Show Focuses On Travel Overhauls

Mary Ann McNulty and Cheryl Rosen contributed to this report.

<I>New York</I> - In the computer world, the term GIGO--"garbage in, garbage out"--has long been used as a shorthand way to explain that not even automation can fix a process gone awry. It's a concept the travel industry appears to be embracing as every segment recognizes that before they automate, they must overhaul the expensive, time-consuming and labor-intensive process in travel today.

Fixing the status quo has become the mantra for suppliers, travel managers and vendors of automated travel solutions, more than 2,000 participants at Corporate Travel World were told in New York earlier this month.

From Via World Network's revolutionary new vision of booking and paying for travel, to Texas Instrument's travel Web page, corporations are rethinking the way they book, pay for and manage travel.

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Picture a travel process in which your travelers never have to stand on line and an accounting system where they don't pay until they board the plane. That's the vision Via World Network president Elmer Baldwin painted of a truly "end-to-end technology solution" that will include trip planning, booking, financial transfers, airport checkin, expense reporting and analysis.

For now, Via, the wholly owned subsidiary that Andersen Consulting announced last month (BTN, Feb. 24), is focusing on a system that "piggybacks on e-ticketing" and applies published and unpublished fares as close as 20 minutes before the flight in an automated refund and reissue process, patented under the name Bill@Use. "We're not saying there should be no charge for penalty fares or no-shows, but the concept is that if I don't get on the plane, I shouldn't pay for the ticket," Baldwin said in his keynote address. "And that does not mean a forfeit of cash-flow benefit for the airlines."

Achieving the vision "will take the cooperation of corporations and airlines and technology providers, and we're not leading with this as something we need to install today, but as a blueprint for change that has eluded the industry," Baldwin said. Via is working on offering direct and indirect connections to suppliers and low-cost front-end connections through a system being developed with Sun Microsystems in what has become the largest Java project in the world, he said.

Via is looking for a limited number of travel-manager partners, and hopes to install the system--which also incorporates unique speech-recognition technology (BTN, March 3)--at four or five customer sites by summer. "We're not doing an aggressive launch, but focusing on developing a system that works and that's real, rather than another great product that no one uses," Baldwin said.

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On the show floor, the traffic clearly gravitated to the technology product debuts--including Sabre's Travel Planner for intranets, a new booking system from Cel Corp. and Apollo's AgencyConnection, which allows travel agencies to private-label Websites for corporate customers.

Sabre's Travel Planner is rolling out now to its first major client, after two months of beta testing under the code name Laredo. The system offers seamless policy integration, highlights preferred vendors and, to build customer confidence, shows flights even if there are no seats available. It can be set to show only preferred vendors or to force travelers to do a best-fare search.

Also at the Sabre booth were demo versions of the Decision Manager and Expense Reporter modules of the BTS suite, both due out in April. Expense Reporter downloads data from the corporate card as well as the CRS, allowing the traveler to highlight and drag the correct charges into an expense report. Decision Manager produces travel management reports from a set of 275 pre-programmed reports and also allows ad hoc queries. The major change from the Prism Group's Travel Manager's Workstation, upon whose software Decision Manager is based, is its focus on "life-cycle management of trips rather than bookings," said senior product manager Pete Cosens. The BTS version will match booked data with corporate-card charges, allow travelers to enter the correct amounts in expense reports and then pass the data back to a single integrated database. Last week, Sabre acquired exclusive rights to the Prism Group's AgencyServer, which will form the core of a travel-agency version of Decision Manager.

Apollo Travel Services, the U.S. distributor for Galileo International, also offered an intranet product but maintained its focus on the agency as the booking source with its AgencyConnection system. Designed to keep the databases of traveler and corporate preferences in the mainframe, the system allows the agency to control access to the Web. Corporate travelers accessing the system will see a Website designed as "The ABC Corp. Home Page, by XYZ Agency."

For the more hands-on, Web developer, Edmonton, Alberta-based Cel Corp. showed its new Amerigo system, designed to allow in-house IS staffers at corporate, agency and vendor sites to connect Websites to legacy systems. Cel research and development vice president Bruce Matichuk said the company is developing its own "integrated suite of products that will work for the agency or the travel manager or the traveler," and this month will launch an Internet site at amerigo.celcorp.com.

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Bjorn Hanson, chairman of Coopers & Lybrand's hospitality practice, told attendees that the U.S. lodging industry made a record profit of $11.2 billion last year and would top that record in 1997 with $13.7 billion in profit.

Hanson forecast that occupancies will continue to outpace the long-term average of 64.6 percent and that average daily rates will continue to climb annually through 1999. While hotel construction has made a comeback, nearly all the new building is taking place in tertiary markets and non-business destinations, he said.

Hanson also noted that the number of employees per 100 rooms had fallen from 80 or more in the 1980s to fewer than 75 in 1995. Limited-service properties accounted for only one-third of the drop; the rest represented real service reductions, he said.

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In a show of hands, 60 to 65 percent of travel managers attending a technology panel said they expect to install an automated booking product in 1997.

Jim Lennon, travel management director for Coopers & Lybrand, a beta site for United Corporate Connection, estimated that 20 to 25 percent of his company's trips can be automated this year. He said 14,000 of the firm's 16,000 employees already have computers, and 20 percent of all calls on his $54 million domestic air volume account involve information-only calls.

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Finding that Microsoft isn't the only online booking vendor in need of a fulfillment agency, WorldTravel Partners has established a new unit called Online Fulfillment Services that already has five customers.

Besides Microsoft Expedia, the new unit will issue tickets for the new Biztravel.com booking site, two airlines and another, unidentified firm that licensed WTP's ResAssist '96 booking engine.

Danny Hood, WTP's president of corporate travel and technology, said customers are contacting WTP for software to finish coding reservations travelers make through the online booking engine.

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Although obstacles to global programs abound--such as cultural differences, the lack of large corporate offices in some countries and the monopoly of national carriers or their ownership of travel agencies in others--successful global programs are possible. Hewlett-Packard's program includes an umbrella agreement that allows customization by each market and a single global car vendor, said corporate travel manager Fred Swaffer. H-P is currently focusing on net fares worldwide and is negotiating with Varig in Latin America as its first step in that region. It also is developing a single central processing site for reconciling and reimbursing travel expenditures in Europe, following the successful adoption of that model domestically. H-P has achieved 94 percent compliance in Europe on a $120 million T&E volume.

Texas Instruments corporate travel manager Colleen Guhin said she, too, has a global policy that allows for flexibility by country. Major differences include rail and ferry policy guidelines for Europe, and differing agency contracts. While fee-based contracts are coming, the majority of European agencies rely on revenue sharing, and the bottom line dictates that agencies in some countries "just can't meet a 3 or 4 percent revenue share," she said. On-sites remain the norm even on small volumes, and are "very difficult to take it away" in a region that still focuses more on service than on cost savings. Guhin has focused on "emphasizing what they are doing right, and asking them what they want and what they think they need to improve." TI is 85 to 90 percent consolidated in Europe.

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The potential to reduce costs by reengineering expense reimbursement processes is more than twice that of reengineering the booking process, said Tom Wilkinson, president of The Travel Management Group in Alexandria, Va., at a symposium on automated T&E products. A company that spends $10 million on air annually has the potential to save as much as $500,000 a year by streamlining the reservation process, but as much as $1.9 million by eliminating the redundancy in expense reporting.

Wilkinson devised these scenarios using industry averages that indicate some companies spend anywhere from $28 to $48 per expense report.