American Express and Business Travel International are expanding the scope of their data warehousing tools beyond air and hotel expenditures to the total cost of travel, as growing interest in such tools prompts providers to offer more global coverage.
Buyers typically use data warehousing—the consolidation of management information from multiple sources to produce a comprehensive picture of a company's expenditure—to negotiate deals with suppliers and to ensure their travelers are sticking to the agreements they put in place. More recently, data warehouses have been used to trace the whereabouts of traveling company personnel in the event of a major security incident. Now, data warehouse providers aim to help buyers account for every travel expenditure.
Yvonne Schneider, American Express vice president and general manager for global product development, said the newest application for data warehousing will prove one of the main benefits of Amex offering consolidated travel management and card data, starting this December
(BTN, Aug. 2)."It gives the full picture," Schneider said. "Corporate clients can understand the total cost of the booking, such as what is happening at the airline counter with charges like excess baggage fees and change fees. We will be able to see if a traveler makes a cheap Web booking but changes it four times at $100 per amendment, which may make it more expensive than an ordinary global distribution system-booked ticket."
As well as merging card and travel data, Amex is expanding the sources feeding into its Global Data Repository. In the world of corporate travel, the data sources that go into the warehouse usually include feeds from all the agencies used by a client, plus payment card data. Other sources may include direct connections to suppliers and feeds from automated expense reporting systems. Amex said it will include more direct feeds from vendors, such as hotel folio data and European rail companies. Schneider said Amex also is stepping up the frequency with which it downloads data to clients from weekly to several times daily in some cases.
Business Travel International is using data warehousing to build total cost assessments in an even more ambitious way. "We are looking to data warehousing for knowledge management and establishing predictive patterns," said Tony Berry, director of operations and support services, speaking from the U.K. headquarters of Hogg Robinson, the managing partner of BTI.
Like Amex, BTI is adding information about the cost of making a reservation, including how many calls the traveler or booker takes to arrange the journey. This is important for assessing whether the client needs a high, medium or low-touch transaction service, each attracting a different level of pricing.
BTI also is adding the expenses associated with a traveler's entire trip, including such airport transfer costs as chauffeur-driven limousines, car parking and—importantly for Europe—rail. Once BTI has this information in its warehouse, it can set to work on trip modeling, Berry said. "If a traveler is flying on a cheaper fare but at a different time of the day, it means he may require a limo, taxi or even an overnight stay," he said. "We may find the supposedly cheap deal may not be the best." Berry admitted the trip modeling application remains "embryonic, because we have to work out which data to collect," but claimed that clients are using the BTI data warehouse globally.
Even for the more traditional warehousing activity of deal tracking, demand continues to grow, according to Michael Whitesage, president of Prism Group. He said the needs of clients have become greater, owing to fragmentation of the distribution network as the universality of the global distribution systems increasingly comes under attack. Each channel has its own data format and quality levels, and the ticketing configurations of airlines have also diversified.
Another area where Prism's business continues to flourish is data exchange between corporate clients and airlines. Much fuss was made earlier in the decade when several U.S. carriers started to insist they would only give their best deals to clients prepared to submit their spending data for inspection through Prism. "If you want a contract, it has to be measured whether you performed," Whitesage said. "Only a handful of people have raised a protest about it. There has been a major revolution in this industry because midmarket companies have been able to go out and get deals for the first time."
Whitesage added that companies are using warehousing to make deals with airline alliances. "Before, the alliance members could not see themselves in a common data environment," he said. "That has been a big growth area in the past year."
Amex's Schneider confirmed that warehousing is helping clients negotiate a greater volume of global supplier deals, especially with airline alliances. She also ascribed growing demand for warehousing to the increasingly procurement-led management of travel. "Purchasers are seeing travel as a commodity," she said. "Taking a more financial view leads to a greater need for data as they ask questions like what percentage of the time they are getting negotiated fares."
Meanwhile, third-party data warehouse provider Hi-Mark is globalizing too. Hi-Mark president Kevin Austin said the company now takes feeds from the top 10 travel agency back-office systems in Europe, plus leading players in Latin America and Asia/Pacific. Austin claimed to be on the verge of signing two big accounts in Europe, where rival Prism claims Shell and Philips among its client base.
Carlson Wagonlit Travel is seeking to expand as a data warehouse provider in Europe, where it is rolling out its CWT Discovery product, already in use in North America and Asia. CWT Discovery now is available in the Benelux countries. Leisha Lindsay, CWT director of global product management-reporting, said it will be aggressively rolled out in the rest of Europe during the next six months. "We want to make sure our customers have the same quality level, business rules and user interface at country level and global level," she said. Lindsay also noted increasing client demand to merge data warehousing with expense management systems and enterprise resource planning applications.
Although the various warehouse providers increasingly have Europe in their sights, there is disagreement over how strong demand really is across the Atlantic. Hi-Mark, which has signed a partnership deal with TQ3 Travel Solutions, believes Europeans are starting to appreciate the benefits. "A light has switched on somewhere for them in the past 12 months," Austin said.
However, Herman Mensink, vice president EMEA for Prism, said he continues to meet resistance. "The lower level of expertise among European corporations makes them much more dependent on their agents for data provision," he said. "They don't know what they are missing."
Mensink added some European agents resist handing data to Prism even when ordered to do so by mutual clients. "They eventually provide the data but try to protect their position by masking some of it," he said. "It's not the mega TMCs causing problems; it is some smaller ones."
Mensink's comments on corporate disinterest were supported by EPostTrip, a Danish provider of a data warehouse that integrates with the Concur expense management system and an outsource expense processing service. "The big problem is that companies don't understand the opportunities warehousing gives them," said Søren Schødt, managing director of EPostTrip. "Consultants have huge difficulties because they can never get the data they need to do their job properly. One small but important detail you never get in the data provided by travel agents is when a trip was booked. This is a very important parameter because it makes a big difference to the price."
"More education is needed in Europe because the need for warehousing is actually greater here than in the U.S. Fare structures are more complicated, data formats vary more and we have to deal with multiple currencies," Schødt said.
In China, there are very different problems with data warehousing, according to American Express. Although Amex is able to extract information from there for analysis in other countries, the company said it cannot provide warehousing to clients inside the country. This is because the Chinese government demands access to all data transferred over the Internet, but its encryption levels are different than those used by Amex.
China apart, Amex expects demand for data warehousing to grow around the world. Schneider said the next big trends would be increasing demands for real-time data and for greater line detail, especially for breaking down tax charges.