We don’t have to look back far to see how much our industry has shifted. A little over 20 years ago, business travel was handled locally by a business travel unit above the holiday shop, and package holidays were commonplace. Few people had internet access or mobile phones but used fax.
Then businesses nationalised, regionalised and globalised their purchasing to benefit from economies of scale and business travel agents started to morph into travel management companies. TMCs earned more than 9 per cent for every ticket sold and benefitted from back-door overrides to increase revenues. Leisure fares were impractical for business travellers because of the minimum stay and advance purchase requirements.
The arrival of zero agency commissions led to the reinvention of the financial relationship between TMC and buyer, and procurement took ownership of corporate travel decision-making. Travel policies were professionalised and controls tightened to drive cost down.
Today, access to a wealth of information is almost instant through unprecedented leaps in technological advancement through web and mobile proliferation. Algorithms used by super-fast processors enable us to buy differently through multiple channels and devices. World events and the speed that information is shared through social networks make risk management a priority for many. The corporate travel manager’s role is far more sophisticated and multi-faceted, requiring multiple feeds of data and a more consultative approach to support their company’s core operation.
Therefore, a challenge to the distribution model is not a surprise but an inevitability in the evolution cycle of the business travel industry. ACTE’s global webinar on September 1 encouraged discussion on the practical issues and solutions relating to Lufthansa’s GDS fee charge, and remains available for download.
There will also be a mainstage discussion on distribution at ACTE’s global conference on October 14-16 in Paris. Conference registrations are tracking well ahead of expectations as this issue goes to press but will be capped at 700. With airline CEO speakers already announced and more being confirmed, thought-provoking discussion is guaranteed.
Join us and unleash your imagination to rethink your business travel strategy. Don’t miss out!