L.A. Story: NBTA Spotlights Tech

By BTN / August 13, 2000

L.A. Story: NBTA Spotlights Tech

Los Angeles - Travel buyers with an opinion on the International Air Transport Association's proposal to place a corporate identifier on every ticket overwhelmingly oppose it, according to a poll Business Travel News conducted earlier this month at the NBTA convention.

Of the 68 people polled, nearly one-third said they did not know enough about the IATA program (BTN, July 10) to venture an opinion. But nearly half of the respondents were against the proposal, supporting the position of Cyndi Perper, who presided over her first convention as president.

Despite IATA's assurances, corporate travel managers are skeptical about how voluntary such a program would be, thinking suppliers likely would offer financial incentives for participation. Some buyers also are concerned that the program would give airlines access to all of every company's data, hence more negotiating leverage.

"It will give the airlines an upper hand in negotiations that they don't need," said one travel manager. "I don't want the airlines, or any other outside group for that matter, to know my total spend until I choose to tell them," said another.

Expressing the sentiments of several other buyers, Andy Menkes, vice president of global travel for HSBC bank, said, "I am opposed to it for one reason: security. I don't want a terrorist to be able to see who we have flying at any particular time."

But for the 14 buyers who supported the proposal, security was not an issue--getting better access to data was.

"It's definitely a good thing to track all corporate purchases and to recognize travelers," said one travel buyer. "The airlines can get all the data anyway."

"I don't see what the big deal is," said another. "It helps us manage our data better; I'm not afraid of the proposal."

Betty Lucero, corporate travel manager for Agilent Technologies, had a simple explanation for her support of the proposal: "I want the data," she said. * * *

BTN also polled NBTA attendees on online bookings, revealing that while 32 of 59 polled buyers reported zero online usage in 1999, only 15 said no bookings were made online this year and just six said they expected no bookings to be made online next year.

Seven travel managers said their companies made more than 10 percent of bookings online last year, while 17 predicted that would be the case this year and 36 said the same of next year. * * *

American Express said corporate clients this month will enjoy access to daily global travel data with ticketed information, in addition to corporate card data, via the American Express@Work Web site. Meanwhile, Hi-Mark announced the Sept. 15 general release of a new data management product that will give buyers all their information in the form that they want on the Internet.

While American Express has been putting card data online for a year, travel data is sent in e-mails. Yvonne Schneider, vice president of Amex Global Information Services, said the trend analysis in travel data was easier to deploy via a push scenario.

Using a password, travel managers will run their own browser-based global corporate card and travel reports in a spreadsheet format. Buyers also will be able to manipulate data online without having to first download the information. Initially available in the United States and Canada, Amex next year will extend the service worldwide.

Roswell, Ga.-based Hi-Mark licensed its entire suite of data management products in June to Microsoft, which had been a client of International Software Products (now TRX Data Services). Dell Computers has completed a pilot of the new product, called WebMan 2000, and will move to production on Sept. 7. DaimlerChrysler began beta testing last week. Agencies WorldTravel Partners and Navigant are among several that also have signed on.

WebMan 2000 updates Hi-Mark's earlier data management tool by adding the ability for travel buyers to create their own queries by providing information as PDF reports, Excel spreadsheets or an OLAP decision cube for data mining. The product also provides new online multilevel administration that can allow travel managers to give access, limited or otherwise, to others in the organization, and security levels that allow users to manage the distribution of information using multiple firewalls from any connected PC.

WebMan 2000 sits on the company's TravelMan architecture, which can access more than 600 data elements. Austin said more than 900 customers worldwide and 70 of the top 100 agencies now are using Hi-Mark software.* * *

Rosenbluth International unveiled a new Internet travel portal, Rosenbluth Everywhere, which can be customized on a company or individual basis.

The portal includes an online booking option, an e-mail template for travel reservations and an array of travel-related information, including traveler profiles, a flight-tracking system, destination-related content, news, maps and company-specific travel information.

"Corporations have intranets, but none as robust as this travel portal," said John Dabek, chief information officer.

The site also integrates wireless bookings made through new products under the heading "Rosenbluth Mobile," including Rosenbluth Mailbox, an e-mail template for travel reservation requests via text-enabled devices, and Rosenbluth @hand, which allows travelers to book travel from personal digital assistants.* * *

Following up on his speech at last year's NBTA conference in Minneapolis, Vince Caminiti, Delta's senior vice president of sales and distribution, updated delegates on the carrier's technology initiatives, including corporate bookings through delta-air.com.

"We are in the beta test phase of the project, and expect to be expanding it to other accounts soon. When that happens, corporations with Delta agreements will be able to book and track negotiated discounts and take advantage of special Web fares online," he said during his keynote luncheon speech.

Steve Scheper, Delta's director of agency and corporate programs, told BTN that corporate bookings on delta-air.com will be open to a much larger corporate account base in the next few months. However, a group of 70 of the carrier's top national accounts--which initially told Delta last year that access to special Web fares is paramount--was briefed in May and asked for feedback.

"From our perspective, some channels are more cost-effective than others," said Scheper, "and direct booking through delta-air.com certainly is the most cost-effective."

Regarding its own Web site, America West Airlines agreed. Though AWA is exploring direct connections, both with and without third-party vendors, "My reservation about third-party vendors is getting into a situation like the CRSs where you don't control your own data," said Ron Cole, vice president of sales. "Like the CRSs, they are a middleman looking to carve profit from the process."* * *

GetThere Inc. CEO Gadi Maier also delivered a luncheon speech, suggesting that travel managers who are skeptical of the Internet's ability to provide a travel agent's service level should "future-proof" their companies.

"By that I mean, stay current and position yourself, your department and your whole company for the future," said Maier. He went on to outline GetThere's view of the four key criteria for selecting a tech vendor--among them that it be independent of existing airline, agency or GDS suppliers.

One observer working for a travel company that owns a piece of GetThere joked, "I'd like to hear what exactly Gadi means by 'independent.' " Responding to that, a GetThere spokesman said, "The bottom line is we have never had United or Amex dictate how we do business. They are most interested in our success, not bias toward them."

According to GetThere's most recent annual report, "United Airlines and American Express have significant influence over our management and business decisions." United's Covia unit owns 29 percent of GetThere and has two representatives on its board; Amex holds 15 percent and one board seat.* * *

Last room availability continues to be an industry hot button, to the point where one NBTA educational session that was intended to focus on the electronic RFP process quickly evolved into a debate about LRA.

Buyers continue to charge that hotel sales managers are not prepared to negotiate LRA, and in situations where they do so, are not always honoring it (see special report, page 29).

"LRA is a basic requirement that we included in the bid package this year, the first year we've done this," said Wendy Nathan, travel manager for Johnson & Johnson in North Brunswick, N.J. "We look to pay the going rate in the city, and if this means paying a premium to have LRA, we can live with that. The same applies to blackout dates as long as we know about them in advance. But for us to run a program as large as ours without LRA in today's market is unrealistic."

The need to have LRA built into agreements can run counter to buyers' efforts to limit the number of their preferred properties in a given destination. "We try to limit the number of properties in a city in order to be able to drive volume to the hotels that are included," said Rick Wakida, travel analyst and technology manager for Vodafone Airtouch Communications. "At the same time, if we can't negotiate LRA at these properties and therefore our travelers are being denied reservations, we have no choice but to add more hotels in those markets."

Hotel sales managers argued that corporate travel programs rarely were mandated and that they didn't always achieve the volume projections promised in the negotiating process, reducing the hotel companies' interest in extending LRA even at a premium.

Nathan and Wakida said their companies were considering setting up special hotel codes to track how many times travelers attempted to book preferred hotels in key destinations and could not. This data then would be useful in negotiations when the hotels raised arguments about volume commitments.

LRA has become such a hot issue in the industry that the NBTA hotel committee is considering drafting an industrywide definition, particularly regarding room type, that then could become standard. No such definition presently exists.* * *

Experts on one panel suggested several strategies for smaller companies to get some bang for their airline buck.

"Sixty-five percent of your air volume should be covered by some sort of discount, including soft-dollar programs," said John Schuler, director of consulting services at American Express One. "Your agency should use its buying power on your behalf, and you should build relationships with other carriers to keep your preferred guessing."

Among other strategies mentioned were to organize city-pair data, demonstrate ability to shift share quickly and understand basic airline yield management and agency override programs. "Some carriers will say a 15 percent discount does not qualify those revenues for overrides," said John Heilner, a consultant with Management Alternatives/MSIG in Princeton, N.J. "How does that impact you?"

Meanwhile, soft-dollar programs could include frequent flyer-based incentives, upgrades, airport club memberships and even creative cargo programs that could generate savings for passenger travel.

Panelists also suggested that buyers consider Internet fares if they are significantly cheaper than those available through traditional means. * * *

Corporations will focus on adding midprice properties to their hotel programs in 2001 and beyond, while hotel companies continue the trend of developing brands in this category.

According to Jane Gardner, travel operations manager for the Americas at Cisco Systems in San Jose, "We've seen a major shift toward the midprice sector, as long as proximity and things important to our travelers like high-speed Internet access are available."

Deluxe and upscale properties, by contrast, are in less demand and Gardner anticipated that would not change in the next few years.

"There always will be some demand for hotels at these more expensive price points, if only for senior management and certain kinds of customer travel," she said. "But, by and large, our travelers are satisfied with the environment they find in midprice chains."

Recent figures indicating rates of supply and demand growth reflect this interest in the midprice sector.

"Midprice chains without food and beverage accounted for 32 percent of U.S. hotel rooms under construction in 1999," said Michael Mahoney, managing director of the lodging and hospitality practice at PricewaterhouseCoopers. "This is the sector where developers want to be today. Midprice hotel rooms are easier to build because there's no lag time in the development process as there often is with upscale brands, which are more complicated physical plants."

Mahoney projected occupancy rates industrywide of 62.5 percent in 2002. Occupancy rates at midprice chains without food and beverage, however, would be 65 percent, while midprice chains with food and beverage should see occupancy rates of 58 percent. At the same time, though, occupancy rates at upper upscale and deluxe properties should be 71 percent. This reflects the fact that fewer hotels in these sectors will be developed in key markets, creating pressure on occupancy rates for existing properties.* * *

NBTA's Allied Member of the Year is Bob Dirks, senior vice president of marketing for Hilton and chairman of the Institute of Business Travel Management. Calvin Smoot, travel manager for the Church of Latter Day Saints, won the NBTA President's Award.

Meanwhile, NBTA members voted in Don Draves of corporate services at Miller Brewing Co. and Mike Mary, director of travel services for Adidas International, as new board members, replacing Tom McCabe of PerkinElmer and Elaine Kretten of Senco Products.

Members also passed a bylaw requiring new board members to have been an NBTA member for three years and to have served on an NBTA committee or as a chapter officer.

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