Some
corporate travel buyers have bemoaned that airline supplier data on their
organizations' air spend is as good as their own. In some cases, it may be
better. That's on top of the general need among buyers to have meaningful
benchmarks to which they can compare organizational performance. The first
product from ARCLabs seeks to meet that need.
ARC developed ARCLabs to advance research and development and better serve
travel agencies and corporate buyers. According to ARC managing director of
product management Doug Mangold, it's about leveraging the vast amounts of data
ARC warehouses, improving industry analytics, engaging customers and
"finding ways to innovate faster and get solutions into customers' hands
more quickly than the traditional product development process."
FareSight is a corporate air spending benchmarking tool meant to help travel
buyers optimize air travel purchasing, understand travelers' buying habits and
determine how their programs stack up against the market. Though similar tools
are available from other sources, ARC believes FareSight will provide data more
quickly and include details not measured by others.
ARC has been working on a FareSight prototype for a while, collecting feedback
from corporate travel managers and consultants and tweaking accordingly. It ran
demos at the Global Business Travel Association convention in San Diego this
month and plans early next month to get it in the hands of a small group of
guinea pigs to provide additional feedback ahead of a commercial launch. ARC
indicated that pricing has not yet been determined.
In the initial version, users will be able to access online and manipulate a
set of four graphical dashboards, and toggle filters on and off to dynamically
change the displays. For example, they'll see their organization's typical air
spending information, including ticket counts for domestic versus international
flights, economy class versus premium classes, purchases broken out by advance
purchase period, ticket volume by origin and destination and O&D ticket
share by airline.
Users also will see scores for their average fares in each of those categories,
determined by how they compare to market averages. In this case, the market
represents all tickets processed via ARC, including corporate negotiated rates.
"For every O&D that this company has ticketed, where is the
opportunity and where have [they] paid too much?" Mangold said. Data on
airline share, meanwhile, may help companies "adjust their spend
accordingly by looking for more opportunities, depending on agreements they may
have, to shift share or look for ways to reduce the spend into that
O&D."
One aspect that ARC views as a differentiator for FareSight is refund and exchange
information. The system calculates total penalties from change fees generated
by refunds and exchanges in a given period. "We don't think anyone else is
presenting that level of detail," Mangold said. Should there be spikes in
the incidence of refunds and exchanges, which can be displayed via color-coded
representations, "you can match that up against any last-minute travel you
may have had in that period, or how travel was being planned at that
time."
All the data is derived from "two years of ticketing data that we have in
our Compass data warehouse," Mangold explained. "Data is loaded each
week, and we think that's more timely than some of the other corporate indexing
tools available out in the market right now."
ARC is working to incorporate additional filters based on travel buyer
feedback, notably including how an organization's average fares compare to peer
companies. "If customers need a specific solution, we can work on that as
well," Mangold added.
Given that some airlines aren't always thrilled about having their fares
compared against competitors, what do the airlines think of all this? Mangold
said there has been no pushback from the airlines with which ARC has discussed
FareSight. On the contrary, he noted their cooperation in properly using class
of service codes to sort fare data into economy class and business/first class
buckets.
"From the carriers' perspective, they know the customer might get this
data anyway somehow," Mangold said. FareSight just gets it to them more
quickly and perhaps in greater detail. He added that this solution could easily
be transferred to the travel agency community, though ARC for now is focused on
providing it to corporate buyers with assigned ARC numbers.
The next steps for ARCLabs will include additional reporting products for
corporate and agency customers. "But we are also looking at
nontraditional, at least for ARC, ways of partnering or working with other
entities to see what is possible for our data. We have some work coming up with
academic institutions—we haven't really done that before—and we are looking to
get more people to play with the data we have, see how to marry it up with
other data and see how others would view the data."
Noting that the concept of ARCLabs isn't original—citing Sabre Labs and Bell
Labs as examples—ARC president and CEO Mike Premo said the idea is to use that
theme "to convey to people that we are innovating and new ideas are coming
out." He noted that "data has gone from zero in the past seven or
eight years to be 20 percent of our business. Some of it is about enhancing
analytics for various clients."
Another goal of ARCLabs is helping travel agency constituents. "We depend
on the agency system for our livelihood," Premo said. "There a lot of
areas where we can add or underscore agency value. The point of sale is a
perilous place to try to live. I want to focus on the value we add once the
sale happens.
"How can we get agents and their customers doing more commerce that ARC
processes at least a piece of?" Premo continued. "In agency land, the
customer contact kind of stops once the sale is made. They really hand it over
to the vendors at that point unless there is a service issue, but the customer
contact point disappears. We think there are some things we can do to help
connect the travelers and the agents in a way that's going to add value to both
of them."
— David Meyer contributed to this report