Google has included lodging in its travel management program that allows employees to book anywhere and enter trip data in a proprietary system for reimbursement and tracking.
The company last year revealed that it had introduced such a structure for air travel. The concept attracted significant attention from travel management specialists who saw it as an example of shift in control to travelers. Yet, the program required a data capture tool, which Google built and is not expected to sell, making the process difficult to replicate.
In the new hotel program, as with air, the Trips online system suggests to travelers rate caps and if they book a rate that falls below the cap, the company puts into an account half of the savings for that traveler to use for future business travel. Bookings over the cap require review, unless past credits are used to offset the difference. A traveler might, for example, use saved-up funds in the bank account for a premium-class ticket or luxury hotel room.
"I set caps based on our deals, so in Prague for 190 I would set a cap at 195, meaning there's no downside--only upside," said Google global travel manager Michael Tangney, speaking here Monday at an Association of Corporate Travel Executives conference. "My hotel program is fairly open, but we still have 65 percent adherence to the program. We are guiding people to the deals. We know the hotels people use because we use them on a consistent basis. We list them in a standard format in the Trips tool, and they can select them."
Google uses the SynerTrade e-auction tool to solicit negotiated lodging rates. Its €130 million (US$194 million) global travel program covers 15,000 employees. About 45 percent of the company's travel is domestic in the United States, with about 17 percent domestic in other countries and the balance international, said Tangney.
Making Use Of The Open Market
Tangney first talked publicly about Google's trust-the-traveler take in May 2008, when preferred travel management company Carlson Wagonlit Travel was getting about 60 percent of Googlers' air bookings. That figure has fallen to 50 percent now, largely because "there is a tremendous amount of good deals out there" in the open market, said Tangney.
In the United States, Google offers travelers the option to book with Concur's Cliqbook. Three-quarters of total bookings are made online, but only about 25 percent to 30 percent of that is through the Cliqbook tool.
"I don't think self-booking tools meet our needs as travelers very often," said Tangney. "People judge it against the best tool in the open market. It's not possible for a business tool in that environment to continue to innovate. In a very defined environment, they have huge value. We did try an online booking tool in Europe for about a year, and it bombed. The feedback was: ‘These are all terrible.' A general Google principle is that if you can't do it when you turn it on, then you can't do it. If it needs training, it's not worth it."
About half of the company's travel is booked on consumer sites or other ways. "When given the opportunity, people can be very creative," said Tangney. "There was a guy spending $42 a night in Santa Monica, and I rang him up for an explanation. He said, 'I rent an RV. I'm staying on the beach and surfing every morning.' "
Regardless of the creativity of the bookings and despite the fragmentation of the channels, Google has a highly comprehensive view of its purchases because travelers must enter information into the Trips system to be reimbursed. Google uses Oracle's expense management system, which takes the feed from Trips.
"I know the leakage," said Tangney. "People can find amazing deals out there, and it puts pressure on our internal deals. We use the information to say [to suppliers]: 'Match it, or you're not going to be in our process.' "
With this setup, the company does not have to renegotiate contracts to benefit from lower market prices. "The savings from this environment happen instantly," he said. "In a more traditional structure, it would be, 'Stick to the deal.' "
Not So Replicable
The Trips system is not likely to be made available to other firms, said Tangney, so he recognized his unique position. Building Trips did not require a big investment, he said, "but I do appreciate that it's not the easiest thing for everyone to do. We get five engineers in a room, and they knock something out in two days and it's a great tool." Asked whether his program would work without such a system, Tangney said, "It would be extremely difficult. You need some way of capturing data. Who knows? We have seen social networking tools like TripIt that have the capability of showing and capturing information."
Tangney acknowledged some other challenges, although they were not enough to make the company reconsider the gist of the program, which is to trust that employees on balance will do right by the company. These issues include reliance on the employees for accurate data entry; conflicts with suppliers who prefer a comprehensive, TMC-fed data picture; and productivity issues for employees who waste too much time trying to beat set rates.
Meanwhile, Tangney has many of the same headaches as other travel management professionals, from slashed budgets to data consolidation for traveler safety and security. The company recently relaunched its corporate card program after debating personal versus corporate liability. Google two months ago unveiled a new individual bill/corporate pay program with Citibank, and a country-by-country rollout is underway.
Tangney's pet peeve is new booking fees imposed by airlines on global distribution systems and TMCs: "It's impossible to explain the logic."