Business Travel Tech Talk London, 16 October,
Business Travel Awards Europe, 30 October, JW
3rd Annual Business Travel Intelligence Summit
In BBT over recent years we have delved into the proliferation of mobile devices, open booking (travel 2.0), personalisation, consumerisation, gamification, new distribution capability (NDC), direct connect, iBeacons, sharing economies, travel management apps and much more.
With each issue comes a new trend or buzzword into which we ravenous hacks sink our teeth. Topics evolve at their own rate, and have differing impacts on traditional travel management principles: cost, compliance and duty-of-care.
It’s little surprise that travel buyers and managers have had to do a fair amount of pivoting to adapt to the evolving facets of corporate travel. Though for the most part, the majority of travel buyers have not so far been deeply affected – there has been change, certainly, but no revolution.
But travel management is arguably on the cusp of a new era. Managed travel 2.0 advocates, who reside principally in the US, have long predicted that technology and evolving consumer habits would lead to the fragmentation of the business travel supply chain. And now, in light of Lufthansa’s decision to introduce a €16 surcharge on every segment booked through the global distribution systems (GDSs), coupled with moves by major airlines to open up IT platforms to developers working with the NDC computer code, it seems that the castle walls around the travel policy, preferred supplier programmes, travel management companies (TMCs), GDSs and corporate card suppliers could be starting to crumble. It remains difficult to predict how these developments will manifest themselves, though it’s safe to assume the status quo will disappear.
Process and procedure
Dan Ruch is chief executive of Rocketrip, a US-based tech firm that helps businesses incentivise travellers to adhere to travel policy via a data-driven budget and rewards platform. He says cost-control, compliance and duty-of-care are the three pillars welded into travel procurement and management. No matter how consumer trends and technology influence supplier strategy, these characteristics are non-negotiable within the evolving supply chain.
The thrust of a recent speech to travel buyers was to focus on getting creative around those pillars. And this is the key message: corporate travel policies and programmes are wedlocked to those three pillars, but how can human ingenuity be exercised to enhance process and procedure?
Chris Vince is operations director for Birmingham-headquartered TMC, Click Travel. While the company differentiates itself by marketing its hi-tech and digital credentials, Vince also cites non-tech creative solutions to long-standing challenges. “For example, we have a telecoms company that has a significant long-haul programme,” he says. “It changed booked policy from business class to economy, but gives travellers extra annual leave at the end of a trip. The cost of premium travel outweighs the cost of the time off, which allows savings to be made.
“Then we have a client in the construction industry doing a lot of travel between the UK and the Middle East. The policy permits business class travel. To reduce costs, the policy now allows staff to volunteer to fly economy or premium economy, in exchange for sharing the amount saved on the business class ticket,” he says. Meaning if the economy ticket was only £1,000 versus a £5,000 business ticket, that’s £2,000 straight into the employee’s pocket. Suffice to say the Click client is saving money and has happy travellers.
Rocketrip’s Ruch says many of his US clients have already implemented the same strategy. “There needs to be intrinsic motivation [for travellers to follow policy],” he insists. “It comes down to money. They rightly ask: what’s in it for me? Can I share half the savings? Then yes, I’ll start aligning my interests with those of the company.” He adds that gamification has to a large extent “failed”, saying that compliant-traveller league tables, digital high fives and gold stars have little or no impact on traveller behaviour.
Carlson Wagonlit Travel (CWT) may have something to say about that: the global TMC has been a major advocate of gamification, reporting regular customer success stories (see Case Studies, p66). And Click’s Vince says his clients are just scratching the surface of gamification, but believes league tables can encourage policy compliance, especially in organisations that have different brands or business units competing against each other.
However, Vince has a plethora of practical ways to enhance the three pillars. “A training company we work with used to host all its sessions in Bristol,” he says. “The city has been booming over recent years and costs were spiralling. Therefore, the business decided to switch all its operations to Birmingham. They looked at the most cost-effective place in the country. The savings generated have been astronomical.”
Back on the technology side, Click promotes use of tolerance levels for clients spending lots of money on rail tickets. The policy means you don’t force travellers to book the cheapest ticket – you simply put a cap on what they can spend. That may or may not include first class fares. But giving the traveller more leeway encourages them to act sensibly. “Whitbread just decided they’d turn policy on its head. They allowed people to do what they wanted [within the tolerance level] and then removed first class trains from the booking display. There was no negative feedback the company saved £140,000 in one year,” he recounts.
Another Click customer, the British Heart Foundation, is an interesting case from the charitable sector. Such organisations are not in existence to make profits, though every penny must be looked after. The travel manager wanted to make savings by getting people to book further in advance, but did not want to come across as too strict. Vince takes up the story: “It boils down to a communications strategy. They thank people in advance for their frugality, whereas in the private sector people don’t tend to communicate as much about thanking people for making the right choices. It’s a slightly softer approach.”
Embracing travel 2.0
Salesforce.com has been at the cutting edge of creative travel management for a number of years. With partners BDC Travel and Concur, the software company has attempted to embrace a travel 2.0 strategy, though its travel manager, Robbie Hughes, admits the programme still has some way to go before it truly embraces open booking. But Hughes envisages big changes in travel procurement and management, and believes the recent Lufthansa announcement is just the tip of the iceberg. He says: “The scenario plays into our ethos [of open booking]. The airline is encouraging people to book direct, and I think these sorts of relationships will increasingly exist between corporates and suppliers.” If that’s the case, it makes it very difficult to plan ahead.