CWT - Business Traveler Services - Finding the Right Fit

Transcription

Welcome to the CWT Travel Management
Institute research series
The CWT Travel Management Institute conducts in-depth research into effective travel management
and meetings and events (M&E) practices to help clients worldwide derive the greatest value from
their travel and M&E programs.
Drawing on the global resources of Carlson Wagonlit Travel (CWT), the institute provides a regular
flow of business intelligence and best practices, offering actionable insights into the eight key levers
to effective travel identified by CWT.
The research presented in this report focuses on how companies can optimize booking processes
and provide the right services and assistance to travelers.
Other original research publications include:
Meetings and Events: Where Savings Meet Success (2010)
Room for Savings: Optimizing Hotel Spend (2009)
Playing by the Rules: Optimizing Travel Policy and Compliance (2008)
Global Horizons: Consolidating a Travel Program (2007)
Toward Excellence in Online Booking (2006)
In addition, the CWT Travel Management Institute publishes white papers, case studies and articles
on industry issues.
Eight key levers to effective travel management
1. PROVIDE THE RIGHT SERVICES AND ASSISTANCE TO TRAVELERS AND OPTIMIZE
TRANSACTION PROCESSING
2. Tackle hotel spend in a disciplined and professional manner
3. Continue to drive air and ground transportation savings
4. Increase policy compliance and optimize demand management
5. Further consolidate travel programs
6. Address security needs and corporate social responsibility
7. Integrate meetings and events into the travel program to control and optimize the
related spend
8. Develop executive dashboards and actionable performance measures
Contents
Introduction........................................................................................................................................................ 3
About this research.......................................................................................................................................... 7
Key findings in brief......................................................................................................................................... 9
Key findings explained
1. Online booking tools bring proven benefits when
implementation is tailored to each company’s specific context...............................................11
2. To find the right service configuration, savings and program objectives
must be carefully balanced with the needs of travelers and travel arrangers......................45
3. A wide range of services enhance the traveler experience,
helping to boost well-being and productivity.................................................................................73
4. Improvements in travel and expense management can bring considerable
cost savings, while increasing policy compliance and reducing fraud....................................95
Conclusion.....................................................................................................................................................115
Glossary..........................................................................................................................................................116
Introduction
As business travel spend increases along with the
global economy, travel managers need to keep
focusing on their two most important objectives:
driving savings while keeping travelers safe,
productive and happy. The services a company
provides to its travelers play a key role.
A return to growth and rising
business travel
spend, as seen after 9/11 and during the recent
economic crisis. Now that the global economy
has pulled out of recession, business travel
should grow steadily over the next few years.
Forecasts show annual growth of approximately
4.5 percent for GDP and 7.4 percent for
international business travel (including tourism),
according to the International Monetary Fund1
and the World Travel and Tourism Council. (See
Figure 1.)
Business travel has always been closely linked
to the global economy: any major event that
affects GDP makes a similar impact on travel
Figure 1: 7.4 percent annual growth is forecast for international travel spend (2010-20)
US$ billion at
current prices
2,000
838
Business travel and tourism spend
899
957
Annual growth (%)
1,030 1,115 1,204 1,294 1,388 1,488 1,595 1,709
7.4
659
10.1
Asia Pacific
1,500
1,000
500
278
300
42
45
264
306
2010
251
40
241
329
364
491
446
542
598
Latin America
65
73
6.1
North America
55
61
69
58
407
427
6.4
350
388
447
368
Europe,
Middle East
and Africa
5.7
405
48
51
289
312
332
314
324
342
368
395
421
447
475
501
530
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
Sources: World Travel and Tourism Council, CWT Travel Management Institute
What these spend figures do not show is the
link with prices and travel. In 2011 at least, price
increases are expected in all areas of travel, with
the exception of car rental in some markets, and
1
travel managers will continue to face pressure
to contain costs as companies ease restrictions
on travel.
World Economic Outlook, International Monetary Fund (April 2010)
3
At the same time, there is growing awareness
of the need to balance cost savings with traveler
well-being, providing the right services to ensure
convenience, comfort and safety for employees.
This is reflected in a survey of CWT clients,2
which shows a mix of travel management
priorities for 2011, ranging from cost-driven
items such as optimizing online adoption
(ranked second out of 11) and enhancing the
traveler experience (ranked fifth) to addressing
safety and security (in eighth place). The top
ranking item, improving compliance, brings
improvements across the board—savings,
service and security—by ensuring travelers use
the recommended suppliers and processes.
(See Figure 2.)
Figure 2: Travel management priorities for 2011
1
Improving traveler compliance
2
Optimizing online adoption
3
Driving air and ground transportation savings
4
Optimizing hotel spend
5
Enhancing the traveler experience
6
Optimizing the travel policy
7
Developing key performance indicators
8
Addressing safety and security needs
9
Further consolidating the travel program
10
Tackling meetings and events
11
Making the program more environmentally friendly
Sources: CWT Travel Management Institute
2
Travel Management Priorities 2011, CWT Travel Management Institute (2011)
When designing a travel management program,
companies must make a number of trade-offs
to satisfy different requirements. For example:
Local vs. global content. Companies need
to consider local and regional contexts when
deciding on content and processes. One of
the questions, for instance, is whether a
single, global online booking tool (OBT) is
the best choice, given that a multitude of
country-based or regional OBTs can often
provide more complete content (e.g., access
to national rail offerings and local support).
While major OBT providers are developing
a strong rail offering in larger markets, they
have yet to do so in some smaller markets.
Streamlined vs. high-touch service.
To boost cost-savings, companies can
look carefully at eliminating superfluous
services and ensuring that core services are
provided in the most efficient way. Here an
important issue is whether or not the cost
savings provided by streamlined service
provision can offset the potential leakage
(booking outside the preferred channels)
and associated risks for safety and security if
travelers resist change and continue booking
through local travel counselors. Cultural
expectations and local languages are often
sticking points when a decision is made to
consolidate service internationally and limit
service to one language (usually English).
According to CWT research,3 when highly
aligned processes and simplified services
are introduced as part of global program
consolidation, companies can save up to
20 percent of total travel spend.
Online vs. offline booking. Many
companies simplify service provision and put
a strong emphasis on online booking, but
this model is not suitable for all companies.
3
First, satisfaction rates are invariably better
for offline than online booking, and second,
some companies have a corporate culture or
travel booking requirements that disqualify a
very high share of online bookings.
This report aims to help companies with the
following questions:
How to find the right balance between
online and offline services? What is
the impact on cost savings and traveler
satisfaction? What are the criteria for
selecting an online booking tool? Should
companies buy directly from online
booking tool providers or through their
travel management company’s reseller
agreements?
How to find the most relevant service
configuration? How can a company
balance savings, program objectives and
traveler satisfaction? How to best manage
simple and more complex bookings? What
are the key criteria for designing a service
configuration or a request for proposal? What
kind of service level agreements should a
company negotiate?
What services and features do travelers
and travel arrangers expect, and which
add real value (e.g., end-to-end service,
VIP service, unused-ticket management,
mobile services and social networks)? Which
services are essential and which are simply
nice to have?
How do companies manage expenses?
Who handles expense management
internally? Which types of suppliers are
preferred? What are the synergies with travel
management? What are the best practices?
Global Horizons: Consolidating a Travel Program, CWT Travel Management Institute (2007)
5
About this research
Objectives
This CWT research has four main objectives:
1. Identify key ways to optimize transaction
processes
2. Define the appropriate service configuration,
optimize the request for proposal process
and set appropriate service level agreements
3. Identify the services that improve the traveler
experience
4. Define an effective strategy for expense
management
Methodology
CWT combined several research techniques:
Surveys
A detailed questionnaire on business
traveler services, answered by 204 travel
managers worldwide
An online survey of travelers and travel
arrangers worldwide on their preferences
and behavior, answered by 2,439 travelers
and travel arrangers from 15 companies
A detailed analysis of 152 CWT global or
regional clients and 322 local clients to
determine the maturity of companies’ travel
programs and room for improvement in
terms of savings and traveler safety (CWT
Diagnostic)
In-depth interviews
Interviews with more than 40 experts
from corporations, expense management
companies, global distribution systems and
online booking tool providers
Quantitative analysis
An analysis of CWT transactions worldwide
to observe the evolution of online adoption
by industry and by region
An analysis of a company’s top 15 routes
to see the differences in performance
between online and offline booking
(advance booking and impact on average
ticket price)
An analysis of CWT transactions worldwide
to determine the share of point-to-point vs.
multi-segment trips
Case studies
1.How a leading biotechnology company
increased cost savings and traveler
satisfaction by introducing a full-service
center configuration (Page 55)
2.How a global reinsurance company reduced
transaction fees by 10 percent, achieved
90 percent online adoption and boosted
compliance through a standardized service
center configuration (Page 57)
3.How a global technology company made
savings of 42 percent on travel management
costs and 99 percent booking accuracy by
implementing a global travel policy and a
network of multinational service centers
(Page 59)
4.How an energy services firm improved its
unused-ticket management, raising the
redemption ratio by 50 percent (Page 93)
This research was carried out from September
2010 to April 2011 and involved a wide sample
in terms of company size and industry, travel
managers’ scope of responsibility and travelers’
home region, as shown in Figures 3-4.
5.How a European multinational made its
expense management more efficient
by introducing an automated system
(Page 104)
6.How a large global conglomerate worked
with its TMC to fully outsource expense
processing (Page 106)
Figure 3: Breakdown of surveyed travelers
By sector
By region
Retail
23%
Other
31%
Asia Pacific
15%
No response
4%
Europe,
Middle East
and Africa
16%
Engineering
and technology 3%
Consulting
17%
Banking and financial
services 3%
Consumer products
and services 4%
Aerospace
and defense
9%
Healthcare, life sciences
and pharmaceuticals
10%
North America
65%
Source: CWT Travel Management Institute
Based on a survey of travelers (2,439 responses)
7
mation
Figure 4: Breakdown of surveyed travel managers
By sector
Banking and financial services
13%
Healthcare, life sciences and pharmaceuticals 6%
Other 45%
Telecommunication equipment and services 6%
Industrial manufacturing 5%
Retail 3%
Automotive and transportation 4%
Media and communication 3%
Chemicals 4%
Government and public sector 3%
Consumer products and services 4%
Computer hardware, software and services 4%
By region of headquarters
Asia Pacific
4%
No response
14%
Latin America
7%
Europe, Middle East
and Africa
45%
North America
30%
By geographical scope of responsibility
Regional
18%
a
Local
38%
Based on a survey of travel managers (204 responses)
Global
44%
Key findings in brief
lower ticket prices. Surveyed travel managers
estimate that ATP is 7 percent lower when
booked online than offline, and a sample
analysis reveals savings of 6 percent in
one organization, reaching 24 percent
on one city pair. This said, online booking
becomes less efficient if a high proportion
of transactions involve errors or queries that
cannot be handled through automation.
Companies can also dilute the benefits of
OBTs if, for example, the “repeat trip” feature
on OBTs prevents travelers from obtaining
the lowest available fare with an alternative
supplier at the time of booking.
This CWT research highlights best practices in
four main areas:
1. Online booking tools bring proven
benefits when implementation is tailored
to each company’s specific context.
According to travel managers’ estimates,
just over half of all bookings (52 percent)
are made online in companies that have
implemented OBTs, and some companies
achieve much higher adoption rates. Clearly,
the type of trips being booked plays a key
role, as “simple” point-to-point travel and
domestic travel are typically more suited to
efficient online booking than more complex
itineraries, and the proportions vary between
companies (45-64 percent in a sample of
companies).
Online adoption is also driven by factors
ranging from the macro-economic context
to travelers’ willingness to use an OBT
and the company’s ability to successfully
institute internal change. In particular,
travel managers introducing OBTs need to
explain how online booking fits with their
travel program and underline the benefits
compared to using consumer travel sites,
which inevitably offer more choice. (Many
travelers are dissatisfied with the range of
travel options and fares on their OBT and
41 percent say OBTs decrease the level
of service they receive, indicating room for
improvement.)
High adoption is not a goal in itself, however,
and performance varies in terms of each
company’s ability to maximize the benefits of
online booking. On average, OBTs increase
program compliance, increase productivity
and minimize costs, not only through more
efficient, convenient processes but also
Last but not least, companies need to
carefully consider the trade-offs involved
in sourcing a single OBT or best-in-market
OBTs regionally or locally, as well as whether
to source directly or use reseller agreements.
A multiple OBT approach is chosen by more
than 90 percent of CWT global clients
despite the higher costs, to ensure the best
possible fit with travelers’ needs in specific
countries.
2. To find the right service configuration,
savings and program objectives must
be carefully balanced with the needs of
travelers and travel arrangers. In general,
travelers value simple, fast booking and
24/7 access to service far more than other
features such as service in their native
language or the quality of technical support,
although needs vary between organizations
(e.g., some populations of travelers may
require special VIP service or end-to-end trip
management).
9
In terms of booking services, the features
that count most are the ability to book
when it suits travelers, obtain the lowest
rates and make all bookings through the
same channels. At the bottom of travelers’
priorities are items such as access to other
travelers’ advice, pre-trip information and the
quality of advice obtained, which suggests
that travelers already know what they want
when booking.
When switching service configurations,
travel managers should consider a whole
range of criteria, ranging from the need for
local content and service support to their
company’s ability to manage change. The
main available configurations (on-site, fullservice, standardized and multinational
service centers) each serve different
priorities that should be discussed with the
travel management company, along with
service level agreements.
For best results, companies should ensure
they have an effective travel policy in place
with measures to reinforce compliance. The
savings available to companies vary with
the starting point but can reach 20 percent
of operational costs (i.e., 0.5-1.0 percent
of total travel spend), mainly due to more
efficient processes and lower operating
costs linked to service center location.
3. A wide range of services enhance the
traveler experience, helping to boost wellbeing and productivity. Among those that
stand out for travelers are easily accessible
information, user-friendly technology that
facilitates trip planning, and 24/7 assistance
around the world.
Seven important services are particularly
worth exploring: Web-based traveler
portals that provide easy access to practical
tools and information (e.g., destination
intelligence for safety and security purposes);
traveler profile tools that make booking
more efficient while helping to improve
compliance; numerous mobile services
that are highly valued by travelers wanting to
save time and stay informed while on the go;
highly-valued emergency assistance and
risk management services; social media,
which are likely to be used more commonly
in business travel in the future, compared
to the small minority of travelers who use
them at the moment; VIP and end-to-end
services that may be required for specific
segments of travelers; and unused-ticket
management solutions, the best of which
are fully automated.
4. Improvements in expense management
can bring considerable cost savings,
while increasing policy compliance and
reducing fraud. It follows that expense
management is a major focus area for
companies, especially in view of the recent
economic downturn and increasingly
strict regulation on corporate governance.
Three main areas need to be tackled:
policy (including which expenses are
acceptable, how to pay and how to file
claims), processes (many of which can
be outsourced), and systems (either Webbased or hosted, and ideally automated and
integrated into other IT systems).
Companies can often gain in efficiency and
flexibility by reorganizing the way these tasks
are handled. For example, an automated
expense management system can reduce
the cost of processing expense claims by
more than 30-40 percent, according to
industry experts. Efficiency gains and cost
savings can also be made through in-house
shared services or outsourcing, and/or the
use of low-cost locations.
1. Online booking tools bring proven benefits
when implementation is tailored to each
company’s specific context.
To reap the full benefits of online booking, companies require a tailored strategy and
thorough implementation plan. Online booking tools (OBTs) are used increasingly by
companies wishing to minimize costs while providing convenient booking features for
travelers. Many factors influence online adoption, from the macro-economic context
to organizational culture, but high adoption rates are possible, particularly when a
comprehensive implementation strategy is implemented. Companies also need to
carefully consider the trade-offs involved in using a single OBT or best-in-market OBTs
regionally or locally, as well as whether to source directly or use reseller agreements.
Benefits of online booking
When implemented in the right way, corporate
online booking tools enable companies to
generate significant savings while offering
travelers convenient service features. This CWT
research confirms a number of benefits:
Lower transaction costs. Transaction costs
typically represent 3-5 percent of total travel
spend. Within this budget, simple, touchless
online transactions generally cost half as
much to process as manual offline bookings,
while the cost of assisted bookings comes
about halfway between online and offline
Figure 5: Transaction costs are significantly lower for online bookings
High case
Low case
Online tr
ansac tio
n
on
A ssis ted
sac tion
line tran
O ffline tr
ansac tio
n
Based on CWT client transactions for North America
11
Travel managers rank booking cost optimization
top of the list of factors driving online adoption,
followed by service features that enhance the
traveler experience (24/7 availability and ease
of booking), as shown in Figure 6.
transactions. In some cases where assistance
is required more than once, however, the
cost may be higher than for offline bookings
if per-touch charges are applied, given that
companies must also pay an OBT fee.
Figure 6: Travel managers say optimized booking costs are the main driver of online usage
Factors driving online usage in order of importance
Booking cost optimization
24/7 availability
21
1 8
Ease of booking
7
Increased compliance
with travel policy
10
Speed of booking
14
11
15
7
10
17
15
21
30
20
17
12
13
5
3.5
14
16
14
40
60
Respondents (%)
3.4
12
16
16
Least important
6
16
19
47
3.0
23
25
22
2.5
39
36
25
Standardization of travel
management across regions
0
12
Average
ranking
6
80
4.0
5
4.6
8
100
Most important
4
3
2
1
Lower average ticket price (ATP). Previous
in-depth CWT research4 indicates that the
ticket price is on average 5 percent lower
when travelers use online booking tools
instead of contacting a travel counselor,
and savings can sometimes reach 15
percent from combined savings on airfares
and booking fees. In the current survey,
travel managers say the average air ticket
price paid through online booking tools is
7 percent lower on average, while close to
a third of respondents (or 45 percent when
excluding “don’t know” responses) believe it
is more than 8 percent lower. An analysis of
transaction data for a global company’s top
15 city pairs used by its global headquarters
in Paris shows a reduction of 6 percent in
ATP. (See Figures 7-8.)
Figure 7: Travel managers say online booking reduces the average air ticket price by
7 percent on average
Travel managers (%)
Estimated savings on airfares through online booking
40
Average: 6.7%
1,595
30
20
37
10
9
3
0
No savings
<2%
5
2-4%
12
4-6%
6
6-8%
12
8-10%
16
>10%
Don't know
Source: CWT Travel Management Institute.
4
Toward Excellence in Online Booking, CWT Travel Management Institute (2006)
13
Figure 8: The average air ticket price paid by a global company on its top 15 city pairs from
France is 6 percent lower when booked online
Difference in average air ticket prices (online vs. offline)
Average: -5.9%
7.8
5.6
-3.2
-7.1
-9.6
-6.8
3.2
-9.0
A
B
C
D
E
F
G
H
I
J
K
L
Based on tickets between France and a company’s top 15 destinations in economy/coach class in 2010
A key reason for the lower ATP is that travelers
are more likely to choose cheaper fares
when they see a range of options on their
screens and experience “visual guilt.” They
may also access cheaper booking classes
by booking earlier, although the impact of
online booking on advance booking appears
rather limited: nearly 35 percent of surveyed
travelers and 20 percent of travel managers
say OBTs do not lead to earlier booking.
(See Figure 9 on Page 16.)
-4.9
-1.1
-2.8
M
N
O
-22.9
-24.4
Route
-8.0
-9.6
Improved compliance with the travel
policy, bringing savings. In the CWT survey,
just over half of travelers (52 percent) agree
that booking online forces them to be more
compliant with the travel policy, and previous
research5 also shows that companies using
OBTs have higher levels of compliance with
preferred airline policy and a greater share
of restricted fares than other companies.
Improvements in both these areas can
bring substantial savings. This is true both
in mandated and non-mandated policy
environments, as online booking tools can
be configured to display preferred options,
flag out-of-policy alternatives, provide
policy reminders or refuse non-compliant
bookings.
5
Efficient booking processes. OBTs can
save travelers time when booking through
standardized, well-designed processes, and
can add convenience by being available
24/7 and offering relevant information
(e.g., on travel options that comply with
the travel policy). Surveyed travelers
tend to acknowledge these benefits: for
example, 54 percent of respondents say
that booking online is faster than contacting
a travel counselor (vs. 23 percent who say
it is not), while 46 percent say booking is
simpler and requires fewer iterations (vs. 28
percent who say the opposite). It is worth
noting, however, that 41 percent of travelers
say online booking decreases the level of
service they receive. (See Figure 9.)
Playing by the Rules: Optimizing Travel Policy and Compliance, CWT Travel Management Institute (2008)
15
Online booking: numerous benefits
Figure 9: Travelers and travel managers acknowledge the benefits of online booking
Travelers
More appropriate for simple bookings
5 222
Forces me to comply with the travel policy
7
Faster than offline booking
3
3 4 2
11
Simpler and requires fewer iterations
10
Reduces the level of service I receive
8
Generally helps me to book cheaper fares/rates
11
Reduces the content I have access to
9
6
5
5
10
18
31
3
3
7
6
23
5
10
26
11
17
11
26
6
6
15
6
6
10
6.2
17
5
14
33
6
9
11
4
5.7
11
5.6
11
5
32
5
8
13
3
11
5.5
7
5
33
5
9
10
5
11
5.5
6
7
3
20
43
40
4
60
4.5
6 2 5
100
Completely agree
10
9
8
7
6
5
4
3
2
5
80
Completely disagree
1
6.2
13
7
19
0
6
6
7
5
Forces me to book earlier in advance
Respondents (%)
22
Average
score
7.2
Travel managers
More appropriate for simple bookings
21 5
Generally helps travelers to book
cheaper fares/rates
Forces travelers to comply with the travel
policy
6
17
6 3 24
13
4 12 3
Faster for travelers than offline booking
7
Simpler for travelers and requires fewer
iterations
7
Forces travelers to book earlier in advance
6
Reduces the level of service travelers receive
8
4
6 2 4
4 2
6
20
10
8
6
9
28
9
6
6
16
6
19
19
8
6
5
31
5 3
20
2
10
46
7
31
20
26
5 3
Respondents (%) 0
53
7
23
15
Reduces the content travelers have access to
16
Average
score
8.8
5
24
9
40
5
9
9
1
3
7.2
22
6.3
6.1
15
10
5.6
1
8
5.1
4
7
5.1
4
13
16
80
Completely disagree
2
24
1
6
60
7.3
100
Completely agree
4
Based on a survey of travelers (2,106 responses) and travel managers (110 reponses)
5
6
7
8
9
10
More often than not, survey respondents say
the benefits of online booking tools far outweigh
the limitations: 65 percent of travel managers
and 52 percent of travelers say “yes, by far” or
“yes, somewhat.” (See Figure 10).
Figure 10: Travel managers are more enthusiastic than travelers about the benefits of online
booking
Travelers’ views on whether OBT benefits outweigh the drawbacks
Don't know
11%
Yes, by far
13%
No, not at all
8%
No, not really
29%
Yes, somewhat
39%
Travel managers’ views on whether OBT benefits outweigh the drawbacks
No, not at all
7%
Don't know
12%
Yes, by far
27%
No, not really
16%
Yes, somewhat
38%
Based on a survey of of travelers (2,120 responses) and travel managers (192 responses)
17
Growing use of online booking
tools
Given the benefits, it is hardly surprising that
more and more bookings are being made online,
as noted by 70 percent of travel managers
and 53 percent of travelers in companies that
implement OBTs. On a scale of 1-10 (1 being a
strong decrease and 10 being a strong increase),
the average scores are 7.5 for travel managers
and 6.7 for travelers. Interestingly, there are
two peaks in travel managers’ responses: one
around 5 (online booking remaining the same
over the past few years) and a slightly higher
peak around 10 (a strong increase), as shown
in Figure 11.
Figure 11: Travel managers and travelers note an increase in online booking over the past
3-5 years
Perceived evolution in online booking
Travel managers (%)
40
30
Average: 7.5
20
31
27
10
2
0
0
1
2
Strong decrease
1
3
6
0
4
5
No change
6
12
15
6
7
8
9
10
Strong increase
Travelers (%)
40
30
Average: 6.7
20
40
10
2
1
2
1
1
2
3
4
5
0
Strong decrease
5
6
No change
Based on a survey of travel managers (115 responses) and travelers (2,266 responses)
11
7
18
15
5
8
9
10
Strong increase
Today, OBTs are used for just over half of
all bookings on average, according to travel
managers. (See Figure 12.)
Figure 12: Online adoption reaches 52 percent on average, according to surveyed travel
managers
Respondents (%)
30
Average: 52%
20
27
10
0
26
18
17
8
4
Don’t know
<30%
30-50%
50-70%
70-90%
>90%
Online adoption (% all online and offline bookings in companies that use OBTs)
In the future, online booking should grow
further, according to 84 percent of travel
managers. Most travelers, however, say their
use of online booking will probably remain the
same (56 percent, compared to 14 percent of
travel managers). These opinions are shown in
Figure 13.
19
Figure 13: Most travel managers believe online booking will continue to grow, whereas
travelers expect usage to stay the same
Estimated future evolution of online usage
Travel managers (%)
40
Average: 7.9
30
20
36
10
14
0
1
0
1
2
Strong decrease
2
3
16
8
9
0
4
14
5
No change
6
7
8
9
10
Strong increase
Travelers (%)
60
50
40
Average: 6.2
30
20
56
10
14
0
1
1
1
2
Strong decrease
1
1
3
4
5
No change
6
8
10
6
7
8
Based on a survey of travelers (2,265 responses) and travel managers (116 responses)
12
4
9
10
Strong increase
There are wide variations in online usage levels
between different countries and industries,
however. For example, Australia’s online usage is
nearly triple Spain’s (44 percent vs. 14 percent).
Moreover, according to a CWT analysis of
70 million transactions, high-tech companies
have been faster to adopt online tools than
those operating in energy and utilities, chemicals
or the public sector. For example, usage reaches
61 percent in electronics companies, compared
to 17 percent in the public sector and 34
percent on average across all industries. (See
Figures 14-15.)
Figure 14: Online usage varies considerably between countries and industries
OBT usage by country (% all transactions)
44
41
Australia
United
States
37
Canada
26
France
19
17
17
14
Germany
United
Kingdom
Sweden
Spain
Based on CWT transaction data
21
Figure 15: High-tech industries lead the way in online usage
Online usage by industry
Electronics
Agriculture
Hospitality
Construction
Telecommunication equipment and services
Computer hardware, software and services
Food and beverage
Engineering and technology
Consumer products and services
Business services
Healthcare, life sciences and pharmaceuticals
Industrial manufacturing
Media and communication
Retail
Consulting
Metals and mining
Banking and financial services
Aerospace and defense
Automotive and transportation
Energy and utilities
Chemicals
Government and public sector (incl. not for profit)
Other
Average
61
54
53
52
47
46
46
46
44
42
41
40
38
37
37
34
33
31
30
29
20
17
22
34
0
10
20
30
40
50
60
70
Online usage (% all transactions)
Based on 70 million transactions
These variations are partly explained by external
factors such as Internet usage and the economic
context, as well as corporate culture:
Internet usage. The extent to which a
country’s population goes online impacts
travelers’ readiness to use online tools, as
well as the maturity of the service offering.
Figure 16 shows the correlation between
online booking and Internet usage in
different countries. In this way, the growth
in online booking is part of a wider online
trend in all areas of business and people’s
private lives.
Figure 16: Online booking usage correlates with Internet usage
Online booking vs. Internet usage by country
Internet
usage
June 2010
(%)
100
United Kingdom
80
Singapore
Hong Kong
60
Ireland
Germany
Norway
New Zealand
Australia
United States
Finland
Latvia Switzerland
Czech Republic
y=0.4x + 0.7
R 2=0.6
40
20
0
0
10
20
30
40
50
60
70
Online booking 2010 (%)
Sources: ITU, European Union statistics, CWT transactions, CWT Travel Management Institute
23
Economic context. Companies tend to
accelerate their online usage plans when
under greater pressure to reduce costs,
as has been the case over the past few
years with due to the economic downturn.
Figure 17 shows how online usage grew
32-36 percent faster after the start of the
financial crisis (third quarter 2008 to third
quarter 2010) than before (first quarter
2005 to second quarter 2008).
Figure 17: Online usage increased with the economic downturn
Impact of economic crisis on OBT usage in Europe and Asia Pacific
+36 %
Growth in
online usage (%)
+32%
1.0
0.8
0.6
0.4
0.92
0.89
0.66
0.70
0.2
0
Europe
Asia Pacific
Growth increase per quarter before crisis (Q1 2005 - Q2 2008)
Growth increase per quarter after crisis (Q3 2008 - Q3 2010)
While general trends can be observed, the
pattern is different for every company, as
illustrated by three examples in Figure 18. The
first shows a global high-tech company with very
high, stable levels of online adoption (more than
80 percent), while the second shows a global
chemical company with much lower adoption
(hovering around 20 percent). In the third, a
global manufacturer doubled its adoption to
around 50 percent in 2009 but later lost some
momentum.
Figure 18: Online adoption trends vary between companies
Online adoption
(% all transactions)
100
Example 1: a global high-tech company
80
60
40
20
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2009
2010
Based on 1,400,000 transactions
Online adoption
100
Example 2: a global chemical company
80
60
40
20
0
2009
2010
Based on 314,000 transactions
Online adoption
100
Example 3: a global manufacturing company
80
60
40
20
0
2009
2010
Based on 181,000 transactions
25
Corporate culture. In addition to being
influenced by external factors such as the
industry context, companies with the highest
adoption rates tend to have one or more of
the following internal attributes:
systematically measured and managed
E-culture: employees are technology
driven and go online for many
administrative tasks, such as expense
reporting
Adaptable to change
Mandate-based: decision-making
generally a top-down process
Self-enabling: a strong do-it-yourself
culture, where most employees do not
have administrative assistants
is
They also employ best practices in terms of
online implementation, as discussed on Pages
27-37.
Process-focused: a methodology to
improve process performance that is
Figure 19: Online adoption is impacted by corporate culture
Average score
Very strong 10
Impact on online adoption
9
7.8
8
7
6
5
6.0 6.2
5.5
4.8
6.0
5.5
6.5
6.3
6.9
6.3
5.7
7.0
6.6
5.8
5.2
6.3
6.6
5.4 5.5
4
3
2
Very weak
1
Ability to change
Self-enabling
Online adoption
Process performance
<30%
30-50%
E-culture
Culture of mandates
50-70%
>70%
Travel patterns. In Figure 14 on Page 21,
the countries with the highest online usage
levels (Australia, the United States and
Canada) have a high proportion of domestic
travel and many “simple” point-to-point
bookings.
Access to a growing range of content
and features. Online booking tools are
integrating more content and features that
were previously only available offline (e.g.,
low-cost flights, rail bookings or reservations
for more than one passenger at a time),
although performance varies considerably
between providers in different markets.
Implementing an online
booking tool
The way an online booking tool is implemented
goes a long way to ensuring high adoption
levels and optimized benefits. A number of best
practices are worth noting:
Define an OBT implementation strategy.
Ideally clear objectives are set before embarking
on a project that involves considerable
stakes and challenges. Surprisingly, many
companies either have no online strategy
or no action plan attached to their strategy
(Figure 20).
Figure 20: 37 percent of companies have no online strategy or action plan
Breakdown of companies by OBT strategy/action plan
Strategy and action plan
fully communicated
21%
Don't know/
not applicable
1%
No strategy defined
and no action plan
19%
Strategy and action plan
ready for deployment
with appropriate resources
16%
Strategy and action plan complete
but no resources/budget
5%
Strategy defined but no action plan
18%
Strategy defined and action
plan being prepared
20%
Based on a travel program diagnostic survey for 152 clients
Set realistic objectives for OBT adoption,
in terms of the amount and type of
bookings that can be made online.
Surveyed travelers and travel managers
agree that online booking is most suitable
for “simple” transactions (67 percent and
93 percent respectively, as shown in Figure
9 on Page 16). Above a certain level of
complexity (e.g., multi-segment trips)
booking tends to be more efficient through
a travel counselor.
Before implementing an OBT, companies
should therefore consider the proportion
of “simple” trips being booked, and in
particular, point-to-point trips compared
with
more
complex
multi-segment
itineraries. Based on CWT global client
data for second semester 2010, point-topoint trips account for more than half of
all transactions: 55 percent overall, rising
to 62 percent in Europe, Middle East and
Africa, although they are less common in
Asia Pacific (34 percent of transactions) and
in first class (45 percent).
(See Figure 21.)
27
Figure 21: Point-to-point trips account for 55 percent of transactions on average
Point-to-point vs. multi-segment trips (H2 2010)
By region
Trips (%) 100
80
34
52
62
58
55
42
45
North America
Global
60
40
66
20
48
38
0
Asia Pacific
Europe,
Middle East
and Africa
Latin America
By travel class
Trips (%) 100
80
60
52
55
45
55
72
40
20
48
45
55
45
28
0
Economy/
coach
Premium
economy
Point-to-point
Based on 12.5 million transactions
Business
Multi-segment
First
All classes
At a company level, point-to-point trips account
for 45-64 percent of transactions in a sample of
15 global CWT clients, underlining the need for
a tailored approach to online booking strategy.
(See Figure 22).
Figure 22: Point-to-point trips account for 45-64 percent of transactions in a sample of
15 global companies
Point-to-point vs. multi-segment trips by company (H2 2010)
Trips (%)
100
80
36
36
40
40
41
41
41
43
47
48
50
51
54
55
55
64
64
60
60
59
59
59
57
53
52
50
49
46
45
45
60
40
20
te
g
era
lom
ng
Co
T ir
em
an
u fa
c tu
r in
i ng
ul t
ns
or
od
go
er
um
Co
s(
sp
un
m
m
co
Int
er
ne
ta
Co
ns
Te
le
t s)
n
t io
rt
ic a
po
gy
t ra
nd
ya
pu
erg
En
m
ns
olo
ng
hn
ini
te r
an
as
l, g
nd
co
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te c
dm
ul t
i ng
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ns
nk
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ng
ini
hn
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m
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te c
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ng
lom
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dm
as
l, g
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ns
um
er
go
od
s(
co
Type of
company
an
sm
eti
c s)
0
Point-to-point
Multi-segment
Based on 2.1 million transactions
Companies should not exclude all “complex”
trips from online booking, however. When
the same multi-segment trips are booked
repeatedly, offline travel counselors can
identify suitable flight options and two or three
hotels in each location, enabling travelers to
easily replicate previous bookings using the
standard OBT “repeat trips” feature. Moreover,
in Germany, Cytric has developed software to
handle multi-segment itineraries efficiently. This
said, offline booking remains the most effective
way to guarantee the best routes and prices for
complex trips, especially when repeat online
booking may exclude the lowest available fare.
29
Companies can also consider their share of
domestic and international trips. CWT client
data for Asia Pacific, for example, shows that
online booking is 3.5 times more common for
domestic flights than international flights, which
tend to be more complex and less recurrent.
(See Figure 23.)
Figure 23: In Asia Pacific, online booking is 3.5 times more common for domestic flights
than international flights
Online booking tool usage in Asia Pacific (2007 – 2010)
x3.6
x3.0
x3.4
x3.7
OBT usage (%)
35
25
20
15
27
10
5
9
7
32
28
26
9
8
0
2007
2008
2009
International flights
As mentioned earlier, the success of online
booking for different kinds of trips also
depends on the company culture and travelers’
willingness—and ability—to use an OBT. One
surveyed firm, a global consultancy, has dropped
online booking after meeting with considerable
resistance from travelers who prefer to book
through travel counselors. In contrast, a global
high-tech company with a strong self-help
culture has a high online adoption rate, including
for multi-destination itineraries. For the latter
company, the key question is how to ensure
sufficient content in the OBT so that travelers
can book the most cost-effective travel options:
country-specific content such as rail or lowcost carriers must be included if the company
2010
(January – October)
Domestic flights
is to optimize savings. This illustrates how high
adoption is not a cure-all solution by itself and
must be part of a well thought-out market-bymarket strategy.
Minimize assisted online bookings. This is
important if companies are to reap maximum
benefits from their online booking strategy in
terms of efficiency and traveler satisfaction.
Fifty-one percent of travel managers of large
global or regional companies say online
bookings require assistance due to traveler
error or request, compared to 15 percent
who say they are due to TMC back-office or
technical constraints. (See Figure 24.)
Figure 24: 51 percent of travel managers in large global/regional companies say assisted
bookings are due to traveler error or request, compared to 15 percent who say they are due
to TMC back-office/technical constraints
Online bookings requiring assistance for different reasons
Large global/regional companies
>40%
21-40%>40%
16%5%
5%
21-40%
16%
Don't know
34%
Online bookings
requiring assistance due to
traveler error or request
30%
5%
5%
<20%
<20%
5%
21-40%
Online bookings requiring
>40%
assistance due to
TMC back-office/technical constraints
Local companies
>40%
5%
21-40%
13%
Don't know
34%
Online bookings
requiring assistance due to
traveler error or request
31%
6%
<20%
3%
<20%
8%
Online bookings requiring
21-40%
assistance due to
>40%
TMC back-office/technical constraints
Based on travel program diagnostic surveys (152 and 322 clients)
31
the travel management company pays upfront
and invoices the customer), can be avoided by
requiring travelers to use their corporate payment
cards when making a reservation. Further
bookings can be completed without assistance
if the company favors instant ticketing, since
around 50 percent of all air bookings require
intervention by travel counselors when airlines
bring forward their ticketing deadlines.
Many more bookings could be completed
without assistance if the right processes are
used. For example, companies can switch off
the OBT’s “add comment” function, which is
often used unnecessarily. They can also require
travelers to keep their profiles up to date so
that all the relevant information is available
without involving a travel counselor. (The main
reasons for automation failure are incomplete
or outdated credit card information, or missing
passport information, such as full name, gender
and country of passport issuance, which is
required by the Advanced Passenger Information
System used in many countries, such as China,
India, Japan, the United Kingdom and the
United States.) Billing issues that call for manual
intervention, such as hotel bill-back (where
According to surveyed travel managers, at least
15-20 percent of assisted bookings could be
avoided. (See Figure 25.) Some companies
reach considerably higher levels of performance:
(See Pages 24-25.)
Figure 25: Travel managers estimate that 15-20 percent of assisted bookings could be made
touchless
Assisted online bookings that could be avoided (i.e., non-assisted)
in a sample of large regional/global companies
<5% bookings
22%
Don't know/not applicable
45%
5-20%
21%
>80%
1% 60-80%
40-60%
2%
5%
Average: 16%
20-40%
4%
Ensure that the travel policy and OBT
configuration meet travelers’ needs.
When questioned about why travelers book
outside the preferred online channel, travel
managers say the main reason is cheaper
fares being available through other booking
channels. This is confirmed by travelers’
relatively low satisfaction ratings for access
to the cheapest fares: just 5.7 out of 10 on
average, with a score of 6 or more for only
49 percent of respondents. (See Figures 2627.)
Figure 26: Travel managers say the main reason travelers book outside the online booking
tool is that they find cheaper fares elsewhere
Influence of different factors on non-compliance
with preferred channels according to travel managers
Travelers finding cheaper fares
through other booking channels
13
Proposed travel option
not meeting traveler needs
6
4 3
17
Travel management company not empowered
to enforce policy for non-compliant bookings
19
7 32
3 22
25
Travel management company
strictly enforcing the policy
7
30
Travelers’ personal preference for
booking on other travel Websites
0
28
8
13
4 4
6 2
4 6
6 32
25
6
23
6
6
20
3
24
6 32
30
5
14
6 3
32
Travelers’ lack of awareness
of preferred booking channels
11
31
30
Compliance not
a high management priority
6
6 1
26
40
Average
score
6
5
2
19
4.9
4.9
4 2
17
4.8
9
1 10
4.5
6
3
4.4
9
80
100
Respondents (%)
No influence
1
5.3
11
17
5
60
3
2
8
8
6.1
21
Strong influence
3
4
5
6
7
8
9
10
33
Figure 27: Traveler satisfaction scores are relatively low regarding lowest-fare availability on
their corporate online booking tool
Traveler's satisfaction with online booking tools
for obtaining cheapest fares
Respondents (%)
25
20
Average: 5.7
15
25
10
14
5
7
5
8
7
1
2
3
4
17
6
4
7
0
Very dissatisfied
5
Score
6
7
8
9
10
Very satisfied
Another important reason travel managers
mention for travelers booking outside the
OBT is their dissatisfaction with the travel
options offered. This may be due to the OBT
parameters set by the company, or some
trips deviating from the main travel patterns
covered by preferred supplier agreements.
Travelers may also want to book with the
same suppliers they use for leisure travel
(e.g., low-cost carriers that may not be part
of the travel program) and compare the OBT
with leisure reservation sites that inevitably
offer more choice.
Travelers need to be reminded that OBTs
are intended to facilitate their access to
bookings supporting the travel program,
and that using their OBT positively impacts
supplier negotiations and the cost of travel
after discounts. For example, research by
Topaz International in 2009 shows that
airfares booked through travel management
companies were equal or lower to fares paid
on public Internet sites in more than 90
percent of cases. (See Figure 28.) Moreover,
booking through the preferred channels
brings other benefits, such as the ability to
track travelers effectively in emergencies.
Communication on these issues plays a key
role in change management programs, as
discussed on Pages 37.)
Ensure that the OBT is user friendly and
travelers are trained to use it. Travelers are
more likely to abandon their online booking
tool in favor of another booking method if
processes are unnecessarily complicated
or time-consuming, especially compared
to airlines’ Websites that are fast and easy
to use, being limited to their own offerings.
This is a weak point, according to travel
managers’ satisfaction ratings: OBT usability/
features receive one of the lowest average
scores, just ahead of OBT evolution and
traveler satisfaction. (See Figure 29.)
Figure 28: Airfares booked through TMCs were equal or lower to fares booked on public
Internet sites in more than 90 percent of cases
Airfares (%)
100
7
9
9
6
7
6
5
8
93
91
91
94
93
94
95
92
2001
2002
2003
2004
2005
2006
2007
2008
80
60
40
20
0
Agency fare equal or lower
Agency fare higher
Source: CWT Management Institute,
Based on research by Topaz International, May 2009
Figure 29: Travel managers are less happy with traveler satisfaction than other criteria for
evaluating online booking
Travel managers’ satisfaction with online booking tool features
5 2 5 5
Compliance with travel policy
Accuracy of proposed rates
8
15
33
6
Ability to steer travelers
toward preferred suppliers
6
7
4
Comprehensiveness of content
8
2
9
Adoption rate
(% of bookings made online)
16
Ergonomy/functionalities
Evolution of the tool
Traveler satisfaction
5
16
8
21
14 6
7
10
9
4
9
6
7
8
13
12
19
15
14
2
17
80
Very dissatisfied
1
12
8
40
60
Respondents (%)
6.6
8
6.2
6
9
10
11
8
6
15
15
24
20
7
18
11
29
10
22
15
9
20
14
19
12
20
3
21
6
22
5
0
15
21
10
7
10
Average
score
4
6.0
5.8
9
5.7
42
5.5
5
5.3
3
5.2
100
Very satisfied
3
4
5
6
7
8
9
10
35
Ongoing traveler satisfaction surveys carried by
CWT (CWT Listens) reveal significantly lower
scores for online than offline transactions in all
regions, underlining that progress can still be
made in terms of user-friendliness and travelers’
acceptance of this way of booking. In an analysis
of close to 270,000 bookings worldwide made
between January 2010 and May 2011, the
population expressing high satisfaction (at least
7 out of 10) is much larger for offline bookings
(87 percent) than for online (78 percent).
Conversely, the population expressing high
dissatisfaction (4 or below) is much smaller for
offline bookings (6 percent) than for online (10
percent). These results are mirrored across all
regions.
Figure 30: Satisfaction scores are significantly lower for online than offline transactions
Travelers (%)
100
80
47
42
48
57
64
44
42
37
37
30
27
10
4
4
Offline
Asia Pacific
7.9
18
13
5
4
Online
7.5
36
32
35
20
0
74
50
60
40
29
36
45
6
1 2
Offline
8.6
11
10
32
24
2
5
5
Online
Offline
Online
Latin America
16
9
3
3
Offline
North America
8.1
8.9
3-4
7.7
5-6
12
7
3
3
Offline
Europe, Middle East and Africa
8.1
7.3
Average satisfaction scores
1-2
6
5
Online
7-8
Based on traveler feedback (CWT Listens survey) after 270,000 transactions (January – May 2010)
9-10
5
5
Online
Global
8.3
7.6
Design and communicate a clear
policy on online booking, supported
by measures to reinforce compliance.
Mandating the policy, rather than merely
presenting it as guidelines, tends to work
best, although this is not suitable for all
company cultures. Compliance can be
reinforced at the time of booking by the OBT
configuration and offline measures such
as empowering travel counselors to refuse
bookings that could be made online. Travel
managers should constantly review policy
settings to enable travelers to make smart
decisions (e.g., accepting a flight that costs
US$100 more if it avoids an overnight stay
or a 4-hour connection). (See Pages 60-70
for more information on travel policy and
compliance.)
Implement a change management
program to support
OBT adoption.
Typically a plan will include communications,
training and post-implementation support
rolled out over several weeks initially,
combined with longer-term action (e.g.,
regular communications on OBT features and
user tips). Effective change management is
critical to the success of an online strategy, by
preparing employees for the new processes,
explaining the benefits and creating buyin. However, the survey reveals plenty of
room for improvement here: 23 percent of
companies fail to implement specific action
to support their online booking policy.
Figure 31: Few companies implement medium- to long-term change management to
support online implementation
Breakdown of companies by change management/communication program
to drive online booking adoption
Actions for permanent/lasting change
actions focusing on only one area
or target audience
7%
8%
No specific action
23%
Permanent/lasting change management actions
(e.g. coaching/training)
13%
Multiple actions in the mid-term
(about 2 years)
13%
3-5 actions
in the short-term
(a year or less)
18%
1-3 actions
(e.g., a memo at launch)
18%
37
Selecting suppliers
However, this approach can come at the cost
of local content and features, and may not
suit travelers in all markets. A best-in-market,
multiple OBT approach is more appropriate
when a company wants to ensure the
best possible fit with its travelers’ needs in
specific countries. This is particularly true
of companies that do not mandate online
booking in their policy and must therefore
obtain buy-in from travelers. The main
disadvantage is the potentially higher cost,
linked to implementation and managing
several suppliers.
The choice of online booking tools is critical to
the success of an online strategy, and travel
managers need to work through a number of
important steps:
Choose between a consolidated global
OBT strategy or best-in-market model. No
single OBT offers all the features available
in all markets: for example, OBTs that lead
the market in North America lag behind
the leaders in Europe in terms of content
(particularly rail) and service/support
features. In addition to content, local service
support can also be lacking.
Each strategy involves trade-offs, depending
on the company’s culture and goals.
Companies opting for a single OBT
worldwide can gain in terms of ease of
use, consistent content and streamlined,
more cost-effective operations (e.g.,
implementation, maintenance and updates).
More than 90 percent of CWT global
clients who implement online booking
take a best-in-market approach, but it
is important to note that overall traveler
satisfaction levels are comparable for both
types of online approach, indicating that the
execution is as important as the strategy.
The benefits of each
summarized in Figure 32.
approach
are
Figure 32: Key benefits of a consolidated global OBT and multiple best-in-market OBTs
Single global online booking tool
Economies of scale
Single supplier management
Improved leverage and customization
Consistent user experience
Simplified implementation
Best-in-market
Market knowledge
Local support
Local content
Multiple best-in-market
online booking tools
Choose the right OBT provider. A number
of key criteria should be considered when
selecting one or several online booking tool
suppliers:
Geographical footprint and strengths
in key markets. As mentioned above,
an OBT may be present in the relevant
markets but not have the same capabilities
in each due to market constraints or the
OBT vendor focusing its development on
specific geographical markets. As a result,
the OBT that offers the best fit varies with
each company’s global or local needs.
(See Pages 40-41.)
Air booking capabilities, such as
enabling one-way bookings and maximum
segments on itineraries involving multiple
destinations, displaying all types of fares
(negotiated and public), showing fees
for exchanging tickets and other ancillary
charges, and offering low-cost carriers.
Hotel booking capabilities, such as
integration with non-GDS hotel databases,
displaying spend caps per city and showing
previously booked hotels per destination.
Other booking capabilities, such as
integrating national and international rail
bookings (a key feature in some markets
such as France) and enabling “guest”
booking for travelers outside the company
who do not have a profile in the system.
Mobile applications, and in particular
booking features, which will be increasingly
important.
Alignment with GDSs. GetThere is aligned
with Sabre, its parent company, while AeTM
is owned by Amadeus. These booking tool
providers tend to focus their development
and support on configurations using their
related GDSs.
Ability to support preferred payment
methods, such as corporate payment
cards for all bookings, or different payment
methods (e.g., individual corporate cards
or lodge cards) depending on the type
of booking (air, hotel, rail or car booking)
and pay-as-you-fly travel passes (e.g., for
American Airlines, Air Canada and SAS).
End-to-end integration with expense
management tools. For example, Concur
and KDS both offer end-to-end travel and
expense management solutions. Rearden
Commerce integrates ExpenseWire and
other financial systems.
Policy support, such as targeting dynamic
messaging at specific groups of travelers,
customizing exception codes, restricting
out-of-policy bookings, and automating
pre-trip approval or notifying designated
personnel when out-of-policy bookings are
requested.
Site administration, to support the
travel policy (e.g., only displaying
preferred suppliers or displaying them
more prominently on the screen), the
company’s branding (adapting the screen
environment) and customized OBT
parameters (e.g., the number of authorized
hierarchy levels impacting the options
appearing on the screen).
Configuration features such as data
protection certification and the ability to
synchronize with Web-based portals.
Other factors, including cost, service level
agreements and the quality of commercial
relationships.
39
Which OBT for which market?
For companies wishing to consolidate their online booking, CWT recommends a choice of six
regional suppliers (no single provider has the strongest offering in all regions):
Amadeus e-Travel Management (AeTM): a market leader in Europe, also present in the
Americas and strongly developing in Asia Pacific
Concur Cliqbook Travel, which is driving high satisfaction as a leader in North America and
developing in other regions, especially Europe, Middle East and Africa
GetThere: the optimal choice for a single OBT strategy, as a leader in North America, which is
present also in Latin America and Asia Pacific, and developing in Europe
KDS: a market leader offering integrated expense management in Europe, and also developing
in other regions
Rearden Commerce: a growing OBT in North America that is a close fit for smaller companies
and offers additional traveler services such as airport parking, dining, events and Web conferencing
Traveldoo: an OBT with a strong presence in France and growing in Europe
Companies implementing a best-in-market OBT strategy, can also consider a variety of multilocal providers, including Arnold in Australia and New Zealand; CWT B+Plus in Japan;
CWT Connect Now for small to medium companies in Europe, Middle East and Africa; CWT Online
in China; and Smart Traveler in Brazil.
In some countries (e.g., China, Indonesia, Japan and Korea), companies must continue to use local
OBTs regardless of their strategy because regulations on content availability are limiting foreign
providers’ development there. In other markets (e.g., Nigeria and other low-cost labor countries),
CWT may recommend a fully offline strategy, which can be more cost-effective and efficient than
implementing an online booking tool.
As technology evolves along with user expectations, travel managers should carefully monitor the
available features and switch OBTs if necessary to ensure an optimal fit with needs.
41
Select an appropriate OBT supplier
model. Companies are fairly evenly divided
in their use of direct agreements with OBT
suppliers or reseller agreements. Direct
deals are slightly more common, especially
among larger companies, but the proportion
of reseller agreements is growing. This
reflects companies’ different priorities. Both
types of clients see advantages of their type
of model but the top three benefits noted
by companies sourcing OBTs directly are (in
order) commercial relationship, price and
evolution of the tool, while the top three for
clients who delegate OBT management to
their TMC are price, commercial relationship
and quality of service. (See Figure 33.)
Figure 33: Companies that source OBTs directly rank the benefits of their model differently
to those that manage OBTs through their TMC
Companies that manage their
online booking tool(s) through the TMC
Most important
Price
Commercial
relationship
Commercial
relationship
Price
Quality
of service
Evolution
of tool
Evolution
t l
off tool
Responsiv
Respon
sivene
i eness
ss
Responsiveness
Least important
Companies that have a direct relationship
with their OBT provider(s)
Technical support
Technical support
Responsiveness
Quality
of service
There are plenty of arguments in favor of using
the travel management company as the single
point of contact for OBTs:
Handling of technical issues (e.g.,
troubleshooting and managing escalation to
OBT providers).
Access to best-in-class OBTs, integrated
with other TMC products.
The ability to expand OBT usage to other
geographical markets without lengthy
contractual work.
Lower licensing, hosting and transaction
fees. Small to medium companies will
almost certainly obtain better pricing deals
thanks to the TMC’s negotiations on behalf
of all clients, while larger companies can
benefit from competitive pricing, along with
reduced costs and increased consistency.
A wide range of services from consulting
and initial set-up to ongoing site
administration that removes the burden
of handling travel policy updates, entering
preferred suppliers, managing rules and
updates. (This said, TMCs also offer site
administration services to companies that
sign direct deals with OBTs, since this
facilitates day-to-day problem resolution.)
At the same time, arguments in favor of direct
agreements with OBTs include:
Fully negotiable licensing, hosting and
transaction fees with any OBT editors.
Control of the relationship with the editor
and the TMC, the company being the main
point of contact.
Local language support for OBT users
through a technical help desk and end-user
training.
43
SUMMARY
Best practices for companies that have not yet implemented an online booking tool include:
Identifying the benefits of online booking compared to offline transactions in the
context of a specific organization and how best to take advantage of them (e.g., to
maximize cost effectiveness through unassisted bookings, companies can reduce booking
error with measures such as instant ticketing and up-to-date traveler profiles)
Choosing the most appropriate online strategy: a single global supplier or a best-inmarket, local approach, and a direct relationship with the supplier or coordination through
the travel management company
Identifying the supplier/s that can best suit the organization’s footprint and strategic
priorities as they evolve
Planning and implementing a full online booking strategy, from setting realistic
objectives and ensuring that online booking tools meet travelers’ needs, to carrying out
a change management program. This should include explaining the differences between
consumer travel Websites and a corporate OBT, and policy designed to support a travel
program.
For companies wishing to increase adoption, best practices include:
Understanding the drivers of online adoption, which include both external factors and
each company’s internal context (e.g., corporate culture and types of bookings)
Balancing corporate savings objectives with traveler satisfaction
Constantly reviewing policy settings to enable travelers to make smart decisions (e.g.,
accepting a flight that costs US$100 more if it avoids an overnight stay or a 4-hour
connection)
Keeping up momentum for online usage through regular communications on new OBT
features and tips
Monitoring new technology and user expectations, pushing OBTs to develop new
features, and switching OBTS if necessary to ensure an optimal fit with evolving needs
2. To find the right service configuration, savings
and program objectives must be carefully
balanced with the needs of travelers and travel
arrangers.
A range of key factors, such as the company’s ability to manage change and switch to
a more standardized, automated system, also need to be taken into account. The main
available service configurations each best serve different priorities, and these should be
discussed with the travel management company, along with service level agreements. To
reap the full benefits of a service configuration, companies should ensure they have an
effective travel policy in place with measures to reinforce compliance. Finally, companies
benefit from efficient access to content through global distribution systems.
Which services are considered
most valuable?
The survey underlines that travelers and travel
managers above all expect corporate travel
services to be user-friendly, simple to use and
efficient, with travel managers placing a slightly
greater focus on savings features.
When asked to rate different features of
corporate travel services by importance, travelers
say they value booking simplicity, 24/7 access
and speed far above other criteria. Access to
relevant content ranks fourth, while service
in their mother tongue, quality of technical
support, and access to VIP services come next.
(See Figure 34.)
45
Figure 34: Above all, travelers want simplicity, 24/7 access and speed from corporate travel
services
Average
ranking
2.5
Travelers’ ranking of corporate travel services by importance
Ease of booking 12 5
24/7 access
2
3
23
12
8
Speed of booking 1 4
Access to relevant content
(e.g., rail and low-cost flights)
12
14
10
19
11
20
Access to service in mother tongue
31
15
14
28
21
20
18
7
12
13
32
Access to VIP services
30
14
6
9
17
54
Respondents (%) 0
22
20
40
60
11
80
12
3.0
11
3.7
4.7
13
9
3 2 5.0
5 4 22 6.1
100
Least important
7
2.8
35
26
29
Quality of technical support
26
Most important
6
5
4
3
2
1
Looking specifically at booking, travelers rate the
ability to book at their convenience far above
other features. (See Figure 35.) Convenience
is therefore a decisive factor in determining
the right service configuration. Travelers also
value highly the ability to obtain the lowest
rates, book all travel through the same channel
and access a wide range of options. The ability
to book through the same channel is all the
more important as more than half of surveyed
6
travelers say they booked a combination of
flights, hotel accommodation and car rental for
their last trip. (See Figure 36.) At the bottom of
travelers’ priorities are items such as access to
other travelers’ tips, pre-trip information and the
quality of advice obtained, which suggests that
travelers already know what they want when
booking. (A survey carried out in 2008-9 in
relation to hotel booking6 had similar findings.)
Room for Savings: Optimizing Hotel Spend, CWT Travel Management Institute (2009), pp. 40-41
Figure 35: The most important booking features for travelers are the ability to book when it
suits them, obtain the lowest rates and book all travel through the same channel
Travelers’ ranking of booking services by importance
Ability to book when it suits me
9
9
Ability to obtain lowest rates
12
Ability to book all travel through the same channel
15
Access to a wide range of options
10
13
15
16
23
24
Ease of changing/cancelling if required
Speed of booking
26
Cost of transaction to the company
25
23
24
32
39
Immediate booking confirmation
35
0
27
18
5
19
1,398
3.3
1,199
9
3.4
762
11
3.6
274
8
3.8
154
3
3.8
921
8 1
4.2
71
12
14
40
60
Respondents (%)
4
716
3.2
8
23
Least important
976
13
15
31
20
3.0
3.2
17
15
54
15
17
9
18
25
27
Access to other travelers' tips
1,205
23
23
24
Pre-trip information
15
24
20
1,179
2.8
19
23
22
80
1,614
2.6
22
26
22
20
Quality of advice
35
23
Ease of booking within the policy/program
2.0
59
16
17
Average Number of
ranking responses
100
Most important
3
2
1
Figure 36: Just over half of travelers book a combination of flights, hotel accommodation
and/or car rental at the same time
Booking categories for most recent trip
Flight
37%
Hotel accommodation
7%
Other
2%
Car rental
2%
Several of the above
52%
47
respectively). Two other important features
(the ability to obtain the lowest rates and
access a wide range of options) achieve lower
scores (6.3 and 6.0 respectively, as shown in
Figure 37).
In terms of satisfaction, two of the features
travelers consider the most important (the
ability to book when convenient, and the ability
to make all travel bookings through the same
channel) score highly (8.0 and 7.5 out of 10
Figure 37: Travelers are most satisfied with OBT convenience features such as the ability to
book anytime and immediate booking confirmation
Travelers’ satisfaction ratings for different booking services
Ability to book when it suits me 2111 12
Immediate booking confirmation 2112
Ability to book all travel through the same channel 212 2
Speed of booking
5
12
9
5
16
5
5 3 4 5
4 6
7
23
7
5
7
4
10
5
0
15
6
8
14
38
14
7
45
15
10
20
1
2
3
9
6.0
9
6.0
6.0
12
4
4
8
5.9
7
5.8
4 5 5 13
40
60
Respondents (%)
80
Very dissatisfied
5
5
12
58
6.3
10
6
11
7
5 4
13
6.7
13
6
18
11
6.7
15
9
20
8
20
Quality of advice obtained 4 4 4 3
Access to other travelers’ tips
16
43
7
Cost of transaction to the company 5 3 5
9
21
9
7.5
23
21
13
7.7
25
13
15
6
23
Pre-trip information 3 3 4 3
Ease of changing/cancelling if required
24
7
8.0
34
15
12
29
Access to a wide range of options 4 3 4 5
14
25
16
Ease of booking within the policy/program 3 12 3
Ability to obtain lowest rates 5
21
12
Average
score
100
Very satisfied
4
5
6
7
8
4.8
9
10
channel. However, they place slightly more
focus than travelers on savings features, ranking
the ability to obtain the lowest rates first by far,
and the cost of transactions fourth (compared
with eighth for travelers). (See Figure 38.)
Travel managers value the same booking
services: their top five criteria are the ability to
obtain the lowest rates, the ability to book at
the traveler’s convenience, ease of booking in
compliance with the policy/program, the cost
of transactions to the company, and the ability
to make all travel bookings through the same
Figure 38: Travel managers value the same booking services as travelers, while placing greater
focus on costs
Average Number of
score responses
Travel managers’ ranking of booking services by importance
Ability to obtain the lowest rates 5
12
Ability to book when it suits the traveler
9
23
Ease of booking within the policy/program
11
Cost of transactions to the company
20
6
54
14
15
26
16
16
23
20
Quality of advice
24
16
Access to a wide range of options
24
29
Ease of changing or cancelling if required
25
20
28
17
32
40
0
5
4
3.0
81
16
3.2
62
8
3.3
51
7
3.4
76
3.6
92
3.7
6
3.8
69
3.9
20
5
13 1
5
40
60
Respondents (%)
Least important
19
17
22
35
20
99
14
17
80
71
112
18
22
2.5
3.0
26
34
49
13
146
2.9
11
24
31
18
32
14
24
14
22
Access to travelers' tips
Immediate booking confirmation
29
33
Speed of booking
42
20
1.9
15
5
100
Most important
3
2
1
49
traveler’s convenience), they are slightly less
satisfied with savings features such as the ability
to obtain the lowest rates and the cost of the
transaction to the company (6.8 and 6.5 out of
10 respectively). (See Figure 39.)
While travel managers report a high level of
satisfaction with convenience features (ease of
making a booking compliant with the policy/
program, the ability to make all bookings through
the same channel, and the ability to book at the
Figure 39: Travel managers are more satisfied with convenience features than savings features
Average
score
Travel managers’ satisfaction ratings for booking services
Ease of booking within the policy/program 2 1 3 2
Immediate booking confirmation 1 3 3 2
13
6
13
9
5 32 4
Quality of advice obtained
7
Cost of transaction to the company 3 3 4
5
14
5 22 7
Ability to obtain the lowest rates 2 5 4
7
17
9
16
17
6
12
23
6
4 5
7
Access to travelers’ tips
6
9
4
0
5
7
12
12
10
8
18
2
6.8
14
6.8
6.8
6.5
14
20
7
10
6.4
18
9
9
6.3
9
6
9
6.3
14
6
4 4
80
Very dissatisfied
1
7.1
13
14
8
19
40
60
Respondents (%)
7.3
23
9
22
42
20
7.3
25
22
17
20
7.3
19
23
6 17
7
19
8
17
27
Ease of changing or canceling if required
19
14
12
13
12
12
10
6
6 33
23
13
Access to a wide range of options 3 5 2 7
21
10
26
Speed of booking 3 3 3 5
27
16
6
10
Ability to book when it suits the traveler 4 21
15
5.1
100
Very satisfied
3
4
5
6
7
8
9
10
Balancing service and savings
The right service configuration for a company
is not necessarily the cheapest but the one
that best serves the purpose at the best
price. Trade-offs are involved in any service
configuration. For example, to improve access
to content, companies ideally keep the set-up
as local as possible, but to reduce costs they
might want to consolidate the service locations.
Each company’s situation will be different,
disqualifying a “one size fits all” approach. Here,
travel management companies can provide
valuable insight based on their experience with
different client profiles.
When determining the most appropriate service
configuration, travel managers should look at a
whole range of key criteria, from the required
services and savings to the organization’s ability
to effectively transition to new processes:
Local content and cultural proximity. In
some countries, access to local content
(e.g., rail) can be very important and a
local service presence is required—for
example, China, where all domestic air
travel is on a different global distribution
system (TravelSky); Japan, where five out
of the seven computer reservation systems
(CRSs) are only available domestically; or
Brazil, where the main domestic airline
(TAM) is only available in local CRSs and
local-language skills may be hard to find
outside the country. Companies should
therefore analyze their needs country by
country.
How satisfied are travelers with the current
services? Where are the gaps?
Standardization. Is the company ready
for standardized, simplified services and
processes? Can travelers book using a single
language (English) or are several languages
required? Companies need to bear in mind
that multilingual service pushes up travel
counselor employment costs by at least
20-30 percent in a consolidated service
configuration.
Online adoption. A company has scope for
increasing online adoption if it has already
achieved at least 40-50 percent and is able
to successfully institute internal change. The
challenge may be greater if adoption has
been lower in recent years—in this case, the
company should investigate the possible
barriers to online usage (e.g., a large
proportion of complex transactions that are
less suited to online booking; or a lack of
policy mandates, effective communication
or fit with corporate culture) and identify
possible solutions.
Cost savings. Economies of scale are
impacted by the economic context of each
country. When considering local volumes
and costs (e.g., salaries and occupancy), it
may be cheaper to service travelers from a
center in their domestic market (which is the
case for Spain, for example, where salaries
are highly competitive on a European level
due to the current economic situation) or
from another country (the case for Swiss
travelers, where both labor and occupancy
costs are high).
Personalization. Does the company have
traveler segments that require specific
service configurations (e.g., a VIP desk)?
51
Service quality. As seen earlier (Page 46), a
range of features are important for travelers,
such as 24/7 access to services, user
friendliness, and efficient booking processes.
Depending on the type of trips and the
company culture, some travelers may also
expect highly experienced travel counselors.
Other considerations include:
Operational simplicity. One advantage of
moving to a multinational service center
is that companies work with a single team
and standardized services, saving on costs,
as well as facilitating policy changes. In
addition, a centralized service configuration
makes it easier to implement a single global
supplier for online booking tools and/or
expense management.
Seamless implementation and change
management. Effective change management
and communications, along with a mandate
culture, impact a company’s ability to
effectively drive online adoption or switch
from a full-service center to a standardized
configuration. These factors need to be
taken into consideration when looking at the
available service configuration options.
Commercial considerations. This point
concerns the largest companies that sign
global deals directly with a global distribution
system. If they agree to use a single GDS
across most markets, their options may be
limited in terms of service configuration.
Such organizations may be best served
from a multinational service center, which
avoids the need for local knowledge of
their particular GDS, but the downside
is potentially poor local content in some
markets. Companies that do not have a
formal preferred GDS have more flexibility
in their choice of configuration.
The key features of different service
configurations are shown in Figures 40-41.
On-site service center
Full service center
with dedicated team
Full service center
with designated team
Standardized service
center
Multinational service
center
n
ty
at
io
ali
ra
nt
Ce
ic e
rv
Se
li z
qu
gs
v in
sa
st
Co
&
Lo
ca
cu l co
ltu nte
ra
l p nt
ro
x im
Pe
it y
rs
on
ali
za
t io
n
St
an
da
rd
iza
t io
n
Dr
i
ad v in
g
op
t io onli
n ne
Figure 40: Overview of available service configurations and key features
Figure 41: Different service configurations suit different needs in terms of low- or high-touch
service, and standardized or customized processes
Cost and complexity of different service configurations
High
On-site service
center
Full -service center
VIP service
team
Cost
Standardized
service center
Multinational
service center
Low
Low
Complexity of change
High
The savings companies can make by switching
service configurations vary with the starting point
but can reach 20 percent of operational costs
(i.e., 0.5-1.0 percent of total travel spend). The
key factors driving savings are booking efficiency
through standardization, which improves travel
counselor productivity, and lower employee/
occupancy costs linked to service center location.
53
Main service configuration options
The five main types of service configuration are
described on the following pages, along with the
fulfillment and technical support centers that
support them:
On-site service center or “implant.” This
highly adaptable configuration places a
dedicated team of experienced counselors
on the company’s premises, where they
work alongside travelers. Several benefits
are available:
Traveler satisfaction. Many travelers
greatly value being able to talk to a travel
counselor just down the hall. The solutions
available through face-to-face interactions
can also be more flexible.
Increased compliance, control and
visibility. Having travel counselors on site
can facilitate management supervision
and interaction.
Optional targeted services. Implants
may include dedicated staff to meet the
needs of designated VIPs (e.g., senior
executives and frequent travelers) and/or
other specific segments (e.g., international
travelers).
On the downside, implants do not offer
economies of scale like other kinds of
service centers, and smaller teams make
staffing more complex (e.g., ensuring
consistent service levels and business
continuity during vacations or peak periods).
In addition, the technology infrastructure
of this configuration lacks the robustness
of service centers. However, contrary to
popular belief, implants are not necessarily
the most expensive option, thanks to high
productivity and excellent quality.
This type of service can meet
requirements of companies that have:
the
A strong cultural identity
A high share of VIP travelers and/
or frequent travelers with complex
requirements
A strong employee-service culture where
cost is not a major driver
The desire to preserve a certain degree
of management control and avoid
standard policies, procedures and online
technologies
Companies in the banking, insurance,
consulting and legal sectors usually fit this
profile.
Full-service center (off-site). With this
service configuration, travel requests are
handled by a team of travel counselors at a
centralized, off-site service center. The team
can be either dedicated to the company’s
travelers or, for additional savings, part of a
shared pool serving different companies. In
both cases, travel counselors are trained in
the company’s specific program.
An off-site model is often a more costeffective choice than implants as it may
reduce some direct expenses, such as
occupancy costs at the company’s offices,
(e.g., if the company is short of space and
considering moving), while offering the
efficiencies of service center operations.
Shared teams and equipment provide
economies of scale, as well as greater
staffing flexibility than on-site centers to
ensure consistent service regardless of call
volumes. (Small dedicated teams, on the
other hand, share the same limitations as
implants.) In addition, local service-center
management can promote best practices,
personal development opportunities and
employee engagement, resulting in longer
tenure and better service. Finally, the ability
to leverage state-of-the-art technology,
systems and processes is another key
differentiator.
A budget that does not provide for a
large enough team of on-site counselors
to ensure consistent cover during peak
periods, training, vacations and sick leave
This service configuration is designed for
companies that need consistent quality of
service combined with the flexibility of a
larger team than their transaction volumes
would normally justify. Such companies
tend to have some or all of the following
features:
A desire for travel counselors to integrate
the organization’s culture
Fluctuating volumes with peaks and
troughs in transactions
Requirement for local services in the local
language
A strong focus on cost savings
Case study: a full-service center to optimize savings and satisfaction
A leading biotechnology company wanted to take its US$80 million travel program to the next
level, increasing cost savings and traveler satisfaction. After reviewing its processes and introducing
a full-service center configuration, the company improved service quality and reduced costs by
US$1 million within three months. Moreover, it estimates annual savings at US$1 million on air
spend and US$2.5 million on car rental over three years.
Working closely with its travel management company, CWT, the company decided that a full-service
center configuration would best support its efforts to consolidate travel spend globally while fulfilling
local travel needs country by country. CWT helped the company negotiate air and car-rental contracts
globally and implemented an online booking tool, along with a suite of products to improve data
consolidation and service (e.g., traveler profiles, a traveler portal, an online reporting center and
Web-based customer service tracking). This configuration also allowed for the use of best-in-market
global distribution systems.
Initially rolled out in North America, the full-service center configuration will cover 30 locations
worldwide when complete.
55
Hybrid model (on-site facility and off-site
full-service center). In this configuration,
one or more dedicated travel counselors
work on the company’s premises (typically
to handle more complex business such as
international transactions, visa/passport
assistance and VIP services), while a
dedicated or shared team of counselors
at a low-cost service center manage less
complex arrangements for the general
traveler population.
standardized processes keep online and
offline transaction costs to a minimum.
Other benefits include uniform service
levels in the markets served, consolidated
reporting and improved compliance, since
policy changes and updates are easier
to enforce through consolidated teams.
Companies implementing a standardized
service configuration may also add services
for specific traveler segments (e.g., VIPs).
The hybrid model allows more flexibility for
both day-to-day operations and emergencies,
since the off-site and on-site teams can back
each other up when necessary. However,
companies that require only a small number
of counselors (under a dozen, as a rough
guide) should consider implementing a fullservice center to best manage staffing issues
without affecting service levels.
A need for local content and services in
at least four countries, with country-based
counselors who speak travelers’ language
and understand the local culture and
travel infrastructure
This model is worth considering when the
company has one or several main markets
with sufficient travel volumes to justify an
on-site team, and smaller markets that can
be handled by a shared full-service center.
Standardized
service
center.
This
configuration consists of local services (onand offline) with high levels of standardization
across all the company’s markets, enabling
decentralized service at the lowest possible
price. All but the core booking services are
removed, and all simple transactions are
made online—where possible unassisted.
When counselors intervene, the leanest
processes optimize their productivity.
Local teams provide the benefits of cultural
proximity, local language and content,
simplicity (by limiting operations to simple
transactions) and knowledge of each
market’s travel infrastructure. In addition,
A standardized service center is suitable for
organizations with high transaction volumes
and the ability to implement uniform
processes across their traveler population.
Such companies usually have the following
features:
A desire to minimize transaction costs
while closely aligning the service with
traveler requirements to ensure maximum
use of preferred booking channels
The ability to manage change and gain
buy-in when switching to standardized
processes, notably by mandating a single
travel policy regionally or globally
The standardized service center can be an
important step in a configuration roadmap,
enabling companies using a full-service
center to move to a more cost-efficient
configuration without making some of the
compromises involved in regional or global
consolidation.
Case study: a standardized service center configuration combining lower costs and
local flexibility
A global reinsurance company with US$60 million travel spend reduced transaction fees by
10 percent, achieved online adoption of 90 percent and boosted policy compliance after switching
to a standardized service center configuration from a full-service center.
This move was part of a program consolidation strategy aiming to increase cost-efficiency while
retaining the flexibility of local content, languages and travel infrastructure knowledge. Roll-out
involved eight European countries prioritized according to travel volume.
Following a detailed gap analysis of the company’s services, CWT implemented a standardized service
center configuration, accompanied by a change management plan, consistent service standards and
a Web-based monitoring tool. The company overhauled its travel policy and introduced an online
booking tool, restricting services to a core offering using a single global distribution system. At the
same time, productivity was boosted through lean booking processes for simple bookings (handled
by fulfillment centers) and more complex transactions (handled by travel counselors).
57
Multinational
service
center.
This
configuration uses locations offering the
most competitive labor and occupancy rates.
English is usually the preferred language, with
other languages available at additional costs.
Multinational service centers use a processdriven counselor desktop application to
ensure the consistency and quality of
services delivered through automation and
seamless processes.
A multinational service center configuration
offers the following benefits:
Lowest possible transaction fees due to
standardized services and processes
Accept that highly automated service centers
require travelers to manage bookings with
limited advice from travel counselors
Are willing to have limited access to local
content and services (e.g., rail content)
Are able to adopt a single travel policy across
the geographical areas served and mandate
standard processes
Standardized service levels
Are willing to carry out an internal
change program to ensure successful
implementation of online services (i.e., an
adoption rate exceeding 35 percent)
Strong compliance with the travel policy
Are prepared to limit service to English
Lowest staff and occupancy costs
Consolidated reporting
Simplified service management
Are prepared to mandate use of the service
or accept some level of leakage (booking
outside the preferred channels) in order to
reap the benefits of lower transaction costs
This option is suitable for companies that
have large GDS-bookable travel volumes and
can fully benefit from the cost-efficiencies of
online booking while reducing offline costs
to a minimum (notably by managing internal
change and promoting traveler compliance).
Typically, these companies:
Require service in at least five countries,
representing at least US$30 million spend
Have a strong focus on cost savings
Have a strong
management
global
identity
and
It is worth noting that traveler satisfaction
levels for multinational service centers may
often match those for other configurations.
This said, a country-by-country gap analysis
should be conducted between the company’s
current service configuration and the proposed
multinational service center in order to ensure
that needs are addressed in the most effective
way.
Case study: a multinational service center brings impressive results
A major global technology company achieved savings of 42 percent in travel management costs
and 99 percent booking accuracy (i.e., error-free transactions) by implementing a global travel policy
and a network of multinational service centers.
Implementation was phased over two years and 60 markets, starting with the Americas, then
Europe, Middle East and Africa, and Asia Pacific. In the first year, 85 percent of transactions were
processed through the new streamlined network. With global control over its program, the company
had more leverage to negotiate with airlines, producing a 12 percent reduction in the average air
ticket price. Cost savings were also generated by the successful implementation of a single online
booking tool, with a global adoption rate of 90 percent (70 percent unassisted transactions). In
addition, robust point-of-sale processes and management tools enabled the company to closely
monitor hotel compliance, while increasing the timeliness and accuracy of bookings and reports.
Limiting the number of service centers enabled mandatory policy changes to be pushed through
faster, with the online booking tool and travel counselors promoting compliance at the point of sale.
All these service configurations are supported by
fulfillment centers and technical service centers:
Fulfillment centers are back-office teams
who intervene in on- and offline bookings
that cannot be processed without assistance.
Many rejected online bookings can be
managed at the fulfillment center without
contacting the traveler. However, in a small
number of cases (e.g., when alternative
travel arrangements are required) the
booking request is queued to the company’s
offline counselors, who contact the traveler
to complete the booking.
Technical service centers respond to
travelers’ queries by phone or email,
resolving any problems with usage and thus
helping to prevent travelers from disengaging
from the OBT process. Costs can be kept
to a minimum if communication, change
management and training sessions are
conducted within the company.
59
Figure 42: Fulfillment and technical service centers support all service configurations
On-site service
center
Full-service
center
Standardized
service center
Multinational
service center
(customized,
dedicated and local)
(customized,
shared and local)
(distributed,
standardized and
pan-European)
(centralized,
standardized and
pan-European)
Fulfillment center
Technical service center
Preferred service configurations
CWT asked travel managers and travelers to
select their preferred service configuration
from four options, ranging from very flexible,
high-touch service (e.g., on-site implants) to
highly standardized service that offers simplicity
combined with local market content. The results
show that travel managers seek a greater
balance between cost efficiency and services
than travelers, who lean more toward flexibility
and customization. Travel managers’ top choice
(Option 3) corresponds to a standardized service
center configuration, while travelers would
prefer a full-service center set-up (Option 2),
giving their lowest score to highly standardized
multinational service centers (Option 4), as
shown in Figure 43. Again, this highlights the
need to decide how far traveler preferences
should be traded off against savings goals.
Figure 43: Travel managers seek a greater balance between cost efficiency and services than
travelers, who lean toward flexibility and customization
Average Sample
size
rank
Travel managers
Option 3: service focusing on increased
operational and cost efficiency while still providing 1 10
flexibility to deliver company-specific services
19
Option 2: service offering maximum
flexibility and customization (less high-touch
than Option 1)
28
8
Option 1: very flexible, high-touch
service for executive travelers
(e.g., 24/7 reservation assistance)
28
28
29
Option 4: highly standardized service
offering simplicity without
losing local content and cultural proximity
41
16
15
15
30
0
22
15
15
19
25
24
12
2.0
155
2.9
155
3.1
155
3.1
155
20
40
60
80
100
Respondents (%)
Least preferred option
Preferred option
5
4
3
2
1
Average Sample
rank
size
Travelers
Option 2: service offering maximum
flexibility and customization (less high-touch
4
than Option 1)
Option 3: service focusing on increased
operational and cost efficiency while still providing
flexibility to deliver company-specific services
7
Option 1: very flexible, high-touch
service for executive travelers
(e.g., 24/7 reservation assistance)
16
20
30
29
2.4
1,983
15
25
24
29
2.5
1,978
26
3.1
1,975
3.3
1,968
31
Option 4: highly standardized service
offering simplicity without
losing local content and cultural proximity
16
17
0
14
32
22
13
19
10
40
60
80
100
Respondents (%)
Least preferred option
Preferred option
5
20
4
3
2
1
(Option 1: on-site service center, Option 2: full-service center, Option 3: standardized service center, Option 4: multinational service center)
Based on a survey of travel managers (155 repondents) and travelers (1,983 respondents)
61
Service level agreements
Service level agreements (SLAs) play an
important role in delivering consistent service
to travelers. When working with a travel
management company, companies need to
jointly define criteria for tracking performance
and measuring ongoing progress. In doing so,
they should:
Keep sight of the big picture, monitoring
traveler satisfaction and savings as a whole
and zooming in on specific aspects as
necessary.
Define one or several key performance
indicators for each SLA.
Determine how often key performance
indicators will be measured.
Attribute an importance weighting to each
SLA so that overall performance can be
tracked (using a weighted average).
Figure 44 shows examples of SLAs (mandatory
and optional) that companies can adopt.
Distinguish between mandatory and
optional SLAs, keeping them to a workable
number.
Figure 44: Examples of recommended and optional service level agreements
Recommended SLAs
Key performance indicator
Client satisfaction
Average satisfaction score on an agreed scale
(e.g., 7 on a scale of 1-10)
Survey travel manager
or client contact
Annual
Traveler satisfaction
Average satisfaction score on an agreed scale
(e.g., 7 on a scale of 1-10)
Automated survey of a sample
of travelers immediately after
booking
Monthly
Responsiveness
Percentage of calls answered within X seconds
(generally 80% within 20 seconds)
Monitor phone reports
Quarterly
Handling of
customer complaints
Percentage of complaints acknowledged within 48 working hours Review open/resolved
and progress updates provided until issue is resolved
issue log
Quarterly
Booking accuracy
Percentage of errors (e.g., <2%)
Review customer service
reports/log
Quarterly
Annual business plan
Develop and review annual
business plan
Annual
Global review meetings/calls between
the company and the program manager
Review business
performance
Twice a year
Business planning
Business reviews
?
Action
Frequency
of reporting
Category
Optional SLAs
Category
Key performance
indicator
Action
Frequency
of reporting
Availability/access
Minimum percentage adherence
to agreed operating hours (e.g., 98%)
Adhere to agreed operating hours
Annual
Data accuracy
Usage of lowest available airfare if
applicable and corresponding
savings/missed savings
Track lowest applicable airfare
Monthly
Data availability
Consolidated data available
XYZ days after the end of the month
Provide consolidated data
Quarterly
Savings
To be determined after a detailed
study of savings opportunities*
Achieve targets
Annual
Percentage of compliant
/non-compliant bookings
Global review meetings/calls between
the company and the
program manager
Twice a year
Travel policy
compliance
?
* E.g., percentage of bookings where the lowest applicable fare was offered (depending on company policy)
63
Scope of services: items to include in a TMC request for proposal
Every organization has specific priorities that should be explained to travel management companies
to find the best fit with their needs. The following lists provide an idea of the core services that
should be included in transaction fees, as well as optional services that may be required:
Core services
Service provided by counselors using the predominant market GDS
Employees and non-employees (including contractors) serviced through standard processes
Standard business hours for all locations (specified in the TMC proposal) and direct dial number
for all locations
Fulfillment of online booking transactions, either automated (unassisted) or with counselor
intervention (assisted) as required
Domestic and international airline reservation services (including low-cost carriers where relevant)
in accordance with the company’s business travel policy, using preferred rates (negotiated by the
company or the TMC) when available in the GDS
Low-fare management, including offering alternative quotes (requested routing and/or lowest
logical fare, based on the TMC’s air selling matrix but balancd with market practices, such as
best-available fares that make alternative quotes irrelevant)
Preferred vendor management, including offering the traveler’s requested supplier and the
lowest fare or rate available in the GDS
Hotel and car reservations using negotiated rates available in the GDS in line with the company’s
travel policy, and promotional pricing offered by airlines
Service level of an agreed percentage of incoming calls answered and serviced by a travel
counselor within a set time (most commonly 80 percent within 20 seconds, although costconscious companies have started to move to lower service standars such as 60 percent of calls
answered within 30 seconds to encourage the use of online booking tools)
Customer service for pre- and post-trip traveler inquiries or issues
Processing of schedule changes or cancellations upon notification by airlines during each
location’s opening hours
Instant electronic ticketing prior to fare expiry as confirmed at the time of reservation
Electronic non-refundable ticket tracking and management where relevant
A management system for traveler profiles, with Web access to self-service updates, and
acceptance of initial and ongoing HR feed
Access to a traveler portal for practical information and tools (described on Pages 73-74)
Policy reporting using standard exception codes, consolidated management reporting and
carbon emissions reporting
Core safety and security services
Timely customer experience surveys,7 annual travel manager surveys coupled with automated
quality assurance
Optional services
Specialized services: VIP, enhanced mobility, leisure, passport and visa, meetings and events,
program management and consulting services
Bookings: non-GDS content, including hotel rooms/block space and company-owned properties,
rail, car/limousine, ferry, private jet and chartered flights
Ticketing: delayed ticketing, including courtesy hold and hold/re-book processes, paper ticketing
and document delivery, refunds, frequent-flyer ticket redemption and upgrade management
where appropriate
Pre-approval and exception approval processes
After-hours service and 24/7 emergency services
Online booking tool support: implementation, integration, maintenance, technical help desk,
training and measures to promote adoption
Consolidated reporting, including credit card spend
Single sign-on for TMC products within corporate network
For example, CWT Listens is a globally standardized 90-second survey that is sent automatically after a sample of on- or offline
transactions, not more than every 180 days, for feedback while the service is fresh in the travelers’ or travel arrangers’ minds.
7
65
Travel policy and compliance
To reap the full benefits of a service configuration,
organizations need to implement an effective
travel policy, along with measures to promote
traveler compliance. Many can improve their
performance in these areas: as described in
previous in-depth CWT research,8 companies
save on average 20 percent of total travel
spend when they introduce best practices to
optimize travel policy and traveler compliance.
Savings are available in five main areas:
Advance air booking. Booking two or
three weeks in advance enables travelers
to access significantly lower fares. Discounts
can exceed 50 percent of the ticket price,
especially on highly competitive routes or in
economy class. There is no price advantage,
however, in some extremely regulated
markets such as China and India.
Restricted airfares. Even when the cost
of changes or cancellations is taken into
account, the use of restricted airfares usually
brings savings: on average 24 percent of
the price of fully flexible fares.
Preferred
suppliers.
When
used
consistently, preferred suppliers enable
companies to pay less, compared to using
a mix of suppliers on a “best price” basis.
Companies that require travelers to book
preferred suppliers can save an estimated
16 percent on hotel rates and 18 percent
on airfares, thanks to volume discounts.
Travel class/category. Changes in the
authorized comfort level can have a
significant impact on savings: up to 30
percent of air spend and 20 percent of
hotel spend, depending on the travel
8
patterns. Companies can benefit by aligning
their policy with standards in their sector.
Preferred
booking
channels.
Onand offline booking through the travel
management company bring tangible
benefits: lower prices, increased use of
preferred suppliers, and consistent safety/
security tracking and services.
CWT has identified a number of best practices
for designing travel policies and boosting
traveler compliance, as described below:
Engaging management throughout the
organization. Best-performing companies
have support for raising awareness of travel
rules, overcoming resistance to change
and promoting compliance. Four action
areas appear to be particularly important:
1) making senior management support
visible, 2) escalating the approval process
for exceptions, 3) involving management
in pre-trip approval when implemented,
and 4) engaging team leaders in post-trip
follow-up.
Providing
travelers
with
clear,
comprehensive guidelines. The most
effective travel policies cover each of the
five main savings areas mentioned above
in a user-friendly format. This contrasts with
many documents observed in the market
that are long, difficult to read and imprecise.
Ideally, a travel policy sets mandates where
the corporate culture allows it. According
to the current survey, mandates are now
the norm: about 80 percent of companies
mandate policy items, although this figure
drops to 66 percent for booking through
preferred channels.
Playing by the Rules: Optimizing Travel Policy and Compliance, CWT Travel Management Institute (2008)
Figure 45: 20 percent of travel managers and travelers say their travel policies are
recommended rather than mandated
Travel managers Recommended
20%
Travelers
Recommended
20%
No travel
policy 1%
Don't know
10%
Don't know
1%
Mandatory
70%
Mandatory
78%
Figure 46: One third of travel managers say the preferred booking channel is not mandatory
Policy on preferred booking channels
Recommended but not mandatory
23%
No policy
9%
No preferred booking method
1%
Don't know
1%
Mandatory
66%
67
Standardizing the policy regionally
or globally. By aligning travel rules and
processes across business units and
regions, travel managers can share best
practices and save on average 12 percent
of total travel spend. In the latest research,
however, nearly a third of respondents
(29 percent of travel managers and
27 percent of travelers) say their companies
still use local travel policies.
Figure 47: Nearly a third of travel managers and travelers say their companies use local travel
policies
Travel managers
Local (country level)
30%
Regional
13%
Travelers
Regional
9%
Local (country level)
27%
Don't know
7%
Don't know
1%
No travel policy
1%
Global
56%
Global
56%
Promoting
compliance
through
communications and training. The bestperforming companies clearly explain
the benefits of their travel policy to
travelers. They also make the policy easily
accessible online and in local languages,
communicating any changes in a timely
manner. All travelers and travel arrangers
should receive thorough training in the travel
policy, booking processes and tools. Finally,
progress reports can help motivate travelers
to comply by making their efforts visible.
Driving compliance through point-of-sale
measures. Compliance can be improved
considerably by integrating the policy into
the booking process, to steer travelers
toward compliant options. For example,
online booking tools can clearly indicate
compliant options, filter out non-compliant
content and provide policy reminders.
Offline, companies can ask travel counselors
to advise in-policy options and empower
them to refuse out-of-policy bookings—
in fact, the vast majority of companies
(88 percent) do so. (See Figure 48.)
Figure 48: 88 percent of companies require TMCs to enforce compliance at the time of
booking
Enforcement of the travel policy during booking
No enforcement: the TMC process all bookings,
regardless of whether they are compliant or not
9%
Don't know
3%
The TMC must not process
non-compliant bookings
9%
The TMC must remind the traveler
of the company's policy
when a non-compliant request is made
but can still process the booking
28%
The TMC must ask for authorization
or notify management when
a non-compliant request is made
51%
Companies can also use automated messaging
set up to send policy reminders and other
messages to targeted groups of travelers. CWT
Program Messenger (formerly CWT Policy
Messenger) is one such service, which allows
travel managers to contact travelers who request
a non-compliant booking, for example, while
informing their managers. The service can also
be used for other types of messages, such as
health and safety information related to specific
bookings. Client data indicates that automated
messaging can make a significant impact on
compliance and other key program metrics,
resulting in 4-7 percent savings on total travel
spend.
69
Tracking progress and taking corrective
action. Travel managers should measure
progress regularly. In particular, comparing
results by business unit or division and
sharing that information with team leaders
can reinforce efforts to boost compliance.
It is also worthwhile identifying the minority
of travelers who are responsible for the
majority of non-compliant bookings and
taking targeted action (e.g., a personalized
email reminder of policy rules). Moreover,
non-compliance reports may indicate areas
of the program that need to be changed.
Benchmarking industry performance.
Although a travel policy should reflect a
company’s culture and business priorities,
benchmarking can ensure it remains in line
with evolving standards in the same sector
(e.g., on the minimum flight duration for
business class travel). In addition, companies
can identify savings opportunities or highlight
below-average results by tracking their peers’
performance in key program areas.
Leveraging travel management company
expertise. A travel management company
can facilitate travel policy design and
implementation, as well as compliance.
TMCs are also well positioned to help
monitor
and
improve performance,
based on their specialized knowledge and
technology.
Access to full content
It is important to ensure efficient access to
relevant content at competitive prices in
accordance with the travel policy. Global
distribution system (GDS) business models
have evolved as financially strapped airlines
seek to reduce their distribution costs, and optin fees are often charged to ensure that full
content remains in the GDS and that the booking
process remains efficient. Removing content
from GDSs results in inefficiency, as travelers
and travel counselors struggle to consolidate
content from multiple sources. To date, no
single alternative system provides the full range
of content—including hotel, rail and car—or the
pre- and post-trip services currently available in
GDSs. And integrating a variety of alternative
systems would lead to higher technology costs
and more expensive servicing. (See Page 71.)
GDS content: a crucial role in managed air programs
Currently, global distribution systems house more than 6 billion airfares, half of which are fares
negotiated by travel management companies or their clients. These systems play a key role in
effective air programs for several main reasons.
The ability to access GDS content through TMC counselors or online booking tools as opposed
to connecting directly to hundreds of different suppliers, provides corporate clients with easy
fare comparisons and an efficient, cost-effective one-stop shopping environment (on- or
offline). CWT estimates that transaction fees would increase by at least US$25 per flight if a
proliferation of direct connect models were required to maintain this environment.
Another important strength of GDS distribution is the ability to easily change tickets, especially
given that business travel itineraries are changed nearly six times per trip on average.
Booking through GDSs not only facilitates spend reporting but also allows companies to track
travelers effectively and provide invaluable assistance in emergencies.
GDSs continue to invest an estimated US$750-800 million annually to enhance their
capabilities. As a result, they are technically able to integrate airline products and services that
have previously required separate booking and payment (e.g., ancillary services such as meals
and checked baggage).
In 2010, American Airlines reignited debate by removing certain content from GDSs and selling
fares only through its own Website, although a more fragmented airline offering significantly reduces
transparency and efficiency for corporate customers. CWT believes a direct connect model cannot
serve the best interests of corporate buyers.
71
SUMMARY
Best practices for rolling out an optimal service configuration include:
Identifying the service features that are most important to travelers and balancing
“ideal” service with savings requirements
Considering priorities in terms of online vs. offline, local vs. global, and customized vs.
standardized service
Making a realistic appraisal of the organization’s ability to manage change when
switching to a different configuration
Discussing priorities with travel management companies and ensuring that the right
features are included in TMC service offerings
Jointly defining appropriate service level agreements with the TMC
Implementing an effective travel policy and measures to promote traveler compliance
Benefiting from efficient access to content through global distribution systems,
compared to connecting with multiple suppliers
3. A wide range of services enhance the traveler
experience, helping to boost well-being and
productivity.
Among the services that stand out for travelers are easily accessible information, userfriendly technology that facilitates planning, and 24/7 assistance around the world. This
section discusses seven important services: Web-based traveler portals, traveler profile
tools, mobile services, emergency assistance and risk management services, social media,
VIP and end-to-end services, and unused-ticket management solutions.
Web-based traveler portals
A Web-based portal provides travelers with
easy access to a wide range of practical tools
and information that can help them prepare
for travel and keep informed while on the road.
Features include:
Information for planning travel: flight
schedules, destination intelligence, health
and security advice, carbon emissions and
visa/passport requirements.
Booking services: access to the company’s
online booking tools, contact details for travel
counselors, pre-trip approval processes, the
traveler’s profile, travel policy and travel
itineraries.
On-the-go information and alerts such as
flight alerts, real-time news updates, and upto-date information on airport connections.
Other practical tools such as a currency
converter, world clock and international
dialing codes.
73
Figure 49: Example of a traveler portal (CWT Portal)
Much of this content is provided by the travel
management company, based on service level
agreements and third-party content provided to
all portal users. In addition, travel managers can
use the portal to communicate with travelers
and travel arrangers, customizing content as
required to different populations of travelers
(e.g., by business unit, geographical region or
language).
Several main benefits can be drawn from a
portal:
Reduced costs and increased productivity.
A Web-based portal helps reduce costs
by facilitating travel arrangements and
promoting efficient booking processes—in
particular, more online booking, fewer calls
to the service center and less time spent
by users searching for information from
different sources.
Increased policy compliance. Policy
information can be displayed prominently
on the portal, helping to ensure travelers are
aware of important policy items and take
into account any changes when booking.
This kind of communications can make a
significant impact on compliant booking
behavior.
Enhanced safety and security. By
facilitating access to real-time news alerts,
risk assessments and country-specific
content, a Web-based portal helps keep
travelers informed of safety and security
issues related to their travel.
Profile management tools
Profile management tools store traveler
information to make the booking process
more efficient, while helping ensure travelers’
preferences and policy restrictions are taken
into account. This information typically
includes personal data (e.g., full name, date
of birth, passport number and contact details),
preferences or special needs (e.g., aisle or
window seat, and dietary restrictions) and
loyalty program subscriptions. Other details
(e.g., survey results) can be added depending
on the company’s needs.
In the past, profile management systems were
made up of multiple databases, requiring
information to be duplicated manually for
use with different online booking tools and
global distribution systems. Now, Web-based
systems make it possible to rely on one master
database that automatically sends updates to
the relevant tools, making information available
more consistently without error. In addition, the
importance of up-to-date traveler profiles has
dramatically increased in recent months as
the United States’ Secure Flight program and
the Advance Passenger Information System
used in various countries (e.g., the Australia,
the United Kingdom and the United States)
demand complete, accurate passenger details
in advance of ticketing.
In general, profiles are completed or updated by
travelers, although some details can be entered
automatically (e.g., from a payroll system, if
integrated).
A Web-based profile management tool offers
numerous benefits:
Greater convenience and efficiency.
Travelers and travel arrangers can easily
access their profile using a single sign-on
and update the information as required
since Web-based tools are available 24/7.
In addition, travel managers can automate
data feeds and eliminate time spent dealing
with customer service issues that arise
because of inaccurate profile information.
Policy compliance. Accurate profile data
can be used to improve policy compliance
at the time of booking. In particular, upto-date information on the traveler’s
hierarchical status enables online booking
tools and travel counselors to suggest the
appropriate classes of travel and flag or
block non-compliant requests.
Safety and security. By housing relevant
traveler details like mobile numbers,
emergency contacts and visa/passport
information, travelers can be assisted
or contacted directly in the event of an
emergency. In addition, data security
is provided by encryption, personal
identification numbers and passwords.
Facilitated
standardization
and
automation of other services. For
example, up-to-date contact details and
traveler information can be used for
unused-ticket management or mobile
services. (Mobile numbers are lacking
for 55 percent of travelers in CWT’s
profile management system.) Moreover,
organizational information (e.g., on
travelers’ divisions or cost-centers) and
other static reporting data can be used
by a travel program management center,
payment card companies or safety and
security service providers. Data capture is
more efficient this way than at the point
of sale, and the data quality is enhanced,
especially when refreshed by HR feeds.
75
In addition, automated HR feeds provide
better control over access to booking
channels and help prevent fraud by
automatically barring service access when
employees leave the company.
Today, most companies lack an optimal traveler
profile system, according to CWT data gathered
in program diagnostic surveys. While 36 percent
of surveyed travel managers say they have
a profile management system with ongoing
feed from human resources data, 40 percent
have a profile management system without
this efficiency. A further 21 percent manage
profiles only through GDS profiles or through
ongoing HR feed into online booking tools. (See
Figure 50.) Moreover, these results come from
a survey sample that includes a large proportion
of large global or multi-regional companies,
which have been quicker to adopt the most
advanced practices.
Figure 50: Only 36 percent of surveyed companies have an optimal system for profile
management (Web-based profile tool with ongoing HR feed)
Current profile management systems
Ongoing HR feed into
profile management system
36%
GDS profile only
12%
Ongoing HR feed into online booking tool
9%
3%
Profile management system without
ongoing HR data
40%
Mobile services
assistance (alternate flight search, a travel
directory and click to call). In a separate
survey carried out by CWT at the end of
2010, many travel managers said they
planned to offer mobile technologies as a
way to improve the traveler experience—in
fact, this was the most popular planned
measure, especially in Asia-Pacific, where
47 percent of travel managers put this
measure first. Travel managers in other
regions also identified this as their first
planned measure, although to a lesser
extent (43 percent in North America, 35
percent in Europe, Middle East and Africa,
and 20 percent in Latin America, as shown
in Figure 51).
According to surveyed travel managers, more
than 80 percent of companies provide travelers
with smart phones, enabling them to access an
increasing abundance of mobile services. These
can enhance the traveler experience while
providing opportunities to drive compliance and
savings:
An enhanced traveler experience.
Numerous services provide convenience
for travelers, including access to information
(e.g. on itineraries, destinations and
preferred suppliers), practical tools (e.g.
local time, weather reports and currency
conversion), real-time alerts (e.g., flight
status and emergency alerts) and booking
Figure 51: Mobile technologies are particularly valued in Asia Pacific and North America
Travel managers planning
to offer mobile
technologies
to travelers (%)
50
Travel managers' scope of responsibility
40
30
47
20
43
36
35
10
35
30
20
0
fic
ia
As
ci
Pa
st
ca
Ea a
eri
le
Am
dd Afric
i
n
i
M nd
Lat
e,
a
rop
rica
me
No
A
rth
al
b
Glo
el
lev
try
C
n
ou
el
lev
age
er
Av
Eu
77
Opportunities for savings through
increased productivity, since mobile
services help employees make constructive
use of their time when traveling. To make
the most of these opportunities, companies
need to work with their travel management
company and online booking tool vendors
to provide integrated online, offline and
mobile solutions. This is necessary to
ensure consistency and avoid a proliferation
of systems that need to be managed and
maintained, leading to higher costs and
unforeseen technical challenges.
The CWT survey clearly shows that, above all,
travelers look to mobile services for time savings
and convenience. These rank top among the
expected benefits, far ahead of cost savings,
better communications or increased safety and
security. (See Figure 52.)
Figure 52: Above all, travelers expect mobile services to bring time savings and convenience
Travelers’ ranking of benefits offered by mobile services
Time savings 1 6
Convenience (e.g., information
2
about cancellations, delays or crises)
16
9
28
17
0
20
20
31
Enhanced safety and security
17
13
21
40
60
Respondents (%)
80
Least important
5
2.0
26
36
20
1.8
40
29
37
Better communications/networking
49
32
28
Savings
Average
ranking
6
3.6
4
3.7
10 3
3.8
100
Most important
4
3
2
1
Rating the available features, travelers and travel
managers agree that itinerary information, flight
status updates and electronic boarding passes
are by far the most important services to have
through mobile devices. Safety and security
alerts rank fourth, before maps, TMC contacts
and tourist information. (See Figure 53.)
Figure 53: Travelers and travel managers agree on the most important mobile features
Travelers’ ranking of mobile services by importance
9
Itinerary information 11 4
19
Flight status updates 113 7
6
Maps
5
11
21
22
21
22
10
32
25
21
18
40
4.6
4 2
4.7
4 3
5.1
7 2111
6.5
8
27
20
5 2
9
61
0
2.5
22
26
21
2.4
36
35
Tourist information
2.2
33
20
Travel management
company contacts
35
33
Electronic boarding passes 3 3 5
Safety and security alerts
31
Average
ranking
60
80
100
Respondents (%)
Travel managers’ ranking of mobile services by importance
11
Electronic boarding passes 3 1 5
Itinerary information 12
10
Flight status updates 11 3
Safety and security alerts 2
13
14
10
Maps
9
41
17
12
28
28
40
15
Travel management
company contacts
26
31
16
21
47
20
6
10
40
60
2.7
7
9
11
17
4.1
3
141
1 3
3 11
4.6
5.4
6.5
80
100
Respondents (%)
Least important
7
5
27
74
0
15
17
31
Tourist information
2.6
28
23
Average
ranking
2.3
Most important
5
4
3
2
1
79
In addition to these mobile services, companies
can negotiate with their online booking tool
providers to obtain integrated mobile booking
solutions when they become available,
enabling travelers to book in compliance with
their travel policy using preferred suppliers. For
the moment, these booking services are still in
their infancy.
To make the most of mobile services, companies
can consider a number of points:
Create a specific policy on mobile use,
including items such as the use of preferred
roaming providers, and activating the geolocalization option
Identify best-in-class applications for
travelers, in cooperation with the travel
management company
Include mobile applications in the
selection criteria for online booking tool
and expense management providers,
as these services will be an increasingly
important integral part of their service.
Pay attention to data privacy issues,
as well as the costs related to mobile
applications
Emergency assistance
Natural disasters, political unrest, terrorism and
health scares are an ever-present threat to
travelers’ safety and well-being. Concerns have
heightened in recent years, following a number
of high-profile incidents requiring evacuation,
such as the nuclear accident in Japan, the “Arab
Spring,” severe hurricanes in the Americas and
the ash cloud in Europe, to name just a few.
Unsurprisingly, travelers and travel managers
give a high importance rating to emergency
assistance (8.8 out of 10 on average), followed
closely by 24/7 booking. (See Figure 54.)
Figure 54: Travelers and travel managers attach great importance to emergency assistance
Average
score
Travelers’ rating of corporate travel services
Emergency assistance in exceptional
circumstances (e.g., extreme 1111 7
weather or strikes)
2 5
24/7 booking services
11 21
(including hotline support)
12
9
17
4
Traveler profiles automatically
available to travel counselors 2122
to save time when booking
Online expense management
tool with direct feed
from payment card data
11
5
9
Ability to redeem unused tickets 2111
13
9
6
6 23 2
Social media (for other travelers’ tips)
21
11
8
20
9
10
8.1
38
20
5
8.2
45
11
13
27
0
10
21
17
8.8
58
18
8
5
7.5
28
7.0
25
29
5
40
60
Respondents (%)
5
3.9
5 14
80
100
Average
score
Travel managers’ rating of corporate travel services
Emergency assistance in exceptional
circumstances (e.g., extreme 21112 2 3
weather or strikes)
Ability to redeem unused tickets 1211 4 3
Traveler profiles automatically
available to travel counselors 2 21
to save time when booking
11
24/7 booking services
(including hotline support) 1 3 21
Online expense management
tool with direct feed
from payment card data
8
Social media (for other travelers’ tips)
7
14
12
18
9
4
6
0
6
13
19
21
9
5
5
13
13
26
20
8.6
51
16
9
3 3 2
16
10
8
3
9.0
67
43
8.2
41
8.1
6
13
13
40
60
Respondents (%)
2
6 2
80
Irrelevant
1
6.7
26
5.0
7
100
Relevant
3
4
5
6
7
8
9
10
Based on a survey of travelers (2,185 responses) travel managers (184 responses)
81
Companies can take several measures to
ensure they minimize travel risks and provide
the right duty of care to all business travelers.
These include safety and security services
offered by travel management companies:
Trip-specific intelligence: destination
information and alerts automatically
pushed to travelers based on their booked
itineraries
Access to safety and security experts
Destination
intelligence:
detailed
destination information, including risk
assessment, that enables companies to
make informed decisions on how best to
protect travelers
Alerts: automated notifications to travel
managers and travelers of urgent events
impacting travel
Traveler tracking: reporting systems
that enable companies to quickly locate
travelers in an emergency and get them out
of harm’s way
Crisis management: SMS and/or emails
from an emergency center to travel
managers, with response teams ready to
identify, locate and assist travelers affected
by the crisis
Increasingly safety and security services are
provided by mobile, with a growing number
of applications helping companies ensure their
duty of care to travelers.
For additional support, companies can also
strike agreements with security specialists,
either directly or through the travel management
company, for benefits in terms of coordination
and volume discounts. Specialists like i-Jet can
offer enhanced services such as:
Proactive employee communications:
services enabling travel managers to
communicate immediately and efficiently
with travelers potentially impacted by an
event
Medical and health information: alerts
regarding health warnings, immunization
needs and other health-related information
Other risk mitigation services: security
and health evacuations, expatriate services,
intelligence newsletters and monitoring of
key sites
Emergency service centers: a key role in traveler safety and security
Emergency service centers deal with reservations, changes and enquiries outside normal working
hours, both during crises and in other situations when travelers require urgent assistance with
bookings.
The following assistance is typically available:
Arranging alternative travel after flight disruptions, cancellations, re-routing and overbooking
Reserving accommodation through the appropriate global distribution system and/or directly
with hotels using best available rates
Handling crisis communications: after approval from an incident management response team,
the emergency service center can initiate the crisis communication process (e.g., running specific
reports by flight number or airport code)
Usually an emergency service center manages same-day travel bookings that cannot be handled
by the traveler’s regular travel counselors outside working hours. Where necessary, regular travel
counselors may complement the emergency service center’s efforts by working outside their normal
office hours.
A good example was during the Icelandic volcano in April 2010, which caused unprecedented
disruption to global air travel—some 7 million passengers were impacted when more than 100,000
flights were cancelled. Immediately after the European airspace was closed, CWT teams worked
around the clock to provide information, assist stranded passengers and help find alternative
transportation to get them home. This meant teams liaised closely with suppliers (airlines, hotels,
rail and car-rental companies) and stayed in constant contact with the impacted travelers and their
companies. During that time, CWT travel counselors handled 10 times more incoming telephone
calls than usual.
83
Social media
Social networking and user-generated content
are increasingly appearing in the workplace
and opportunities abound for travelers to use
them to their advantage. Social media can be
used at every stage of a trip—for example,
to obtain information on destinations, share
recommendations on hotels, track flights, draw
attention to service issues and to socialize with
friends and colleagues who might be nearby.
According to the CWT survey, searching for or
sharing information and networking with peers
are by far the most important features of social
media for business travelers, before monitoring
and receiving travelers’ feedback, obtaining
market intelligence and communicating with
suppliers. (See Figure 55.)
Figure 55: Benefits travelers expect from social media
Average
ranking
Travelers’ ranking of social media benefits by importance
Look for and/or share information 5
Network with peers
9
14
10
Monitor and receive
other travelers' feedback
14
45
24
18
21
11
Obtain market intelligence
27
22
0
4
3.1
3.2
10
13
40
60
Respondents (%)
Least important
12
18
19
20
5
25
25
54
2.5
30
24
36
Communicate with suppliers
2.0
8
80
6
4.1
100
Most important
3
2
1
Source: CWT Travel Management Institute. Based on a survey of travelers (1,678 responses)
This said, social media ranks low in importance
for travelers, scoring an average of only 3.9 out
of 10 and coming bottom of a list of service
features travelers expect today. (See Figure 54
on Page 80.)
media ranging from 17 to 53 percent. (See
Figure 56.) Unsurprisingly, usage is higher
among younger age groups: 42 percent of
under 35s, compared with 39 percent of
travelers in the 35-44 age bracket, 30 percent
in the 45-54 bracket, and 23 percent of over
55s.
In fact, only a minority of travelers use social
media for business travel: 35 percent according
to the CWT survey. North America leads the
way, with 38 percent of the travelers saying
they use social media, compared with 29
percent in Asia Pacific and 27 percent in
Europe. The differences by company are more
striking, with the share of travelers using social
Figure 56: In a sample of 14 companies, 17-53 percent of travelers use social media for
business travel
Trips (%)
Travelers’ use of social media for business travel in a sample of companies
100
80
60
40
53
20
0
Type of
company
Me
dia
an
de
c
du
ati
n
Co
on
su
m
g
er
51
oo
n
Co
ds
su
m
g
er
48
oo
ds
Co
43
u
ns
l t in
g
42
n
Ba
k in
Bio
Ag
r ic
g
tec
ul
41
o
hn
e
tur
log
an
37
y
dc
m
he
ic a
ls
F
g
Lo
d
oo
36
is t
ic s
an
db
30
e
ev
r ag
e
Se
30
27
22
ce
ail
r in
r vi
21
17
nt
se
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n
e
o
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nu
an
Ma
de
ce
n
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tu
fa c
g
At the same time, nearly a third of travel
managers (31 percent) say they do not know if
employees in their company use social media
for business travel, showing a need to better
understand the stakes. (See Figure 57.)
85
Figure 57: 31 percent of travel managers do not know whether their travelers use social
media for business travel
Travelers’ use of social media for business travel according to travel managers
Don't know
31%
Yes
15%
No
54%
It is likely that social media will be used more
often by corporate travelers as specific business
travel applications come onto the market and
a new generation of media-savvy employees
join the workforce. Travel managers will also
use social media increasingly to facilitate
communications with travelers, especially
in emergencies, and to access valuable
information. For example, feedback from
travelers can be used to improve the travel
policy and support supplier negotiations.
For the moment, many organizations are still
learning how to effectively make the most of
social media, with the different communications
practices and risks implied. Some companies
have introduced a social media policy to explain
to employees how to best manage the risks,
which cover not only corporate image but also
employees’ reputation and security. With such a
policy, employees are encouraged to use social
media responsibly.
In order to best leverage social media for the
business travel program, travel managers may
conduct an audit to find out what can work best
for travelers in their company.
VIP and end-to-end services
Companies may identify traveler segments with
specific needs that require different service
configurations. Such needs typically include VIP
services and end-to-end trip coordination.
VIP services typically include 24/7
reservation assistance, meet-and-greet at
airports, and a whole range of concierge
services. No doubt reflecting the small
minority of VIPs within organizations (a
mere 2-3 percent of all travelers on average,
according to travel managers), few travelers
consider VIP services important. When asked
to grade VIP services on a scale of 1-10, 1
being irrelevant and 10 being extremely
important, travelers give an average grade
of 5 (neither important nor unimportant).
Only 21 percent consider these services to
be very important (a score of 8 or higher).
Travel managers value VIP services slightly
more than travelers: on average they rate
them 5.8 out of 10 for importance, with 34
percent rating them at least 8 out of 10. The
results vary by company, however, with the
share of travelers considering VIP services
very important ranging from 10-31 percent,
indicating that this type of service is more
appropriate in some company cultures than
others. (See Figures 58-59.)
Figure 58: VIPs represent only 3 percent of all travelers on average
Respondents (%)
60
Average: 2.6%
49
50
40
30
24
20
12
10
10
5
0
Don't know
<1
<3
<5
<10
Estimated VIP population (% of all travelers)
87
Figure 59: 21 percent of travelers and 34 percent of travel managers consider VIP services
very important
Importance of VIP services according to travelers and travel managers
Travelers (%)
Average: 5.0
25
20
15
10
22
17
5
7
8
2
3
8
5
12
11
4
0
1
4
5
6
7
Irrelevant
8
9
6
10
Extremely important
Travel managers (%)
25
Average: 5.8
20
15
19
10
5
10
9
6
5
3
4
8
9
10
14
10
0
1
2
5
6
Irrelevant
7
8
9
10
Extremely important
End-to-end trip management. Integrated,
end-to-end trip services (including taxi and
restaurant reservations, parking and evening
events) do not seem to be a high priority
for now: travelers rate their importance at
5.6 out of 10 on average (1 being irrelevant
and 10 being extremely important), with
29 percent rating them 8 or higher. Again,
results vary greatly by company: the share of
travelers considering this service important
(with a score of 8 or higher) ranges from 1846 percent, showing that this type of service
is more appropriate for some companies
than others. Travel managers attach slightly
more importance to end-to-end services,
rating them 5.8 out of 10 on average, with
33 percent rating them 8 or higher. (See
Figure 60.)
Figure 60: 29 percent of travelers and 33 percent of travel managers consider VIP services
very important
Importance of end-to-end services according to travelers and travel managers
Travelers (%)
Average: 5.6
25
20
15
22
10
5
13
0
1
6
7
2
3
4
4
5
9
10
13
6
7
8
5
Irrelevant
9
11
10
Extremely important
Travel managers (%)
25
Average: 5.8
20
15
20
10
5
8
10
1
2
13
6
5
3
4
0
15
5
5
6
Irrelevant
14
4
7
8
9
10
Extremely important
When deciding whether to implement VIP or
end-to-end services, an internal audit can help
companies to strike the right balance between
costs and travelers’ needs.
89
Unused-ticket management
solutions
When travelers miss flights or change their
plans, their tickets can often be redeemed
in some way, through exchanges or fare/tax
refunds. To avoid eligible tickets going to waste,
companies can use unused-ticket management
solutions, the best of which are fully automated.
Exchanges vs. refunds
In North America, exchanges are more common
than refunds, representing 12.8 percent and
3.4 percent of tickets respectively in 2010. (See
Figure 61.) Latin America follows a similar trend,
with 12.3 percent of tickets exchanged and
2.4 percent refunded. This reflects carriers’
policies: most coach/economy fares can
be exchanged before departure or within a
specified time limit afterwards, and many lowcost airlines also allow tickets to be transferred
to other passengers. In fact, 91 percent of
organizations’ unused documents can be
exchanged in North America, according to CWT
client data.
In Europe, the Middle East and Africa, unused
tickets are more frequently refunded than
exchanged, (13.2 percent vs. 6.2 percent).
In Asia Pacific, unused tickets are managed
similarly, more often refunded than exchanged
(6.7 percent vs. 4.4 percent), with the
exception of Australia, where many tickets are
exchangeable but nonrefundable.
Figure 61: The proportion of ticket exchanges and refunds varies between regions, depending
on carriers’ policies
Share of refunded and exchanged tickets
By region
% tickets
15
13.2
10.3
9
9.8
8.4 8.6
7.8
6.7
4.4
4.6
3
2.3 2.4
Asia Pacific
7.9
6.5
6.2
5.6
6
0
12.6 12.8
12.3
12
Europe,
Middle East
and Africa
Latin America
3 3.4
North America
Exchanged tickets in 2009
Refunded tickets in 2009
Total
By ticket value
% total ticket value
20
16.8
15
13.4
11.6
10.2
10
6.7
7.7
7.1
5
1.5 1.1
0
Asia Pacific
1.4 1.2
Europe,
Middle East
and Africa
2 2.4
7.7
3.9 4.1
3.2 3.4
Latin America
2.4 2.4
North America
Total
Available solutions
Three main options are available for managing
unused tickets:
Manual. This approach requires travel
counselors to cancel a ticket in the global
distribution system (GDS) by hand, typically
several days after the scheduled departure
time or once the counselor receives
notification from the traveler. The travel
counselor also notes the unused document
in the traveler’s profile for future use when
applicable. The counselor must later retrieve
the unused document information to apply
the value to a future trip.
Semi-automated. These systems provide
ticket information via the GDS and free
travel counselors from manually searching
through traveler records. Manual processing
still occurs, however, when tickets are reused or refunded.
Fully automated. The most advanced
unused-document tracking solutions are
integrated not only with agent desktops and
GDSs, but also online booking tools and
other processes to drive automation and
higher redemption rates. Regular updates on
unused documents are provided, along with
reminders of ticket availability for travelers,
travel arrangers and travel managers. When
a new reservation is made, these systems
either prompt the traveler to apply the value
of unused documents to current travel, or
do so automatically. Another benefit is
comprehensive data, which includes, for
example, the reasons for cancellation.
91
CWT research shows that only 40-50 percent of
eligible tickets are exchanged or refunded with
manual tracking. Semi-automated solutions
results in redemption rates of 70-80 percent,
while the most advanced solutions rise to more
than 90 percent.
Benefits
At the same time as producing savings,
unused-document management tools benefit
travel programs by streamlining processes
and enhancing reporting capabilities that
can be used to drive a variety of program
improvements, including:
Efficiency gains. Automated solutions
improve accuracy and bring efficiency to the
unused-ticket management process, freeing
up time for travelers, travel counselors and
travel buyers.
Enhanced compliance. When unuseddocument tracking is linked to a messaging
tool, companies can encourage travelers
to redeem unused tickets while promoting
the use of preferred suppliers and booking
channels.
Improved negotiations. The visibility
provided by unused-document tracking
systems also enables companies to improve
negotiations with preferred suppliers. For
instance, a company may be able to share
their current unused volume with an airline
partner, and discuss options for making
these credits easier to use, such as waiving
name change fees or extending expiration
dates.
Travel managers clearly see the value of
unused-ticket management solutions: while
only a minority (24 percent) use best-in-class
automated solutions for the moment, the
remainder say they would be interested in
doing so when such services are available in
their key markets. (Their average interest level
is 8.2 out of 10, and 71 percent rate it 8 or
above.) (See Figures 62-63.)
Figure 62: 64 percent of travel managers say they do not implement an automated unusedticket management solution
Share of companies implementing an automated solution
to redeem unused tickets
Don't know
12%
Yes
24%
No
64%
Figure 63: 71 percent of travel managers who do not implement an automated unusedticket management solution say they would be very interested in doing so
Travel managers' interest in implementing
an automated unused-ticket management solution
Respondents (%)
50
Average: 8.2
44
40
30
18
20
13
9
10
0
1
2
0
3
1
2
3
4
Not at all interested
9
1
5
6
7
8
9
10
Very interested
Surveyed travelers also show an interest in
unused-ticket management, rating the ability
to redeem tickets 8.1 out of 10 in importance
on average. (See Figure 54 on Page 81.) The
fact that so few companies manage unused
tickets in an optimal manner is partly explained
by reliable, fully automated systems only just
becoming available on the market.
Case study: redeeming 98 percent of unused tickets through an automated
management solution
An energy services company took action after discovering that 24 percent of its total tickets were
going to waste. After implementing an automated solution provided by CWT, the company reduced
this figure to 12 percent to achieve a stronger return on its travel program. In effect, the new
solution increased the ratio of redeemed tickets by 50 percent, and the reuse ratio of eligible tickets
by 98 percent, bringing savings of US$5 million on its US$60 million travel spend.
Among the key features that helped drive this improvement were: introducing automatic tracking,
increasing opportunities to redeem unused tickets by making them available in the system less
than two days after scheduled travel, integrating the relevant information into on- and offline points
of sale, and delivering automated reports on unused-ticket patterns and traveler behavior.
93
SUMMARY
A wide range of services help improve the traveler experience:
A Web-based traveler portal helps reduce costs and enhance safety and security by
providing travelers with easy access to practical information and tools.
Profile management tools make booking more efficient by ensuring up-to-date traveler
information is systematically available, while increasing touchless online bookings (i.e.,
automated bookings made successfully without assistance) and facilitating the use of
other travel management tools.
Mobile services such as itinerary information, flight status updates and electronic boarding
passes are highly valued by travelers wanting to save time and stay informed while on the
go.
24/7 emergency assistance, usually provided through special teams, ensures that
travelers can always receive help as required. In addition, traveler tracking and other
risk management services help ensure that companies provide the right duty of care to
travelers.
Social media can be used at every stage of a trip for networking and sharing information,
although travelers currently consider them low in importance for business travel.
VIP and end-to-end services can be important for clearly defined segments of travelers
in some organizations.
Unused-ticket management solutions are of growing interest to both travelers and travel
managers, given the high proportion of tickets that can be exchanged or refunded instead
of going to waste when travel plans change.
4. Improvements in travel and expense
management can bring considerable cost
savings, while increasing policy compliance
and reducing fraud.
T&E management is a major focus area for companies, especially in view of the recent
economic downturn and increasingly strict regulation on corporate governance. With the
right policy, processes and systems in place, significant gains can be made in terms of
efficiency and savings, as well as improved compliance.
Companies have two main objectives when
tackling expense management:
Increase compliance with regulation
on corporate governance. A strong T&E
policy and enhanced reporting capabilities
improve visibility and reduce system abuses
or outright fraud. These improvements help
companies meet regulatory requirements
while supporting strategic objectives.
Reduce costs. Direct savings are possible
when improvements are made in a number
of areas, such as T&E policy, negotiations
with suppliers, and reporting. Indirect
savings can be achieved by implementing
more efficient processes, both in terms
of the technological systems used and
the way expense management teams are
organized. For example, an automated
expense management system can reduce
the cost of processing expense claims by
more than 30-40 percent, according to
industry experts.
This means tackling three main areas:
Policy or clear rules that let employees
know which expenses are acceptable,
whether or not they need to seek prior
approval for expenses, how they should
pay, and when and how to file claims.
Processes for filing expense claims,
collecting
invoices,
approving
and
reimbursing expenses, reclaiming VAT and
auditing. Many of these processes can be
outsourced to third-party specialists.
Systems, which can be either manual or
automated, stand-alone or fully-integrated
into other IT systems (e.g., online booking
tools and payment card solutions).
Companies can choose between Webbased solutions managed by service
providers, or hosted solutions, where the
software is managed inside the company.
Best practices in each of these areas are
discussed in this section.
95
Figure 64: Expense management involves policy, processes and a system
Authorized expenses and amounts
Policy
Employee’s roles, cost centers and
hierarchy in the expense approval process
Filing of expense claims and invoices
Expense
management
Processing and reconciliation of expense claims
Processes
Approval and reimbursement of expense claims
VAT reclaim and reimbursement
Auditing
Web-based software, hosted software
System
or manual spreadsheets
Expense management: a growing market
CWT estimates the addressable expense management market at approximately US$49 billion
globally, split into US$4 billion for expense management systems and US$45 billion for outsourcing
services. (See Figure 65.) These figures refer to market potential as opposed to actual revenues
realized by providers.
Figure 65: CWT estimates the value of the global expense management market at $49 billion
Total expense management market (2010)
System market
Major assumptions
Total business travel market
(Europe + N. America + Asia Pacific)
Average cost per business trip
Ratio of trips to expense
reports generated
Outsourcing services market
Scenario
Low case
Base case
US$725bn
US$1,062
US$1,328
1.08:1
Major assumptions
Total business travel market
(Europe + N. America + Asia Pacific)
US$725bn
Ratio ofdirect travel costs/
indirect travel costs
20:1
Share of travel costs within
total business-related indirect costs
40%
Average price per expense report
US$5.3
US$6.6
Share of expense claims costs within
total business-related indirect costs
52%
Total system market
US$3.2bn
US$4.9bn
Total outsourcing market
US$45.1bn
This market is likely to expand by 6-9 percent in North America and 5-8 percent in Europe in
2011-15, thanks to a combination of economic growth (hence greater expenditure) and increased
penetration (more systems in use in companies):
Economic growth. GDP should grow by 10.9 percent in Asia, 4.4 percent in North America
and 3.4 percent in Europe annually for the 2011-15 period according to the International
Monetary Fund. Correspondingly, business travel spend is expected to grow by 10.3 percent,
6 percent and 4.5 percent annually in these three regions.
Increased penetration. There is plenty of room for growth, as expense management systems
have penetrated only a small corner of the market up until now—mainly larger corporations.
The estimated penetration rates in companies of more than 50 employees range from less
than 1 percent in Asia and 2 percent in Europe to 8-9 percent in North America, as shown in
Figure 66.
97
Figure 66: Penetration of expense management systems is low
Estimated penetration of expense management systems
within companies of more than 50 employees (2010)
%
50
40
30
20
10
0
≈8-9
North
America
≈2
<1
Europe
Asia
These differences are largely explained by the regions’ varying levels of maturity in three main areas
that drive penetration:
Cost-cutting programs. Given their ability to streamline administration as well as facilitate data
tracking and auditing, expense management tools are naturally seen as a way to reduce costs.
And, according to a report by McKinsey,9 cost cutting is by far the top priority for organizations’
procurement (identified by 46 percent of survey respondents), well ahead of supplier
relationship management (18 percent) or gaining control of more spend areas (14 percent).
Adoption of corporate payment cards and online booking tools (OBTs). To bring more
efficiency, companies already equipped with corporate payment cards and OBTs often add
expense management systems—and penetration rates for both are rising, especially among
mid-sized European companies. Increasingly, organizations are opting for integrated travel
and expense management solutions, which can cost significantly less than separate systems,
especially when bundled with payment card solutions. According to CWT research, an expense
report costs 20-25 percent less when the expense management system is bundled with
corporate cards.
9
“Five ways CFOs can make cost cuts stick,” McKinsey Quarterly (May 2010)
Regulation on corporate accountability and responsibility. National and international
regulation drives the expense management market by requiring companies to adhere to strict
standards of accountability that require stringent reporting and compliance measures. In the
United States, all publicly listed companies must abide by the Sarbanes–Oxley Act (2002),
while in Europe, EU and national regulations impose even tighter restrictions in some areas, as
well as complex VAT reclaiming processes. Automated expense management solutions play an
obvious role in meeting those obligations.
Figure 67: The expense management market is driven by economic growth and increasing
penetration of expense management systems
Driver
Volume
Economic
growth
GDP annual growth forecast (2011F-15F)
Business travel market annual growth
forecast (2010-20F)
Future growth
North
Europe
America
Sources
4.4%
3.4%
IMF
6%
4.5%
World Travel &
Tourism Council
Trend for cost cutting programs
Penetration
rate driver
Increasing use and penetration
of payment cards and online booking tools
Interviews
Compliance and reporting regulation
Estimated annual growth (2011-15F)
6.9%
5.8%
CWT
estimates
Based on data from the International Monetary Fund and World Travel & Tourism Council, interviews with industry experts, and CWT estimates
99
Policy
Once a company has asserted the need for an
automated expense management process, it
usually sets up a project team to define new
rules and processes. This typically takes 3 to
12 months, depending on the organizational
complexity.
In addition to the best practices described
earlier, the following are worth considering:
Include expense management in a
broader T&E management policy. (See
Pages 66-70 for best practices in policy and
compliance.)
Ensure that the policy covers payment
methods. For example, employees can
be asked to consistently use corporate
payment cards to assist data tracking and
help make the reconciliation process more
efficient.
Set up expense management tools to
reinforce the policy. For example, online
expense claim tools can show out-of-policy
spend items to send a reminder to travelers,
while flagging non-compliance to auditors.
Enable senior executives to access realtime data, in order to track traveler
compliance (e.g., overall rate of compliant
bookings and compliance with specific
policy items, such as the use of preferred
suppliers).
Ensure non-compliance is followed up.
According to surveyed travel managers, only
60 percent of companies require travelers
to justify out-of-policy bookings, leaving 26
percent who do not or are unlikely to do so.
This is confirmed by travelers: 16 percent
say no real action is taken, while 34 percent
do not know the consequences of out-ofpolicy bookings. (See Figures 68-69.)
Figure 68: A quarter of travel managers say travelers do not have to justify out-of-policy
bookings
Requirement to justify out-of-policy bookings
No
15%
Don't know
1%
Unlikely
11%
Probably
13%
Yes
60%
Figure 69: 50 percent of travelers say out-of-policy bookings are not followed up or they are
unaware of the consequences
Consequences of out-of-policy bookings for travelers
Booking appears on exception
report with no further action
12%
Non-compliant expenses
are not reimbursed
12%
Booking appears on exception report
and travel management team
sends policy reminder to traveler
19%
No consequences
4%
Don't know
34%
Booking appears on exception report
and traveler's direct management
sends policy reminder
19%
101
Processes
Select an efficient expense management
system. Typically five steps are involved
in selecting an expense management
system: defining an expense management
strategy, setting a budget and specifications,
organizing a request for proposal, evaluating
the different offerings, and negotiating with
providers. (See Figure 70.)
Effective expense management goes beyond
selecting a suitable expense management
provider. Companies need to work closely with
their provider to ensure that the right processes
are in place and fully operational.
Figure 70: Five key steps in supplier selection
Purchasing
process
Key decision
makers
Define expense
management
strategy
Finance/
accounting
(CFO) and travel
departments
Issue budget
and
specifications
Finance/
accounting
and travel
departments
Organize
request for
proposal
Finance/
accounting
department
Evaluate
offers
Finance/
accounting and
travel
departments,
and business
line managers
Select and
negotiate with
suppliers
Finance/
accounting
department
The finance/accounting department—and
more specifically, the chief financial officer—
is most often the key decision maker in the
choice of expense management providers,
usually working closely with the purchasing
department, which leads negotiations with
suppliers. Ideally, the travel department
also takes part in the process, given the
synergies between travel and expense
management, and in some organizations
the travel department has the lead.
According to market feedback, the
most important criteria for an expense
management system are return on
investment and adaptability—i.e., its ability
to be integrated into existing systems
and across multiple regions if required,
and updated as necessary in line with an
evolving T&E policy or other parameters.
Small and medium companies also look for
simplicity or ease of use. (See Figure 71.)
Figure 71: Key criteria when selecting an expense management supplier
Key purchasing criteria
Relative importance
Large companies
Small-medium companies
Return on investment
Adaptability and flexibility
Ergonomy
Simplicity
New features
Price
Implementation
Contracts are generally signed for
3-5 years and cover access to the
expense management system interface,
implementation, support and maintenance
services. Options may include integration
with the company’s existing IT systems
(online booking tool, enterprise resource
planning tool and corporate payment card
system), auditing and analysis services,
e-scanning services, and a custom VAT
reclaim program. In addition, special clauses
may include discounts based on the volume
of expense reports generated, or further
customization for an additional fee.
Ensure that the expense management
system is user-friendly and efficient. As
a general rule, the more automated and
integrated the system, the greater the savings
since employees spend less time filing their
expense claims, and the administration is
lighter downstream. Among the features
worth considering are:
Mobile applications for on-the-go
processing of expense claims—an
increasingly popular feature, according to
the CWT survey (Figure 72)
Easy-to-use categorization of spend items
Currency conversion
Pre-populated claims forms, integrating
data from online booking tools and
corporate payment cards
Automated policy checks to warn
employees of any breaches and flag the
relevant items for managers and auditors
Integration with finance systems
Automatic reimbursement
Short and simple electronic submission,
including scanned receipts
103
Figure 72: On-the-go expense reporting is already used by 11 percent of companies and
7 percent plan to in the next 12 months
Companies using a mobile application for expense reporting
Currently use
11%
Plan to use in the next 12 months
7%
Researching options
24%
Don't know
58%
Case study: making in-house expense management more efficient
A multinational producer of high-tech materials and devices found its employees were unhappy with
its manual expense management process, which required time-consuming report filing and long
waits for reimbursement. At the same time, the management wanted to better manage the risks
of fraud and out-of-policy expenses as travel spend, in particular, was becoming more complex (up
to 5,000 employees were traveling every year, making 20,000 trips to 400 different destinations,
and accounting for US$131 million annually). The company did not want to outsource its expense
management after a negative experience with payroll outsourcing that raised a number of issues
and did not bring the expected return on investment. Instead, the company decided to introduce
an automated system in-house, working with a supplier who would develop a customized system
in Sweden, the company’s home market.
It took a year to build a well-configured system, but the results were convincing: increased visibility
on T&E spend; improved productivity thanks to employees saving time when filing expense reports;
and lower costs through improvements such as policy adjustments, renegotiations with preferred
suppliers and reduced fraud. The company now intends to roll out the system across its subsidiaries
worldwide and also integrate an online booking tool through the same provider.
Find the right balance between pre-trip
approval and post-trip expense auditing.
Pre-trip approval processes can mean that
less post-trip auditing is required. Often,
however, pre-trip approval can be avoided
when employees are required to use
preferred booking channels that are set
up to reinforce compliance, as described
above. A good compromise can be
simplifying the pre-trip approval process as
far as possible (e.g., by enabling electronic
approval for a trip or reducing the number
of hierarchical levels involved) or limiting
it to some exceptions (e.g., long-haul or
business class travel).
Ideally, out-of-policy items are flagged in the
expense management system, and auditors
investigate these, as well as the most
expensive claims and a random sample
of 10-20 percent of claims. A further audit
might be conducted of employees known
to have breached the policy previously.
Consider fully outsourced expense
management. Outsourcing can help
reduce expense management costs
while providing expertise that may not
be available in-house. Yet few companies
outsource expense management today:
under 5 percent of companies served by
large IT service organizations, according to
CWT research. Companies that outsource
successfully tend to share a number of
characteristics. First, to make return on
investment possible, they must have a high
volume of expense claims (at least 50,000
per year). Then, automated expense
management software and a centralized
organization allow efficient implementation.
Previous outsourcing experience (e.g., in
payroll management) also helps ensure
that the process brings benefits.
Ask specialists to manage VAT claims.
Exhaustive, accurate data is essential for
managing VAT claims effectively. In the
most advanced companies, VAT specialists
process cross-border claims, relying on an
efficient, unified expense management
system to do so effectively.
105
Figure 73: Four key characteristics for successful expense management outsourcing
1
High volume
of expense
claims
2
4
An automated
expense
management
system
Previous
outsourcing
experience
3
A centralized
organization
Requires a high level of maturity
Case study: from manual to automated, and in-house to fully outsourced expense
management
A large global conglomerate successfully switched from manual expense-claim processing to fully
outsourced expense management, reducing costs and gaining flexibility in the process. To do so,
it enlisted the support of its travel management company, CWT, from A to Z. This support covered
setting up and administering a customized, automated expense management system with a
technical hotline and day-to-day administration; processing expense claims (e.g., invoice collection,
data reconciliation/analysis, and auditing); and managing payment cards.
If managing expenses in-house, consider
shared services. A slightly more common
option is for companies to consolidate
expense management for different business
units within a shared service center, which
is usually housed at a single location.
Streamlining and standardizing internal
processes through shared services typically
reduces costs, while providing greater
visibility and control.
Consider locating service centers in
low-cost labor countries (e.g., China,
India, Ireland or Poland). This solution
enables the company to either keep
expense management tasks in-house or to
externalize them to a company in a “best
shore” location.
Roll out the system. This involves the
project team consulting with business
units and getting buy-in from executives
and training employees before the system
comes into use. The full implementation
process usually takes a few months,
but can last up to a year. A step-by-step
approach can facilitate major changes, such
as switching from a manual, decentralized
organization to a fully automated,
centralized and outsourced one. Generally,
companies implement the system in
one region before replicating the process
worldwide. In the past, major organizations
tended to have one expense management
system per region or even one per business
line to adapt more easily to specific needs,
but increasingly they are taking a global
approach to enable data consolidation,
assist auditing and better manage the risk
of expense fraud. This in turn has a direct
impact on supplier selection as companies
seek out global providers.
Systems
Broadly speaking, expense management
solutions are available as either Web-based
software or hosted systems:
Web-based software (or software as a
service – SasS) provides service on demand
through Web browsers. These systems
represent 70-80 percent of the market.
Pricing is based on upfront implementation
costs and ongoing transaction fees
(typically a monthly payment based on the
number of submitted expense reports) to
cover report processing, as well as technical
support services, system maintenance and
upgrades. There also may be additional fees
for features such as importing corporate
payment card statements or online booking
tool invoices, scanning receipts and
conducting comprehensive audits.
Hosted systems, sold under license,
enable companies to install the software
in-house so that users access the system
directly from their computers. This pricing
model combines upfront implementation
costs and user fees (i.e., payment based
on the number of licenses, rather than the
volume of processed expense reports).
107
Figure 74: Two main pricing models for expense management software
Type
of system
Web-based
Description
The software
is hosted by
the supplier
and accessed
by users
through a
web browser
Pros
Accessibility from
remote locations
Reduced need for
expert IT teams
Cons
Loss of control since
data hosted by third
party
Examples
of suppliers
Market
share
Expense
management
specialists
70-80%
Enterprise
resource
planning
providers
20-30%
Easier installation
and implementation
Scalability across
platform
Constant automatic
software updating
Hosted
The software
is hosted by
the customer
and accessed
by users
directly from
their
computers
Higher security
Accessibility limited
(the data is stored
to the office
on own equipment)
Longer and more
Possibility of direct
difficult implementation
and immediate
Need for IT expert
customization if
teams ensuring
needed
installation, updates
and maintenance
Penetration
trend
On average, an expense report costs
US$4-7 for “standard” service and US$9-12
when additional features are included. (See
Figure 75.)
Figure 75: Typical pricing of an expense report
Pricing
Type of system or
service offered
Upfront cost
+
A
System configuration
and implementation
+
About 6 months of transaction
(depending on implementation
complexity)
Unit expense report price varies
according to volume generated
Expense report treatment
Typical
scope
Transaction fee
(often monthly)
+
Support (hotline)
=
Maintenance (upgrades)
B Optional
scope
(excluding
outsourcing)
+
Total (A)
Estimate EM growth p.a (2011f-15f)
=
Price depends on chosen
Free for additional features
features and supplier
Total (A + B)
US$4-7 per expense report
Price depends on the feature
chosen and the supplier
US$9-12 per expense report
The market can be further broken down into five
main types of players with different positioning
across the value chain:
Pure players. These specialists tend
to focus on simple, affordable expense
management solutions for small companies,
as well as bundled solutions in cooperation
with payment card companies, online
booking tool providers, travel management
companies and other partners. Pure players
offer strong technological expertise and
often have solid reputations, but their
offerings tend to be limited geographically,
focusing mainly on national, and sometimes
regional, markets.
Providers of online booking tools
and/or corporate payment cards. These
players partner with expense management
specialists to offer bundled solutions
focused on travel, usually addressing travel
managers.
Enterprise resource planning (ERP)
providers. These companies provide
integrated software to manage information
across
business
functions
within
organizations. They focus mainly on large,
multi-regional and global companies,
and have begun providing expense
management as part of their offering.
109
IT service companies and outsourcing
companies. These companies provide
customized
bundles
of
expense
management and IT services, offering both
competitively priced standard features and
more expensive optional features. Their core
target is large companies looking for a more
standardized and cheaper offering than the
solutions offered by ERP providers.
Travel management companies. TMCs
offer end-to-end solutions combining travel
management and expense management.
They may have proprietary expense
management tools or act as resellers for
third-party providers.
Figure 76: Five main categories of expense management providers
Type of players
Pure specialists
Estimated share of expense
management within total sales (2011)
90%
15-30%
Online booking tool/corporate card providers
Enterprise resource planning providers
IT services and outsourcing companies
Marginal
Travel management companies
Figure 77 shows how these different suppliers
fit into the landscape of interrelated systems
and services, and how they have moved into
expense management from their core service
offering.
Figure 77: How different players are positioned across the value chain
Pure players
B OBT specialists
Implement
-ation
Help desk
Payment card
Systems
Travel
services
Expense management
Enterprise resource planning
OBT
Payment
back office
Services
Systems
OBT
Services
Travel
services
Expense management
Implementation
Outsourcing
IT services and outsourcing providers
Implementation
Help desk
Payment card
Systems
Expense management
OBT
Payment
back office
Services
Systems
Services
Travel
services
Payment
back office
Outsourcing
ERP providers
OBT
Help desk
Payment card
Travel
services
Expense management
Implementation
Outsourcing
Help desk
Payment card
Payment
back office
Outsourcing
Travel management companies
Systems
OBT
Services
Travel
services
Expense management
Implementation
Core positioning
Payment card
Positioning extension
Help desk
Payment
back office
Partnerships
Outsourcing
111
Bundled solutions are increasingly in demand
as companies favor a single interface to cover all
their T&E management needs, including online
booking and corporate payment cards. In fact,
47 percent of surveyed travel managers say
TMCs should include expense management in
their offerings, no doubt reflecting the fact that
travel expenses make up the bulk of expense
claims. (See Figures 79-80.)
Figure 78: 47 percent of survey respondents say TMCs should offer expense management
services
Travel managers who consider TMCs a valid player in expense management
Don't know
23%
No
30%
Yes
47%
Figure 79: Travel expenses make up the bulk of expense claims
Type of business
expense
Example
Transportation (airfares, rail travel, etc.)
Travel
Hotel accommodation
Car rental
Restaurants
Other
Taxis
Other (parking, public transportation, etc.)
Share of
T&E expenses
CWT’s survey of travel managers shows that
more than a third of companies (38 percent)
are equipped with the expense management
module of broader enterprise resource planning
systems. This figure is likely to be artificially high,
however, since the survey sample included a
large proportion of major companies. Slightly
fewer (32 percent—a mix of large multinational
companies and more local players) have an
independent expense management tool, while
19 percent have a combined tool for expense
management and online booking.
Figure 80: More than a third of surveyed companies have expense management tools
integrated into a broader enterprise resource planning system
Breakdown of companies by type of expense management system
Don't know
11%
One module of a broader
enterprise resource planning tool
38%
Combined with an online booking tool
19%
An independent tool
32%
113
SUMMARY
Effective expense management can help companies reduce direct and indirect costs,
while improving compliance with corporate governance regulation.
Web-based expense management solutions are increasingly bundled with online
booking tools and corporate payment cards, providing a single interface for all expense
management needs.
Three main areas need to be tackled: policy (including which expenses are acceptable,
how to pay, and how to file claims), processes (many of which can be outsourced), and
systems (which ideally are automated and integrated into other IT systems).
Companies can often gain in efficiency and flexibility by reorganizing the way expense
management tasks are handled, with in-house shared services and outsourcing, and/or
operations housed in low-cost locations.
Conclusion
Ensuring that companies service their travelers in the most effective way involves a fine balancing
act between different priorities—in particular, finding ways to streamline processes and optimize
costs, while providing travelers with the convenience they need.
Travelers rightly have high expectations of corporate travel services, but they also distinguish between
those that are most important to them and those that are simply nice to have. Travel managers
should be aware of these needs, while taking into account the company’s unique context, which
makes certain service configurations more suitable.
An evolving market offering means that the choice of available tools and features is growing fast,
underlining the need to arbitrate carefully and take a tailored approach. The opportunities have
never been greater for companies to find the right fit with their goals.
115
Glossary
Fulfillment service center: a back-office team
that intervenes to process air, hotel, car, rail and
ground transportation reservations made onor offline that could not be processed through
automation. This service configuration is usually
centralized at a country or regional level.
Expense management solution: Web-based
or hosted software used with an appropriate
policy and processes to manage corporate
expense claims. Increasingly, these solutions are
bundled with online booking tools and corporate
payment cards, providing a single interface for
all travel and expense management.
Full-service center: a team serving one or
several companies, often using client-specific
processes. A key strength of full-service centers
is the provision of local content such as rail and
ground transportation.
Global distribution system (GDS): a reservation
tool used by corporate travel counselors for air,
hotel, car or other travel services. The four main
GDS worldwide are Amadeus, Galileo, Sabre
and Worldspan. Other computer reservation
systems are available in specific markets
(e.g., TravelSky in China).
Multinational service center: a team of travel
counselors who employ standardized processes
to serve several countries. These centers are
usually based at near-shore locations that offer
competitive labor and office costs.
Offline transaction: a travel booking made by
contacting a travel counselor by phone, email,
fax or order requisition system (e.g., Oracle or
SAP).
Online adoption: online transactions divided by
all transactions, online and offline, in companies
that have an online booking tool.
Online booking tool (OBT): a customized,
online interface allowing automated booking of
trips within company policy.
Online penetration: total transactions (online
and offline) made by companies that have an
online booking tool installed, as a percentage
of the transactions made by all companies
regardless of OBT availability. Online penetration
is a theoretical measure of the percentage of
online bookings and hence a good metric for
understanding market maturity, in terms of the
acceptance of online booking tools.
Online transaction: a travel booking initiated
through a corporate online booking tool. The
transaction may be either touchless (completed
without
manual
intervention),
touched
(completed by a counselor without traveler
intervention after an automation failure) or
assisted (where either the traveler initiates a
manual change or the fulfillment center needs
to contact the traveler to process the transaction,
typically to make changes after ticketing or to
settle payment if a payment method is declined,
etc.).
Online usage: the percentage of all transactions
made online (vs. offline) [online transactions
divided by all transactions].
On-site service center or “implant”: a
dedicated team of travel counselors located
on the company’s premises who deliver a
customized service.
Profile management tool: a database for
traveler information (e.g., personal data
and information on preferences and loyalty
programs), aimed at making the booking
process more efficient.
Unused-ticket management solution: a
system for redeeming tickets through exchanges
or fare/tax refunds, using manual processes or
automation.
Standardized service center: a team providing
highly standardized services adapted to local
languages, cultures and content. These centers
are usually located in ”best-shore” locations (i.e.
countries offering optimal conditions in terms
of costs, etc.), in line with the goal of keeping
offline transaction costs to a minimum.
Technical service center: a help desk for
online products and tools provided by the travel
management company or online booking tool
vendors. It is the single point of contact for
customers using online tools (e.g., booking
tools, Web-based portals for travel program
information, etc.)
Traveler portal: a Web-based gateway to a
wide range of practical tools and information
for helping travelers prepare for travel and stay
informed while on the road.
117
For more information on how Carlson Wagonlit Travel
can help your company, please contact your CWT sales or
program manager or email us at: [email protected]
All research published by the CWT Travel Management Institute
is available on
www.carlsonwagonlit.com
Scan the QR code for direct access to our online section

CWT - Business Traveler Services - Finding the Right Fit

Transcription

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