Visa, Hyatt Further E-Folio

<B>Visa, Hyatt Further E-Folio</B>

By Bruce Serlen

The drive to provide travel managers with full hotel folio data electronically will gain momentum on two fronts today: Visa U.S.A. is expected to announce that it is working with its first member bank, J.P. Morgan Chase, and its first hotel company, Prime Hospitality, to make the electronic data available to travel managers whose travelers use Chase Visa corporate cards. Effective immediately, these travel buyers can receive data from their travelers' stays at Prime Hospitality's two brands--AmeriSuites and Wellesley Inns & Suites--as part of an enhanced version of the credit card feed they already receive.

Separately, Hyatt Hotels Corp. is set to announce that it will begin submitting e-hotel folio data to corporate travelers from IBM, the company that, up to now, has been the key catalyst in getting hotels to make providing e-folio data a priority.

Unlike other hotel companies working with IBM, Hyatt has the capability to submit the data from every U.S. and Canadian property in its system--as opposed to just a percentage. Coincidentally, Prime Hospitality has been working with IBM on e-folio as well, and also provides the data systemwide.

For travel managers, having access to detailed hotel folio data electronically can fulfill their long-held wish for a truly paperless expense reporting system. With airline 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 benefits that travel managers gain from a paperless system can be considerable when you factor in the scale of the expense reporting system at a large company, which might generate tens of thousands of individual receipts a year.

For Visa, it made sense that the hotel data used to prepopulate expense reports should come from a credit card vendor. Visa, after all, already provided travel managers with the total amount travelers spent on hotel stays as part of the larger credit card feed.

This feed now will include a line-by-line breakdown of how much was spent on the hotel room itself, local taxes, in the hotel restaurants and gift shop, on room service and mini-bar, etc. Visa conducted a beta test with Prime this spring to work out any technological glitches (BTN, June 11).

"This is a win for all sides of the equation," said Michael Dryer, Visa U.S.A. senior vice president for commercial solutions. "Travel managers benefit because they get much better data on travel spend along with the streamlined expense reporting capability. Travelers, meanwhile, benefit because they're able to submit their expense reports with less time and effort, the data having already been prepopulated. They can identify personal expenditures or sign off on the whole folio electronically."

Dryer said J.P. Morgan Chase was the first of Visa's member banks to make e-folio data available because it had clients who were agitating for it and the bank itself was interested in the technology. He said other of Visa's member banks soon would be adopting the technology, though he wouldn't specify which member banks or indicate the timeframe.

Similarly, he said Visa was in discussion with other hotel companies besides Prime Hospitality to join the program, but couldn't specify when that would occur either.

J.P. Morgan Chase estimated that 2,000 to 3,000 of its large and middle market Visa client companies were eligible to have e-folio hotel data added to their credit card feed. "A majority of these clients use our PaymentNet software, where the e-folio data will be loaded," said Cindy Smith, senior vice president of client relations and program consulting for J.P. Morgan Chase. "Travel managers simply log onto PaymentNet and then can access the folio data." There are no additional fees for this functionality.

Smith said that in making e-folio available to clients, the bank was looking to add extra value. "Given the pressure they're under today, clients want as much data as they can get," she said. "Not only do we want to deliver payment technology, but we want to deliver it in a way that helps the client manage the accompanying data."

The e-folio process begins when the traveler checks out of one of the 135 AmeriSuites or 72 Wellesley Inns & Suites, paying with a Visa corporate card. "Working with our outside vendor, Multi-Systems Inc., whose property management system we use, we've developed software that recognizes folios that carry a Visa credit card number," said James Crosby, vice president of technology for Prime. "The system then separates these folios out and creates a file that's sent to Visa."

Included in the file, however, are folios for all Visa member banks. Visa, in turn, has a written interface with J.P. Morgan Chase. Consequently, Prime doesn't have to write an interface for each of Visa's client companies.

For Prime, e-folio was an opportunity to show its leadership in technology and its responsiveness to the needs of travel buyers.

"It's also a form of competitive advantage, meaning we think travel managers will direct business to Prime because we can provide this time-saving benefit," Crosby said.

For Visa, the relationship with Prime and J.P. Morgan Chase complements an e-folio beta test presently underway at Visa International's European region, where it's working with 22 Millennium & Copthorne hotels.

At Hyatt, the motivation behind the e-folio initiative was the opportunity to generate more business with IBM, which happens to be the world's largest buyer of corporate travel.

Yet, unlike other hotel companies driven by similar motivation, Hyatt committed to making e-folio available at all of its 122 properties in the United States, Canada and the Caribbean, as opposed to only properties that draw a lot of Big Blue room nights.

"We wanted to have the flexibility to know that we could provide electronic folio data at any property in the system the client chose to use," said Rob Sarmiento, assistant vice president of business travel.

IBM's interest in promoting e-folio goes beyond satisfying its own expense reporting needs. Not surprisingly, IBM markets its expense reporting software, a product called Expense Reporting Solution, that comes with e-folio capability. Other companies acquiring ERS would tailor the e-folio capability to their own needs the same way IBM did.

Hyatt was at an advantage in developing e-folio because all its properties share a single property management system. "As a result, the back-office functions all speak to each other, which makes an undertaking like e-folio much more feasible," he said.

Hyatt expects other clients to want access to e-folio data for their own travelers. "As we start receiving RFPs for 2002, we see information on e-folio being requested much more than in the past, so we know interest exists," Sarmiento said.

He noted that because of legal issues around the release of this kind of data, companies have to sign a release form before Hyatt would submit data. While he expects to be working with other clients soon, he declined to name any likely candidates.

As with Visa's relationship with Prime and J.P. Morgan Chase, Hyatt believes travel buyer's interest in e-folio data goes beyond expediting expense reporting. "The more information buyers have at their disposal about the specifics of their travel spend, the better able they are to understand the requirements of their employees on the road--and ultimately the better equipped they are to negotiate on behalf of their companies," Sarmiento said.

While e-folio is novel right now, he said he expected it will become the norm one day. But that doesn't mean there's going to be one standard format.

"In the same way there are variations in the way clients submit RFPs, there are likely to be different approaches to e-folio," he said.

Travel industry consultants confirmed this negotiating advantage.

"Once buyers can see the data broken out line by line, they have a more in-depth, insightful idea of where travelers are spending money on property and can negotiate accordingly," said Linda Baygents, director of corporate hotel programs for TQ3 Maritz Travel Solutions.

"They can compare the spend at different properties in a destination as well as by price point and brand. If nothing else, they'll have a better sense of what items--rate aside--they should be negotiating.