Unmanaged Travel 1.0
When the travel industry first adopted computers for booking
business and leisure travel in the 1970s, it was the airlines that provided the
access via their carrier reservations system (CRS). As such, airlines were able
to bias displays toward themselves. At that time, airline fares were regulated
and all carriers had to charge the same fares in a given city pair. Hotel and
car rental bookings were very basic and did not store corporate rates. There
was no mid-office technology or any technology to support travel policy
enforcement. There were lots of valid reasons for a corporate traveler to book
hotel and car outside of the CRS, based on its inherent limitations. For all of
these reasons, I call this era Unmanaged Travel 1.0.
Managed Travel 1.0
In the early '80s the airlines no longer could bias
displays, and in the process divested themselves of the CRS and as a result the
global distribution system was born. The key players came from the airlines:
Sabre from American Airlines, Apollo from United Airlines, PARS from TWA,
Deltamatic from Delta Air Lines, SystemOne from Eastern Airlines and Panamac
from Pan American. As competition grew among the players, the prevailing
systems were Sabre, Apollo and PARS (later absorbed by Travelport). The
enhanced capabilities of the GDSs over their predecessors were integrated
technologies, robust content, elimination of airline-specific biasing and a
mid-office capability to capture policy violations and report on them via
corporate hierarchy. These enhancements provided a solid business case for air,
hotel and car bookings to be booked via the approved travel management company.
Managed Travel 2.0:
My Definition
The events surrounding 9/11 had a severe and long-lasting
impact on our industry. One outcome that has enhanced managed travel was the
discovery that hundreds of thousands of corporate travelers could not be
located on 9/11 because they did not book their passenger name record—or part
of the PNR, specifically the hotel piece—via the TMC, so there was no way to
know where they were staying.
As a result, travel managers enlisted senior management
support to require (as part of travel policy enforcement) that all bookings be
made by the approved online booking tool or TMC. The value of this discipline
has a multitude of corporate benefits, including:
- The ability to locate employees anywhere in the
world
- The ability to contact employees and have them
cancel a segment if they are flying to a (newly known) high-risk area
- Data consolidation for enhanced supplier
negotiations
- Assurances that the negotiated corporate rate is
applied when booking
- Visibility of noncompliant bookings (like those
at non-preferred hotels or at the wrong rate)
- Enhanced TMC revenue streams, which could
improve revenue sharing or reduce fees
- Internal budgeting assistance as all bookings
are on one place
- Improved efficiency in using one system instead
of multiple systems and the phone
- Ease of making changes en route and after hours,
since the TMC has visibility to the entire PNR
Unmanaged Travel 2.0:
Formerly Known As Managed Travel 2.0
There has been a lot of hype around a new concept in which
employees should be able to book outside of the TMC, so long as the information
gets captured in the expense system or itinerary management tool. What's the
big deal? It's cool because it lets employees do what they want. After all,
this is the younger generation.
I challenge any company to let me know if they allow
employees to buy their own office furniture based on their likes or dislikes.
How many employees are allowed to buy their own laptop online and then ask IT
to configure it? These items can cost less than a business trip, yet the
purchasing protocols are mandated.
The reality is that what is being called Managed Travel 2.0
is really Unmanaged Travel 2.0 in that we are taking a step backward and
bypassing all of the protocols and technologies that were developed at a cost
of hundreds of millions of dollars and saying, "It's OK to skip all of
this and go out and surf the web to find the bookings that meet your
needs." You can then (voluntarily) send that info into our expense system
and all is good. Sorry, folks. This concept will increase travel costs,
increase productivity costs and lose valuable data, from both a risk-management
and a supplier optimization standpoint.
What we need is Managed Travel 3.0, a world where booking
via the approved channel and booking preferred suppliers at a company's negotiated
rate is mandatory in order to be reimbursed. Then and only then will our
industry have the discipline that exists in so many others to control the
purchasing behavior of the employee who is spending the company's money, not
their own.
Menkes is the founder
and CEO of Partnership Travel Consulting.
This perspective originally appeared in the Jan. 20, 2014, edition of Business
Travel News.