ACTE Survey Underscores Buyer Concern About Managing Ancillary Fees

Without a solution to track and report on ancillary airline fees, many travel buyers are encountering problems in managing and measuring the total cost of trip as 29 percent of about 300 travel buyer respondents to an Association of Corporate Travel Executives survey released yesterday said that they do not manage the total cost of trip well and 51 percent reported that they only manage it somewhat well.

The survey, which was unveiled at the association's New York Executive Forum, also found that 41 percent of respondents said "unmanaged" ancillary expenses, which include airline seat upgrades and bag fees as well as dining costs, made up of 5 percent to 15 percent of T&E budgets. Thirty-two percent of buyers said less than 5 percent of their budgets were spent on ancillary charges and 21 percent said 15 percent to 25 percent of their expenditure went to such costs.

Respondents reported that the top three challenges to effectively tracking the total cost of trip come from data collection, systems limitations and data accuracy issues, respectively.

These sentiments were echoed by some of the forum's audience members. One large market travel buyer said he uses corporate card data to attempt to identify baggage fees by pulling out all the airline charges less than $50, which can't be change or cancellation fees, so "you kind of assume that it is one of those fees."

Marsh & McLennan global corporate travel lead Judy Bauer said, "What we would like to do is get a lot more of these expenses put in our policies. We had some discussions with one of the airlines last week about the fact that there are all these incremental costs coming up and we don't even have policy around it, never mind start tracking them."

The MMC travel program is developing a global travel policy and trying to address the ancillary fee environment. "All of these questions are coming up now because when you look at the ancillary costs that are just outside of air, hotel and car, there is a long list and I don't know how you are going to track them all and then set policy on top of it," Bauer said.

Ingersoll Rand director of strategic sourcing Tom Barrett said that some of the fees are being picked out on card data as miscellaneous charges separate from other retail expenditures, which can be done based on where they are being registered in the reporting systems. "We are educating management to see it and publicizing it, but I don't think we can come out and say, 'no, you can't do this.' For a while, there were times where we weren't paying for Internet connection fees at hotels in the beginning. At some point, you are going to see a lot more of these things. We've just got to try to figure out what is the laundry list."

Another New York-area travel buyer suggested other pricing schemes that could be applied without creating the mess that ancillary fees have caused for buyers. "The airlines need to price their solution appropriately so that we don't have to do this," he said. "If I'm booking a seven-day trip, I know that I am going to be packing a bag or two bags, so perhaps there is something to be said about pricing appropriately based on the segment or duration of the trip. There are other ways to do this. It seems like we are being held hostage."