Online Managed Travel in Today's Marketplace

Transcription

1 SMART MOVES FOR SMART BUSINESSES: Online Managed Travel in Today's Marketplace White Paper Developed and Written by ProMedia.travel Custom Publishing in Partnership with nutravel Technology Solutions

2 Contents 1. A Case for Savings Historical Framework Tailoring Solutions Connectivity Key Benefits What to Look For Access to Inventory Administrative Control Service Data Security and Integrity 7. Conclusion Bibliography

3 A Case for Savings As travel prices skyrocket in virtually every category, smart businesses are exploring any angle that reduces their expenses. Increasingly, they are turning to an indispensable piece of technology: the corporate online self-booking system. By enabling travelers to make reservations on their own, companies can save as much as 80 percent on agency booking fees. But even more important, they can shave as much as 20 percent off average airline ticket prices because of a phenomenon called visual guilt. According to The Wall A recent survey by the Business Travel Research Centre of Cranfield University found that companies save 25% on travel agency fees and 9% on airline tickets. Street Journal, visual guilt pushes business travelers to opt for cheaper choices than corporate travel agents or administrative assistants would book... because they saw lower prices on an online booking screen. Online bookings average about $80 less than comparable agent bookings, according to the Journal report. About $20 of that comes from the cheaper fees for self-booking as opposed to paying an agent; the other $60 is the bonus from visual guilt. With an average ticket price of $ , savings can be substantial. A recent survey by the Business Travel Research Centre of Cranfield University found that companies save 25% on travel agency fees and 9% on airline tickets. Self-booking tools also help companies negotiate better with travel suppliers, provide point-ofsale policy control and improve traveler service through self-control and all-day access, among other benefits. Business travel is hectic enough. The last thing road warriors need is to have to worry about things for which travel professionals are responsible, such as where to find the best fare. Yet, the travel industry and its systems are vastly complex. Travel management operations already include a multi-faceted set of information technology systems run by travel agencies and suppliers, requiring that tools meant for users are both simple on the front end and capable on the back. To make it all work, corporations require simply designed, fast and powerful travel-booking tools that seamlessly integrate with the multiple travel management systems, administrative functions, payment mechanisms and customized solutions. HISTORICAL FRAMEWORK Businesses began testing versions of tools that accessed live inventory and issued tickets as long ago as the early 1990s, around the same time they started automating such other areas of their enterprise as expense reporting. Today, more than 90 percent of all tickets in the United States are issued electronically, which also saves processing costs relative to using paper. The growth of electronic tickets, since their introduction by major airlines in 1995, was both an enabler and a beneficiary of online booking. Parallel to increasing e-ticket acceptance among road warriors and managers over the past ten years, interest in such enterprise software tools 1 Average 3rd Quarter 2006 Domestic Fares - Bureau of Transportation Statistics 3

4 as expense management, groupware and corporate Intranets continued to grow. Corporations that began automating other areas of their employee relationships, from benefits to company directories, at the same time turned an eye to travel in search of benefits including transaction cost savings, improved policy compliance and traveler empowerment. A WORD OF CAUTION - The travel industry s technology goes back as many as 40 years, meaning some systems are inflexible to changing needs ONLINE MANAGED TRAVEL REVENUE IN $ BILLIONS and can be expensive to modify. As such, today s businesses should require a user-friendly tool that can bring information from these complex systems of airlines, hotels and car-rental companies to the computer screens of their travelers in a way that s easy to understand. Above all, systems must be geared to support business missions. Selecting the right management and technology partners is critical. TAILORING SOLUTIONS Forecasts and averages may be helpful in painting an overall picture, but nobody actually works for the proverbial XYZ Corporation. In many environments, solutions tailored to meet your specific needs are critical Travel management operations already include a multi-faceted set of information technology systems run by their agencies and suppliers. Thus, integration Air Hotel Car Source: Jupiter Research Above all, systems must be geared to support business missions. Selecting the right management and technology partners is critical. What do best practice companies report they are able to achieve after undertaking improvement initiative today? asks a recent Aberdeen Group study. The answer: More peace of mind that they are working with the right suppliers and seeing improved quality of service, [leading to] sustained savings and more strategic business relationships. 4

5 CONNECTIVITY Corporate travel environments contain complex ticketing, quality control, consultative and other systems designed to help firms manage travel budgets and counter travel suppliers complicated pricing and scheduling systems (which confuse travelers and can alter business costs). As a result, corporate booking tools need to be nimble. Study after study shows that when travelers are shown a list of many options, they choose less expensive airline tickets and hotel rooms. They need to be able to connect to multiple sources of inventory, as airlines and other travel suppliers have diversified the channels into which they place fares and seats or rates and rooms. While integration with legacy inventory systems remains the primary method through which booking tools do what they do, newer systems like FareLogix and G2 SwitchWorks have emerged. In certain cases, such as with G2, these newer inventory sources benefit from substantial support from suppliers because G2 and others like it offer travel sellers lower costs of distribution than the traditional GDS systems. In addition to fare and rate content, there are a number of functions that require seamless integration. For travelers, few aspects of making bookings are as important as the correct insertion of their traveling preferences their payment method, loyalty program numbers and seating preferences. Other important forms of integration include the dissemination of real-time flight information and connections to expense management systems. KEY BENEFITS It boosts the bottom line Study after study shows that when travelers are shown a list of many options, they choose less expensive airline tickets and hotel rooms. One large corporation slashed its $10 million annual hotel tab by $1.5 million as travelers chose slightly less expensive rooms than those the travel agency typically offered. When Thomson Corporation rolled out an electronic booking system, its average ticket price fell by $28. At Lucent, the average ticket price fell by 26%. Citibank reported lowering fares by 20-25%. The New York Times calls this phenomenon traveler s guilt -but companies call it bottom-line savings that quickly add up. Savings are realized in many different forms. Online booking systems can also save corporations on booking fees. With a saving of approximately $20 per ticket it does not take long to realize significant cost reductions. Most travelers love it Improved Employee Productivity Some things are just too important to leave to other people. When your travelers are far from home, having the right seat on the right airline can make all the difference in keeping them upbeat and comfortable focused on the mission at hand rather than the long road ahead. Most travelers appreciate the control that comes with seeing all the options and making their own travel selections. And with 24/7 access, travelers can go online anywhere and anytime to make their reservations or check their itinerary. 5

6 Safety and security. Online booking keeps privileged information about your executives and employees safe within your company s firewalls, safe from the prying eyes of hackers, phishers and competitors. Increases use of preferred suppliers and travel policy compliance In a recent survey, 76% of business traveler managers said providing an online booking tool is the best way for companies to get their travelers to comply with corporate policies and to use preferred airlines, hotels and car-rental companies. Online booking systems can be set up to highlight the suppliers who give you discounts, or even to prevent travelers from making reservations at other hotels and airlines. They also can send alerts to managers whenever a traveler tries to go around the rules - a simple step that s usually all it takes to insure that every traveler does the right thing. CONCLUSION Today, the use of self-booking tools continues to grow in the managed travel marketplace. A recent PhoCusWright survey found that online corporate travel sales have been growing by 25 percent a year since 2003 in the United States. What to look for in an online booking system: Access to inventory Is it independent of travel suppliers, so that there is no bias in the choices it offers your travelers? Does it show extra additional options, such as discount airlines like Southwest or Jet Blue? Can it display your negotiated corporate rates and your preferred suppliers? Can travelers search for hotels by location within each city? Are bookings made in real time? Administrative Control Can the system easily load your corporate policies and preferences? How does it handle traveler profiles? Can it upload them automatically? Are they complete? Do they include frequent traveler programs, preferred payment mechanisms etc? Can you customize the look and feel of the system to your specifications? Service How fast is the system? Is it easy to use? Are there drop-down menus and easy-to-follow steps? Can your travelers access it 24x7, in the office or on the road, so they can make or change plans at their own convenience? Can they connect to a real person when they need help making a booking or getting information? Can the help desk access their actual reservation, see just what the traveler sees and make changes that will be reflected immediately? Data security and integrity Can you keep your corporate profiles onsite in your own company, where no outsider can access it? Can travelers go into the system and change their preferences? Can you easily add and delete travelers as employees join or leave your company? Can you save your company money by capping the amount travelers can spend or limiting the class of service they can book? 6

7 More than 40 percent of all managed corporate travel will be booked online next year. The Travel Industry Association of America reports that 30 percent of online travelers are business travelers. Jupiter Research predicts the online managed travel market would double, from $15.1 billion in 2005 to $31.5 billion in To successfully ride this wave, businesses need the right management and their selection of technology partners is crucial. What do best practice companies report they are able to achieve after undertaking an improvement initiative today? asked a recent Aberdeen Group study. The answer: More peace of mind that they are working with the right suppliers and seeing improved quality of service... [leading to] sustained savings and more strategic business relationships. Bibliography McCartney, Scott. Exploiting Travelers Visual Guilt. New York, NY: The Wall Street Journal, July 25, Cannizzaro, Michael. Online Travel Overview Fifth Edition. Sherman, CT: PhoCusWright, Estis Green, Cindy. Cook, Dr. Suzanne D. Travelers Use of the Internet, 2005 Edition. Washington, DC: Travel Industry Association of America, Clarkson, Diane. Sehgal, Virkram; Daniell Wigder, Zia. U.S. Travel Forecast, 2005 to New York: JupiterResearch:. Business Travel Research Centre, Cranfield University. A Study on the Adoption of Corporate Self-Booking Tools. September 2006 custom publishing 181 Westchester Avenue Suite 302 Port Chester, New York ph fax 7