Buyers Balk At Amex GBT Fee

By | October 19, 2016

Though some understand the rationale, corporate travel buyers don’t like the new American Express Global Business Travel surcharge on certain airline bookings.

Concerns go beyond the amount of the fee, which client communications indicate is $10 per transaction. Customers raised several other financial and operational questions. Speaking anonymously due to the sensitive nature of supplier relationships, some GBT clients said they are considering recourse.

A few said they expect the hit to be tens of thousands of dollars. Another described it as “a material cost” for the company. “I do not intend to pay a fee for GDS-participating carriers that aren’t part of the revenue pass-back scheme other carriers provide” to GBT, that travel manager said.

This gets into overrides. These are the payments travel agencies receive for volume on airlines. Sometimes that money is passed through to corporate clients. The Big Three U.S. carriers play heavily with overrides. Low-cost carriers really don’t, and those are the ones GBT’s surcharge targets.

Amex GBT fee

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Other questions relate to the mechanics of how clients will be charged. “Will it be invoiced as a separate line item that needs to be expensed by the traveler?” asked a veteran travel manager. “If so, that will require additional training and communication so that the fee is accounted for correctly. And if we can prove how much we’ve spent for that particular fee, will we end up creating policies to avoid those carriers? It will be very difficult to simply accept and bury yet another fee. They do add up.”

According to written statements attributed to GBT senior vice president and general manager for supplier relations Mike Qualantone, GBT is “working within the framework” of customer agreements to include the “high-cost booking charge to partially recover our incremental costs to process these bookings. In most cases, this means the charge will be within the invoicing and settlement processes.”

Paying the surcharge is one thing. Presenting it at the online and offline points of sale is another. GBT often is “prohibited from adding such charges to the airlines’ fares by the airlines themselves,” according to the written statements. In an interview with The Beat, Qualantone acknowledged travelers “may not see it on each booking on a comparative basis on faring.”

That travelers won’t have all the relevant information during the shopping process doesn’t sit well with clients. Travel Consulted’s Grant Caplan said a travel agency “should be telling the traveler there is an extra fee to book this airline. It’s disingenuous not to tell them.”

In online booking tools, a variety of triggers prompt pop-ups to inform travelers of policy violations, security risks and other scenarios.

“We would definitely put pop-ups in Concur to notify travelers” if GBT applies the surcharge, said one travel manager. “It’s just like we do if they try to make a nonrefundable hotel booking.”

Buyers with clout will try to avoid the surcharge altogether through negotiations. One said the company would switch agencies before paying it.

“If you have a lot of this kind of business, be concerned and try to restructure the financial terms of your travel agency deal,” Caplan said. “If you have very little of it, oh well, it’s a price increase, swallow it and move on.”

TCG Consulting senior engagement manager Pam Collins said affected companies should examine booking patterns. She “anticipates significant assessment and business case development on the part of organizations before agreeing to the fee surcharge proposed by GBT or other travel service providers.”

Collins also suggested travel managers may want to “design strategy for point of sale processing to cover ancillary charges to simplify expense processing and settle with the agency on a periodic basis.”

Meanwhile, Caplan advised travel managers to reconsider preferred airlines. When total costs increase, whether through fees and surcharges imposed by an airline or otherwise, it shouldn’t be ignored.

A buyer at one GBT client went the other way, saying the firm would consider allowing employees to book directly with airlines that otherwise would incur the TMC’s new fee. “We will still capture the data since it will be paid for on the corporate card,” according to the buyer, “and GBT will actually earn less rather than more.”

Travel managers at a few of GBT’s largest accounts said they hadn’t been approached by the travel management company on this issue. According to Qualantone, the company is “progressively enacting the charge” through discussions with all customers.

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