Business Travel Show Europe Kick Off, 23 February,
Global Travel Risk Summit Europe, April 2023,
3rd Annual Sustainable Business Travel Summit
THE YOUNG TRAVELLER in his 20s leaves his London office for a trip to New York and Washington. All flights and hotels had been booked through the travel management company (TMC) according to company policy. But in the cab to Heathrow, the traveller pulls out his smartphone and begins changing these arrangements to suit himself.
It is a scenario that a growing number of travel managers will ruefully recognise. While travellers have been going off policy for decades, the advance of mobile technology has made this both easier and more frequent.
But if this is a growing concern for travel managers, it is not the only one. There are now a good many issues which can conspire to keep a travel manager awake at night. It is a job, industry experts agree, that has become a lot more complex over the last few years.
As Chris Reynolds, senior partner with consultants 3Sixty Global and a former travel manager with Siemens, remarks: “If you have a well-managed travel programme with the correct suppliers in place you should sleep like a baby.”
In an ideal world all should work well but, unfortunately, we do not live in this place. The well-managed programme will cater for most eventualities but there are a number of recurring issues that give rise to sleepless nights.
Paul Tilstone, the outgoing CEO of the UK and Ireland Institute of Travel & Meetings (ITM), calls these problems the “big beasts” of the business travel jungle. Among them are specialisation, legislation and sustainability, but top of his list is distribution. This is not just the cost that global distribution systems (GDSs) levy for full content but also the rise of the internet as a “solid distribution tool”.
He cites the no-frills carriers as ones which fully used the web to attract customers who formerly had used an agent. “The internet allowed these no-frills carriers to grow. It allowed travellers to tell their travel managers they could get cheaper flights than the TMCs,” he says.
This diversification of the market has since grown enormously, with all major airlines encouraging travellers to book directly with them.
American Airlines, for example, launched Direct Connect, which enables customers to go straight to the airline for their reservations. Launched partly as a gambit in what seems its never-ending battle with the GDS Sabre, it also lets AA and any other airlines with similar facilities to launch products directly to customers. Travel managers see it as a threat to their control of bookings.
Smartphones are just the latest tool that can enable travellers to go their own way. At the ACTE/ Management Solutions UK forum in London in May, this issue was one of the main topics discussed.
Emma DeLange, European travel manager for Amdocs, an IT company, said her travellers wanted to use new technology on iPhones but the company was “a little concerned about it” and was actively putting together a policy to control it. “You can fight it, but it is inevitable. They are going to download it and use it. We have to embrace it and find ways to control it as much as we can,” she told delegates.
Bridget Stack, travel manager for the food and beverage company Kerry Group, describes the practice as “maverick booking” and calls on IT providers to find ways to stop it. She adds that while she did not mind her travellers using iPhones to pick restaurants, she is “really frustrated about travellers being able to book on them”.
Ian Windsor, HRG’s managing director for Europe, is more sanguine about the issue. He thinks smartphones have created a very different world, but some companies handle it well and get travellers to send emails to their office saying what they are doing. “If a traveller wishes to change something, they can do it off the radar,” says Windsor, “though this could have happened at any time in the last 20 years.
Going ‘off the radar’ creates both security and data issues, but this behaviour will not change – it is human nature. There is no point in trying to back away from new technology – it is what the traveller is working with. It is such a mobile world, with information on the go, and it is what travellers want. Whole lives revolve around it.”
Andrew Phillips, senior account manager at Giles Travel Management, also identified the use of smartphones to change itineraries as a growing problem. “When travellers go off on trips, they will take their credit cards and mobile phones with them and, more and more, they are trying to book via the mobile phone or make changes to their itinerary through it.
“The issue here is whether, if it goes through a mobile phone, the booking is captured and also whether it is handled through the travel programme. It is all about control at the end of the day,” he says.
But as both Windsor and Phillips point out, it is not just a simple matter of control. Going ‘off radar’ can create the loss of data that travel managers need to lever the best deals but, perhaps more worryingly, it means travel managers may not be able to contact a traveller when an emergency arises, as they will not know where he or she is. This happened not only in the aftermath of 9/11 but, more recently, during the 2008 terrorist attacks in Mumbai. Here, companies found that many travellers had booked their hotels outside policy and were difficult to locate. Consequently, their bosses did not know whether they were safe or not.
One feature of the constantly changing travel market is that it is providing ever-more choices.
An obvious example is the wide range of accommodation which covers three-, four- and five-star hotels, boutique properties, apartments and budget hotels. In air travel there is the choice between using low-cost carriers and legacy airlines, and also which part of the plane a traveller is going to sit in. Tilstone calls this “specialisation”, and the travel manager’s problem is that this plethora of choices available to the road warrior has to be balanced with the procurement ideal of consolidating suppliers to as few as possible. If all travellers are obliged to stay at a preferred chain wherever possible, or another brand where it is not, the company is likely to be able to increase its leverage when negotiating deals. This could save it money.
But this puts restrictions on where travellers can stay. It is all to do with satisfying both the procurement department and the traveller, and the travel manager is the one caught in the middle. Nigel Turner, Carlson Wagonlit Travel’s director of public sector and industry affairs UK, identifies this as one of the “toughest” challenges the travel manager faces. While procurement is constantly looking for “solutions that produce savings”, the travel manager is trying to deal with the expectations of the traveller. It is an equation that is becoming increasingly difficult to balance.
Phillips says that situations like this emphasise the need for not only travel buyers but also TMCs to build relationships with the travellers. Windsor says there is good reason to believe that there was a growing understanding between the manager and the traveller.
“Travel managers and travellers are more understanding of each other. The travellers accept that if they are travelling to a European city, they acknowledge the use of budget airlines, but if they are going to Asia or North America, they want to travel business class,” he says. Basically, it is a bit of give and take. The travellers can perhaps save the company some money by going no-frills but, in return, they would like the comfort of business class on long-haul trips. It is not a firm agreement, Windsor stresses, but for both sides, the idea is there.
Another major worry highlighted by both Phillips and Windsor is the airline policy of ancillary charges, or unbundling. It can make a travel manager’s life a nightmare just trying to work out the cost of a flight. It is not just the variety of costs which make it difficult to capture the spend but also more sensitive areas such as whether the company should pay if a traveller orders extra wine with his meal or hires an additional pillow on a long trip.
Phillips says that one of the top requirements for any buyer is getting the best rates – but what becomes extremely complex is that there is a suite of add-on prices and fees. “How do you negotiate with suppliers?” he asks. “Not everything is included into the one price. So things become difficult. There could be additional costs. That is a big change. It is essential for travel managers to know what costs they are incurring. It makes it difficult to work out the cost of a trip if items are unbundled. You also need robust data if you want to negotiate with suppliers and, with unbundling, that is another difficulty.”
Windsor also draws attention to the way airlines were adding taxes and surcharges to tickets. “These extras do not count towards any deals or incentives. Travel managers are, therefore, seeing their costs go up and there is nothing they can do about it. These additional elements make it very difficult for travel managers to control their costs. You can see it is causing a lot of frustration,” he says.
Another of Tilstone’s big beasts is legislation. The number of rules and regulations affecting the industry seem to be growing. The most prominent of these newcomers is the Corporate Manslaughter and Corporate Homicide Act 2007.
This is a landmark piece of legislation under which not only companies, but also senior management, can be held to account if there are serious failings of management amounting to a gross breach of their duty of care that then leads to an employee’s death. Companies and their travel managers are obliged to think carefully before sending an employee into an area where there is known unrest. Syria and some other Middle Eastern countries could currently fall into this category.
But besides the major task of pursuing an effective duty of care, Tilstone lists other pitfalls, such as the new Bribery Act of 2010 (which aims to cut out or, more realistically, reduce the bribes, considerations and backhanders in international business), VAT changes, new laws regarding trading in the City and the EU Emissions Trading Scheme.
Not all fall directly on the desk of the travel manager, but they may all crop up to some extent and, as Tilstone points out, they cost the company money as specialist knowledge is needed to deal with them. For example, a specialist risk company may be called in over duty of care, while expensive corporate lawyers might be needed to steer travellers away from the grip of the Bribery Act.
Another problem now moving up the agenda is sustainability. Tilstone, Windsor and Turner all agree that while ‘green’ issues slipped down the list of priorities during the recession, they are now on the rise again. Tilstone predicted that they would be “a big item” over the next 18 months. Windsor suggested that not taking the green choice could lead to “visual guilt” among travellers.
Finally, there is the issue of the current international turmoil. The recession presented serious problems for travel buyers and with the latest financial crisis, many of these still exist. But there are also unexpected events, which throw down challenges for the travel manager. The last few years has seen an abundance of these, among them Mumbai, bird flu, volcanic ash, the Japanese tsunami, and the bomb attack and, most recently, the bomb attack and shootings in Norway.
This, Tilstone feels, calls for flexibility in a travel manager’s approach. They have to be ready to react to any emergency in which their travellers might be caught up. “Not even five years ago did they have to plan for so much,” he says.
“Security is an underlying theme of the big-beast theory. It is crisis management. You must know where travellers are and how to track them. We know we have to do this and it is a major part of our role. It transcends a single issue.”
Reynolds concurs: “The most serious one, and the only one that really matters, is the safety of travellers. No matter what plans and processes you put in to place, you can never guarantee the absolute safety of a traveller. Regardless of this you should never stop trying by using continued communication, working with the third party suppliers you have contracted, and educating.
“If you do not have a robust process and plan in place to cater for any security incidents or natural events that impact on travel, then perhaps you should invest in some ProPlus for tomorrow.”
It all adds up to a full suite of problems, enough to keep the soundest sleeper awake at night. But as Windsor remarks: “Travel managers are more like jugglers with a lot of balls in the air. Compared to five years ago the job is more complex, without a doubt, and a lot more dynamic. It is a completely different ball game.”