2015 Global Corporate Travel Overview and Trends Partnership Travel Consulting

Transcription

1 2015 Global Corporate Travel Overview and Trends Partnership Travel Consulting November 11, 2014 Presentation Copy- Not for distribution

2 Partnership Travel Consulting Phil Dunphy Tom Kallas Andrew Menkes

3 Strategic Partners» Payment Systems» TMC» OBT» Expense Systems Preferred Supplier» Airline» Hotel» Car Rental» Meetings DMC s» Ground Transportation

4 4 Airlines Hotels Car Rental Meetings Payment & Expense TMC & Technology Airfare Preferred Property Car Company Liquidated Damages Card Used Preferred TMC Class of Service Upgrades Room Category Room Charges Car Type Refueling Audio Visual Charges Meals Use of Card Payments Online Booking Tool Fees Frequent Flier Bias Comps Mobile Routing

5 5» Founded in 2000, in New York City, with Consultants based in the US, UK, EMEA and APAC» Subject matter experts in business travel program optimization» Prior management positions with: Air France, American Express, Avis Budget, BCD Travel, BTI, Bristol-Myers Squibb, British Airways, Daimler, Eos Airlines, Expedia, IVI Travel, Lufthansa, Mitre, Open Skies, Pan Am, Pfizer, Republic National Bank, Rosenbluth, System One, TWA, United Airlines, Wal-Mart» PTC s business model is focused exclusively on Corporate Travel and we service more than 20 of the BTN top 100 companies

6 6 Andrew Menkes Phil Dunphy Tom Kallas Tanya Racz Duane Futch Tom Stone Brigitte Jakubowski Steve Armstrong Don Murphy 300+ years of travel industry experience Mark Williams

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9 Ancilliaries 9

10 15 Regulation Deregulated New Era Industry Cost of Capital Industry Avg. ROIC F ROIC calculated using consensus estimates for EBITA margin and assuming constant capital turnover and taxes relative to 2013 Source: McKinsey corporate performance analysis

11 major carriers with approximately 90% of the market share 4 major carriers with approximately 87% of the market share

12 Source: IATA

13 For every airline industry costs increase by $1.6 billion annually. increase in oil price Source: IATA Fuel has added $70 billion in industry costs since 2010

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15 Page 15 Companies Needs Employee Needs Regulate/Monitor T&E policies and compliance Limit cash expenses Streamline expense reconciliation process Manage spend globally and negotiate vendor discounts Acceptance, everywhere Streamlined expense reporting & payments Adherence to T&E policies Travel assistance services Business Travel Accident Insurance 15

16 Corporate Card Program Highlights Manage globally Maximize control Drive savings Benefit employees Will support the successful and timely rollout of automated expense management tool and migration to Shared Services Ensures all colleagues have access to an appropriate payment tool program around the world, Standardization and alignment of global processes and payment solutions Supports a Global communications plan to include procedures, policy, and processes that streamline the financial process, thus reducing risk and cost. Drives compliance Supports a client defined hierarchy to enable global divisional level reporting and transparency of spend Initiated wide-spread project to identify appropriate payment solutions to capture an report on spend DATA globally includes participation from company. Corporate card provider and online management tools. Supports the streamlining of reporting to maximize efficiency of company processes Insights to spend and categories to help provide a purchasing decisions modeled and enhanced by spend data Maximize global cash incentive levels Drove compliance with Corporate Card usage through the development of specific country targeted programs Utilized a wide range of data available to negotiate contracts and monitor contract compliance Minimize delinquencies in individually and central billed accounts through ongoing monitoring and communication with responsible individuals Developed reconciliation guide for card members Provide dedicated customer services through Pfizer-dedicated Amex staff Provides door to door Business Travel Accident insurance Utilized fee free Premium card issuance Supported colleagues during Shared Services migration Membership Rewards Program if allowed by Company Minimizes Risk, Fraud, and noncompliance

17 Page 17 $69 per transaction saved and 68% reduction in procurement cycle time By using corporate/ purchasing cards instead of checks companies save time and money Source: Accounts Payable Network, Key Accounts Payable Benchmarks, 2009

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22 Page 22 56% increase in expense report efficiency Automated expense reports integrated into back-end accounting systems provide significant organizational efficiencies Source: Corporate Travel Card Benchmark Survey Results; RPMG Research Corporations

23 » Traditional Well established. Buyers still seeking nirvana for price and service» OBT Established based on generational gaps. Never reached the potential market penetration predicted. Slow to develop, slow to adopt.» Mobile In 2012 mobile reached 5% of online booking transaction. That was a 166% increase YOY. Expect to be nearly $40B in (source PhoCusWright) 23

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26 » PhoCusWright conducted an online survey of more than 2,000 travelers who had taken at least one trip in the preceding 12 months and found that 32 percent of "mobile web users researched air options, while 14 percent made a reservation" on their mobile device.» Mobile's position as a point of sale has yet to mature, but it's coming of age. PhoCusWright projected that airlines last year generated $2.7 billion from bookings through mobile devices, representing 5 percent of online transactions. "Mobile provides a compelling opportunity for airlines to foster direct relationships with travelers.» Carriers have focused on delivering to consumers what United Airlines executive vice president of marketing, technology and strategy Jeff Foland called the "right offer, right time, right place, right price." Mobile increasingly helps accomplish that, he said.» Eighty Three (83) percent of airline respondents to its survey "have the ambition to sell ancillary service on smart phones by

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28 Defining Social Media Broadcast Media We tell you. Interactive Media Tell us what you think about what we tell you. Social Media Tell each other.

29 900, , , , , , ,000 Top Impact Points of Social Media 1. Increased Brand Recognition.. 2. Improved brand loyalty. 3. More Opportunities to Convert. 4. Higher conversion rates. 5. Higher Brand Authority. 6. Increased Inbound Traffic. 7. Decreased Marketing Costs. 8. Better Search Engine Rankings. 9. Richer Customer Experiences. 10. Improved Customer Insights. 80,000 65,000 42,000 29

30 NDC is a travel industry-supported program (NDC Program) launched by IATA for the development and market adoption of a new, XML-based data transmission standard (NDC Standard). The NDC Standard will enhance the capability of communications between airlines and travel agents and will be open to any third party, intermediary, IT provider or non-iata member, to implement and use.

31 Airline Airline Product differentiation Marketing the richness and uniqueness of airline products Marketing personalized offers Agent Access to full and rich Content Compare flight products based on schedule, price AND value Work with real-time product and fare data Customer Transparent shopping Deliver the right products at the right prices Offer each traveler the opportunity to shop based on what they value be it anonymous or personalized

32 AREA Airfares Transaction Fees Hotel Car Rental Corporate Cards Policy TMC Data Meetings FOCUS Ticket accuracy (not PNR quotes) # of Transactions, No Touch Application of corporate rate, commissions, rate loading, squatters Commissions, Upgrades, Refueling Direct-bills, double-payment, personal Use of preferred suppliers Staffing, Revenues, Expenses = Invoice Integrity, Protection, Resale How much time to you have????

33 Benchmark vs. RFP 1. Speed and cost of project 2. Validate assumptions 3. Will to change 4. Price 5. Service configuration 6. KPI s and SLA s 7. Revenue validation

34 » Cancel for cause/convenience» Conditions surrounding commission return» Industry Change clauses and revenue transparency

35 Highest Lowest Agent Productivity Adoption Rates Compliance Levels Ticket Accuracy Average Expense Report Transaction Cost Talk Time Cost Per Mile Turnover Customer Service Issues

36 » Airline» Hotel» Car Rental» Meetings» Charge Card» Travel Agency» Ground Transportation

37 » Policy» Compliance Channel Rate Room Type» Per Diems» Value-Add Services» Live Directory

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40 » Limos» Black Car» Yellow Cab

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42 The travel policy is a living document that is readily accessible to all employees; travelers, travel-arrangers and travel enablers. The policy clearly communicates the Travel Purchasing System and the reasons behind the decision. The travel management company assists in policing the policy, but the ultimate tool is corporate responsibility and the expense reporting system.

43 » Employees can book travel from any source they want» Employees can fly any class of service they want» Employees can book any airline they want» Employees can stay at any hotel of their choosing» Employees can rent any car type they want from any supplier» Employees can use their own person credit cards to get triple mileage» Employees can fill out their expense reports whenever they have time to do so

44 » Has not been updated in several years» Is not easily found on the company intranet» Is not required reading for new employees (especially those who travel on company business)» Has not been adequately communicated to the company approved travel agency (Travel Management Company)» Is not enforced prior to commencement of travel» Is loosely and/or randomly enforced in the major spend category areas of airfare, hotel, car rental

45 TMC s manage the majority of the Corporate Travel 100. PTC will ensure that there is a mix of bidders, to include OTA s and Regional TMC s 45

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47 Performance Analysis & Contract Audit Innovative Practices & Effective Policies Integrated Enabling Technologies Global Consolidated Data Repository Discount Programs & Negotiation Strategies Optimal Preferred Supplier Base Segment travel directives that accelerate savings through: 1. Policy and service level agreement compliance 2. Rationalized supplier base 3. Pricing and contract deals 4. Traveller, supplier, and sourcing organization productivity Travel Industry Trends & Influencing Drivers

48 2015 Global Corporate Travel Overview and Trends Partnership Travel Consulting November 11, 2014 Presentation Copy- Not for distribution