European Partnering: TQ3, Deloitte; Delta, Marriott
TQ3 Travel Solutions finally has launched its long-heralded consultancy collaboration with Deloitte. Called Advito, it promises to deliver "advisory, technology and outsourcing services to targeted multinational companies."
Contrary to earlier statements, Advito is not a joint venture but a wholly owned subsidiary of TQ3, with Deloitte acting as what is termed an "exclusive strategic partner." The headquarters of the organization will be TQ3's Europe, Middle East and Africa head office in London, and the managing director is Karen Daud, who joins from Deloitte. Other staff will be co-opted from both organizations.
Larger travel management companies have claimed to offer consultancy services for about a decade but have struggled to convince corporate clients that this is much more than account management at an inflated price. Speaking before the launch of Advito at the Business Travel 2004 show in London last week, TQ3 COO Toby Joseph claimed the new venture would be different. "Travel management companies lack true consultancy expertise, but consultancies that have tried to provide services in this market have lacked travel expertise," he said. "The logical thing is to bring them together. Where I think having Deloitte alongside will truly make a difference is in integrating travel programs into the overall business of corporate clients." Joseph added that the Deloitte connection also would help TQ3 to gain the attention of chief financial officers.
As well as consulting on procurement and process improvements, plus such technological issues as integration with enterprise applications, Advito is offering a range of outsourced services. These include traveler help desks and what it described as "travel management operations." Asked whether this meant TQ3 would be competing directly with travel managers for their jobs, Joseph said: "We are not targeting anyone's jobs but travel managers are changing their roles. The old-fashioned travel management role is not an area where companies will invest a lot of money."
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A bulk-purchasing initiative for European companies flying to the United States also was unveiled at the conference. Global Business Pass claimed to provide discounts of up to 50 percent on fully flexible walk-up tickets with Delta Air Lines in return for a minimum purchase of $55,000 over five years. Buyers also can purchase blocks of units redeemable for discounted room nights with Marriott International for a minimum of $5,000.
Global Business Pass has been launched by Royal Ocean Corp., a company in Bermuda operated by British expatriates from outside the travel industry. All the fares it quotes are fixed for five years and include codeshare flights operated by any Delta partner. Examples include $1,551 one way in business class between London and Atlanta or New York with a 14-day advance purchase. For less than 14 days in advance, the fare rises to $2,118 or a last-seat availability of $2,433. The 14-day purchase is roughly comparable with fares sold through consolidators in the United Kingdom but without the usual restrictions, such as nonrefundability.
Global Business Pass also covers domestic fares within the United States (New York-Boston is £26, or US$48, one way with a 14-day advance purchase). However, it is not for sale to U.S. companies. At present, it is only available to U.K. corporate entities, but it is being rolled out in other European markets later this year. Royal Ocean Corp. charges an 11 percent administration fee on the investment made by the corporate client, and the rest is held in trust to buy the air or hotel units. Booking is made on a dedicated Web site backed by Worldspan.
The program includes four Marriott brands: Ritz-Carlton, core Marriott, Renaissance and Courtyard. Flat hotel rates in British pounds are locked in on an annual basis, rather than percentage discounts, and are valid at all worldwide properties, regardless of day of week. The program also offers last room availability. "Global Business Pass is aimed at small and medium enterprises but also at larger companies if they don't have a deal with Delta and want to lock in their fares for the next five years," said Royal Ocean Corp. chairman John Bintliff. "A number of corporations have committed to buy, covering $8 million to $10 million, including some large corporations in the financial sector that already have volume deals and are using this as an add-on."
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BTI UK has launched what it claimed is a unique service of sending booking information by short message text to travelers' mobile phones. Called SMS Traveller Itineraries, it initially is restricted to sending hotel reservation confirmations to users of its online tool Hotelbooker. Next on the agenda will be sending out security alerts, followed by air itineraries. Airlines also are working on the technology in Europe. SAS has launched a checkin procedure for passengers using SMS on their mobile phones.
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Fares charged by European no-frills carriers are beginning to rise, according to American Express and BTI UK. Amex started tracking low-cost airline fares at the beginning of 2003 and reported a marked jump in the second half of the year in most markets. With no data from 2002 to compare it with, there may be seasonality involved, but BTI said the average fare on low-cost airlines paid by its customers last year rose from £104 to £114 (US$191 to US$210). At the same time, fares offered by traditional carriers have fallen, one of the reasons cited by Ryanair CEO Michael O'Leary for its recent profit warning. A session at the Business Travel show proved that many larger companies remain unenamored with the no-frills carriers. "Sixty percent of the routes we fly are served by low-cost carriers," said Ernst & Young travel manager Sharon Fattore, "but our usage of them is in single digits."