Onsites Now Half Of Peak Number

The number of ARC-designated onsite agency configurations dropped last year to slightly more than half its 1999 peak, when it recorded 3,837 branches.

ARC, which has tracked the annual change in onsites since 1994, has charted their steady decline during the past decade as a result of the proliferation of online booking, widespread e-ticketing, higher costs of maintaining in-house agents, corporate cost-crunching and technology improvements that increase service levels at travel management company call center locations.

For those 1,941 U.S. companies that still had onsite agency configurations as of year-end 2007, many have slimmed operations and modified agency configuration into a hybrid of different transaction types across fulfillment channels to find the right mix of onsite, call center and online booking use.

American Express Business Travel currently operates U.S. onsites with about 400 clients, two-thirds of which carry one to three agents, said senior vice president and general manager of global operations Julie Bottner.

BCD Travel operates about 200 U.S. onsites, with more than half carrying three agents or less, according to executive vice president of global business solutions, sales and marketing Louise Miller. The company now operates 27 U.S. business travel centers. Prior to 1998, when BCD's U.S. predecessors formed WorldTravel Partners-BTI Americas, the company had three times as many onsite locations and one-third as many call centers.

Smaller agencies that tend to cater to high-touch accounts also have seen the onsite practice recede considerably. While Melville, N.Y.-based Austin Travel's seven onsite accounts produce 20 percent to 25 percent of its corporate business, a mere 5 percent of Austin's overall transactions are processed through those agents, according to president Jeff Austin.

Less than 30 percent of Amex's U.S. air transactions are processed from onsites, but the number is slightly moving upward over the past 12 to 18 months, Bottner said. "We have even seen a bit of a resurgence in '07 and '08 toward this model."

Bottner said the resurgence is largely due to the ability of corporations and TMCs to fuse various service configurations by pushing simple and domestic reservations online, while keeping some onsite agents to handle complex, international and executive bookings. Some corporations also have added call centers into the mix by routing overflow calls to offsite agents and linking all communications through a common IT system. "It doesn't have to be all or nothing with an onsite," Bottner said. "Customers are more likely to select an onsite model for their program because it doesn't have to be this way."

Last year, long-time onsite user BAE Systems opted for a hybrid model after considering closing its U.S. onsite operations in favor of a primarily online booking program. Instead, the company now has North American point-to-point domestic transactions processed online, while other reservations go through one of the company's 38 Amex onsite agents, who are housed in four onsite BAE offices, including the 14 home-based agents who have transitioned from the corporation's former Austin, Texas, office, according to Melissa Grimes, manager of travel administration.

The Corporate Travel 100 company's less than 50 percent online adoption rate has yielded a 27 percent to 30 percent reduction in average ticket price for domestic routes, accounting for $2.5 million in air savings in 2007. The savings has been used to offset onsite costs, such as the technology investment in linking onsite agents through a common telecommunications platform housed in Greensboro, N.C., so that, when necessary, calls can be transferred from onsite locations to call centers and vice versa.

R.J. Reynolds Tobacco, which has a 55 percent online adoption rate, also is constantly evaluating its service configuration. It shrunk its onsite operation over the years from 15 agents to six plus a manager, but it is far from dropping its onsite outright.

"What concerns me the most about doing away with the onsite is the service level," said Linda Beaver, lead manager of corporate travel services. "We have a very high customer satisfaction rate right now. It hovers between 89 and 100 percent. Our agents are long-term agents. They know our culture, our policy and travelers. There is a high regard and credibility with them. Moving to a call center, I feel, would diminish that."

When the Winston-Salem, N.C.-based company conducted an agency bid more than two years ago, the pricing structure of the onsite model was still more cost-effective than a call center configuration.

"We looked at the transaction fee for going through the call center," Beaver said. "The fee was higher because they built the infrastructure price into the transaction fee at the call center location."

Three years ago, the American Bar Association had an onsite operation, which yielded higher costs, such as higher average ticket prices, said Marty Balogh, ABA director of meetings and travel. The organization now uses Orbitz for Business call center services in Fargo, N.D., for its 7,000 profiled travelers and $5 million annual travel volume.

"The way that people are now doing their travel, they want as much information as possible and they want to do it anytime, not just confined to their office hours," said Balogh.

American Electric Power also shifted to offsite agents. Although it has achieved a marginal savings of $50,000 from not directly paying salaries and benefits, it gained significant customer service from the transfer of back-end support, technology and telephony services to the agents' parent company, Travel Solutions. Now, calls are answered within the first 30 seconds 87 percent of the time.

"We were missing out on a lot, whether it was the phone systems, workflow management sharing resources and moving labor around," said Jeff Parlet, director of real estate and workplace services. "It's not only a cost savings, but our overall service levels are up because of that."