Megas Spin Web For Smaller Cos.

Atlanta - Echoing recently redoubled efforts by other mega agencies to win the business of smaller business travel spenders, WorldTravel BTI today began operating TravelAgent.com, an online travel management suite of products targeted at companies with under $2 million in annual air volume. Select internal clients today are set to start using TravelAgent.com, which offers online booking and Web-based reporting, as well as provides access to call center agents and some negotiated rates.

Companies with small and midsize travel volumes in recent months have adopted travel management services in a variety of new Web-based arrangements. Since April, those companies with less than $12 million in annual air spend have seen fresh turnkey online offerings from American Express, Carlson Wagonlit Travel—in partnership with IBM Leveraged Procurement Services—and Rosenbluth International.

The largest agencies are set to exploit what they see as the potentially fertile ground of the small and midsize markets, but their new streamlined products are taking on online leisure retailers as well as regional agencies and each other.

Positioned as a customizable template for lightly managed programs, the TravelAgent.com suite includes online booking, profile management, reporting, wireless access and WorldTravel's negotiated rates for air, car and hotel purchasing. "Companies that have multiple supplier contracts or specific policy needs will be able to create customized TravelAgent.com sites," said WorldTravel president Danny Hood.

The TravelAgent.com portal also features destination information and flight schedules and is priced on a transaction basis, with fees of around $25 for bookings that originate online. It has no implementation fee.

Although TravelAgent.com is designed to be totally Internet-based, it does have 24/7 support from WorldTravel's call centers. Telephonic bookings will cost more than the $25 online bookings, but WorldTravel has not yet arrived at a standard price for phone transactions.

With its streamlined suite of services, TravelAgent.com falls somewhere in the middle of the spectrum between the unmanaged online fulfillment of leisure retail sites and a full service travel management relationship.

Brandon Strauss, general manager of TravelAgent.com, said, "We want to provide clients in the under $2 million range a low-cost option for travel management. Potential clients who are using Expedia or Travelocity now have an option that is in the middle between Expedia and full service travel management." Strauss expects TravelAgent.com will meet with healthy demand because "commission cuts and higher transaction fees are pushing small and midsize companies' interest" in new approaches to travel management.

The other travel management companies that in recent months launched Web-based products for small and midsize companies are encouraged by adoption rates so far.

Rosenbluth in June launched ePAC, its Web-based streamlined offering for midsize companies. "From a demand standpoint, we're having an excellent year," said Gordon Locke, vice president of marketing for North America.

Thirty companies are in various stages of implementation of ePAC, he added.

Similar to TravelAgent.com, ePAC has a two-tiered pricing structure that breaks out online and telephonic bookings. Rosenbluth would not provide BTN with pricing details, but a consultant familiar with ePAC said the company is charging an average of $30 for each booking. There is no implementation fee for the bundled suite of products, which includes booking, fulfillment and reporting tools.

Also targeting small and midsize companies, IBM Leveraged Procurement Services in May introduced the Business Travel Savings Program, a travel procurement service operated in partnership with Carlson Wagonlit Travel. Tom Frillici, BTSP program executive, said 150 companies are in dialogue with Frillici's team and more than 30 clients fully have implemented the program.

BTSP offers companies discounted rates from air, car and hotel suppliers, and fulfillment services from CWT. The companies that participate in the program will receive CWT's all-in-one Symphonie platform, which includes call centers, a self-booking tool, Internet-based reporting and customizable travel portals.

Similar to ePAC and Travel-Agent.com, BTSP has a two-tiered pricing system. The program charges $25 for electronic bookings and $40 for agent-initiated reservations. The implementation fee is $500 for companies with less than $1 million in annual air spend, and $1,000 for companies with $1 million or more in annual air spend. "Typically, the clients who have signed up with us do not have a managed travel program," Frillici said, "and they are now recognizing the value of having a travel service provider to allow them to concentrate on their core business processes."

Meanwhile, American Express One in April launched RezExpress, a low-cost remote telephone fulfillment service for clients with less than $2 million in annual air spend, which complements Amex One's Local Office call support and the RezPort self-booking platform. American Express One general manager Rion Needs said RezExpress had been in soft launch since last October and more than 280 clients are using the service. Online bookings with RezPort are priced at $15 per transaction. For telephonic reservations, basic full service runs $25 to $35. The average per transaction agency fee paid by midsize companies to their travel management companies in 2001 was $30.89, according to research conducted by BTN earlier this year.

Some small and midmarket products launched by the megas in recent months appear to be priced significantly lower than that $31 average transaction fee, but upcoming corporate travel management offerings from online travel retailer Orbitz may be priced even lower. Orbitz in July at the National Business Travel Association conference announced that its TravelBuilder corporate fulfillment tool would cost $5 for self-bookings and around $15 for assisted ones. Orbitz plans to charge an implementation fee to pay for the integration of traveler profiles and corporate discounts. Orbitz this month is expected to announce its first TravelBuilder client. In July, an Orbitz spokesperson said more than 300 companies had expressed interest in purchasing TravelBuilder.

While large travel agencies and such online retailers as Orbitz and Expedia are wooing small and midsize companies with low-cost, Internet-based travel management suites, many smaller corporations for now are sticking with regional travel management companies. These buyers are adhering to the theory that it is better to be a big fish in a small pond than a small fish in a big one.

Antoinette Cirone, travel program coordinator at Roy, Utah-based Iomega Corp., in the first quarter of 2001 conducted a request for proposals for her company's travel program, which comprises just over $4 million in annual U.S. booked air volume. After reviewing bids from large and small travel agencies, she opted to end her relationship with American Express and award her business to Salt Lake City-based Christopherson Travel Group, a regional agency that is approximately 5 percent of the size of American Express, by U.S. booked air sales.

"American Express had a good product," Cirone said, "but we were looking at our pricing structure and wanted something that was a little more hands-on and flexible. We did not want to go to a one stop for everything—car, agency and online booking. We wanted to parse our travel program out."