<B>Use Fuels CTD Move</B>
<I>Second In A Series On Online Adoption</I>
By Jay Campbell
<I>Fairfax, Va. - </I>American Management Systems in January finished its transition to an Airlines Reporting Corp.-accredited Corporate Travel Department, thanks, in large part, to the rate at which its tech-savvy workforce flocked to Sabre's GetThere booking tool.
The company's experience demonstrates how high usage of online booking can support other corporate travel initiatives, as well as boosting such traditional practices as the use of preferred vendors.
AMS, an information technology consulting firm, spends about $35 million on U.S.-booked air travel annually and has about 2,500 frequent travelers. The company now reports that 70 percent of both domestic and international airline reservations are made online, up from the 25 percent rate achieved within the first month of U.S. implementation in November of 1999.
"I see no issue in getting to 80," said AMS corporate travel manager Cheryl Hutchinson. "I don't think we could have done the CTD without the online booking. It is much easier to bring in-house a handful of people than a roomful of people, so the two go hand in glove. I think a major hesitation for many companies on the CTD is that they'll have to manage a large staff."
Agent headcount dropped to nine as a result of the online usage, down from an "overstaffed" 21, Hutchinson said. Altogether, the online booking tool has cut travel operational costs by 70 percent; return on investment was achieved within the first month.
The move to a CTD and use of online booking each are saving AMS "a couple of million" dollars this year, which translates into "a couple dollars of shareholder value," Hutchinson said. The millions do not include the effect of 18 percent to 20 percent lower fares now being booked on the top 25 city pairs. Hutchinson cited better traveler awareness of the options for the lower "top 25" fares booked through GetThere compared with those booked by agents. "Sometimes people aren't patient enough to listen to all the options on the phone," she said.
Perhaps, they're simply excited by what's new, which is why Hutchinson's online booking awareness program was so well-received. She cited communication as the major driver of adoption, within the context of "critical" senior management support and a set of young, tech-savvy travelers that required no training.
Hutchinson got the word out by issuing newsletters, e-mailing travelers the full business case for online booking, training agents and others in the department to educate users and promoting the tool on telephone hold recordings.
A mandate to use the tool domestically--"not an edict," said Hutchinson--came down only after most travelers had begun using the tool anyway. "We don't enforce the mandate, but we do report to the business groups on their adoption," she said. Project-level managers also are aware of the transactional savings to be had, since they are being charged the cost of agency services. "People are responding to the cost savings. Now the business groups are influencing travelers not only on this, but also on the use of preferred vendors," Hutchinson said.
The CTD status also improved vendor partnerships. "Our relationship with key preferred air, car and hotel vendors is much closer now because there is no longer a third party," she said. "Every week, I feel better about the communication. It now is just our agenda and their agenda, and it is very advantageous that the staff is very clear on what their mission is."
After switching agencies from American Express to Carlson Wagonlit Travel and then to operating a CTD, Hutchinson temporarily farmed out fulfillment to five-year-old Emergency Travel Service in Charlestown, Mass., before taking it in-house.
"They have a high level of service and are open to doing online booking fulfillment after hours," she said. "They're not threatened by the transition to a CTD, and we're not competing with them or taking anything away from them. They tend to be slow during the day and they were eager to try it."
AMS still uses ETS for 24 by 7 service. ETS general manager Eric Fischer said the company has an ARC number but doesn't use it, instead charging clients a transaction fee that can vary based on how much work the transaction requires, for example "full service," "light touch" and "no touch."
Hutchinson said that she probably could convert about 30 percent of bookings to touchless reservations "with the right automation," and that's a goal going forward.
Another planned initiative at AMS is to implement a software package that would combine transaction fees with fares charged at the credit card level.
"We do charge a transaction fee back to the traveler, but right now it's just the one fee," said Hutchinson. "We want to differentiate between online and agent-assisted, another incentive to get people to use online booking."
AMS also plans to deploy GetThere's DirectMeetings online meeting space and food and beverage reservations tool.
Asked what she would have done differently in implementing online booking, Hutchinson said she would have ensured better coordination among AMS, the agency and GetThere during the initial piloting stage.
"Not implementing in a coordinated fashion can be a critical failure and a major reason why people don't get beyond 5 percent," Hutchinson said. "We did okay, but initially it was new to the travel agencies, and the communication between them and GetThere could have been better. Of course, this was two to three years ago, and GetThere since has learned a lot about talking the agencies' language and vice versa.