BTN Editor Elizabeth West moderates Liberty Mutual’s Michelle DeCosta, ACT’s Jennifer Steinke and Roadmap’s Jeroen van Velzen
reasons and despite various roadblocks, travel management is becoming more
global. According to two recent industry papers on the subject, the benefits
have outweighed the challenges for many companies, including smaller firms.
While there are many ways to approach the effort, some basic tenets apply.
of corporate travel programs is not only growing but accelerating,"
according to an AirPlus International/Association of Corporate Travel
Executives paper published this month. Owing to "inherently different
circumstances" for corporate travel programs in each country, however, "tensions
persist between global goals and local realities."
percent of 136 ACTE members polled in February "believe it is less
difficult to manage a multinational program now than it was five years
ago," 26 percent do not. "Furthermore," according to the paper,
"47 percent see significant conflict between the global and national needs
of their travel programs."
Even so, the
advantages of global programs compel many companies to undertake such projects.
"Reducing cost is clearly the priority for firms choosing travel
management globalization today," according to an American Express Business
Travel paper, also issued this month, produced in conjunction with Business
Travel Media Group (BTN's parent
company). "Savings are found through leveraging increased volume with
suppliers as well as through efficiencies that come with managing the program
in a more centralized and consistent way. To that end, procurement and finance
teams are likely to be the driving forces behind globalization efforts."
the AirPlus/ACTE research, about 30 percent of buyer respondents indicated their
programs encompass 21 to 50 countries and another 19 percent said programs
cover more than 50 countries. When asked about their program's reach five years
ago, the numbers were 18 percent and 10 percent, respectively. It follows that
the number of respondents representing organizations with single-country
programs has fallen, from 29 percent a decade ago to 16 percent five years ago
and just 3 percent today. These findings led researchers to conclude that
"managing travel on a global basis has switched from being the exception
to the rule."
the AirPlus/ACTE paper offered several reasons for the accelerating trend. For
one, "travel spending is clearly becoming more dispersed, geographically
speaking," they wrote. When survey participants were asked about the
percentage of their companies' travel spending that originates in Europe and
North America, 24 percent indicated that between 91 percent and 100 percent of
spend originates in those regions, down from 32 percent five years ago and 38 percent
10 years ago.
highlighted improved automation ("cloud computing allows travelers,
bookers and travel managers to access the same web-based tools worldwide, even
in smaller markets") and more suitable global products and services developed
also cited the need to track travelers as part of global security program, and
concluded that more smaller companies are globalizing their corporate travel.
"It used to be just the large companies, the Fortune 100, that you would call global," said Amex senior
vice president and general manager Tom Bligh, speaking this week at an ACTE
conference in New York. "But now we see it across the whole strata of
companies. Even the smaller ones now are looking for advice on how to take
their programs global."
suggested that the economic crisis at the end of the last decade served as the
spark for many global initiatives.
have traditionally been satisfied with controlling 80 percent of their travel
costs," according to the AirPlus/ACTE paper. "Now they have mature
travel programs and are chasing the remaining 20 percent as a new source of
savings. Corporations improve the completeness of their data through
introducing a global travel policy and consolidating their selection of travel
management companies and card issuers. This strengthens their ability to
negotiate with suppliers—the guiding principle of travel program
AirPlus/ACTE research asked travel buyers about the extent to which certain
travel management program components have been globalized. For all seven
components listed, "global deployment increased from 2001 to 2006 and then
increased at an even faster rate between 2006 and 2011," according to the
paper. "The results show that companies have globalized the internal
aspects of their travel programs more than they have globalized tools and
services from external suppliers."
nearly three-quarters of respondents said their organizations have a global
travel policy (up from 43 percent five years ago) and 59 percent indicated that
global data reporting systems are in place (up from 27 percent in 2006) even as
"anecdotal evidence suggests the quality of the tools, and the quality of
data input from different parts of the world, remains highly variable."
percent use global corporate card programs (up from 28 percent) and 50 percent
use global expense management systems (up from 19 percent). The prevalence of
global TMC programs doubled among the survey base to 55 percent.
global travel operations to one or a few TMCs "is often regarded as the
first and most important step to globalizing a travel program," according
to the AirPlus/ACTE paper. "It provides the data for establishing compliance
and creating supplier deals which ultimately meet the strategic objectives of
the program. There is a strong counter-argument that a single global TMC is
unnecessary because the corporate client can integrate data from different
TMCs, especially if it has a good data warehouse. However, advocates of a
single TMC worldwide point out that it avoids duplication of effort in several
respects, such as communication and enforcement of travel policy, for example
by switching preferred suppliers in the TMC's reservations system."
according to AirPlus/ACTE survey results, 87 percent of buyers said TMCs
"have improved and/or expanded over the past five years to support global
travel programs more fully."
suggested that by using a consolidated TMC (or TMCs), buyers "should be
able to realize significant savings—not only through leveraging increased
volume with fewer partners but also by reducing service redundancies from
country to country."
global deals with airlines, hotels and car rental companies also have become
more commonplace, with 64 percent of AirPlus/ACTE survey respondents indicating
their companies negotiate such contracts, up from 26 percent five years ago.
"Hotels are generally considered to be the most achievable," according
to the white paper, "but experiences in dealing with multinational airline
"major exception" to globalizing travel management components is
online booking tools, according to the authors. While the number of respondents
who reported that their booking tool is globally deployed was more than double that
of five years ago, the figure still was just 23 percent. "Many buyers
conclude no single tool performs adequately in every market, for reasons
including lack of localized content and lack of support in that region,"
according to the paper. "The other reason is that many buyers have decided
a single booking tool is not a strategically important objective so long as
they have a common data reporting platform and payment system, and the chosen
TMC or TMCs can support several different booking tools."
corroborated those observations. "Online booking tools exhibit regional
strengths and weaknesses that are generally associated with the global
distribution systems that power them," according to its paper. "While
some online booking tools can be integrated with multiple global distribution
systems, their functionality can suffer."
discussed the possible benefits of global supplier deals, Amex suggested that
consolidating to a single provider "for these key travel management
services and technology, however, has not been the defining characteristic of
global travel programs." Rather, Amex argued that such programs are
defined by global governance, a single travel policy and "data
number of buyer respondents who see continued tensions in balancing global and
local needs, AirPlus/ACTE paper authors wrote "the story of travel
management globalization is far from complete, and that there is a further
implication to this gap between aspiration and reality, which is that
significant barriers are still impeding progress."
the various cultural differences, "local hostility" to supplier
selections and policies, data inconsistencies, disparate accounting and
reporting systems throughout global enterprises, and technology shortcomings
(especially in China, where card companies and GDSs are heavily constrained).
also noted that "respondents especially criticized TMCs for offering patchy
service across their networks" and conveyed "a perceived gap between
the image of consistency suppliers present in their branding and the reality
when it comes to operations and account management. Suppliers are criticized
too for sometimes bypassing the client's global procurement structure and
offering rates directly to local offices."
Amex in its
paper made a similar observation: "Unique supplier relationships
complicate the picture of travel management globalization, and it is a rare
company, indeed, that avoids regional politics during a travel globalization
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