BTN's Silver Anniversary: Buyers Eye 25 Years Of Business Travel And Beyond

To help reflect on the lessons of the past, the challenges of the present and the possibilities for the future of business travel management, in this milestone moment during which we commemorate 25 years of Business Travel News, we gathered three former BTN Travel Managers of the Year—Colleen Guhin, Dominion's Donna Kelliher and Partnership Travel Consulting's Andrew Menkes—and BDO Seidman’s Cynthia Gillen, the current president of the Chicago Business Travel Association.

Business Travel News: What are the major business travel management changes that have occurred in the past 25 years and, more importantly, what we have learned from them?

Colleen Guhin: One of the things that impacted me the most was when the commissions started going away, and we went from being a profit center to a cost center, and really had to justify our existence to our management. I had been tracking the numbers anyway, so it wasn't a major change for me, but it totally changed the way I thought about what I did and what we brought to the company, and we certainly had to demonstrate our bottom line.

BTN: It wasn't just a financial change. What else changed in the process?

Guhin: The online booking tools were just starting to come into play, and that had an impact. We were one of the first corporate clients for what was at the time Internet Travel Network, so a lot went into trying to craft that.

BTN: Was there a change with management?

Guhin: They had to, because they had to start making decisions about whether we were going to go forward. It was my job to educate them on what was happening and what was changing. They never bothered us before, because we made money for the company. Now, all of a sudden, they had to pay for us, so what were they paying for? That was a lot of work educating them. It wasn't an easy process.

Cynthia Gillen: That was the tip of the iceberg. Corporate travel programs were brought in to help maximize revenue, and a lot of that was possible because the data started to be there. Before the commission cuts came—but more importantly, after the commission cuts—was the need to find the data. We were adopters of BTS early on for online booking systems. We looked at it as a way to maximize profitability in our company, because we could make travel more efficient and support our supplier relationships. As a result of the cracking of the iceberg, the idea of transparency of the disclosure of information came up. Before that, everyone knew there was money out there, but as long as money was being made, you didn't need to look into it too far. A lot of the changes we've seen in the past 10 years stem from the days when the old system stopped working and the new system wasn't in place to fill in.

Andrew Menkes: In a nutshell, what goes around comes around. We are an industry of acronyms, and I came up with one: like Emeril says, BAM. Bankruptcies, acquisitions and mergers. In many ways, technology replaced commissions. When commissions were rocking and rolling, I remember earning hundreds of dollars on the Concorde route segment as an agency, but once the commissions went away, the costs had to be transferred. How do you offset costs? You give a tool to the client and say, you do the work.

If you look over the last two decades, the desktop technology for an agent via GDS has not changed proportionately to the way this industry changed. It's "Gilligan's Island" syndrome: They could make a telephone out of two coconuts, but they still couldn't fix the hole in the boat. There's still a big hole in the travel boat, where a lot of the technology has been pushed out to the customer where it would be better served if it existed inside the supplier base: agencies, airlines, hotels, car, etc. We're seeing it migrate that way with BlackBerrys and PDAs, where you can self-book and self-change, and yet I've not seen an effective tool that someone could literally do an end-to-end trick.

BTN: Deregulation was in 1978, and it was 1984 before American Express launched American Express Business Travel and our original owners started Business Travel News. What was that period like?

Menkes: I was a reservations agent at TWA, where we had three fares. Fares were a lot more simple back then. They were almost always identical among carriers. As business travel got more complicated, so did the fares, because you had more airlines coming in, and now there are, what, 3 million fare filings a day? My class at TWA here in New York was the first one to use computers. Before that, it was a blackboard, and if the flight number and date wasn't on the blackboard, you could sell it. Fares today, even professionals don't understand them. It adds a degree of mystery that brings people to their site to search and play, but it shouldn't be that complicated.

Gillen: I'd say the mystery of travel is gone. It has been demystified from back in the earlier days of the blackboard, or fares in the computer where only people who could read DOS code could figure out what they were. Back in the days of regulation, airlines were regulated like a utility. Since deregulation, they have had to function like a utility without the regulated protections that come with it.

Menkes: Back then, you were forced to go to a travel agent to book a trip. You had no idea who flew where. There was no World Wide Web. The CRSs, which became GDSs, haven't changed that much. The traveler is now an MBA with a Wi-Fi laptop who can see more than the agent. Between the two of them, neither has full access in a single channel to know every flight available between London and Milan. In Brazil, 70 percent to 80 percent of the market can't be booked through a GDS. Although it's come the full circle, what we've still never developed is having you go on one page and connect the dots. That's probably the biggest hole: content.

Guhin: Nobody wants it to happen. They want their own content out there first.

Donna Kelliher: As Andy said earlier, what goes around, comes around. People Express charged fees and collected their money onboard. Here we are 30-something years later, and we have fees, like it's something new and different. We don't know the price of the ticket is until after the trip has taken place. Transparency and technology need to get married.

Menkes: Just who's going to pay for the wedding?

Guhin: Or force the wedding? A shotgun wedding?

BTN: What effect did the Sarbanes-Oxley regulations have?

Menkes: It added discipline to a lot of travel programs, for those companies that didn't have a centralized payment program. It brought the discipline that you have to have a profile to get a ticket. Pre-trip authorization started to become more popular.

Guhin: It wasn't just travel-focused. We made some tweaks to the policy. Our company tended to overreact to everything. From a travel perspective, the biggest thing they did was put a receipt requirement in for zero dollars, so you had to have a receipt for everything, which totally went against my grain. They made some changes to the expense reporting tool to make sure they were tracking and auditing, but it really didn't have that big of an impact on the travel program itself other than people were traveling all the time, going to conferences to learn about SOX.

Kelliher: We used it to some degree as an opportunity to tighten down policies. If you have to go through a process, as painful as it may be, how can it help your initiatives and make them a little bit tighter and recognized as being auditable?

BTN: What else from history comes to mind?

Menkes: With the TMC segment, there's always been a Fab Four at the top who have always ruled the roost for global bids. Rosenbluth was the first with DuPont. There's a history of large companies becoming very successful and then becoming acquired. Thomas Cook, Lifeco, Rosenbluth, Travel One, Navigant, TQ3—at one point, each was a player in their region, nationally or globally, and at one point, they got bought. It's safe to say we're back to a Fab Four again, including the divorce of what was BTI. That seems to be a constant theme. The players change, but it's coincidental that there always seems to be four at any point that are in first class, so to speak, in their own cabin.

BTN: Is that a mystical thing, or is there a reason?

Menkes: It's a money thing. When you get big enough, you get noticed. When you get noticed, you get temptation. That temptation is a nice check, and you get bought out. Some acquisitions have made a ton of sense. Some have made no sense.

BTN: Is this such a harsh down cycle now that there might be lasting effects?

Kelliher: I often wonder, with technology the way it is, will we see a shift back like we've taken our company in working with regional or small agencies in managing travel? Technology has allowed travel agencies in small-town America to take a different seat at the table. Bigger is not always better.

With airlines, everyone keeps anticipating the marriages of a few and capacity cuts. I'm not sure that I'm well-educated enough about that to suggest what might happen, but competition is good. I've spoken publicly about working not only within your company but reaching out to our communities more, working with local airports, chambers of commerce, all those things that in some way expand your goals. In working and partnering close with our suppliers, none of us want to see anybody in Chapter 11. We all need to learn that to play in the sandbox together, which is not such a bad thing.

BTN: In the past two years, with the seller's market, we heard less about partnerships. Do you think we'll hear more in the next phase?

Kelliher: I would certainly hope so. I've always tried to partner with our suppliers. Those relationships are different based on the program that you have. You're seeing a lot more of that right now in the hotel industry. Every mom-and-pop hotel in Virginia is in our program, because one day, we'll need those people. It's balancing that with leveraging in your top markets. We want our suppliers to make a profit, and we want to make our travel dollar go the furthest it possibly can go while providing customer service. It's the balancing act.

Menkes: With the economic times we've been through, travel has gone from an assumed expense to what it's always been: a controllable expense. The controls can be as simple as a budget or as draconian as pre-trip approval on everyone. What has gone away is the open checkbook for travel. There's a lot more focus on it down to traveler level—if I manage my spend well, I can make three trips out to Virginia instead of two—to the travel buyer/purchaser level, knowing the full 360 of what it costs to run a program and where I can save.

We're also seeing demand management, pre-trip approval and Webconferencing, which wasn't an option five to 10 years ago. The amount of money spent on our meetings and incentives is nowhere near what it was and I doubt for some time that's ever going to go back. It's discipline, a renewed C-level focus that says it is in my top three controllable expenses, and damn it, I can control it. I can control it from the top with an ax, and I can let my travel professionals use a scalpel.

BTN: Is this a period in which we'll see more mandates?

Menkes: It depends on the culture. There are some companies where you won't find the M-word in their dictionary. You can control behavior without a mandate, and in some cases, it can be led from the top. I've seen a client very recently change policy, including for senior execs, to get rid of first class. It's not a mandate; it's that this is what you're doing. That said, I think a mandate is the ultimate weapon. There's other tools out there, with technology and pre-trip and profiles, etc. It's going to be harder to just get on a plane and go somewhere. You're going to have to sell it to someone. It may be your boss or it may be your own budget, but the old days of just going and assuming it to be approved, those are gone.

BTN: After Sept. 11, there was a big rage to tap pre-trip reporting, and after a couple of years, they backed off that. In a lot of places, they're reimplementing it. It sounds cyclical.

Gillen: What goes around, comes around. This environmental challenge that we're in is not new, either. Go back to Sept. 11, the Gulf War, the last stock market crash. The focus of what a travel management program and travel management suppliers are all about hasn't changed. The job isn't about putting butts in seats and heads in beds; it's about creating profitability for the company, and there are tools out there to do that.

A lot of it is the ascendance of procurement. Procurement has brought discipline to an existing travel management program. It hasn't changed what we're trying to accomplish, and it hasn't changed the profitability desire. It's just changed how it gets done. It depends upon data. Before, we were finding all these sources of data and looking for transparency. Now, we're analyzing the data. That's procurement focus: tools, technique and approaches for analyzing data, creating a benchmark. They say if you measure it, it will change. That's been one of the most exciting changes in travel management, the marriage of procurement approaches with travel management goals and initiatives, and it's a good marriage.

BTN: Colleen, even before commission caps, you were involved in trying to get your hands on your data and working with travel management consultants to benchmark. Did those practices change that much, or is it just that they've been embraced by the industry?

Guhin: They've been embraced a lot more. You talked about the marriage of travel and procurement. In my 20 years of travel, I've always been in procurement. We've always applied procurement strategies to managing travel. That's why data and benchmarking were always so important. It's being embraced more now, which means there's more of it and it's more available. You talked of the importance of partnerships. Right now, every company, travel-related or not, is trying to survive. Airlines are no exception, and they're going to get creative. They're coming out with some ideas that are totally against a managed travel program, like having the agencies pay for distribution. It's going to be a tough time for us with these things coming to light.

Content is another thing. Without full content, it's really hard to manage our programs, but we're getting further away from that. Even though there's a lot more out there to find, you can't go to one place and get it all. The travelers are much more savvy in where they look for fares and different options than they ever were. Before, all they could do was count on the agent on the phone to tell them what's going on, and they had no way to confirm or deny it. Now they're spending 10 times more time than they should looking for better fares and better ways to get where they're going, to trip up the systems we had in place.

Kelliher: We're now managing four generations of travelers. How do you balance that, because you have such a wide range of personalities and expectations to manage? Technology has got to play a role in that, but there's still a large population of travelers who really and truly want to get on the phone and talk to somebody to book their travel.

Menkes: There is an objection from these four generations of travelers to having to pay a fee to talk to someone who knows less than they do. The average travel agent doesn't have the same degree of education as a frequent business traveler. The agent has green-screen, DOS technology that hasn't changed much with horrible content. The traveler is looking at a Wi-Fi-enabled laptop and gets more information, yet somehow has to justify paying $50 to talk to that kid on the phone who can't tell what the hotel room looks like.

Kelliher: We've never transitioned from order-takers to consultants. If you're partnering with the right organization, you can still provide that service, but there has to be a very big benefit in the whole business model. Unfortunately, the TMCs have not quite gotten there. They're very good at certain elements of their business, but there are a lot of companies that have other requirements that need support. Emergency response is one of those. We have partnered outside of the travel management arena to make sure our programs are complete.

BTN: What can be done about content? Is that a solvable problem?

Gillen: I don't think it's an obstacle. This is the age we live in, the democratization of information, divided among hundreds of channels out there: magazines, Web sites, newspapers, Twitter. Having 100 percent content access is not going to be an achievable aspect, because today, things change momentarily. Even your 100 percent content place is not going to be able to tell you that there's a security backup at Terminal 7 at O'Hare. Travel management needs to move beyond the content question and say, there is diverse content, how do we manage it? How do we interpret it? How do we integrate it? How do we choose the content that's going to be relevant for our particular needs and disregard the content that isn't? That's going to be a big challenge in the next 25 years.

Menkes: I'll try a different angle. If you look at how the industry has changed, it went from zero online to an average of 70-something percent, depending on the company. If you look at the role of the TMC, the traditional role goes upside down in an online environment, in using someone else's technology.

Playing with some acronyms, you could have this black box that has GDS, WWW, CNN, BBC, BTN, DHS. If this were a true content aggregator and I was booking my trip from here to Turkey, it could pick up that there's traffic on the Van Wyck to Kennedy, there's a weather issue in Turkey and my connecting airport is going on strike tomorrow. The information is out there. Anyone who can seize the opportunity and collect it and make it meaningful and relevant to the transaction level is going to have a value-add that most companies would pay for. The winner of this game is going to be the one who can get it on the desktop.

Remember the Rosenbluth Continuum, where they had their operations center? It was manual, but they had their eyes on the TV stations around the world, so they knew what was going on. I agree it can't be done now because no one has figured out the ROI. It's worth paying for on a transaction basis if it enables the traveler to be smarter and safer. The Fab Four has an opportunity to do it, but there are enough nontraditional players with technology backgrounds and resources, and it requires artificial intelligence, too, to get it down to the transaction level. Somebody better do it. Somebody will. It's a matter of who does it first.

Guhin: It'll probably be someone so obscure that we've never heard of them before.

BTN: We've heard a lot over the years about the end-to-end model. Does that qualify as the holy grail, and how far are we from achieving it?

Guhin: What Andy's talking about is more relevant than an end-to-end solution. I've never had a problem in not having it, but full information to the traveler is more important.

Kelliher: The more we partner with various sectors, there becomes a whole circle of suppliers, and it's difficult to come up with end-to-end.

We, too, have not had the luxury of having true end-to-end, but we haven't suffered as a result. We've become stronger advocates and understand our programs more clearly.

Gillen: We looked at it with the ultimate goal of obtaining cost information and accurate budgeting information in the expense system. Is there an end? Yeah. It all ends up in the expense system. It does come through multiple channels, and I've seen the number of channels increase with the introduction of multiple fee structures that are coming through. It's amazing the number of different names a taxicab company will have when they come through an expense system. We focus on the data.

BTN: At this time, transaction volume is down quite a bit. Particularly from the agency side, is the transaction going to be the basis on which we do business?

Guhin: It's hard to get away from the transactions. They're there. That's how you conduct business.

Menkes: It's a catch-22. The advantage of a transaction fee is that if you're paying a dollar per transaction, you have an independent way to count up transactions, if you're clear on how you can find them.

I think we'll go from a transaction fee to a performance fee. If you just handle my travel, you will make very little profit, but if I set up with you as a partner goals and objectives for the year—things within our control, because you can't control our transaction volumes—but if the service is great and the savings are great, you'll earn up. If you fall below it, you're going to pay.

The problem with a transaction fee is that it's one-sided. It virtually guarantees profitability to the entity that sets it up. You're getting your expenses covered, and it's a cash register. The busier the account is, the more money you'll make. If most of it is online, your expenses haven't really gone up, but the client is paying those fees.

Guhin: What goes around, comes around. I had a contract like that in place in 1991. It was a challenge, but you had to balance those things. You have productivity and efficiency over here, customer service over there, and if you can't get them both right, then it's to nobody's advantage.

Menkes: They'll have to reinvent themselves and get out of the transaction model, not just because the economy is bringing them down. It's not a sustainable model going forward.

Kelliher: There's a lot of opportunity. If you get the right people and the right technology, there's an opportunity to do just that, and we should try to drive that as much as possible. There's a lot of opportunity out there to build this tool that Andy's talking about.

BTN: For a long time, we thought the answer might lie in the corporate intranet, the portal. Can you still do more from your corporate intranet and be able to drive from your home base?

Kelliher: I would say yes. We're trying to launch some initiatives. Then you get into the whole social networking piece, engaging with your travelers. What better way to work with your supplier than to get that feedback? There are a lot of opportunities to enhance our portals, pulling in blogs and supplier forums and all kinds of things that will help us manage and leverage and provide increased support within the frame of our contract with the supplier. There's a lot of opportunity within our own portals.

Guhin: If you can get them to use it. That's the biggest challenge: keeping it simple. If they can't find what they're looking for, they'll walk away. But there's potential there.

Gillen: A lot of corporate intranets when first developed in the '80s and '90s were basically online file cabinets. What's been changing and is happening on the corporate side is a reflection of what already has happened in the consumer market. The communications are changing to the immediate: 140 characters to fit it into a tweet. The nature of intranets and travel programs are going to change. Speed is important. Relevancy is important.

Menkes: You have to have control over content, so it doesn't cripple your managed program with outside forces trying to push people to their particular services.

BTN: Is that when travel managers look to noncore suppliers?

Kelliher: We partner with technology companies. IJet or Cornerstone is an example of that. It's like building your house. Some go to one travel management company and sign the deal and they're going to manage your property. Others want to build the house and customize it according to your needs, selecting the best in breed or best practitioners. That's the approach I see, because the technology company—that's their business. It's core to them. That's what they're passionate about.

Gillen: One of the things that comes out of the current perspective is spend, spend, spend. Whether it's money spent for travel or new computers, they both show up as numbers on the budget sheet.

To look for other sources for technology just seems natural. To look for integrating, utilizing resources that already exist within our own company—in our IT divisions, our business lines—there's nothing to stop integration with that. Travel management is not in its own little box in the corner anymore.