Published November 2005
Everyone considers themself an expert at booking travel. So much so that employees constantly question the need for managed business travel. Consultant Tony O'Connor examines the issue.
"My company makes me book travel through a corporate travel agency, or through a corporate online booking tool. But these days, there is so much cheap travel on the web. I can go to airline sites, hotel sites, car rental sites, last minute bargain sites, and even sites that search other search sites. I know where I’m going. I know what I’m doing. Why can’t I just book my own travel? Give me one good reason!"
Here are eight:
1: Discounts: Unless your company is small, it will have negotiated discounts with travel suppliers. Usually, the only way to access these corporate bargains is via the corporate booking channel. For example, if you book as Joe Citizen on an airline website, how can the airline apply your company’s discount? Corporate discounts can run well into double figures.
2: Booking fees: For complicated travel, you still need the human assistance of a travel agent. The fees charged by your company’s corporate travel agency or TMC are transparent and low. The fees charged by the retail agent at the shopping mall are less transparent and higher.
3: The cost of your time: I like surfing around travel websites. I like comparing airfares and hotels. I like seeing prices and pictures. (Everyone needs a hobby.) But it’s not good economic use of my time. You are probably costing your company at least $65 per hour, and perhaps much more. Seeing and comparing a wide range of prices and options on various websites can take a long time. From the company’s point of view, it is much better for you to send all your travel requirements to a person or a computer that is programmed to do the job for you, quickly and thoroughly.
4: Safety: You are travelling on behalf of your company. Your company is legally and morally responsible for your safety. It needs to minimise your personal risk in three ways. Firstly, the company needs to prevent you from undertaking risky travel. Secondly, it needs to know your general whereabouts at any given time. Thirdly, should anything happen, it needs to act first, act quickly and get you home safely. The record of your booking through a TMC reliably provides the necessary information to your employers. Some of you reading this will someday need emergency assistance in-transit.
5: Company travel policy: The company is paying for your travel and has a right to determine the cost. Some let you go first class all the way. Others watch the dollars. Whichever, it’s the company’s decision, and only with a corporate booking channel can it apply booking filters to minimize non-compliance. Your new Sales Trainee might think he deserves a Garden Suite at the Ritz, but your CFO probably has other ideas.
6: Supplier management: The various commercial discounts that your company has in place typically require minimum expenditures or market shares. The only way it can track its performance is with the data collected and sorted via a corporate booking channel. Yes, internal systems and card companies can gather data. But the data needs to be consolidated, and it needs to be rich in travel information, not just transactional information. Also, good data allows the company to add up its "bang for the buck" to get best deals in future negotiations with travel suppliers.
7: Additional value-adding services: TMCs market these heavily. Some of their services you can probably live without. But some are of real value, especially when they are already included in lower TMC booking fees.
Useful services include:
- Tracking of unused tickets and credits
- 24/7, multi-lingual, toll-free international booking
- VIP booking services.
8. Personalized knowledge and advice: At the risk of sounding like a TMC salesperson rather than a buyers’ advocate, I think this should be acknowledged. The booking consultant at a TMC should get to know you personally. Assisted by good software, he should develop a rapport and a familiarity with your preferences and patterns.
OK, but there are web-only bargains that I’ll miss out on.
Yes, there are. There have always been specials and bargains flashing on and off in the retail market that corporate booking processes can miss. Many of these specials are now on the web. But from your company’s point of view, it is the average cost of all travel that counts. There are two reasons why retail travel agents and websites are unlikely to offer the cheaper option, overall:
TMC discounts
Firstly, there are discounts that they miss. TMCs have buckets of discounted airfares and hotel rates based on their large spend with suppliers. They are particularly competitive for international and business class travel. Rather than pan-flashing specials, they are continuously available discounts.
Fare and rate searching
Secondly, one of the key features of a TMC’s booking software is its capacity to automatically search the market place for best fares and rates, wherever they may lie. There are many places to go, and the software is stretching to keep up. But good corporate booking engines are still the best searchers in the market place; better than the retail search engines, and better than you or me clicking around on the net.
OK, but I keep seeing cheaper travel on websites!
Granted. Sometimes you will find unbeatable bargains on the net. But the corporate prices might be lower than you think. When travel is booked through a TMC, you might not see all the discounts. There are two types; negotiated discounts, and commissions that the supplier pays to the TMC and the TMC should then pass on to you. The endcost of corporate-booked travel is often lower than it looks.
