New technology development in the fragmented and mainly offline ground transportation space is garnering the interest of procurement professionals whose companies spend a lot of money in this category. The hope is that new and maturing suppliers including Groundrez and Ground Travel Technologymay further enable consolidation and better purchasing management.
"It hasn't happened because there's no ubiquity" of systems, said T2Impact analyst Timothy O'Neil-Dunne. "Now, it's a little different, and the technology is not that difficult to integrate."
According to LCT Magazinemanaging editor Jon LeSage, "The two big problems have been connectivity to global distribution systems, the Internet or intranets, and the ability to integrate affiliates. With those challenges, how do you have seamless reservations, billing and ticketing systems that communicate to drivers? The technology pieces are starting to fall into place."
MORE LIMO OPERATORS TAKE RESERVATIONS ONLINE Source: LCT Magazine2006 survey of 400 operators |
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A poll last year by LeSage's publication found that 41 percent of 400 ground transport operators were taking reservations through online tools, compared with 22 percent in 2005. About half of the 400 were users of software specifically designed for the limo business, which various sources described as an $8 billion to $14 billion industry. LeSage said about half of chauffeured transportation revenue is related to business travel.
Limos tend to represent just a few percentage points of travel spending, but can be much higher for financial and professional services firms with large operations in Boston, Chicago, New York, Washington, Los Angeles or San Francisco-where the use of limos is most prevalent. Rates, meanwhile, are on the rise.
While executives at such larger limo operators as BostonCoach, Carey, Dav El and Empire/CLS have significant presence at travel purchasing events and employ sales and marketing people to go after managed corporate travel business, the vast majority of the industry is made up of "Mom and Pop" operations. Some such firms may have affiliate relationships with each other or the larger providers through networking organizations, but technology to link them--such as Ground Travel Technology's TranspoNet and FleetBook's FarmManager-has only recently emerged. Smaller operators "will become more technologically oriented, especially as more acquisitions and rollup happen in this business," said LeSage.
Other challenges to centralized purchasing include the one-to-one relationships some limo suppliers have with corporate executives and the unpredictable nature of business travel. Moreover, reservations system providers have limited ability to access content from all key players, due to lacking technology or ownership rivalries. The phone remains their greatest competition.
Ground Travel Technology (GT3) is the longest-running reservations system in the business, with links to the three major U.S.-based GDSs, use by the three largest U.S. travel management companies and Web connections to the likes of Orbitz for Business and Concur Technologies' Cliqbook. According to GT3 travel services division president Gregg Tuccillo, his company should shortly be hooked in with the Amadeus GDS and its e-Travel corporate booking tool. "We're finally seeing corporations tackling that last mile," he said.
GT3 last year connected with Rearden Commerce, adding joint client GlaxoSmithKline to a corporate roster that Tuccillo said also includes Bristol-Myers Squibb and The Hartford.
New player Groundrez, meanwhile, just launched a "pop up" booking option for users of Sabre's market-leading GetThere self-booking tool, with plans to include parameters for policy controls and preferred suppliers, and tracking of the reservation's purpose. One GetThere customer that books 500,000 ground transactions per year has been trying to get a handle on its purchasing by digging through card reports, said a GetThere executive.
Groundrez also is tooling up to address airport parking, taxis and rail, as well as car services.
"Ground is one of our initiatives for 2007," said Fair Isaac Corp. director of procurement Bob Steiner. "The good thing is that the technology is a lot farther along than it was three years ago."