Reporter's Notebook: Masters Consider Travel 2.0's Value

What TRX president and CEO Trip Davis called the "democratization of information," Web 2.0 applications for corporate travel, dominated much of the early portion of February's Masters Program in Washington, D.C.

Though several buyers during a panel discussion said they have yet to embark on Web 2.0 initiatives in their travel departments and questioned the value of such offerings, Thomson Corp. has moved from idea to action.

"We get a lot of feedback from travelers," Thomson worldwide travel manager Cindy Heston said. "We wanted to put that into a format that would be insightful from a community perspective." That desire led Thomson's travel department in the past year to gain IT support and develop an in-house social networking platform for corporate travelers.

Heston said the program is based on a traveler survey "with an interactive component to enable traveler insights." Heston described the model as "controlled chaos," where traveler submissions are screened before being posted and the travel department itself builds some content. Heston said the model supports travel policy and "I hope it will support and enhance preferred suppliers." Heston said the ultimate goal is integration with its self-booking tool, "since travelers now must go to a separate site from where they post insights to book."

One supplier in the audience expressed concern that criticism of preferred suppliers could compromise marketshare agreements, to which Heston replied that it's better to hear travelers' thoughts before they elect not to use preferred suppliers. The platform is not simply for travelers to log complaints, Heston added, but rather offers insights to other travelers. "If we ask them to comment, and we're asking for insight, we have to be ready to take action," she said.

On the supplier side, Raj Singh, president and COO of Concur Technologies, said the expense and booking company opened a platform for customers to communicate with one another online. Concur operated the module privately, and just recently opened it to the public, Singh said.

TRX's Davis summed up social networking industry sentiment: "There's a little bit of a mood of, 'It's nice, but...' " He expects such applications to gain traction. "Get yourself ready," he said. "One year's time, it will hit you hard if you're not."

"As GDS fees for airlines go down, fees for hotels are rising, in some cases by double-digit numbers," said Marriott senior vice president of e-commerce Shafiq Khan. "We believe that if these trends continue, we'll be put in a situation similar to the one the airlines were in recently. That is something we should avoid."

Khan said transactions through direct channels cost about $3, with GDS distribution more than double that. Though Khan said he wants to get the two closer in line, Marriott is only in the "very preliminary" stage of addressing it. "One of the biggest missing pieces in the previous round [of GDS cost cuts for airlines in 2006] is that corporate travel managers were not at the table," Khan said. "You need to be there with us." He said Marriott has worked with clients to lower distribution expenses, but did not give detail, citing confidentiality.

"We all have distribution processes, one that every customer buys through," Khan said. "I'd suggest looking at the entire process—every part, every cost item—and see if there opportunities for you. Someone as big as Lockheed Martin, there may be more opportunity than someone who is smaller."

Not even John Calverly, chief economist for American Express Bank, can determine if the United States is in recession, though he greeted supplier executives and business travel buyers at this year's Masters Program, by saying, "I'm afraid I don't bring very good news on the economy." Striking perhaps his most optimistic note during his presentation, Calverly said, "Maybe we'll get relief in oil prices. It ought to happen if the world economy is slowing, but if OPEC is holding things so tight, it might not." Though Calverly's crystal ball was murky, he said oil prices likely have peaked, "barring geopolitical shocks," and should come down from $100 to somewhere closer to $80. Calverly called travel a "cyclical business, and the cycle has turned down," and said financial, real estate and consumer-oriented businesses are the most likely to scale back business travel.

Virgin America CEO David Cush said, "I'm absolutely convinced that consolidation will happen this time," with two or three major airline mergers more likely than one. "I refuse to believe the rest of the U.S. legacy carriers will let two merge and become the powerhouse." After the first merger, Cush said, one or two more will happen very quickly. Though Cush said new entrants and low-cost operators in the past had tried to bar mergers from happening, he noted that "as long as there's guaranteed access to critical airports, we have no problem with consolidation."