As most corporate travel managers focus on driving online booking adoption and reducing transaction costs, the concept of "high-touch" travel, whether based on price, reservation complexity or level of customer personalization, is experiencing a cultural shift. With e-fulfilled or "no-touch" transactions becoming the industry norm and a baseline for determining transaction processing services necessary to complete a reservation, some travel managers and agency executives said any agent-assisted transaction now is defined as high-touch in light of increasingly automated fulfillment.
"What we always considered standard and high-touch is now all high-touch," said Patricia Carlin, travel manager for Dublin, Calif.-based technology firm Sybase. "It's becoming much more specific and sophisticated on one level, and much simpler on another." As automation replaces functions typically factored into a high-touch transaction—such as ticket upgrades, refunds and exchanges—the definition of truly high-touch service is increasingly narrowing and customers who require it are easier to identify, said Sybase's Carlin. Such reservations are becoming more VIP-oriented and tailored to specific traveler needs.
"To me, high-touch has to do with the level of the employee and the type of trip they're taking, whether they're complicated itineraries or not," said Carlin. "My senior vice president has to go to Los Angeles, and though he could go through Swabiz, he still has his admin go down to the onsite. Even though that's ordinarily a no-touch or low-touch reservation, the service those executives require makes it high-touch."
Those personalized transaction services may include everything from a meet-and-greet at the airport to restaurant recommendations, child-care arrangements or private jet reservations. "We had a client—a championship squash player—that wanted us to reserve court time and a squash partner for him in London," said Michael Steiner, executive vice president of New York-based Ovation Travel. "Another client wanted us to set up time for his daughter to practice the piano while they were traveling."
"There just isn't one approach to high-touch service, It's really based on what the client needs and what their perception of high-touch service is," said Steiner, noting that, while transaction costs are tremendously variable and contingent on any number of factors, fees can range from $5 for the most highly automated transaction to $75 for the most complex, high-touch reservation. "For many of our clients, the definition of high-touch is dedicated service. For some, it's VIP service."
Mark Majewski, senior vice president of operations at WorldTravel BTI, estimates that 80 percent of WorldTravel clients with air spend in excess of $5 million maintain VIP desks for extremely high-touch travel services. Corporate America's perception of the employees allowed take advantage of high-touch, premium reservation services is changing, he said.
"Revenue-generating employees are being treated like kings of the company. Typically, they're either coded by exceptions to policy or by department," Majewski said. "When companies start focusing on different things, whether they're forced to by Sarbanes-Oxley or whatever, priorities change."
Among WorldTravel clients, said Majewski, "People now view online as low-touch and standard as high-touch." While that assumption generally may hold true, it still can be misleading. "A lot of people assume online means low-touch, but there still may be a number of touches on the back end. You may make your international reservation online, but then it goes to the international rate desk to be touched," he said. "Companies that go to the ends of the earth in the U.S., for instance, are oftentimes the toughest to handle online. The basic roundtrip itinerary to Lexington, Ky., may not come up with a hotel for Hazard. Sometimes the most basic reservations can still be high-touch."
As industry norms shift, said Jack O'Neill, COO of Carlson Wagonlit Travel North America, agencies are faced with the challenge of distinguishing high-touch services. "It's almost created more of a premium and more pressure on those services," he said. "The pricing has also changed because those kinds of services, to be done well, the cost is going up, not down. The pay expectations of those consultants are going up, not down. As business travel has rebounded and there's more executive travel taking place, the demand and expectation for that kind of service has not diminished."
O'Neill estimated the average cost of a fully loaded, high-touch transaction sits in the $40-to-$50 range. Low-touch transaction processing costs, he said, have dropped so substantially during the past few years with the advent of the notorious $5 transaction fee that the price gap has grown even wider. "It's a case of one price going down a lot, and another going up a little," he said.
While fewer than 10 percent of Chicago-based Tower Travel Management's clients employ VIP desk services, president John Smith said that figure represents a demand constant during the past several years. What has changed, he said, is the basis on which companies are contracting for those services.
"Fewer people are seeking VIP services on an exception basis. Fewer and fewer accounts will say to us, 'We want you to handle 97 percent of our business this way and 3 percent are our VIPs and we want you to handle them differently,' " Smith said. "It's not uncommon for companies to want us to provide all employees the same service. It's very common for us to bid on law or professional services firms that may spend a good deal of money and only have 30 or 40 frequent travelers. They may say, 'We want a fully loaded transaction fee for everyone.' They clearly identify that they want high-touch across the board."
With skilled agents at a premium, said Smith, "The percentage of our telephonic, high-touch transactions is higher than it's ever been. They're probably up to 30 percent of our reservations."
Competition between traditional agencies and online-originating agencies not only drives transaction fees down, but also changes the fundamental definition of high-touch service.
"If the customer says, 'I want to be upgraded every time the flight is over two hours long,' and you can deliver that in an automated way, that's still high-touch," Smith said.