Use Of Nonrefundables Up: Industry Lacks Comprehensive Tracking Tools

More corporate travelers are using nonrefundable airfares, but most companies have not adopted fully automated systems to track and store unused nonrefundable tickets and reapply the credit at the point of sale.

While many partial solutions are in use, including electronic-ticket tracking systems that identify many unused nonrefundable segments, no current system fully automates the population of traveler profiles and the exchanges and refund process. At issue are the technologies available and the ability to encompass both agent-assisted and online bookings while taking into account other factors.

Despite the industry's move a year ago, led by Continental Airlines, to increase to $100 the change fee on nonrefundable tickets (BTN, Jan. 29, 2001), more travelers are booking those fares to lower corporate travel costs, sometimes mandated by policy. According to Topaz International, an airfare auditing company based in Portland, Ore., usage of nonrefundable tickets reached 57.2 percent in the first quarter, a 15 percent year-over-year increase. The Business Travel Coalition, in a recent study of air spending at 184 companies (see story, page 10), found 54.2 percent of all tickets were nonrefundable in 2001, up 3.6 percent from a year earlier. In the first two months of this year, the percentage rose to 57.1 percent.

That trend, along with the hush-hush practice by certain airlines of allowing name changes on unused tickets for some clients, has spurred interest in tracking systems, much in the same way that accelerating adoption of e-tickets drove development of unused e-ticket tracking systems.

"People now are more apt to use nonrefundables, so the number of unused tickets is escalating," said Nancy Carlin, vice president of value-add businesses at American Express. "We are starting to see some customers with 60 percent to 70 percent of all tickets being nonrefundable and beginning to automate the process."

However, corporate travel managers must deal with the fact that the more costly tickets involve international segments and are not electronic. Also, that more corporate travelers are using online booking tools.

"Obviously, there is a good opportunity for databases to be developed, but they need the flexibility to be able to tweak and to fit in all those variables," said Bob Lichtman, a partner in Incline Village, Nev.-based Corporate Solutions Group. "I am not seeing anything that handles nonrefundables in a fully automated manner."

Richard Wooten, director of corporate travel services at Lockheed Martin, agreed. "As customers, we definitely will push for automated systems because the pile of unused nonrefundables keeps growing." With no across-the-board solution in sight, Lockheed is taking a three-pronged approach that includes reminders for travel arrangers at the point of sale, traveler access to profiles that show unused tickets and automation within the GetThere booking tool.

That last item has yet to be accomplished and Wooten acknowledged the system "would have to have logic built in to guide travelers" through the complexities of the faring structure. However, largely at the request of travelers, Lockheed already allows travelers to view Web-based profiles—including unused tickets—stored by the company's agency, Navigant International. Wooten said a mandate to use available nonrefundables is in place for one business unit and "working fairly well."

Meanwhile, all the mega travel agencies are progressing on e-ticket tracking systems and point-of-sale notifications of unused tickets. They have yet to deploy a fully automated system, however, that uncovers and reapplies all unused tickets, including paper ones that cannot be found in the GDS, while integrating all online booking tools.

"Some self-service tools send reservations right to ticketing and not through the mid-office," said Louise Miller, WorldTravel BTI's executive vice president for the Midwest region. "But in general, the way our system works is that a traveler request to apply an unused ticket would be looked at on the back end in file finishing, which sometimes is in the mid-office and sometimes is done with manual intervention."

Navigant handles unused ticket tracking in the mid-office, using systems from Aqua Software Products, its wholly owned subsidiary. "The data is stored at the mid-office with Aqua, which can program parameters for how corporate clients reuse tickets at the point of sale," said Navigant president and COO Thom Nulty, adding that the process is the same for online booking tools.

American Express said it also can inform travelers of unused tickets during the online booking process. But Carlson Wagonlit Travel said its solution includes online booking only if the client uses the Horizon self-booking tool, which resides within CWT's Symphonie environment and is in use by 20 to 30 clients. "In Symphonie, we also can see the details of any paper ticket. It stays in the interface," said Lisa Dickey CWT manager of quality management, "so Horizon can display unused documents to the traveler." However, she noted that clients using other self-booking tools "would not see the notifications because it would require a feed from CWT, and that all depends on how willing that third party is."

TQ3 Maritz Travel Solutions has been reluctant to make available similar functionality for any self-bookings. "The challenge with nonrefundable e-tickets is that it is kind of complicated if the traveler does not have knowledge of the system and the faring," said Richard Spradling, corporate vice president of information technology at TQ3 Maritz Travel Solutions. "But if a client had 90 percent online booking, it would be a different discussion."

Meanwhile, because the process of adding unused ticket information to traveler profiles still is manual in most cases, some travel managers prefer to handle it themselves. Case in point, State Farm Insurance in Bloomington, Ill., a company that currently books nonrefundables for more than 95 percent of all tickets and uses its own personnel to input the unused information. Melinda Samp, supervisor of the State Farm business travel center, said the efficiencies become evident at the point of sale. "In Turbo Sabre, when agents are selling a carrier, a pop-up box will appear and notify them about unused credit," she said. "At that point, based on price, a decision is made if it's worth it to reuse."

A Web-enabled desktop application for Sabre-connected agencies, Turbo Sabre is deployed for State Farm by its agency, Navigant International. Samp said the system saves reservationists' time, doesn't require travelers to remember every unused ticket and has generated savings of "hundreds of thousands a year." Overall, State Farm reuses 50 percent to 60 percent of unused tickets, which Samp also attributed to the company's use of Sabre's unused e-ticket report and to traveler recognition of cost savings.

Despite notifications specifically on the agent desktop, one travel manager called "questionable" an agency's ability to inform travelers of unused nonrefundables at the point of sale.

Lichtman agreed, suggesting another pop-up box only confuses an already cluttered agent screen. "From the operational standpoint, that is hit and miss," he said. "The agent is bombarded with so much information when working with the GDS that not all agents always look to use nonrefundables."

Furthermore, some agency clients feel they may not be getting the full value of this type of agency service, which could come with associated fees. "I would like to see T&E expense software handle this," said Robin Buzzeo, corporate travel manager at Taro Pharmaceuticals USA in Hawthorne, N.Y. "There could be a field on the weekly reports where a traveler would indicate that a certain trip was not taken, putting the onus on them."

Solutions from the GDSs primarily focus on e-ticket tracking, though Sabre plans to add functionality to its ticket reporting system in early 2003.

A Sabre spokesperson added that corporations with ticket banks holding all unused tickets would have to negotiate transferability with the airlines. The situation is similar at Worldspan, where a company spokesperson said, "In these cases, Worldspan will work with the corporation and the airline to incorporate this functionality into Trip Manager," Worldspan's self-booking tool.

Oracle, in March 1998, created a ticket bank and mandated nonrefundable tickets where available (BTN, May 18, 1998) by using software provided by Airlink Systems of Fremont, Calif. The mandate and the system, which includes Airlink's Ticket Bank and various automated features for reuse, saves Oracle at least $10 million a year.

Airlink is working with a few other corporate clients to develop similar functionality. President Dick Gintz said the bank collects information from six different sources, including online and offline bookings and ticketing outside the agency from credit card data feeds and other sources.

The Ticket Bank sends queued information to a client's travel agency for individual travelers and also maintains a pool of unused tickets to be used by clients in the event a traveler leaves the company without reusing some tickets or if the client's airline permits name changes.

"We examine each booking to determine applicability for reuse," Gintz said. "The system takes into account change penalties and uses artificial intelligence."

TRX is another third party offering unused ticket tracking. The company creates a database of unused tickets that can be duplicated at the agency. Relevant information then is displayed at the point of sale through TRX's Screen Highlighter desktop utility. TRX "has a plan for ResAssist," the company's online booking tool, for clients also using the ProfileSynch product, according to general manager and executive vice president Steve Reynolds.

Manual options available to travel managers include e-mailing reports to travelers about unused tickets. Lockheed's Wooten also is considering incentives for arrangers who book travelers on previously unused nonrefundables.