Profiles In Travel Management: Insourcing Yields Rating, Tracking - 2007-10-08

Company: Bayer
Worldwide T&E volume: $280 million
Number of travelers worldwide: 25,000
Headquarters: Leverkusen, Germany

The healthcare, nutrition and high-tech materials group Bayer operates one of the most radically in-sourced corporate travel programs in the world. Not only does it design its own technological tools, but also its travel management team sits alongside an in-house travel agency in a limited company called TravelBoard, a subsidiary that sits within the group's competence center for IT-based services. TravelBoard's self-designed tools include a customer satisfaction ratings system that other travel management companies have expressed interest in buying, and also homegrown systems for tracking travelers and monitoring the progress of airline route deals and policy compliance.

Bayer operates in more than 50 countries and has significant travel expenditure in 13 of them, according to Ingo Classen, the group's regional coordinator for travel management. Bayer has had its own International Air Transport Association license in Germany for more than 20 years, but constituted its travel operations as a limited company in 2000. The travel agency business, which does not look for customers outside Bayer, operates only in Germany, home to approximately 11,000 of its 25,000 travelers. Bayer uses Carlson Wagonlit as its travel management company in the rest of the world, other than in North America, where BCD Travel has the contract.

TravelBoard derives income from charging management or transaction fees to Bayer's German operating businesses. It also makes what Classen said is a considerable amount of travel agency income despite the decline of airline commissions.

"There is still a lot of money around which doesn't always appear to the client when you use an external travel agent," said Classen. "The travel agency is still a profit center, which is most important to Bayer."

Bayer also believes TravelBoard allows it to better fulfill supplier contracts because travelers are less inclined to break policy if they make their booking requests to fellow Bayer employees and because there is no conflict of interest between client and agency. "There is no difficulty following the advice of the travel agent about which airline to book," Classen said. "Sometimes agents and clients have contracts with different airlines, and the agency's reservations consultants are unsure which to book. Airlines believe we can steer our policy more successfully as a result and that is reflected in their contracts with us."

A monitoring tool that automates the process for denying reservation requests outside policy also assures compliance. The system has built-in tolerances—such as allowing a noncompliant long-haul reservation if it costs less than $70 more than the preferred option. However, fares greater than that only can be booked if the traveler obtains board-level approval.

TravelBoard operates its in-house agency as a franchisee of BCD Travel, having switched this summer from Lufthansa City Center. It uses BCD's reservations technology and the Amadeus-powered SAP online booking tool and a data warehouse provided by its card provider, AirPlus.

TravelBoard also works with software companies to develop its own technology. Among these, a customer relationship management tool called Welcome Home greets Bayer travelers on the day they return with an e-mail asking them to rate every element of their trip, including all flight sectors as well as hotels.

TravelBoard uses the data to assess whether suppliers are providing appropriate service. For example, Bayer recently experienced a spike in travel to Shanghai. The heavy demand meant travelers had to book several different airlines, each flying different routes. Within a couple of weeks, the Welcome Home data clearly showed that one airline was offering unacceptable standards, and TravelBoard stopped booking it.

If Welcome Home reveals persistent problems with preferred suppliers, TravelBoard approaches them for compensation or tells them it wishes to renegotiate. "It is a new idea for the airlines, but we find they appreciate it if we give them feedback," said Classen.

Welcome Home has attracted the interest of TMCs wishing to buy it, so TravelBoard is negotiating to sell the rights to the product to the software company that built it for commercial development.

Another in-house tool used by TravelBoard monitors progress in hitting deal targets. If a target with an airline looks like it might be missed, spend is redirected toward that carrier. TravelBoard also developed its own traveler-tracking system for use in emergencies. The system takes a feed from purchases through the AirPlus card, as well as from GDS bookings, which means it can track bookings with low-cost carriers.