Collegiate travel managers are as perplexed by the latest global distribution system agreements and the trickle-down effectson airline tickets as many of their peers running corporate and government travel programs. Half of more than 130 attendees at last week's Society for Collegiate Travel Management conference here said they did not understand the mechanics of opt-in agreements, and 24 percent said they have only limited understanding, according to instant electronic polling.
What many did recognize was that fallout from airline-GDS agreements means higher travel agency costs. Only 16 percent said they expected their agencies to absorb the added expense of participating in new programs that ensure access to the widest range of airfares and seat availability.
Some questioned why their travel agencies were raising per-ticket fees when many bookings go to carriers that have not negotiated new GDS agreements which force reductions in agency incentive income. "Some will win or lose in this ball game," said keynote speaker Dean Sivley, COO of Travelport's Orbitz for Business unit. "Maybe opt-in is not the way to go" for certain agencies and managed travel programs.
Sivley said Travelport's Orbitz for Business and Travelport for Business would communicate a $2 per-ticket fee, matching newly enacted policies by some other travel management companies. Only customers with certain pre-existing contractual arrangements would avoid the fees, he added. Sivley also cautioned attendees that "the game is not over," suggesting movement on hotel or car rental distribution costs may be next.
JetBlue Airways senior vice president Tim Claydon told attendees the carrier remains "on the outside looking in" regarding segment fees and other developments, after rejoining Galileo and Sabre this year. Asked how JetBlue's newer GDS agreements differ--other than through lower fees--from those established when the carrier launched at the beginning of the decade Claydon said the parties "broke down previous participation levels" regarding which fare types were included and lists "more inventory now through Sabre than before." [Claydon also noted that for this season, JetBlue for the first time is offering charters for such groups as college football teams.]
Fretting Over IRS Regs
Gwen Spencer, a tax director at PricewaterhouseCoopers, cautioned attendees about the ramifications of "archaic" IRS regulations on such 21st century staples as cell phones and Internet travel packages. "Bundling air, car and hotel into a package can save institutions money," she said, "but the problem comes with [substantiating] the amount, which requires separate expenditures for transportation and lodging. A bundled package does not satisfy the Accountable Plan rules [covering employee reimbursement]."
Moreover, Internet vendors oftentimes won't provide an itemized bill, even when asked, according to Rebecca Beatty, travel director at the University of California, Los Angeles. "They say this is proprietary pricing with the car rental company, the hotel, the airline," she said. "They will not break it down for you."
As a result, UCLA's president enacted a non-reimbursement policy for increasingly popular online travel packages, Beatty said. "This is probably one of the hardest policy implementations that I have had to face because we are telling people not to save money for the university."
She also said IRS rules prompted a new university policy covering laptops, cell phones and other mobile devices. "Individuals are supposed to report on an annual basis the amount of personal use that they incur," Beatty explained.
According to PwC's Spencer, UCLA's approach is one of three possible strategies for determining proper reporting of such items, which increasingly are scrutinized as employee compensation by IRS auditors. The others, she said, are using representative averages or logging all calls, messages and laptop sessions. "If you took this to the extreme to be fully, fully compliant with regulations, people would have to take their phone bills, itemize every call and support the business purpose for that call," she explained. One attendee said her university went so far as calling numbers on employee cell phone statements to verify the purpose of those calls.
Realizing that university employees are unlikely to carefully catalog all their mobile computing and communications, such schools as the University of Southern California now are grappling with policy decisions. "We are trying to come up with a policy that can be practical and won't get us into trouble," said USC accounting/financial supervisor Lynn Corner. "That will be difficult."
Conference Notes
Forty-eight percent of surveyed SCTM conference attendees said their academic institutions now use an online self-booking tool. That is roughly even with the association's findings from a year ago. SCTM said 22 percent of represented institutions used such tools in 2001, and 34 percent responded in the affirmative by 2003.
By another measure, 26 percent said more than half of their institutions' travelers now book tickets online, with 37 percent saying fewer than a quarter of their travelers do so. These numbers indicated room for improvement for those with self-service as a priority, but mandates are not popular in the academic environment. "We used the 80-20 rule, with 20 percent considered maverick spending," said one SCTM conference attendee, regarding his previous experience in the corporate sector. "In higher education, its almost reversed."
Noting that "security concerns take precedent," Travelport's Sivley suggested that mandates could creep into collegiate programs and lead to "much more actively managed programs." Underscoring the point on safety and security, only 24 percent of responding attendees said their schools currently have in place a pandemic preparedness plan.