Google Tries Traveler-Friendly Price Cap Policy - Business Travel News

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Google Tries Traveler-Friendly Price Cap Policy

Milan

May 22, 2008 - 06:44 PM ET

By Jay Campbell

Google is attempting to apply a simple and consistent global air travel policy that recognizes users know what they want and appreciate flexibility, according to global travel manager Michael Tangney. Google offers travel management support in 28 countries and adds a new nation seemingly every couple weeks, Tangney said.

Using an internally built application, called Trips, travelers check what they want to spend or what they have already spent against a database of more than 300 fare caps, based generally on seven-day advance purchase coach rates. If the fare the user wants to buy (or has bought) is under the cap, half of the difference is automatically banked as credit for that traveler. The traveler then can use the credit to offset dollars spent in excess of caps on future fares--such as to purchase a premium service. A traveler booking over a cap instead can claim an exception, which requires vice president approval, or pay the difference personally.

Travelers are allowed to book wherever they want, although about 60 percent do use the preferred travel management company, Carlson Wagonlit Travel. Credits are not applicable to personal travel, but Google by the end of the third quarter plans to create an option for travelers to donate credited travel dollars to charity if they do not want to use them for business travel.

The program's benefits include "few very unhappy travelers," smarter buying behavior, greater use of low rates (including negotiated fares when they're lowest) and equal treatment globally, said Tangney during a presentation here at the Paragon Business Travel Conference & Expo.

"Clever design can provide control," he said. Based largely on traveler feedback after about 9,000 Google employees viewed a spoof video on business travel by two travelers, the variation of a loyalty program launched in December, with the goal of improving traveler satisfaction and controlling spending.

The process applies post-trip as well as pre-trip, since it is tied to expense reimbursement rather than booking. During the reimbursement process with Google's Oracle expense system, a Trips identification number is required and pulls in data on credit and fare differentials.

Reviewed monthly, the fare caps offer a base for budgeting. Management information on their usage helps Google understand market trends. "People will find better deals themselves, but not always," said Tangney. "In the longer term, if the agency is providing a lower price [and people are not buying that way], I need to do a better job promoting that in the system. If the open market price is better, than the agency is not doing something right or I need a better deal. I should always be able to get a better deal."

The program's overall effectiveness remains to be seen. Tangney said costs had "probably dropped," but he wanted to "reserve judgment" following "three months of solid data."

"We're aware of the liability we're building" with the credits, he added.

Although booking outside a designated TMC has pitfalls, Tangney was not concerned about all of them--though he acknowledged that such a scheme would not work for every company.

For suppliers that require the use of agency data through third-party aggregators, Tangney said Google supplements TMC MI with the Trips data. Asked whether there is a safety or security risk in not requiring travelers to use the TMC and its traveler tracking capabilities, however, Tangney said he shares that concern. Google does not track travelers. "We have the capability, by pushing the requirement to do 'Trips' before the person travels, but we don't do that," he said. "It is something we might look to in the future. We do sell [security-related tracking] as an advantage of going through the travel agency."

In part because employees are comfortable with online booking and aware of what's available online, some think "only they" can find good deals, Tangney said. His department adopts several companywide principles, including: focus on the user and "all else will follow," "fast is better than slow" and "there is always more information out there." In the company's travel policy, user satisfaction is paramount and there are no mandates. There is flexibility, as a result, on class of service.

But the travel program does offer guidelines and structure, and emphasizes that travel agency support is important. "No guidelines would not be effective," said Tangney. "They want to know what they should be doing." Ultimately, Google travelers "have the best information about what they want to do" and are "pretty frugal," said Tangney, who was new to travel when he joined Google about six months ago.

Whether Google will expand the program to lodging or other segments is to be determined, Tangney said.

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