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Online Strategies for Travel Programs. Presented to:. PAMPI and PHL BTA Joint Education Institute. Tom Wilkinson President, TRW Travel Consulting, LLC www.managedtravel.net. Presentation Goal.
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Online Strategies for Travel Programs Presented to: PAMPI and PHL BTA Joint Education Institute Tom Wilkinson President, TRW Travel Consulting, LLC www.managedtravel.net
Presentation Goal Premise: The ‘online strategy’ of most corporate travel programs follows the trend in the travel industry itself - • Implement an OLBT gradually with limited usage • Discover the value and ride the wave towards adoption rates over 50% • Look to extend the success in online booking to other areas of corporate purchasing
Humble beginnings … • Significant skepticism about online booking • Technical difficulties • Travelers and arrangers didn’t want to become agents • Travel Managers concerned about loss of control • introducing new applications always challenging • Agencies (TMCs) felt they had to re-build every PNR • and of course feared loss of market share
Humble beginnings… • Initial online rates were very small • 5% - 10% considered successful • 30% adoption was ‘best in class’ • no standard definition of adoption or success (fish stories) • Most agencies ‘surcharged’ online booking • $40 + $5 • online booking tools were an optional choice for techies • Online tools created ITMCs to overturn agency pricing paradigm • reflect the lower labor component of online booking and fulfillment
Humble beginnings… Integrate with Travel Agencies Integrate with Travel Programs Controlled by Travel Managers Initial focus for OLBT’s …. Success despite questions from traditionalists…
Drivers of Success • Agency transaction fees fell • Lower agency fees for ‘touchless’ and ‘light touch’ trx • average about 1/3 – ½ of ‘agent initiated’ fees • TMCs realized their margins could be higher with online trx • Visual Guilt • travelers make better decisions when they have more information • online booking analogous to ‘parallel’ vs. ‘serial’ interface
Drivers of Success • Travel policy • Adoption programs • started by online tools • now offered by agencies • Online culture; youth culture • Industry success • “if they can do it why can’t we?” • Training (?) Third time’s the charm… !
Drivers of Success • Document aggregated savings in agency transaction fees • Document lower ATP’s online vs. offline • same city pairs • Best Practice: Send reports with total documented savings to executives • and cost center managers
Success for Online Booking • All transactions now seen as ‘eligible’ • Mid office processing systems can manage almost any booking • Typical ‘efficiency’ rates over 90% • Online adoption has skyrocketed • Higher ‘all inclusive’ adoption is key metric for many travel programs • Leading online tools report average online adoption over 70% • TMC’s report 80%+ adoption rates • starting at 30% - 50% common • ITMC have guaranteed minimum adoption of 75% • Smaller companies can book 100% online End of story …………. ?
Mid-Office Differentiation vs. Leisure Booking Tools Online Booking Tool Ticket Leisure - Unmanaged
Mid-Office Differentiation vs. Leisure Booking Tools Online Booking Tool Passenger TMC Name Record Mid - Office Corporate/Managed • Profile Integration • Priority Preferred Vendors • Rules Based Policy Back-Office Pre-trip Disapproval Ticket
Mid-Office Differentiation vs. Leisure Booking Tools Online Booking Tool TMC Passenger Name Record Corporate/Managed • Profile Integration • Priority Preferred Vendors • Rules Based Policy Mid-Office
Mid-Office Differentiation vs. Leisure Booking Tools Online Booking Tool TMC Passenger Name Record Corporate/Managed Mid-Office • Profile Integration • Priority Preferred Vendors • Rules Based Policy • Pass/Fail tests (fare threshold) • Complex International • QC (supplemental policy review
Integration of online and ‘offline’ bookings Online Booking Tool ‘Offline’ PNR TMC Corporate/Managed Mid - Office Corporate Travel Counselor Back-Office Reporting Where to call for help? Ticket
OLBT’s: The Leading Edge • Managed online ‘workflow’ methodology • Online booking methodology extended • meetings management • online marketplaces for travel and ‘travel-ish’ services: video conferencing, limos, dining, events, shipping • Integration of reservations, meetings management, expense reimbursement, and vendor payments • closing the loop Building on the success…
Expanding the Model Expense Management Logical temporal progression but what is the value in fusing the data? Is it worth all the integration necessary? What is the ‘mid-office’ process necessary?
Expanding the Model l Proprietary to Rearden Commerce
Building on Success Remember the lessons • It takes time • Convince the vendors they will profit • Need a policy push • Document savings.