Automated Booking Tools Finally Gain Ground In Europe - 2001-12-03

After years of virtually zero sales, corporate online booking tools finally are beginning to register growth in Europe. However, neither the number of customers nor levels of adoption are anything like the recent dramatic successes seen in the United States, and doubts remain whether the greater complexities of the European market ever will allow the same levels of usage.

"The gap will narrow but it will not disappear completely," said Christian Gall, vice president of new technologies at Carlson Wagonlit Travel Europe.

Evidence of the arrival of online booking in Europe is piecemeal but persuasive. Gall said CWT now has 10 major clients using a tool and "15 more banging at the door to implement." One year ago, it had only two clients.

Two of those tools are offered by Amadeus: its Web-based Corporate Traveller system and a collaboration with SAP. August was Amadeus' best month to date for booking volumes through the pair, and the number of transactions in June-August was more than 1,000 percent higher than the same quarter in 2000, albeit from a very small, unspecified base.

"Last year, we had lots of clients piloting, but it was very tough moving them to implementation. This year, they are implementing," said Amadeus vice president for travel agency and corporate partners Ian Wheeler. New clients include Deutsche Bank and DaimlerChrysler for the SAP product, and the Norwegian government in a collaborative effort between Corporate Traveller and telecommunications company Telenor.

Amadeus bought a third tool, E-Travel, from Oracle this summer. Wheeler said the entire corporate online systems division likely will be renamed E-Travel, but with the original E-Travel product being marketed for U.S. domestic travel and SAP and Corporate Traveller aimed at international markets. The division will operate out of Amadeus' offices in Nice, France, and the old E-Travel base in Boston.

French company KDS also has made gains, with its client list jumping from 30 to 50 in the past 12 months. "We have seen a huge increase in interest and adoption," said CEO Yves Weisselberger. "We are dealing with five times as many RFPs as last year." KDS also is going down the path of third-party licensing, which has proved a success for GetThere. KDS is poised to announce that it will be used as the engine for a new Galileo International offering to small and medium-size businesses.

There are several reasons for these signs of growth in European online booking.

One frequently cited explanation is that business travel agents, who work much more closely with clients in Europe than in the United States, are getting behind the products.

"There is a growing awareness within travel management companies that we have to go with this," Gall said. "The word coming down from the top of our organization is that if we can't beat them, let's join them."

Online providers also have praised the global distribution systems for making greater efforts to interface with them. Gall similarly has seen resistance being overcome from clients. "The corporate travel manager doesn't want to upset travelers by making them use the tools, but financial directors are saying, 'I don't care if travelers are upset, I want to cut my costs,' " he said.

Evidence for this comes from Amadeus, which has noticed much stronger demand for online booking in countries where airlines have cut commissions most severely, forcing travel departments to switch their status from profit centers to cost centers.

Clients usually pay smaller agency fees for an online transaction than for booking through a human travel agent. "When you look at the cost per transaction, it is a compelling argument," said Keith Mullineux, European travel manager for General Electric, which has rolled out Sabre Inc.'s Business Travel Solutions in the United Kingdom and now is piloting GetThere in Germany (see story, page 10).

As happens so often in the United States, GE also is finding that the average ticket price is falling 10 percent, making it easier for Mullineux to make a business case internally to budget holders. As well as increasingly favorable market conditions, Gall believes the quality and implementation of online products has improved significantly.

Enhancements include more user-friendly functions, such as easier repeat booking procedures, the start of direct connections that bypass GDSs—KDS, for instance, links directly to Hertz and French rail network SNCF—and more direct links to such back-office systems as SAP.

"We also have been through a lot of mistakes during the past year, such as not checking whether or not bandwidths were wide enough," Gall said. "At Carlson Wagonlit Travel, we now carry out a pre-audit of 30 questions when we help clients implement."

Yet, in spite of all the evidence of green shoots, corporate online tools have some way to go in Europe before they flower as fully as they have in the United States. No one puts the figure of total business travel bookings at higher than 1 percent and even that is arrived at by rounding up to the nearest whole number.

A crucial difference is reluctance to mandate in Europe. Amadeus' Wheeler was not aware of a single company that compels its travelers to book online. However, there also are difficulties inherent in the nature of European travel, of which around 80 percent is international—the inverse of the United States—and the proportion of multi-sector journeys significantly is higher.

As a rough indicator of the difference between the two, GE currently books 50 percent of its travel online in the United States but aims to push that figure up to 80 percent, believing the remaining 20 percent is too complex for self-service reservations.

In the United Kingdom, GE's online booking runs at 20 percent but the company has set the ceiling for adoption at only 50 percent. Similarly, Capital Group has reached 15 percent adoption in the United States but only 5 percent in the United Kingdom. "Europe is more of a challenge," said Los Angeles-based travel, meetings and events manager Stephanie Dillon. "There has to be more of an effort by the online booking tool providers to address the complexity of multi-leg international journeys."

To that end, tool providers are working harder on handholding in Europe. Amadeus, has focused heavily on synchronizing passenger name records for both online and offline bookings. KDS is piloting a facility that lets a traveler click a button for live assistance from the travel agent. The agent then can make real-time changes on the screen that simultaneously can be seen by the traveler.