Perspective: Shooting Holes In Travel 2.0 - Business Travel News

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Perspective: Shooting Holes In Travel 2.0

December 04, 2012 - 03:55 PM ET

By Databasics founder and CEO Alan Tyson

Managed Travel 2.0 this year has been a hot topic in corporate travel circles. Championed by Scott Gillespie, author of Gillespie's Guide to Travel and Procurement, and Evan Konwiser, co-founder of FlightCaster and an industry consultant, the model stems in part from more rapid innovation in leisure travel than corporate travel. There have been suggestions that policies dictating which suppliers and booking channels corporate travelers must use hold back progress for managed travel and sacrifice traveler satisfaction. Databasics founder and CEO Alan Tyson weighs in. 

Alan TysonThe Gillespie-Konwiser travel management model (Travel 2.0) identifies traveler dissatisfaction or "friction" as a cost that is arguably more important than the "hard" costs of direct travel spend. The model draws the conclusion that travelers need to make their own travel arrangements since "satisfaction" is highly subjective and situational. Policies should be goal-oriented. They should specify what should be achieved, not how or what to book. They also should be local in the sense that they should be made as close as possible to the "action." For example, the owner of a departmental travel budget might say that anything within 20 percent of the federal per diem is OK for meals and lodging. Directives from on-high and contracts are out. Suppose mattresses at Hotel X are too soft for a particular traveler to get a good night's sleep. Should that traveler be forced to stay there just because the company and Hotel X have a contract?

Stepping back, when the model addresses traveler dissatisfaction, it is really making the case for taking soft costs more seriously. Still, soft costs are … soft. You can graph them on the same chart as hard costs but in finance departments they don't add up. If you can't assign a specific value to a result, it's hard to know what you can responsibly spend to achieve it.

Soft costs resist quantification. To complicate matters, traveler friction isn't the only soft cost. Some even move counter to traveler friction like time spent (i.e. wasted) planning trips. As the cost of friction drops with the loosening of constraints upon the traveler, the cost of investigating options can (though not necessarily) rise. Consider what it takes to read and submit hotel and restaurant reviews. Companies are even sponsoring blogs to encourage this!

Further, if traveler dissatisfaction is a cost, what is traveler satisfaction worth? Is more satisfaction always better than less, or is there a limit? Intuitively one would expect the curve to flatten out short of allowing employees to "do a Charlie Sheen" at The Plaza. Should a company pay extra so that an employee can have a great meal instead of a merely good one? If so, how much? Or is cost no object?

When a model doesn't have good rules for constraining spend, which Travel 2.0 doesn't, it generally doesn't fare too well: it kills off its adherents. One can object that constraints aren't abandoned, they're just decentralized. This, however, is simply kicking the problem down the road: If we can't figure out good rules, we'll leave it to those closest to travelers—maybe they'll get it right.

Travel 2.0 opens up the soft side of travel management for analysis but finds itself quickly at a dead end: no meaningful structure for containing hard costs or measuring soft costs  and benefits.

Where does Travel 2.0 go wrong? Traveler satisfaction with a trip is not what matters. It's traveler satisfaction with his organization regarding the trip. After all, the soft costs and benefits directly derive from the traveler's relationship to his organization. If a company buys a traveler a first-class seat on a bumpy flight, the traveler might feel the flight was bad, but likely he doesn't blame his company. Result of his dissatisfaction with the flight: none. Travel 2.0, though, looking only at traveler satisfaction, would erroneously assign a cost to the experience.

Travel policy cannot be developed in a silo. The critical idea is that employee satisfaction with the company depends to a significant extent on role appropriate treatment (RAT). Employees need to have a clear idea of who they are with respect to their employer and any actions or policies that confuse the work identity of the employee are likely to be sources of employee dissatisfaction.

This report originally appeared in the November 2012 issue of Travel Procurement. 

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