Out of the office

Is now the time for travel buyers to relax stringent policies and let the traveller take control? Amon Cohen investigates

IT HAS BEEN QUITE A YEAR for revolutions, what with the devastating riots across the UK and the apparent clipping of Rupert Murdoch’s wings. But in our own little world of travel management, will we come to look back on 2011 as the start of another major power shift: the overthrow of the corporate travel policy?

That may seem an extraordinary statement given that, figuratively speaking, travel managers successfully got their hands on the most sensitive part of travellers’ anatomies during the recession, and have generally not let go of their improved compliance ever since.

Yet influential voices such as the Association of Corporate Travel Executives (ACTE) are beginning to challenge long-held assumptions about policy. They question whether the most effective way to manage a corporate travel programme remains dictating a rigid set of booking processes and supplier choices.

Commentators cite two linked reasons why traditional travel policies could become unsustainable. One is the flexibility and personalisation of developing web and mobile technologies. The other is a new generation in the workforce, who have grown up more independently minded (or, for older people groping for another description, “selfish”) because of the increased choice the new technology affords them. According to an ACTE statement released in June: “Today there are 300-plus mobile applications for the business traveller and the power of this technology, in turn, hands power to individual travellers: they want to make their own choices while travelling, upgrade hotel rooms or choose car services over rentals and taxis, all of which goes against the historic corporate travel policy mould.”

BCD Travel has also run with the idea over the summer in two white papers. The first, The Customer Always Knows Best: Leveraging B2C Strategies in Managed Travel Programs, argues travellers can now book and manage their travel so easily that travel managers will no longer be able to dictate – they can only influence.

The second white paper says the assumed ideal process for travel management over the past 15 years has been end-to-end automation, where everyone in the company is required to use the same narrow set of tools to plan, book and claim expenses for their travel. Data flows seamlessly through these tools and into the company’s financial and human resources system, providing excellent management information for the travel manager and easy reconciliation for the finance department.

Now, says BCD, “travel managers may well need to start thinking of the traveller, not the corporation, as their primary customer.

With this fundamental shift in philosophy, travel switches from being a supply chain to a demand chain, and that leads to a substantial re-think of how to build a travel programme.

“In particular, travel managers will need to minimise the number of mandatory tools and processes the traveller is obliged to follow and ensure they are designed with the excellence of user experience in mind. Relaxing policy could lead to de-mandating some of the compulsory steps which make up the end-to-end vision. At the very least, some additional optional tools and apps will have to be allowed into the program. However, making mandatory tools optional will have a radically transformative effect on the way a company manages its travel.”

Revolutionary talk indeed. But how should travel managers respond? Do they really need to abandon hard won mandates and management processes, or should they appear like a Middle Eastern despot and crack down even harder?

Torsten Kriedt, vice-president at BCD Travel, believes change is unavoidable. “The expectation of new entrants to the workplace today is ‘what can you do for me?’, not ‘what can I do for you?’” he says. “And even now, how many companies are able to mandate all aspects of their travel programme? They might when it comes to air, but not hotel.”

James Westgarth, until recently head of travel management for Airbus parent EADS and now running a consultancy called SCS Corporate Travel, reckons travel managers might be pleasantly surprised if they loosen policy and give more decision making to the traveller.

“Generation Y travellers are internet-savvy, but they also understand the need to be careful with company money,” he says. “There is a whole generation which knows nothing but low-cost carriers and an emphasis on cost control. The days of luxury business travel are over, so making the most cost effective choice is now a given.”

Having said that, Westgarth does not believe companies will have to bin their entire travel policies. Instead, he says, “policy will be there for how they book, not what they book”.

A similar view is taken by Sarah Makings, European category manager for travel at KPMG and the Institute of Travel & Meetings (ITM) board member responsible for its resources programme.

“Policy will look different,” she says. “We have to be mindful of these new technologies. If we don’t move, we will lose compliance, but I believe companies can achieve this goal without removing most of their policy. We don’t want to lose sight of our data.”

So the consensus is that policies will have a lighter touch in future, the main debate being over the degree to which they will be relaxed or even withdrawn. What is clear is that travel managers will have to change their approach to their work. “People will buy travel differently,” says ACTE executive director Ron DiLeo. “Today, a corporation has maybe 80-85 per cent of its travel spend under contract, but perhaps in future it will be less as companies allow travellers to book their own choices. That means travel managers won’t have as much spend to negotiate with as in the past, and they will have to make policies more flexible to give weight to the views expressed by travellers in blogs and other social media.”

It leads DiLeo to offer another bold prediction. “Marketing communications will be the most important skill for travel managers for the next five years,” he says. His statement lends weight to BCD’s earlier assertion: instead of travel managers acting as buyers within a supply chain, they will act as sales people within a demand chain, working to convince travellers to follow the company-preferred process and suppliers in preference to what the travellers can source themselves. One new form of marketing, which is gaining coverage at present is so-called ‘gamification’.

Torsten Kriedt also suggests incentivisation, such as setting a cap on how much an employee can spend on a trip and then crediting 50 per cent of any saving below that figure to spend on future trips. It is an approach, which has been attempted by Google, generally acknowledged as the boldest pioneer to date in shrinking the reach of its travel policy. Google travellers can book whichever supplier they want and, most radically, they are not obliged to book through the preferred travel management company (TMC) either.

The Google programme is not a complete free-for-all. The two major restrictions are the price cap and an obligation for employees to log all bookings – regardless of distribution channel – in a proprietary database called Trips. It ensures that Google retains the ability to track travellers and build up a data bank for negotiation and budgeting purposes.
DiLeo has watched the Google model closely and he notes an important point which may provide further reassurance for travel managers nervous of relaxing their policy. “Many travellers came back to booking through the official Google TMC,” says DiLeo. “They realised it’s not always that easy to be your own travel agent. Travellers want to be looked after.”

In any case, says BCD Travel in its white paper on end-to-end, “only the most radical companies are likely to allow travellers something approaching carte blanche in their use of travel tools and suppliers”. The study describes traditional end-to-end as a one-dimensional concept, while the Google approach is more akin to what BCD calls “3D Open Travel Management”, with no single route for moving through the planning, booking and expense management process. In between, says BCD, is what it calls “2D Enhanced End-to- End”, which has the same linear progression as traditional end-to-end, but now with several lines of optional tools running alongside each other in parts of the process. “The expanded choices of tools include those selected by travellers [that is, the new second dimension] as well as their employer,” the white paper says.

The policy revolution creates much for travel managers, often older than their most non-conformist Generation Y travellers, to ponder, but, says DiLeo, doing nothing is not an option. “Mobile means suppliers now connect directly to travellers with no gateways,” he says. “It is going to get harder and harder to corral them down the routes you want them to go.”