I AM LED TO UNDERSTAND that speaking out on hidden travel management company (TMC) fees in my previous column went down as well in some quarters as a hog-roast to wrap up an Arab-Israeli peace summit. I probably ought to upset a different part of the corporate travel community this time round, so why don’t we take a look at travel buyers?
A couple of months ago I interviewed a one-time travel manager who had recently moved on to another job. Rather contentiously, he ventured the opinion that some of his former peers deliberately over-complicate their work because they have too much time on their hands and need to look busy.
Crikey. Time-wasting is not a charge I have particularly heard being laid at travel managers’ doors before. However, what I do believe is that some tasks they have performed for many years are showing early signs of obsolescence.
A prime example is supplier sourcing. Take a look at airline negotiating. These days, short-haul is mainly a question of buying best-on-day and, as the US-based consultant Scott Gillespie pointed out to me, procurement can actually be involved in a conflict of interest here. If a purchaser is incentivised on negotiated savings, then it can be in their interest for a traveller to pick a £200 British Airways fare discounted from £250, whereas it is more in the budget-holder’s interest to pick a £150 Easyjet fare with no discount.
Then there is long-haul. Here, the problem is supplier consolidation. Joint-ventures and mergers mean there are now fewer airlines to choose between on any given city pair. Carefully constructed patchworks of route deals with numerous carriers are slowly giving way to one-size-fits-all deals with a couple of big players, and maybe a handful of regional independents to fill in around the edges.
On top of all this is the hot topic of consumerisation of business travel: giving travellers more self-determination over with whom and how they book. It often used to be the case that when travellers spotted what they thought was a bargain, they had failed to take into account details such as restrictive fare conditions or the retrospective rebates on negotiated fares bought through the TMC. Those sorts of caveats are becoming less relevant today, while at the same time travellers are becoming genuinely adept online researchers thanks to fast access to price comparison tools and peer recommendations.
I therefore think that those who say travel managers need to become influencers rather than controllers have a good point. And that means their job definition, and how their work is evaluated, will have to change, too. Association of Corporate Travel Executives executive director Ron DiLeo, for example, has suggested travel managers might eventually be measured on the effectiveness of their internal marketing campaigns, much like an advertising agency. The idea is nowhere near as barmy as it might first appear.
THIS WEEK [pause to adjust frayed string holding up trousers] I have mainly been learning about the looming new technology of mobile payment. You can read about the subject in the corporate card supplement accompanying this issue of Buying Business Travel.
One thing which surprised me in the course of my interviews was that several card companies told me mobile payment will make little difference to managed travel. I beg to disagree. Mobile payment means, simply, using a virtual card stored on your mobile device to make a payment, such as by waving it over an Oyster card-type near-field communication reader. That may not sound terribly exciting, but perhaps what most people haven’t realised is that you can integrate the payment function with other features and apps on your phone, including GPS, mobile itineraries and, above all, automated expense reporting systems. Put that lot together and a vast vista of new tricks opens up. See the article (Virtual virtues) for some examples.
What also interests me about mobile payment is that it looks like another technology which will force companies to change they way they manage travel. This is because of precisely the same consumerisation trend I discussed earlier. Mobile makes payment and expense management much more convenient and flexible for travellers. I am sure they will adopt it. That leaves employers with two choices. One is that they adopt it, too, and allow travellers to use mobile payment on their company phone. This will keep payment inside the travel programme and lead to better data for travel managers. Alternatively, they can ignore it, and travellers will pay for (and book) travel on their own phones, leading to further alienation from the company travel programme.
I WAS VERY IMPRESSED by the announcement that Intercontinental Hotels Group is to launch an upmarket brand aimed at Chinese travellers. The first Hualuxe Hotels & Resorts property will open by early 2014 and feature amenities and designs specific to Chinese culture, including “teahouses, lobby gardens and late-night noodle bars”.
Now I am not quite sure what a “lobby garden” is, but that does not matter. I am not the target market. I think it is terrific a Western travel company has finally noticed a burgeoning market of 1.3 billion new consumers might want something different from what is served up in Dallas or Düsseldorf. And I like the sound of that late-night noodle bar. I reckon it could catch on for well-refreshed business travellers wherever they are in the world with the munchies at 2am.
FURTHER TO LAST ISSUE’S column, the editor of BBT has relented and ordered a new pic featuring my new beard. The problem is I was thinking of shaving it off. I guess I will have to keep it now.
DISAPPOINTING POSTSCRIPT: it turns out a lobby garden is simply a garden within a hotel’s lobby area. I had visions of it being a sort of gazebo where rich businessmen would urge politicians to cut the upper tax rate and hold forth on other issues dear to their wallets. Maybe my idea would catch on in hotels near Westminster. I think I’ll suggest it to the Conservative Party.