather than hurt rural America. And she reiterated that commercial airlines would hold just two of the governing board’s 13 seats.

Another criticism is that basing a proposal on other countries’ experiences isn’t a sound approach.

During the committee hearing, Sen. Tammy Duckworth (D-Ill.) said, “We are not Canada, we are not Great Britain.” She called privatization “costly and potentially dangerous.”

Chao said the administration recognizes that each country is different, and that the U.S. airspace is the largest and most complex in the world. “Nevertheless,” she added, “there are lessons to be gleaned from the experience of other countries.”

At the ASTA meeting, Holmes-Norton said Congress is “not in the business of reviewing fees, so there is great concern about who would, in fact, speak for the public if there was no Congressional review” of what the new entity charged. “How would that work?” she asked. “These are among the issues that haven’t even begun to be discussed in the way they would have to in order for privatization to proceed.”

Holmes-Norton also threw cold water on NextGen implementation. “FAA says major functionalities of NextGen will be online in Jan. 2020,” she said, referring to the switch to GPS from radar-based systems. “That date, of course, cannot be made. We are too busy with all the moving parts.”

“Friends, NextGen is a fraud,” said airline consultant Mike Boyd, also speaking at the ASTA event. “Look at any Government Accountability Office report. Any DOT Inspector General report. It all says it’s mismanaged. It’s misdirected. It doesn’t have a clue. Doesn’t say anything about money. They haven’t gotten to the money problem yet. It’s just a clueless program. In 1994 myself and another company studied ATC. FAA came to [Congressional] hearings and said they’d have this program fixed in 2000. Now they’re saying 2020. Santa Claus and Elvis will be back before that happens.”

Boyd added that privatizing isn’t the answer. “All you’re doing is privatizing incompetence,” he said. “I think what Eleanor Holmes-Norton brought up … was entirely accurate. You have to think this through before you do it. There are things that do work within the government. This might be one of them.”

Just don’t cite Canada as precedent. “There are more moose in Canada than people, and they don’t fly,” he joked. “So it’s a different story. I think we need to fix what we have rather than rushing off and privatizing it.”

Additional info: The Association of Corporate Travel Executives welcomed the privatization proposal “if this is what it takes to move the needle” on NextGen, but raised questions about ensuring a smooth transition and avoiding work stoppages.

According to the Global Business Travel Association, “creating a not-for-profit corporation to oversee air traffic control, in theory, does offer a remedy” to ATC’s current shortcomings. The Senate Commerce Committee “should consider the President’s proposal, or seriously seek other remedies to solve the problems that includes the concerns of the business traveler,” GBTA wrote.

Disclosure: The Company Dime has an event and research partnership with ASTA.

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Expensify Alleges Patent Infringement In Suit Against Smaller Expense Rival

Expensify sued expense management competitor Abacus Labs for infringement of receipt capture patents.

Expensify’s cap-donning and sometimes pugnacious CEO and founder David Barrett announced the suit on Friday “with no joy.” He claimed Abacus infringed “two of our most core patents surrounding receipt scanning and, most importantly, the automatic matching of the scanned receipt to a credit card feed.”

Innovations allegedly protected by the patents make up Expensify’s SmartScan technology, which allows users to photograph paper receipts such as “credit card slips, odometer readings and cash receipts,” according to the complaint. The software uses optical character recognition (OCR) to extract text from images and insert receipt data into expense reports. It also “analyzes that text to determine what portions correspond to the merchant name, amount, currency and date of the purchase,” according to Expensify. It looks for a currency symbol and if it doesn’t find one, uses a location-based default. It checks already-imported expenses to avoid duplicates.

“In nine years we went from nothing to being the second-largest and fastest growing expense management system in the world,” claimed Barrett’s Friday blog post. Abacus entered the market “late” in 2013, “forcing it to copy” SmartScan “in an effort to gain lost time,” Expensify alleged in the complaint.

Expensify indicated it has more than 4.8 million users at more than 700,000 companies and is growing by 66 percent annually.

Barrett committed to “using every legal tool at our disposal to compete as forcefully as we can.” Expensify filed suit Friday in the United States District Court for the Southern District of New York, located in Manhattan about two miles south of Abacus’ headquarters.

Abacus did not immediately respond to a request for comment.

Expensify CEO David Barrett

Expensify claimed Abacus product descriptions and marketing materials demonstrated the patent violations. Its products capture low-quality images of receipts using mobile phones, Expensify noted. They apply OCR to extract and auto-populate date, merchant and amount. If receipt data are not legible, Abacus uses “a second resource” — humans, Expensify guessed — who use card numbers, receipt amounts and vendor info to complete records. The Abacus software then classifies the type of receipt (for example, cash, personal card or corporate card) based on the gathered info, the complaint alleged.

A YouTube video purportedly further illustrates the Abacus infringement. It depicts the process of “associating the captured image with personal or corporate credit cards of the user and then scanning a plurality of transactions recorded in the financial accounts of the user,” Expensify’s attorneys wrote. “Abacus then compares the known information from the receipt with known information from the financial accounts. When Abacus finds an information match, it identifies the information that was undeterminable from OCR.”

It’s not clear whether those details distinguish Abacus’ activities from those of other expense software providers. Vendors including Concur, Databasics, Deem, KDS, Tallie, TravelBank and Unit 4 promote receipt scanning.

According to Chrome River documentation, the firm’s software “enables expense submitters to simply snap and send an image of a receipt into their expense report. From there, its OCR (optical character recognition) technology can automatically extract vendor, amount and date to automatically create and categorize expense items.”

ExpenseBot CEO and co-founder Ed Buchholz during an April 2016 interview acknowledged the existence of Expensify’s first patent, but questioned its breadth. “They do have a patent on a certain process,” he said. “I’m not sure the extent of it. Our counsel reviewed it and our process is apparently not overlapping.”

Coupa, meanwhile, talks about leapfrogging OCR technology with voice. “Just dictate: “$5 Starbucks today,’ ” said Coupa Software VP of strategy and product marketing Donna Wilczek during an interview last year.

PC Magazine last September published a review of eight expense systems, all of which it said use OCR to reduce manual data entry. The article mentioned Abacus but indicated “the products that glean the most data from receipt images are Certify Now and Xpenditure Small Business.”

“A lot of people do receipt scanning,” Barrett told attendees to the Global Business Travel Association convention last summer. “It’s relatively easy to about 70 percent accuracy, but if it’s only 70 percent accurate, that means you have to double check it and automation is very limited.”

Expensify in 2015 settled with competitor Nexonia a lawsuit claiming the latter violated Expensify’s SmartScan trademark. Included in Barrett’s emailed statement at the time:

“To address the elephant in the room since we’ve sorta cornered the market for patents involving mobile receipt scanning (which has since become a required feature for anybody in the expense management space), I’m often asked how aggressive we intend to get with them. The truthful answer is: I’m not sure yet, and I’d welcome your advice. Nexonia was an easy decision since they were an older incumbent who used mobile scanning and our trademark to close a new round of funding, which is obviously unacceptable.”

Nexonia is now a licensee of Expensify’s receipt scanning patents, which Barrett called a “weapon of mass destruction.” Other rivals could be licensees, as well.

Abacus markets itself as an expense report killer, just as Expensify has for years.

Abacus execs told The Company Dime in May 2016 that its software treats each receipt as its own expense item and thus eliminates the traditional notion of a “report” that must be “submitted.” This speeds up reimbursement. Those responsible for approving expenses submitted by large numbers of employees could sift and sort individual receipts, teasing out only those that require attention. “Forget the report,” said Abacus CEO and co-founder Omar Qari. “Here are the expenses that require your attention. We’ll auto-approve the $5 coffees.”

Here’s Barrett at GBTA last summer:

“Everything we do is about total automation to the point where you take a picture of the receipt, you put your phone back in your pocket and you never think of that receipt again. To the business traveler, no one thinks of the expense report. The grouping of expenses in the expense report is not interesting to them. It’s interesting to the finance team, but to the business traveler, they live one receipt at a time. So we give them that experience — one-receipt-at-a-time business travel. And that depends on super-accurate receipt scanning, and we’re the best in the business.”

Barrett said Expensify creates the report for travelers “automatically, according to the accountant’s design.” Is it a cash expense? Then there’s no reason to wait for anything less than daily reimbursement. Perhaps a traditional monthly report still is created, though automatically, to handle card statements.

“There are a whole range of algorithms that can scan an expense report to see if it’s good or not,” he said. “Maybe 48 of these 50 expenses are fine. Don’t even look at it! It’s a waste of everyone’s time to look at a $5 Starbucks receipt.”

In the interview two months prior, Qari bristled at an Expensify graphic depicting the expense management market with Concur, Certify, Chrome River, Expensify and Tallie as key players and Abacus as a lesser brand. (Dozens of other providers were not listed.)

“That’s highly inaccurate,” Qari said of the Expensify depiction. “They’re unaware of our features.”

In the same interview, Qari addressed the Expensify patents, its report-killing maxim and its longtime slogan about expense reports that don’t suck:

“It’s kind of hard to claim that OCR technology or anything around stripping data from a receipt is something that is patented. We don’t take that approach. Our approach is open. When we built something into iOS for swipe-to-approve expenses, we just open-sourced it.

“Making it not suck for employees is only part of it. What about admins? What about making it better? What about empowering you to improve your career [or the company’s position]?

“With Expensify, you have to create an expense and then create a report. If you turn it on, it auto-submits at the end of each day and it’s riddled with errors.”

In its suit, Expensify aims to recover lost profits and seeks a royalty “to be determined” at trial. Attorneys argued Expensify also is entitled to pre-suit damages. They requested a permanent injunction enjoining Abacus from infringing the patents.

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What’s A Business Traveler’s Time Worth?

U.S. authorities this week said an expanded “laptop ban” is “still on the table.” A prohibition on large personal electronic devices in passenger cabins on all transatlantic flights would decimate productivity. The International Air Transport Association estimated the impact at $1.1 billon annually. How did it come up with that number?

Moreover, do corporate travel managers work out how much productive working time travelers lose in transit? Should they? Such questions relate to reimbursement policies on premium class, Global Entry, airport lounge access and inflight WiFi. They call to mind the bigger-picture ROI of travel.

IATA’s $1.1 billion figure includes $655 million from the “loss of productive time of business passengers.” Those are defined as first- and business-class passengers on Europe-U.S. routes. Using a “conservative estimate,” IATA reckoned that half of them used personal electronic devices to work in-flight. They did so for five of an average nine hours per flight.

To convert all those hours into dollars, IATA relied on the U.S. Department of Transportation’s “recommended hourly values of travel time savings.” VTTS, in turn, is based on average U.S. worker compensation as measured by the U.S. Bureau of Labor Statistics. DOT’s 2016 number (based on 2015 data) for business air travelers was $63.20 per hour. IATA adjusted that up to $64.60 to account for the 2016 U.S. Consumer Price Index.

Industry consultants said companies should try to put their own numbers on traveler productivity but suggested it’s not a very straightforward exercise. Some found IATA’s approach interesting but took issue with the assumptions.

Why only premium-class travelers? It’s not comfortable to do so, but plenty of business travelers work on laptops in economy cabins. IATA said it was being conservative in an attempt to not overstate the potential impact. An analysis by an individual organization would likely include all its transatlantic business travelers, regardless of class.

Why five hours of lost time? Laptops or no, some travelers prefer to get as much shut-eye as possible en route to arrive refreshed, rather than working during the flight.

Why base hourly estimates on employee salaries? “Value is in the eye of the beholder,” said KesselRun managing partner Brandon Strauss. “I’d love to see more thought around how the value of an employee’s time should impact corporate policies, but there needs to be a lot more analysis than just $64 per hour multiplied by five hours.”

value of timeThe roughly $300 total is too low, Strauss said, because it doesn’t account for “the output of that work” and the “relative value” of that employee. In other words, if the value of that trip was “only” $300, he reasoned, the traveler shouldn’t go.

Consultant Scott Gillespie of tClara, who has helped popularize the term “traveler friction,” said companies “absolutely” should do some kind of calculation to value their employees’ time. Though he said IATA’s $64 per hour estimate is a reasonable basis for this analysis, he also argued that a business traveler’s time is worth more.

Rather than crunching salary data, Gillespie advocated looking at gross profit per employee. For many big companies, he said, that equates to a figure several times higher than an employee’s compensation. “You should look at what a road warrior is doing for the business,” Gillespie said, pointing to revenue-generating salespeople as an example. When time is lost, “you therefore have to look at what is not getting done.”

On the other hand, Andy Menkes of Partnership Travel Consulting noted, not all employees are profit-producers. He also pointed out that a senior-level exec who flies in premium class probably makes much more than $64 per hour. He said to gauge the value of time, companies should look at the demographics and specific compensation for their travelers, and the purposes of their trips.

PricewaterhouseCoopers explored this topic when Mark Williams was managing travel there in the 1990s and early 2000s. He said compensation was just one of three numbers considered. The others were the hourly rate at which the company billed customers and the average collection rate. The latter, pegged at about 80 percent of the billing rate, accounted for instances when clients didn’t pay in full or the engagement extended beyond any pre-arranged fixed fee.

Now partner at GoldSpring Consulting, Williams said the impetus at PwC was assessing whether flight connections made sense, economically, as a policy parameter rather than nonstops. “It didn’t,” he said.

Williams said he’s not aware of many companies that calculate the value of travelers’ time. He thinks they should, and the big question is determining which dollar amount to use. He suggested starting with the “fully loaded wage cost” (compensation, plus benefits and taxes) and adding some type of premium to recognize that an employee’s value is greater than his or her compensation. What that premium should be, exactly, would vary from one organization to the next.

Williams also pointed to the age-old question of whether, for the purposes of billing, travel time should be included. He said PwC didn’t charge for it unless employees actually were working in transit, while other professional services and law firms include travel time regardless, “even if they’re watching a movie.”

According to consultant Tom Ruesink, companies talk a lot about assessing trip value but he’s seen few do the “heavy analysis in-house as there are a lot of subjective factors to value.”

But Ruesink said companies usually think about such things when they examine class-of-service policies. “The biggest factor now is rest on long-haul flights,” he said. “Does a traveler get more rest in the business cabin and therefore can be more productive when they hit the ground? The cost of time discussions are usually much more observational and less quantifiable.”

Carlson Wagonlit Travel is one that has tried to put hard numbers on the concept, using worker salaries to do so.

In 2012 it introduced the Travel Stress Index. It determined that travelers lose an average of 6.9 hours of productive time per trip. That equated to $662 using an employee compensation benchmark of $96 per hour (including salary, benefits, etc.). According to CWT Solutions Group vice president Christophe Renard, the TMC settled on the weighted $96 figure by considering salary data by seniority level of surveyed travelers, the mix of those levels among travelers and their countries of origin.

Renard’s team has “run our TSI algorithm for some clients to assess the lost productive time of their travelers,” he said. “We used averages for salary data but indeed we can use a company-specific HR data feed to ensure this is a very accurate estimation for that company.”

IATA also estimated that an expanded laptop ban would mean a 9-minute increase in transatlantic travel times: five on departure (due to “the behavioral response of passengers to the additional screening requirements combined with the lost time that it takes to actually screen passengers on departure,” according to an IATA official); three on arrival (for travelers to retrieve their checked electronic device); and one for flight delays. IATA based those “conservative estimates” on observations from the initial laptop ban covering seven Middle Eastern and African airports.

Additional info: DOT has calculated the value of travel time savings (VTTS) on and off since 1997. It said it does so because that value is “critical” for assessing infrastructure investments and rulemaking initiatives.

For business travelers in general, DOT’s VTTS “is assumed to be equal to a nationwide median gross compensation, defined as the sum of the median hourly wage and an estimate of hourly benefits.” For 2016 (based on 2015 data), it was $25.40 per hour.

DOT recognizes that a “distinct wage is justified” when considering air travel (or high-speed rail). The latest government data on that comes from a 2001 U.S. Bureau of Transportation Statistics study. According to the data, the median household income for business air travelers at that time was about $105,000. That was 2.5 times greater than the overall 2001 median household income, as per the U.S. Census Bureau. Applying that 2.5 factor to the 2016 general business traveler VTTS resulted in an hourly business air traveler VTTS of $63.20.

It was $60.70 in 2015, $60 in 2014 and $57.20 in 2011. DOT calculated VTTS in 1997 and 2003 using a different methodology.

These are averages; DOT recommends applying a one percent increase in VTTS per one percent increase in the travelers’ income.

Airlines affected by the initial laptop ban, according to IATA, reported that about 15 percent of all flights were delayed by an average of seven minutes. Using DOT’s calculation of $47.10 for the average value of travel time for all airline passengers (adjusted upward to $47.20 for the 2016 CPI), IATA’s bottom-line annual impact for this component is $216 million.

The remaining $195 million impact in IATA’s $1.1 billion estimate relates to laptop rental costs. IATA assumed 80 percent of passengers normally carry large personal electronic devices, and that half of them normally use them during flights. It used a “conservative estimate” for tablet and laptop rentals, excluding delivery and insurance costs, of $18.50 per day.


Business Travel’s Personal Toll: Identity Threat Or Reality Check?

Podcast 2: Christa Degnan Manning, Norm Rose, Bhart Sarin

Teleconference 4: Cost Vs. Comfort

Messy Handling Of Global Entry Eligibility Mirrors Wider Chaos Following Executive Order

Travel Friction And The Diminishing Returns Of Cost Savings

‘Laptop Ban’ Prompts Review Of Travel, IT Policies

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

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Teleconference 12: Corporate Airline Relationships

Corporate Airline Relationships
Sept. 14, 2017 at 12 pm EDT
Register here.
Gift a ticket here.

There’s rarely a dull moment in the world of airlines. It’s a supplier segment that underwent radical changes in the past decade, from mergers and joint ventures to new business models and all sorts of new approaches on pricingproduct and distribution. Some things, though, don’t change. Big airlines want more than their fair share of the market from lucrative corporate accounts. Buyers want favorable pricing, attentive account managers, preferential treatment and whatever comforts and conveniences they can get for their travelers.

We’ll convene an expert panel to discuss how both sides are approaching their relationships in the current environment. It will include American Airlines’ managing director for strategic account sales Hank Benedetti, GoldSpring Consulting partner Neil Hammond, Microsoft global travel sourcing manager Diane Lundeen Smith and more speakers to be announced soon.

tcd-teleconference-featuredReserve your dial-in spot now for only $10 (price subject to change). Limited tickets available!

Add to your calendar here.

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Questions or concerns? Got ideas for what we should ask the speakers? Email us.

It’s our twelfth Teleconference, Sept. 14 at 12 pm EDT. Join us.

Find information on other upcoming Teleconference episodes and download previous ones here.

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Teleconference 11: Introducing Blockchain

Introducing Blockchain
Aug. 10, 2017 at 12 pm EDT
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What the heck is blockchain? Tune in as we chat with innovators including Brook Armstrong from Blockskye to learn more about this potentially impactful technology.

It has infrastructure and acceptance challenges. There’s a learning curve. It’s tied up with cryptocurrency’s fits and starts. But when you get to know it, blockchain emerges as a possibly disruptive force in contracting, payment, traveler identity and maybe even travel distribution.

This summer we’ll take you through a blockchain primer and discuss the latest news.

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It’s our eleventh Teleconference, Aug. 10 at 12 pm EDT. Join us.

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Teleconference 10: One-On-One With BCD Travel President And CEO John Snyder

One-On-One With John Snyder
July 13, 2017 at 12 pm EDT
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Gift a ticket here.

Is there a more important travel service provider to large corporate, education and government organizations than travel management companies? Many would say no, and yet the role of the TMC is constantly challenged. New technology, supplier models and traveler demands complicate the already difficult task of meeting procurement’s focus on cost control.


BCD Travel CEO John Snyder

To discuss these and other big-picture matters, we’ll welcome BCD Travel president and CEO John Snyder to this Teleconference series. With assistance from attendees and co-host Paul Tilstone of Festive Road, Jay Campbell will interview Snyder about all things travel management.

Reserve your dial-in spot now for only $10 (price subject to change). Limited tickets available!

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tcd-teleconference-featuredQuestions or concerns? Got ideas for what we should ask the speakers? Email us.

It’s our tenth Teleconference, July 13 at 12 pm EDT. Join us.

Find information on other upcoming Teleconference episodes and download previous ones here.

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