Safety and security
With constant reminders of airport chaos and continuing violence around the globe, it is no wonder that safety and security is the number one concern for ACTE members everywhere. Although travel managers, travel suppliers, and travel management companies often don’t see eye to eye on many issues, safety and security seems to be paramount to everyone.
“Security is the number one thing and affects everything that we do every day,” says Caro Cook, chief, transportation section, at the International Monetary Fund. For Cook, it’s all about knowing where her travelers are at all times. Even if you have systems that record where people are and have rules and regulations in place, people can always slip through the system, especially if they make changes en route, says Cook.
Tom Barrett is concerned about consistency in the security process. “How much time do you need to go to the airport on any given day?” asks the global sourcing director for American Standard Companies. “Some days it can be one hour and other days it can be two and a half hours,” says Barrett. Barrett wants to keep his travelers informed of the latest rules on liquids, baggies, or shoes that might impede their trek through the security maze.
“When you hear stories that people are able to be boarded in foreign countries with Swiss army knives which would have been confiscated in the US,” Barrett gets concerned. “You begin to say to yourself, ‘Well have we set the right standard and expectation about where our safety really lies in this sort of things?’” Barrett expects to be searched when going through security. “I feel good…because I know that somebody’s doing their job and I feel safer to fly today.”
Content fragmentation in the GDS
Another area of great concern for ACTE members is the airline-GDS distribution issue and content fragmentation. “The ‘opt-in’ issue is still not resolved,” says Jo-Achim Hamburger, corporate travel manager at AB Electrolux. “The content issue is my major concern when the airlines do not allow our online booking tools to access their application programming and their web sites.” Hamburger cited the exclusion of Air Canada Tango fares and Southwest Airlines as threats to his corporate travel management programme. He finds it difficult to get complete policy compliance when travelers are continually finding better prices in other booking channels.
Hamburger is not the only travel manager with compliance concerns. “Because of technology an employee will shop two or three different sites very efficiently in order to find the lowest fare and if it’s not with your travel management company then you risk the performance of the entire programme,” says Barrett. And eventually his CFO will want to know why they are paying the travel management company.
Despite the airline-GDS fracas, “Some corporations may have been successful in standing firm in their agreements or maybe negotiating around them,” according to Barrett. But Barrett ultimately believes that corporations will eventually feel the impact of the GDS agreements. “It’s either pay me now or pay me later”, but somehow everyone will get paid in the end, Barrett asserts.
Barrett is skeptical of products that have rushed to plug the content fragmentation gap with GDS bypass. “I’ve often said that I’m prepared to adopt any strategy that lowers my cost of distribution both through the travel management companies or the airlines directly,” says Barrett. But he also adds “In order for me to do so I have to adopt strategies that don’t cause me additional stress or processing time which are not seamless to the system.” So far Barrett has resisted implementing one of these products. “I need to have something that you can invest in the long term strategy,” he says. “I can’t have something which has not been fully developed and fully proven.”
This implementation problem is not limited to GDS bypass software. Travel managers are faced with a cost of implementation for any new technology whether it’s a meetings planner, a new self booking tool, or an entire expense reporting system. “We can’t underestimate the task of implementation and the complexity.” Barrett says he has limited opportunities within his management structure to develop strategies which will return long term savings initiatives to his organisation. “The problem is the return on investment of these things for the cost of change…stifles the opportunities to capture new technologies,” according to Barrett.
Airline consolidation
Airline consolidation is something that worries many corporate travel managers. No one really knows for certain if it will happen, but most see it as a significant worry. Hamburger is very concerned about the negative impact on airfares had the US Airways and Delta deal gone through. Most hope that consolidation among financially strapped legacy airlines will lead to improved hospitality and service, but most travel managers are also worried about the impact on fares.
While there has also been talk of low cost airlines combining in the US, Hamburger thinks that consolidation among the low cost airlines in Europe is also inevitable. “You’ve seen that DBA, the German British Airways, has recently been handed over or bought by Air Berlin,” says Hamburger who thinks there will only be four or five major low cost airlines in Europe within a couple of years. With Air France-KLM and Lufthansa-Swiss Europe could also be headed for further consolidation of legacy airlines.
Privacy
Privacy is a major concern for many travel managers. Most want to insure the privacy of their travelers by being certain that they have the right contacts in place with the right people and that also includes any third parties who handle her data. Some think the privacy issue in travel has not been addressed and many wouldn’t be surprised if the European Union decides to look at travel in a much more direct way in the next two or three years.
Travel management company costs
Travel management company costs are of great concern to corporate travel managers and travel management company staff as well, although this is an area where there could be conflicting objectives and viewpoints from each side.
Barrett feels that transparency in the travel management community is more apparent and needed now more than ever. But Hamburger would like to see a little more transparency in his collaboration with a travel management company. “I still don’t see the full transparency which was promised to us after the commission cuts,” says Hamburger.
Not surprisingly, Chris Cowley, head of sales, BCD Travel Logistics UK, has a different viewpoint on travel management company costs. “The most significant debate that is not happening is the true cost of products and services,” says Crowley. “There’s such a thin profit margin in the (travel management company) business that…there seems to be an unrealistic appreciation of what products and services actually cost.”
Crowley points out an inequity where a corporation may be spending $100m on travel and $2m to service that travel requirement. He claims the buyer will negotiate harder on that $2m than on the air and hotel piece that makes up the $100m. Crowley feels that this situation is perpetuated because the travel management company’s pricing is far more transparent than the travel supplier.
