<B>Visa Enters Folio Fray</B>
<I>Corp. Card Co. Aims To Deliver Full Hotel Data Electronically</I>
By Bruce Serlen
Visa USA last month revealed plans for a pilot program with an undisclosed hotel company to provide travel managers with full hotel folio data electronically. Visa will discuss more details in late July, when it plans to announce multiple partnerships for the project.
Up to this point, IBM has taken the lead in getting hotel companies to provide full folio data electronically. In an effort that began in its U.S. businesses last year, IBM, the world's number-one purchaser of corporate travel, reported that more than 1,000 properties around the country now provide the required data on a nightly basis.
Before IBM got involved, hotels and credit card companies blamed each other for not being able to deliver hotel folio data that could be used to prepopulate expense reports. Now, card vendors, which already provide travel managers with data indicating the total amount travelers spend on hotel stays as part of their larger credit card data feed, are entering the e-folio arena. It is a natural next step that they would have the capability to provide a line-by-line breakdown of how much was spent in the hotel's restaurants, on room service, mini-bar and laundry, at the business center, etc.
"Historically, there's been a push and pull between the hotel industry and corporate clients over the issue of full folio data," said Janet Zablock, Visa USA vice president of commercial products and services. "Initially, the hotels wanted to be able to provide this data themselves. Clients have been demanding it, but in the end hotels don't really want to be in the data business. It's easier to go through the card companies."
Zablock cited a National Business Travel Association survey conducted in the first quarter of this year, which indicated that an overwhelming majority of travel managers would prefer that e-folio data be part of the corporate card feed, as opposed to having to accommodate a separate data feed. Visa plans to formally announce its new e-folio initiative at the NBTA conference in July.
What no one questions is the value to travel managers of having access to detailed hotel folio data electronically, because it will result in a truly paperless expense reporting system. With airlines and car rental expenses already available through credit card reports, hotel data have been the last hurdle to achieving this goal.
"The time savings and other efficiencies you get from a fully paperless system are significant when you consider the scale of the expense reporting system at a company like IBM," said Anthony Angelo, project executive for the company's worldwide employee disbursements. IBM's T&E payouts for 2000 totaled about $1.2 billion. This consisted of roughly 2.2 million transactions. "Each day, we'd been scanning thousands of travelers' paper receipts, so any significant improvement as a result of e-folio would be a major gain in efficiency," Angelo said.
For its part, IBM has a vested business interest in promoting e-folio separate from its own travel management objectives. IBM's Expense Reporting Solution, a tool it markets to other companies, comes with e-folio capability. In the same way that IBM customized the e-folio capability for its own purposes, other companies purchasing the ERS system would custom-tailor the e-folio feature to their own needs.
For hotel companies, being able to provide a client as large as IBM with the range of data it needed, in a format it could work with, proved a technological challenge. "Over the past year, we've been perfecting the technology and now we're in the final stages of the beta test systemwide, which will enable us to submit all the information required seamlessly," said Scott Miller, president of Hyatt Hotels Corp., which is one of nine hotel chains working with IBM.
Hotel companies started with properties in key business cities that were likely to get the most IBM room nights. "From there, we worked with IBM to determine its preferences," said Danny Hudson, vice president of distribution systems for Starwood Hotels & Resorts Worldwide, one of the hotel companies further along with the project. Starwood delivers full data from IBM travelers at 100 of its properties.
As sources of full e-folio data, such card providers as Visa are likely to encounter the same technology challenges facing the hotel companies, regardless of their ability to provide total hotel spend amounts. "The format of the credit card transaction from the hotel doesn't provide enough detail," Hudson said. "The industry standard for hotels is that the credit card transaction only includes the guest's name, dates of arrival and departure and the total amount spent. Breaking out the different kinds of revenue, whether food, beverage, room or incidentals, is a daunting task." Hudson said travelers' privacy was a concern, though it's also a concern when hotels provide the data to corporate clients.
Technologically, it's the hotels' property management systems that are the stumbling block. "PMSs tend to be written in proprietary systems, so they can't communicate with each other," said Shahzad Khan, director of Internet services for Multi-Systems Inc., a Phoenix-based specialist in hospitality systems integration.
Typically, hotel companies are a conglomeration of properties built at different times--some managed, some owned--that operate with PMSs of different generations of technical proficiency. Consequently, the likelihood that a hotel chain's various property PMSs would be identical--and, therefore, able to communicate with each other--is slight. "Breaking out the hotel folio to list line-by-line charges would require writing an interface, which would get the data out of the PMSs' proprietary systems," Khan said.
MSI centralizes data for Prime Hospitality, a third hotel company working with IBM. According to James Crosby, Prime's vice president of technology, Prime provides the data from all 203 of its properties. MSI uploads the information from the properties, stores and sorts it using an open standard system, known as SQL, before passing it on to IBM.
Other corporate card companies, meanwhile, are grappling with these same issues in trying to expand the depth of the feed they provide to travel buyers.
American Express, for example, has been searching for a solution for years without success, according to spokeswoman Melissa Abernathy. "The difficulty isn't in building the reporting system or the data collection system," she said. "Rather, the difficulty is in developing solutions that would work with the various PMSs. In other words, it's building the track for the data to flow through that's still the challenge."
At MasterCard International, the focus hasn't been on e-folio, but on the development of new capability for its corporate procurement card. According to Phil Philliou, vice president of e-commerce and emerging technologies, MasterCard's new SmartLink software integrates procurement information with companies' larger enterprise planning software, such as SAP. "It provides transaction data to a central data repository and then to the SAP system and, from there, to the ledger accounts," he said.
~<I>Jay Campbell contributed to this report.