Ian Thomas
Academic Travel Consulting partner Ian Thomas last week presented at the Society of Collegiate Travel Management's annual conference results of the organization's 2007 benchmarking survey, which was completed by 68 institutions. Thomas was the University of Southern California's travel manager for 14 years before joining ATC in 1998. His discussion with Management.travelabout the results is excerpted here.
The survey found that 51 percent of responding schools had airline contracts in 2006, down from 56 percent the year before and a five-year peak of 66 percent in 2003. What's that about?
It's been more difficult for universities to obtain contracts, and the types of contracts are changing. Five to ten years ago, big universities were getting 15 percent off any fare. They are not now. It's not just in the academic marketplace. Airlines have tightened their contracting. I'm assuming the whole online marketplace, as well as the success of the travel agency commission dropping, which emboldened airlines to tighten their costs, have been factors.
On payment, your presentation cited an "unexplained" drop in the use of ghost cards since 2004, and speculated that it could be due to an increase in procurement cards. Yet, the use of p-cards was down slightly as compared with all the years in which it was tracked, going back to 2001. Can you explain the unexplained there?
Ghost card went down in 2005 and is gradually creeping up. I think there are people who are using anything and everything. Payment is a huge problem for just about everyone and that's partly because of the huge number of non-employees who are part of these travel budgets. It can be as high as 30 percent, or more, of travelers. Many are graduate students or visitors coming to interviews and there's a need to pay for the airline ticket centrally. Schools don't like asking students to fork out money and then reimburse them. There are also all sorts of other [complications], and universities are constantly struggling with what to do. It's a double-edged sword. Ghost cards tend to produce reconciliation nightmares for the universities. P-cards burst on the scene some time ago and some embraced them as a tool to use for centralized travel buying, but they're relying on people in the departments to properly apply purchasing codes or class codes. A lot of places try to avoid large purchases. Some let people use them for travel, and experience problems. So, I think there's been a lot of up and down. It's quite possible that a decrease in ghost card use was actually a reflection of people putting more stuff on p-cards. But people are still struggling to find the right balance of payment options--not just on air, but also hotels. And not just for non-employees, but also faculty.
The survey showed no change in the status quo about agency use. The majority of academic institutions consider use of their preferred travel management companies to be optional, as opposed to required. Are people in academia beginning to look at that differently?
I don't think so. Travel management didn't come to universities until the 1990s and, unfortunately, the people who brought it in were outsiders, and the people they talked to were too high up and didn't understand what was going to happen. Most attempts in the 1990s were disastrous because no one was looking at the difference between the corporate and the academic environments. Now people are looking at it internally; it's not a consultant bending the ear of a president at a football game, telling them they can save $2 million a year. The internal people understand that, except in certain cases, you can't require it. I'm a little surprised we don't see more of a change from optional to required with reasonable exceptions, but it's almost [a matter] of definition, because universities are so shy about using the 'm' word: mandate. They create a huge gray area in terms of what they will, or will not, enforce, so I think there may be some commonality between those who describe themselves as "optional" and those who describe themselves as "required, with reasonable exceptions." Anecdotally, it's all being mucked up by the advent of service fees, online booking and the decrease in airline contracts. Fees change the equation. [Previously] there was good reason [to use a TMC] as it was self-funding, or actually made money. Now, you have to have a different justification.
The figures showed a decrease in the percentage of spending on international air travel, down this year to about 10 percent from closer to 20 percent between 2002 and 2006. What do you think is driving that?
I don't have any data to give you there, but security is quite possibly an issue. The dollar, I'm guessing, is probably an issue. It's difficult to tell whether schools include air costs of their overseas study programs in their air volumes, but those could well be affected by the dollar at the moment. Concerned parents of 20 year-olds could be scared off by security threats. Those would be my guesses.
What in the 2007 survey surprised you?
If you look at the online fees, where 67 percent are paying $10 or less, there has got to be ongoing adoption of online booking and an attempt to harness it better and increase adoption rates. Back when the online travel agencies developed their solutions and started marketing to universities, we kind of predicted they would take over the university market because the brand recognition was so good and people had been having problems familiarizing travelers with GetThere or Cliqbook or whatever. But if you look at [the data], that hasn't happened. We did point out that when you look at adoption, seven respondents had adoption rates of 30 percent or higher. Six of those seven are using OTA platforms. So the OTAs may not have taken over in total numbers, but adoption is a lot easier with that kind of platform than the traditional self-booking tool platform.