Amon Cohen notes an appreciable shift towards demand management – and the simultaneous rise of HR department
A lot of things were different when I started writing about travel management 20 years ago – having use for a comb and being able to play tennis without sitting down between games are two examples which spring to mind.
But another change struck me when I wrote a feature on airline contracting for Buying Business Travel. I realised its subject matter has become a rarity for me. I hardly ever knock out – I mean, carefully craft – articles on supplier management any more. Two decades ago, most of my output dealt with how to get better deals with carriers, hotels or car rental companies.
These days, I am called upon much more to write about demand management – how businesses can improve their travel spend by steering employees more effectively towards making the right choices. And I’m not the only one: my esteemed colleague Betty Low has also written on the subject of demand management for BBT.
The same goes for the various conference programmes I am involved in organising. Needless to say, I am always looking for travel managers to speak, and there are quite a few slots for travel management companies, consultants and technology companies, too, but now we call only on a handful of suppliers to step up to the platform. In fact, looking through my contacts book, I realise most of the airline and car rental execs, and hoteliers I used to talk to are retired or dead. There are some very big brands where I don’t know anyone at all any more.
Let’s assume for a minute that my experience has some wider validity beyond the personal. What does the shift in subject matter tell us, except that I’m not scoring as many free hotel nights or rental cars as I used to? Well, one inference is that maybe corporate clients aren’t getting as much out of supplier deals as they used to either. One travel manager observes in the feature that airline sales people at some carriers are little more than messengers these days, because revenue management departments have assumed responsibility for determining pricing. Consequently, there is very little flexibility for the sales person and the client to hammer out a deal.
And, of course, the opposite is also true. Suppliers feel they can’t get as much out of their corporate clients as they did. Travellers have access to excellent internet search engines which instantly show them if a better fare is available than the one offered through the official managed travel channel.
Related to this shift from supply to demand management, I hear a small but influential number of people tipping human resources (HR) departments to become much more dominant in travel management. If demand management is becoming paramount, then HR dominance makes sense because that is the department which specialises in managing employees.
Another reason offered for a move towards HR is that risk management issues increasingly influence corporate strategic thinking. Ensuring nothing untoward happens to employees on the move, even down to the tax liabilities they incur (a subject I expect to become more noticed in 2014), is becoming a hotter and hotter topic.
Finally, there is the question of getting the most out of your employees. Extraordinary as it may seem at a time when so many graduates are struggling to find work, certain sectors (oil and gas is one) and countries are apparently struggling to attract and retain top talent. Getting travel policy right to deal with this worry is clearly a job for HR. I have even seen some theorising that business travellers need to be treated as human assets. Therefore, the thinking goes, travel managers can work with HR to strategise and budget better deployment of these assets as they plan global expansion and forecast what value travel would bring back to the company.
That last idea certainly is a bit woolly for now, but you can start to see why HR is beginning to be talked up in some quarters as the next overlord for travel. That position has belonged since roughly the beginning of the noughties to procurement. Fifteen years later, is the purchasing department about to wave goodbye to travel?
I’ve got nothing against Michael O’Leary personally. I don’t recall ever encountering a serious delay on a Ryanair flight and, professionally, he’s been kind enough to fuel hundreds of column inches for me through his antics. He even rang me up in person once, when I hadn’t actually requested an interview with him. His PR department had informed him I was writing an article for the Financial Times about criticisms of Ryanair by the now-defunct Air Transport Users Council. O’Leary hated that institution almost as much as he hates the European Commission, and he was only too happy to call me to vent his verbal spleen. I was only too happy to write it all down.
Having said that, I can’t help feeling no one is going to take Ryanair’s new touchy-feely, corporate travel-friendly attitude seriously until Mr O’Leary has left the building. Can anyone in the travel industry, or indeed passengers, have much faith in his apparently Damascene conversion to customer service, given how convincingly he has gone out of the way to be so bloody-minded about so many things that he knows wind up customers over so many years?
Over the past couple of years, there has been a dawning realisation that corporate travel technology lags behind consumer technology, whether it’s booking or expense tools, or mobile apps. Having been out and about at various shows and conferences over the past couple of weeks, it looks like that gap is at last starting to narrow, even in the products designed for travel managers rather than their travellers.
That’s great news for companies at the forefront of this revolution; bad news for those who are behind it. The bar is much higher now. If a corporate travel technology tool is not as slick and quick as Amazon or Google, its days may well be numbered.