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evolves, data improves and companies focus more on their travelers, a new world
of managed travel has emerged, and buyers are developing new key performance
indicators to measure their travel programs’ success within it.
price-monitoring technology like Yapta, which enables travelers and agencies to
rebook airfares and hotels when fares and rates drop, and tripBAM, which can
monitor a booked hotel and comparable nearby properties for better rates. At
face value, rebooking helps travel buyers reduce spend, the most basic KPI
there is. Digging deeper, price-monitoring also can help buyers not only
evaluate just how competitive their negotiated rates and discounts are but also
get a peg on how often travelers are getting those rates.
still, Yapta has prompted Shell Oil corporate travel services manager Cindy
Morse to consider ditching advance-purchase compliance as a KPI. Here’s why.
Should Yapta notify Morse’s travel management company that a fully refundable
plane ticket has gone down in price within the same fare rules, the agency
rebooks it, she said. The savings, averaging 2 percent, go back to the
travelers’ corporate cards, but the real benefit is her ability to realize newly
negotiated rates immediately, or rather retroactively. “You always have that
lapse where … people book so far ahead, they’re not getting the value of the
new contract because [the new rates] are not loaded,” she said. “With this
tool, you can go back and capture all those tickets, issued at higher amounts,
at the new contract rates. We didn’t expect that to happen, but it’s a very big
savings for us.”
That success has
made her question the company’s 21-day advance-purchase policy. “When you
reticket, you’re booking closer to the travel date, and that’s going to bring
[the purchase lead-time] way down,” Morse said. “That’s not a bad thing if
you’re finding savings.” So why measure it at all?
metric worth watching instead. If a cheaper fare appears at 3 a.m., it could
be gone by the time an agency gets to it, said Morse. “Do we want to look at
how we measure the agency, the reticketing success rate and whether they are
capturing the savings? If they increase our savings, can we give them some kind
of a bonus around that?”
TripBAM CEO Steve
Reynolds suggested requiring the TMC to achieve at least 80 percent
fulfillment. “On nights and weekends, if they don’t see it until Monday, that
lower rate is gone,” he said. “For large companies, that’s a significant amount
New technology can
boost old KPIs, too, giving them new meaning. If the discovery of a cheaper
rate on tripBAM flips an out-of-policy booking over to the company’s agency,
Reynolds pointed out, the company’s hotel attachment rate will increase.
All About The Traveler
Now that NetApp’s
travel program has reached maturity, director of global travel services Kathy
Rust said, “We’re looking at areas that … are more focused on customer
satisfaction and responsiveness.” She wants her TMC to come along for the ride,
too, and that means evaluating it beyond the terms of the TMC’s standard
service-level agreement. The TMC may show her its response time to calls, but
she surveys each traveler when he or she returns from a trip and the entire
group again annually to find out more, such as how well the agents serviced the
travelers. That kind of data can be of particular help to smaller companies,
whose spending levels leave them at the mercy of agencies’ standard KPIs and
SLAs, said Schnitzer Steel Industries travel program manager Steven Brossard.
vice president and general manager of American Express Global Business Travel’s
global client group said many companies are concentrating not just on TMCs’
call-response times but also on the quality of those calls. Amex GBT uses
call-recognition software so agents know who the caller is, where the traveler
is and what that traveler’s company travel policy is as the call begins. It
also helps the agent anticipate the need to involve more agents, say, for a
rebooking if there’s a known weather disruption where that traveler is located.
Other KPIs that
focus on travelers’ interests are emerging, he said, such as itinerary
tracking, communicating in emergencies and completeness of traveler profiles,
all in the name of duty of care. And then there’s sustainability, which is in
everyone’s interest. “It’s not hyped anymore, but more and more are running
those reports,” said Torsten Kriedt, vice president of innovation and
intelligence for BCD Travel and its Advito consulting arm, of a rising demand
for carbon reporting.
The focus on
traveler satisfaction and travelers’ needs could filter into buyers’ formal
evaluations of suppliers. “If we put a service quotient into our pricing model,
we might see the tables turn as to who the best carriers are,” said ACT senior manager of corporate travel Jennifer Steinke. “What are the benefits as
a traveler? If we start to combine all those things, we might start to see a
dynamic new way of managing our programs.”
A Different Kind Of Data
None of this is to
say traditional KPIs are history. Savings, compliance and supplier efficiency
remain relevant, Campana said. “Standard KPIs, in the traditional sense, are
something we still see. They’re good for reporting and driving metrics in the
business, and those KPIs drive dashboards for different audiences.”
And yet, the pool of
available data is drifting; companies always have measured what has already
happened, but soon they will seek data that informs their future actions.
There’s IBM’s Watson technology—a descendant of the same artificial
intelligence that won Jeopardy in 2011—which can process massive
quantities of information and, using language skills for both input and output,
deliver intuitive (i.e., humanlike) answers. It’s been used to cull the
reams of medical papers published every month and help medical professionals
make diagnoses. In travel management, then, perhaps it could pinpoint the
precise optimal lead-time for purchasing airfare. Like price-monitoring tools,
that could render advance-purchase KPIs obsolete.
In use in the travel
industry already are BCD’s Decision Source tool, which pools data and runs
algorithms on that data to understand how, say, changing a company’s
business-class policy would impact both the financial bottom line and
travelers. “In the past, we had to use Excel and a lot of error-prone
applications. Now, we can make it prescriptive and show the areas KPIs can
influence,” Kriedt said.
Omega World Travel’s
Omegalytics reporting system uses predictive analytics to prompt changes in
buying behavior. And Travel and Transport has developed a tool that aggregates
travel data and external information like fuel prices, airline operational data
and weather data to set the stage on which travel buyers’ decisions will play.
As KPIs evolve, it’s
becoming clear that the very nature of the information travel buyers can track
will change. If today’s challenge is corralling existing information to aid
decision-making, tomorrow’s potential will be accurately predicting future
Tips For Selecting KPIs From American Express Global
Business Travel’s Vincent Campana and BCD Travel and ADvito’s Torsten Kriedt
Determine to whom
you will be reporting data, and decide what KPIs would be most relevant to each
audience. Focus on what you plan to communicate to engage your stakeholder.
Understand how KPIs
contribute to a collective picture, not just what the number looks like solo.
Design program goals
first, and determine KPIs that advance them.
Bring in a wider
range of data than what your suppliers provide. Hotel data, in particular,
might give a view of only a small portion of your program.
benchmarks. Ensure they remain relevant to your business’s goals.
Look internally at policies
that might help or hinder KPIs.
This report originally appeared in the November 2015
edition of Travel Procurement.
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