For Online Booking, Focus Turns To Usage
<B> For Online Booking, Focus Turns To Usage</B>
By Mary Ann McNulty
The economic downturn appears to be having a positive effect on the deployment of online booking systems as companies zero in on strategies to drive up adoption rates to stretch their travel dollars.
From incentives and information campaigns to hard-line mandates to chargebacks of the higher costs of agent bookings, corporations are trying a variety of techniques to boost usage. The efforts appear to be showing early returns, with some companies reporting adoption rates as high as 75 percent and savings up to 20 percent on average ticket prices off those booked through agents.
Sources emphasized that the vast majority of online booking deployments still are generating less than 20 percent of bookings, but more than a handful now have crossed a critical threshold to prove the business case that technology can save money.
In some of the highest adoption rates ever reported, E-Travel of Concord, Mass., said one corporation reported that 75 percent of its bookings are going through the online system.
"I know this is off the chart," said Ken Burks, E-Travel's vice president of customer support and service. "But the CEO bought into this" and drove it through the corporation with a memo that stated that "effective this day, this is the way we will do business. I wish we had a lot of others that were this high."
Sabre Business Travel Solutions in the past couple of months has tracked five corporate customers that are booking more than 45 percent of all transactions through the online Travel Planner module. A couple are even reaching 70 percent, said director of marketing and business planning Pete Stevens, though he acknowledged that some of them are smaller organizations. But in all examples, the booking system has been deployed throughout the organization and the figure represents total transactions.
Within 120 days of a full rollout, one Internet Travel Network customer had half of all transactions being submitted and booked online, said Jeanette Slepian, vice president of sales.
At ITN's first user group meeting for more than 40 corporate customers, held in Chicago last month, several customers said they are actively looking at two-tiered charge-back systems in which business units are charged one price for online bookings and a higher one for bookings made through a live agent as their 1999 strategy. "They really need to ensure that adoption happens quickly and that they meet their goals," Slepian said.
When managers take the message that there is a cost to the travel booking process to department heads, they understand it, and in some instances can help push use of the online option. Travel costs are in the "rifle scope" of every corporation due to economic conditions. "They have the technology in place that can cut ticket prices and cut transaction costs, that can be used now to lower costs or extend travel dollars they have," Slepian said.
One of the greatest lessons learned from the early adopters is that training is really necessary to boost adoption rates, noted several travel decision makers and tech suppliers.
"The secret is attention. You have to pay attention to these people," said Mike Cox, director of travel services for The Thomson Corp. of Boston, who uses American Express's AXI system.
Thomson deployed AXI a year ago and now has 800 of its 8,000 travelers voluntarily using the system. Full utilization is expected by year-end 1999, Cox said.
But even with a limited number of users, Cox has been able to prove that AXI is lowering Thomson's travel tab. Comparing the top 50 cities for those booking through AXI and those booking through an agent, Cox has documented that average air fares booked through AXI are 20 percent lower, hotel costs are 8 percent lower and car rental costs are 4 percent lower.
Consultant Ralph Brown said he is finding many companies implementing online booking systems without a training strategy, but then sitting down a few months later to develop one. He advises clients to develop a marketing strategy for online booking, as well as an educational campaign to set the expectation levels of both travelers and business managers. In some instances, companies also should train senior managers about the benefits of the systems. Brown has partnered with Pace Sylvan Learning Centers to offer such services.
ITN customers also have emphasized the importance of training, Slepian said, prompting the company to introduce a guide that users can carry in their briefcases, a manual and context-sensitive online help to increase the traveler's comfort zone in using an online system to book. She's still convinced, however, that ITN's Global Manager is intuitive enough to make training unnecessary.
Worldspan has just developed a four-pronged approach to securing higher adoption rates that includes holding its first user group meeting for more than 50 corporations currently using Trip Manager and rolling out an incentive program to encourage agencies to encourage corporations to use the software.
"The focus in 1998 was to get that critical mass," said Vela McClam Mitchell, newly named director of global corporate sales and marketing. "We obviously had a big effort to do that and increased the number of Trip Manager placements by 75 percent over the past six months. We'll continue that campaign to build critical mass, but also get utilization up in 1999."
Part of Worldspan's effort to drive utilization has been to speed up the product itself. The latest version, released in August, is 40 percent faster than the previous version in making routine bookings, said Gary Tofano, manager of global corporate sales and marketing.
Sabre also has focused on the time it takes to make a booking, as well as designing out anything that causes problems in the new releases it has been issuing every six to eight weeks, Stevens said.
At Worldspan, where more than 80 percent of its travelers are now booking through this medium, company executives are touting the benefits of Trip Manager. Adoption since August has been so successful that the company intends to reduce the number of agents working on its account from the current three to just one, Mitchell said.
E-Travel in recent months has overhauled its implementation program to include a meeting with all involved in the decision-making process to detail responsibilities and expectations.
"One of the first issues we've found that's critical is executive level buy-in. If one doesn't have that, the chances of success are diminished," Burks said. Secondly, it's critical that companies spend the time to properly configure the software before deployment to ensure that all negotiated rates, preferred vendors and policies are working correctly.
Some early E-Travel adopters still are reporting low adoption rates, Burks said. "In some instances, I think it's because we once did a poor job implementing. But in recent implementations, we've had as high as 33 percent usage from the start.