Buyers Blaze Trail To Online Booking Territory

By BTN / December 03, 2000

Buyers Blaze Trail To Online Booking Territory

The World Bank contract manager Debbie Horrell, Thomson Consumer Electronics manager of worldwide corporate travel Cindy Heston and Amazon. com travel manager and accounts payable supervisor Karin Hutchinson in late summer joined Business Travel News for a discussion on technology.

The three organizations provided a unique cross-section of case studies. Fast-growing online retailer Amazon.com is working with its travel agency to develop a new booking tool; Thomson, a $60 million global travel account, has significant usage of its booking tool; and The World Bank spends 95 percent of its triple-digit millions in air travel outside the United States.

BTN: Debbie, how would you evaluate online booking for international travel today?

Debbie Horrell: I'd like to see improvements. It's interesting because we had a meeting with American Express recently about retooling the travel program at the Bank. They were surprised at how little online booking has picked up in the past four or five years. They expected by this time to have 20 percent of bookings being made online. It's 5 percent overall in the industry.

I think one of the problems is the products aren't intuitive enough. You have to know what you want to ask the computer. There are systems being developed where you can say, "I want to go to Los Angeles," and it will look at the different airports for you and look for different dates. The systems don't do that now. You have to put in the dates you want to fly. You have to go back then and change if it's not what you want it to be. In order for international really to be accepted by the community, the systems have to be a lot more intuitive. For example, for us, if people are going to Moscow or they're going to Budapest and there aren't daily flights, the systems will just come back and say there's no service. And it's got to be able to look down the week and say, "Okay, you want to do it on a Wednesday and there are no flights, but there are on Friday."

It can happen in the domestic market too, it's just more prevalent in international because you tend to have less daily frequency. So, I think until that happens, international is never going to be widely accepted online.

BTN: Cindy, how much usage are you getting on the Trip Manager product?

Cindy Heston: For 1999, our average was 40 percent online. In 2000, we're averaging about 53 percent for the year to date. We're actually in kind of a reverse mode right now because people are using the product in ways that they shouldn't be using it, for complex trips. So for those, we're out there kind of saying, "calm down, don't use the product. Pick up the telephone or send an e-mail." We try to get them to go to the computer no matter what, so we have an e-mail form that we try to support more than the telephone. We're kind of hoping to even bring the number down a little bit until technology and the systems are even more apt to handle the around-the-worlds and the inner-Chinas and some of those things. People are struggling for half an hour or an hour trying to use the system. But they shouldn't be using the system for these types of itineraries, it's not sophisticated enough.

BTN: Do you think 60 percent usage is an optimal number for this technology?

Heston: For right now.

BTN: Debbie, what about consumer sites. Are your travelers using them and is that a significant leakage problem?

Horrell: I don't think so. They tend to use them sometimes to look up schedules and then come back and if they don't like what BTS is doing, they'll say, "I can find this on Travelocity just fine, how come?" But it is an interesting issue because I think that one of the things we've found when people either use BTS or go to Travelocity, they really do find very cost-effective fares, much better than the travel agent. I don't know whether it's just a point of personal pride that they could beat the agent and find a better deal or what, but they really are very good about finding cost-effective fares.

Karin Hutchinson: We hear that a lot. That's pretty high at our company. On day one when you start at Amazon, they drill into your head the frugality issue. And so, the flight information comes back, the ticket is $600 and the next thing you know they're on Expedia and four other sites trying to find a cheaper fare. When they find it, all of the sudden the e-mails fly: "I found it for $250 on this site and da da da." So, what we did on policy was to communicate to the company that if your ticket price is more than $500 and you want to go out and look, go ahead. One, you are wasting company time, but if that's what you feel you need to do then you can explain that to your boss. But if you find a ticket that's less than $100 difference from what was quoted to you, don't take it. It's not worth it. If you find something that's over that and where you're getting into $200 and $300 savings, then e-mail the agency and say, "I found this here, can you match it?"

They need to fully understand the restrictions, plus they need to understand that they might have to change it and they can't just pick up the phone and call "Net Travel." Then we talk to them about the airline discounts that we get on the back-end that they don't see. So, it's a lot of education on our part and it's been a little bit better.

Heston: I think the only problem we've run into is the new Southwest site. That's been very interesting and we're on a Worldspan system, which doesn't offer Southwest. So, I think we've had one or two incidents where they were able to get $89 tickets through the Southwest business site, and we are looking at that from a policy standpoint. Is it something we should address? Is it so minimal that it's not even worthwhile addressing? It doesn't come up too often because our markets, particularly in Indianapolis, are very competitive anyway. Normally, whatever Southwest offers, the other carriers are going to match immediately. So it hasn't been that big of an issue from a traveler's standpoint. Our net-net rates through Trip Manager are much lower than what they can get on Expedia or Travelocity. I find that they use those other sites mainly because they're unfiltered and they can get a really good understanding of all schedules. They may check schedules and then come back to our site and try and force that schedule in, even though the fare is a little higher.

BTN: So, it's mostly for looking, not booking?

Heston: Right. We just had some focus groups a couple months ago and a lot of secretaries said they will go to Expedia and look and then go back to Trip Manager and try and force something.

BTN: Are they finding better deals because they are finding sales or are they willing to do changes?

Horrell: They have neither the time nor the patience when they are talking to the agency and for whatever reason, they do it on their own, usually domestic. Then we have to explain, "Well you wanted to go at a different time. You didn't want to go out of DWI, you wanted to go out of National. Now, you're out of DWI and you've got this really great deal. Well, Amex could have done the same thing." As long as they have a good fare, we tell them it's fine. Their behavior is interesting. There was a lot of concern when online booking first came about that it would be more expensive, but I think actually it's the opposite.

Hutchinson: It's going to be the opposite for us, with the Highwire product that Metropolitan Travel is working on with us. We'll have built-in travel policy and preferred carriers, and just the transaction cost alone is cut in half.

BTN: Debbie, are you anticipating that kind of savings?

Horrell: I think that's interesting because we were trying to justify mandating going to e-tickets and online for domestic and we were getting the message from American Express that it wasn't going to save that much money. It didn't make sense to do that at the Bank, where the domestic's only 5 percent of our revenue but it's 20 percent of our transactions.

BTN: The theory is, if you are using the technology, you do not need to use as many agents and you lower the headcount, right?

Horrell: Exactly. I guess what American Express was trying to say is because of the Bank's mix with international, you might only save a third of an agent here, a third of an agent there. You are not going to be able to get huge cost savings by eliminating like three or four travel counselors. But I think we want to go that way anyway and just do our own figuring.

BTN: What are the pros and cons of selecting an agency-owned or marketed system?

Horrell: We went through that when Amex had AXI, which I think they've dumped. I don't think they are going to go that route again with the Bank. After having dumped one product, I think it would be rather difficult to build a case for supporting another product.

BTN: Karin, what was your experience with Metropolitan?

Hutchinson: We've been working with them for a couple years on building the system, so I feel pretty instrumental in where it is today. We've been giving a lot of feedback, a lot of testing. Efficiency is the biggest thing. It will automatically tell me when people aren't following policy. Everything's on one screen, not like when you go and do Expedia and your air and your car and your hotel are on different screens. It pretty much rocks.

BTN: And is it helpful that your agency is developing it?

Hutchinson: Yes. Groups of travelers and travel arrangers get together periodically and go over and test it and give an incredible amount of feedback. The next time we meet, the changes that we want are there, so we're good partners. I think it's going to be a great tool for us. Our employees can access their site by our intranet, where they have a custom site for us with our logo and everything. They can request travel, look at hotel directories, look at the weather--but the biggest thing they offer us is reporting. You can go in every morning and look at pre-trip or post-trip reports, by cost center, department, traveler or date. When you don't think you can drill down anymore, you can. The great thing is that you can access it via the Internet, and I've got a password that I can get in and everything's secure. You can then move it from the Internet into Excel, then you can move it into charts for presentations and it makes you look real good. I don't think I've ever run into a situation where a report I've had to have isn't there, which is nice.

BTN: A number of global distribution systems and other tech vendors are developing infrastructure to support Web-based wireless communications. Do you expect to be managing personal automation tools?

Heston: I know with the Trip Manager product they've got several contracts with wireless providers for relaying on-time and gate information. It's all about traveler convenience and that's important. The way business traveler schedules are, it's only going to make more efficient use of their time. Time right now is just an unbelievable value. Any value we can add with our suppliers is going to make us more important in the travelers' eyes.

BTN: What is the role for you in managing such productivity tools?

Heston: It's more education and making them aware that this is available for them. You know, how does it work? What do we have internally? What systems do they coordinate with?

Horrell: For us, that might be a way to again push use of BTS. And that would be good. I don't know how much of a switch in the Bank there has been from laptops into wireless technology, although I think everybody does seem to want their little Palm devices now. But I think it still is limited to a certain extent. The technology is sort of monolithic and our IT department takes control of it, so they decide if there's a laptop, that's the only kind of laptop anybody gets. I think if it were driven from the top, where if they decide that wireless technology is the way to go, then the laptops go and we just have wireless technology. At that point, we could work with them.

BTN: It's pretty early on, but one can imagine having certain leverage where your company has so many of one mobile device and that's the type that your booking vendor is working with now, perhaps there's some reward there.

Horrell: It's something that we could certainly explore, but first I just want to get them to use BTS in the office. Then we'll worry about wireless down the line.

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