The dynamic world of corporate travel keeps all involved on their toes. It’s not just the nature of travel — delays, cancellations and a multitude of other complications. It’s also the business of travel. Travel management practitioners must consider how new processes, evolving supplier strategies and emerging technologies impact their programs. As such, Brandon Strauss of KesselRun Corporate Travel Solutions has some homework for you during the year-end period.
Year-end projects are winding down, annual budgeting is wrapping up and travel is tapering off as employees start taking their use-it-or-lose-it PTO. That’s why you should find time to take a breath, step back and thoroughly review your corporate travel program. I know how hard it is getting out of the weeds sometimes, but with all the changes underway in the industry, as well as those looming on the horizon, it is imperative that business owners think strategically about their travel programs. The burden ultimately rests on you, not your suppliers, to craft the strategy and implement it throughout the organization.
Let’s be clear. Our airline, car rental, hotel and travel management company suppliers are our friends. The relationships are symbiotic. That said, when you consider supplier strategy — particularly in light of significant industry change — corporate goals do not always align. We’ve been down the GDS disintermediation road many times before, but this time corporate travel buyers have more buying options (including supplier direct sites) and powerful data aggregation tools at their fingertips. While some TMCs may argue that NDC is not fair to the corporate buyer, I think fairness rests in the eye of the beholder. The spoils go to those who think and plan strategically about their corporate culture, goals and program disposition.
As part of your year-end review, make sure your travel policy is not silent on issues such as ride-sharing and booking sources. We have seen dramatic increases in Uber and Lyft bookings (often outside of policy) at the expense of one-day car rentals. It’s been an even bigger loss to taxis. The cost/benefit may or may not be measured in dollars alone — the ride-shares tend to be more comfortable, easier to access and, in many cities, less expensive than renting or taking a taxi.
Airbnb is another option used by organizations today. It should be audited internally. Depending on your organization’s booking habits and locations, this may or may not be a good alternative from a security perspective. Many of KesselRun’s clients embraced the solution in certain circumstances but only after the properties were well-vetted. Other clients strictly prohibit Airbnb because they feel it creates undue risk relative to their duty of care policies. While the shift to the sharing economy has benefits, it’s worth noting that it can impact your bottom line by diluting preferred vendor programs.
In terms of booking sources, the recent trend of removing inventory from the GDSs (as Lufthansa did) will only continue, particularly as NDC gains more traction in the short term. Virtually every supplier has a singular goal to increase visibility on their websites, and direct bookings are core to this strategy. How you book as an organization should be carefully considered. Recognize that in today’s environment the probability that your “off channel” bookings increase is more likely than ever.
As many in the United States consider alternative booking sources and modes of lodging and transportation, data security in Europe tightens. If your organization has a European footprint, GDPR is playing a major role in how EU citizens procure travel. In our experience, companies approach the issue in a number of ways. Some take extreme caution, others work through local workers’ councils to gain required approvals while conducting business as usual.
Perhaps an even bigger challenge will come in September 2019 when two-factor credit card authorization becomes mandatory for credit cards issued in Europe. Our understanding at this time is that GDS and direct connect-based bookings won’t present this burden as these bookings are considered “non-Internet.” However, for those who book directly with a supplier, a two-factor authorization will be required with the authorization code coming by way of the traveler’s cell phone. What happens when a corporate traveler doesn’t have a corporate cell phone and doesn’t want third-party verification coming through their personal device?
Lastly, take a close look at your booking practices. Now, more than ever, we see evidence that it pays dividends to be a savvy shopper. This must be weighed against the time it takes to search deals, the adverse impact that “finding it cheaper somewhere else” may have on your preferred vendor programs and the inherent value of live agent support at a time when service everywhere in the industry seems to get worse.
With travel suppliers pushing for more visibility on their respective websites — including enticements for corporate accounts — the time to start thinking about what the future may hold in terms of how we negotiate preferred deals is now. In that way, you will be prepared for any challenges the new year might have in store.