European Online Booking Adoption Roundtable: Cos. Embrace Corp. Tools

BTN editors recently discussed online booking in Europe with three business travel buyers: Yves Galimidi, global travel purchaser for IKEA, based in Zaventem, Belgium; Neil Hammond, global travel manager for Schlumberger, based in Paris, with air volume of $140 million across 40 countries worldwide; and London-based Keith Mullineux, travel manager for Europe, the Middle East and Africa for General Electric, with 23,000 travelers and an air volume of $80 million.

BTN: What progress have you made in introducing corporate online booking tools in Europe?

Neil Hammond: We started in the U.S. and Canada many years ago, and in Europe this year. The first country was the United Kingdom in February and then France, Holland and Germany. We only have one major country to go and that's Norway. We are using GetThere on both sides of the Atlantic.

Yves Galimidi: Last year, we started online booking in Germany and the United Kingdom with Cytric I:FAO. We are learning from our experiences because they were quite different in the two countries. Everything went very smoothly in Germany. The United Kingdom was much more chaotic. We have also started in Italy this year with a small local provider. We will soon start in Austria, the United States, Canada and Benelux, which will all use I:FAO. Within three to four years, all IKEA countries around the world will use online booking tools.

Keith Mullineux: We use GetThere in all 23 countries in our European program. We started with Sabre BTS in Benelux and in 2003 we decided to move to GetThere [which had been acquired by Sabre and merged with its own BTS product]. That was when the bandwagon really started rolling. We just moved our last country, Hungary, a month ago, so now I can say Europe is enabled. There are still one or two countries outstanding, such as Russia, Portugal, Greece and Turkey, but we don't even have them in our consolidated data center. We let them do their thing locally.

BTN: What percentage of your air bookings has been online in 2004 and 2005 and what percentage will it be in 2006?

Galimidi: About 70 percent of our trips are point-to-point in the countries where we have online booking, and this year we have been very close to an adoption rate of 90 percent for those point-to-point journeys. Last year, in the first semester, it was 40 percent and in the second it was closer to 70 percent. We are not using online booking for the 30 percent that are not point-to-point and that is the way it will stay because we do not want to make our travelers experts in travel booking. We will always have another solution for those more difficult trips.

Hammond: I like to talk in terms of total transactions. With our U.S. program last year, what went online represented maybe 5 percent of our global transactions. With what we have rolled out in Europe this year, online is now about 15 percent of our total global transactions. In Europe, our initial pick-up has not been as strong as I would have hoped, except in the United Kingdom, so we have been running at about 15 percent in 2005. Next year, I would hope to get into the 25 percent to 30 percent range. There are challenges to go through in Europe, so before you start mandating or introducing penalties, you really have to make sure you have a robust and reliable product and that all the technologies are connected.

Mullineux: This year, we are going to do 125,000 transactions in Europe and the self-booking tool adoption rate will be 48 percent across all transactions. We reckon about 70 percent of our transactions lend themselves to use of the tool—out-and-back to a single destination, hopefully with the same carriers—so we know there are 30 percent of bookings out there that we will always want agents for. My boss is looking for 60 percent next year, so I am going to have to work out how to get the rate up by 10 percent or so.

BTN: Yves, why did introducing the tool go well in Germany but prove chaotic in the United Kingdom? Was that because of the way IKEA is structured or was it something to do with the tool?

Galimidi: It was not the tool. It was internal. In the United Kingdom, they made it mandatory straight away. There was not enough training. In Germany, we gave it more time, an eight-month period. Giving people the choice worked much, much better, so this is what we will now do everywhere.

BTN: When introducing a tool across Europe, are you discovering national variations in each market or is it pretty much the same?

Mullineux: We noticed huge variations due to the culture. The southern European countries are much more resistant to change. In Italy and Spain, the adoption rate is 20 percent to 30 percent. The further north you move, the higher the adoption, so we have Denmark at 84 percent and Sweden, Norway and Finland—all of which have been moved in the past 12 months— already up to near 50 percent. Germany is anywhere between 55 percent and 65 percent.

BTN: Can you expand on the cultural variations?

Mullineux: People in Mediterranean countries like to have local, direct contacts. They like to talk to people in their own language. In the north, generally, people are much more prepared to do things remotely and in a digital fashion—as long as it works. They expect it to be 100 percent perfect and they give you a very tough time if they notice any anomalies—and, of course, self-booking tools are not 100 percent perfect.

BTN: Did you have to get GetThere to adapt its product?

Mullineux: Absolutely. We work exclusively with GetThere and Sabre, which you could argue should work pretty well because they are owned by the same outfit. Nevertheless, in pushing us out over a three-year period, we started in the easy countries where they are well-established and left the more difficult ones until later on, where we were going in hand-in-hand with them. Hungary was new for Sabre and new for GetThere. It's only a small country, but there is more work there than in a country like the United Kingdom, where there has been a longstanding relationship with Sabre.

Hammond: I want to compliment Keith on General Electric's approach because it is blazing a trail throughout Europe, which is desperately in need of some standardization. We haven't been able to take the same approach, but what GE is doing is paving the way for Europe to become as simple as we imagine the United States to be. We tend to have an oversimplified view of what the United States is like. It is not without its complexities, such as different global distribution systems in different parts of the country. It just lacks international borders. At the same time, we tend to overemphasize the differences of technologies and local market conditions in Europe and use those as an excuse not to do the kind of things that General Electric has done.

BTN: Have you had similar experiences as GE?

Hammond: We haven't done it quite the same way. We are using the same booking tool but we are using different global distribution systems in each country. At some point in Europe, you have to have a disconnect, either between ownership of the booking tool and the GDSs it uses, or through committing to a single GDS even if it is not a major player in certain markets, or through using a different booking tool in each market and making life difficult for your travelers and travel bookers.

BTN: Is it really a disconnect? Is there a problem here?

Hammond: It depends on the company. What GE and Schlumberger have chosen in this case is one online booking tool, which means one relationship with the tool provider, one point of aggregation, one set of system administration and one training program for our employees. At a company like ours, where we move people about a lot, it means they don't have to learn a new tool. So there has to be a disconnect somewhere else: in our case, by using different GDSs.

BTN: What is the point of having the same GDS around Europe?

Mullineux: Global consistency. Our deal isn't just Europe. Being an American company, the pace is generally set from America, and of course Sabre is very strong there, as is GetThere. We would have to have a very good reason to go with a different supplier and we never have had a good reason. It's not all plain sailing. Amadeus is the dominant GDS in Spain and France, so to go with Sabre you are going to make some more work for yourself; but, on balance, there are more pluses than minuses in going with a single GDS and a single self-booking tool than trying to ride different horses. That would have led to cost in trying to manage the complexity.

BTN: Neil, do you think the disconnect issue you have described has an impact on your adoption rate?

Hammond: I haven't got to the heart of all the problems yet. With all of these technologies and a lot of competition between the different players, such as Amadeus working with a GetThere product, or working with an agent that only has one GDS in a particular market, you have to sift through a lot of explanations to verify what the situation is. We have a company culture that is very strong and overrides a lot of cultural differences. The United Kingdom has a quite pleasing early adoption rate against France, but U.K. citizens aren't that much more deft at adopting this technology than the French. Some global distribution systems support online fulfillment better than others.

BTN: Keith, does having a strategy of using a single GDS hinder your relationship with airlines that are more closely related to other GDSs?

Mullineux: Yes, absolutely. We were migrating countries at the rate of one every three weeks until we came to Spain, where it was a bridge too far for Iberia to load our negotiated rates into Sabre. They had never done it before, or at least they claimed they hadn't, and I lost a year because until I got Spain moved, I couldn't do any other countries. I can't move a country and risk all our businesses coming back to me and telling me all my bright ideas are costing them money because their fares are no longer visible to them.

BTN: Is using a single global distribution system part of your follow-the-sun strategy, in which you are consolidating offices worldwide?

Mullineux: Absolutely. We only have three centers now: Phoenix for North America, Poland for Europe and Beijing for Asia. Europe's consolidation is pretty well complete. North America we could carry further by putting in Mexico and places like that. In Beijing, we have put in Hong Kong and now we are looking at Korea and others. Then we will be able to follow the sun with our out-of-hours service. By picking up the six-digit locator reference, if someone is in trouble in some distant place, any agent anywhere can get them out of any scrap and get them going again.

BTN: Is online fulfillment without manual intervention a major goal for you?

Mullineux: In approximate terms, you can say that an agent-assisted transaction is going to cost $45 and one made without any touch on a self-booking tool is going to cost $5.

BTN: Of your 48 percent of transactions made online, what percentage is fulfilled without any touch?

Mullineux: All of them, unless there is a modification. We are looking to go for "book it, buy it" on a test basis, which is what they use in America.

Hammond: The "book it, buy it" issue is one of the challenges in Europe versus the United States. They want a "book and hold" functionality. As fast as we develop it on the tool Keith and I are using, the airlines will take it away. The airlines will shut that one down.