Boston-At the National Business Travel Association International Convention & Exposition here last month, buyer direct members elected director of travel for the Expedition Development Co. Kevin Maguire president and CEO of the association for the next two years.
Maguire said his short-term goals center around building and continuing global partnerships, especially after the Institute of Travel Management, one of NBTA's Paragon Partners, withdrew its involvement from a planned joint educational event in London in September. "I would like to strengthen those and expand to look at Central America and other parts of Europe and ways to make it a good match for everybody that's involved, and as part of that really expand our international education programs because I believe we are a little deficient in that area," Maguire said. "We need to tie in programs that are global in nature, that work not only for American companies, but European companies."
A long-term goal of Maguire's is building the prominence of NBTA globally and tailoring education programs for specific geographic regions, as well as for global travel buyers, so members can obtain the full benefits of being part of the association.
"I would like to see NBTA recognized throughout the world as the number-one source for travel information and we're not there yet," he said. "I would really like to look at the tangible benefits so that when somebody says, 'I belong to NBTA,' they can comfortably rattle off a list of things and show it to themselves, their employers or somebody else. I think we are close to that."
One aspect of Maguire's election platform was bridging the gap and creating open dialogue between NBTA buyer and supplier members, which Maguire said he already has begun by working with Dav El Chauffeured Transportation Network president and CEO Scott Solombrino, who Maguire said he will reappoint as president of NBTA's Allied Leadership Council.
"Scott and I have already started working together on how we can close any gaps and open any new lines of communication over the next six months to a year," Maguire said. "With his leadership on the Allied Leadership Council and with the existing board's willingness to look at other options on ways of how things may or may not be done, we may still have a few gray areas, but we will close the gaps significantly and from any side—either allied or direct—go back to the tangible benefits."
On the legislative front, Maguire said further development of the NBTA Political Action Committee is important, as is building NBTA's involvement in not only national travel issues, but also local and global issues to provide members beneficial information and advocacy. "One concern I have—and it came up at this year's PAC, and there was no answer from the congressional representatives—was what happened to the taxes that were paid on unused tickets," he said. "That is a significant amount of money, and travelers, corporations and taxpayers are entitled to know where the money is or what happened to it."
NBTA members also elected as vice president HSBC travel manager Michael W. Lyons and as directors-at-large JELD-WEN corporate travel manager Flodine Lee and previous NBTA vice president Charles Franklin, American Honda Motor Co. manager of corporate services.
In the inaugural election for allied members to vote in one of their own to the board, Sean McCurdy, Interstate Hotels & Resorts global director of worldwide sales, was elected to a two-year term.
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The European Commission's reported consideration of redefining what constitutes airline ownership of a global distribution system
(BTN, July 23), which would benefit the Amadeus GDS, sparked a contentious back-and-forth between the panel and audience of a session otherwise dedicated to discussion of distribution of European air, hotel, rail and car rental content. The EC's potential redefinition of airline ownership, still unannounced and part of the revision and potential deregulation of its 18-year-old Computer Reservation System Code of Conduct, would allow Amadeus to escape EC restrictions on operations in markets where its airline owners are the dominant carriers. The potential revision apparently centers on the fact that the three carriers that own parts of the GDS—Air France/KLM, Lufthansa and Iberia—even when aggregated hold a 46.8 stake of Amadeus, but investment firms BC Partners and Cinven hold the remainder, a majority
(BTN, June 25)."What is happening in Europe is scandalous," said Geoffrey Breeze, vice president of marketing in Europe, the Middle East and Africa for Sabre, Amadeus' competitor. "We are in favor of deregulation, but the problem is double dominance. Amadeus claims 62 percent marketshare in Europe. The commissioner may be persuaded to the point of view that there is no such thing as a parent carrier. If this goes through without those carriers selling, or allowing them to penalize users of other GDSs, then you will pay."
Iain McDonald, head of global travel management companies for Amadeus, from the audience first criticized the fact that representatives from two GDSs, but not Amadeus, were members of the panel—Breeze was joined by Worldspan vice president of customer marketing Cheryl Weldon—then defended the EC's potential move, noting that the three carriers compete with each other on several routes, and its investors would not allow the carriers to enact GDS policies that bolster their own bottom lines but hurt Amadeus.
The GDS representatives on the panel said that technological advances would allow more vendors to list content in GDSs to allow them more global exposure and easier integration with online booking tools. Less certain was Bill Brindle, business technology and distribution director for mega travel management company HRG, who said many vendors—particularly hotels—see little reason to incur the costs of listing in GDSs when demand remains strong without doing so.
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Users of hotel electronic folio data touted the travel budget and program benefits during an educational session, although buyers in the audience remained reticent to adopt it for what they see as data inconsistencies and not enough hotel participation.
Brian Nichols, hotel and ground transportation manager for Deloitte Services LLP, said his company now funnels e-folio data from five hotel chains, obtained through corporate cards, into a data warehouse for reporting purposes. By next year, Deloitte will begin implementing those feeds into its expense processing tool.
Moving to a paperless expense process had immediate benefits for Deloitte, Nichols said. In the expense realm, Deloitte processes about 600,000 envelopes a year at a cost of $2 per envelope, which means a potential savings of more than $1 million a year, he said.
The grandfather of e-folio, IBM, meanwhile, launched its own such initiative about 10 years ago and still is seeing growth in the program, said Sean Logan, IBM's global hotel sourcing manager. IBM, which receives its e-folio data directly through its own agreements with hotels rather than through corporate cards, now estimates more than 72 percent of the U.S. hotels in its program have e-folio capabilities, and the company plans to push for more, Logan said. Aside from the financial benefits, IBM also began to see increased usage of preferred hotels following e-folio adoption, he said.
"Our travelers, who were sick of mailing receipts, stuck with hotels that had e-folio," Logan said. "We found it became a strong tool for IBM and IBM's hotel partners to drive compliance to our hotel program."
Nichols and Logan said that the increasing number of hotels making e-folio data available through corporate cards is making it easier for smaller companies to use e-folio data in their travel programs. Marriott International expanded availability to all of its brands save Ritz-Carlton early last year, and several other companies, including Hilton Hotels Corp., Carlson Hotels Worldwide, Choice Hotels, Omni and, most recently, InterContinental Hotels Group, are making e-folio data available through corporate cards.
"The other hotel chains are relatively quickly following, so it's not so much about having clout to have the hotel company do it," Nichols said. "It's a business trend that is not going to stop, and hotel companies need to look at it that way: as a value-add to the guests."
"If it's going to move mainstream, it's got to become simple, but I think only demand in the industry is going to create that," Logan said. "We're hoping the corporate card solution becomes the Holy Grail."
From the hotelier side, Hilton managing director of business travel sales Maureen Mackey said she's seen a definite uptick in e-folio usage—even though she doesn't think buyers are using the data to its full potential—since the corporate card companies became involved. Hilton began its e-folio program at the request of IBM, and prior to working with corporate card companies, was sending out about 4,000 e-folios a day, she said. Now that corporate cards are involved, Hilton sends out as many as 100,000 e-folios a day, she said.
Sending out e-folio is a daunting task for hotels, however, she said. "We're not actually making any money as a result of e-folio. If anything, we're taking a bigger hit," she said. "We have to develop the technology, we have to implement it and we have to have people to upgrade the service and maintain it."
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Representatives from airlines and alternative payment platforms during an educational session sounded off on growing credit card expenses and suggested buyers embrace alternatives that ultimately would reduce the airline credit card bill.
AirPlus regional sales director Alexander Houston said there is mounting pressure in the form of litigation, regulation and merchant backlash on traditional credit card providers to reduce merchant fees.
Amid rising merchant fees paid by airlines and growing rebates paid to corporations by traditional card providers, Ed Lihou, who manages Continental Airlines' UATP program, said "A lot of airlines feel they're funding rebates."
Houston said the corporate travel industry could explore three options to bring credit card fees down: a zero-commission structure, which does away with rebates and adopts a "user pay" model; new deals between airlines and credit card companies to bring down merchant fees; or the implementation of new surcharges for credit card purchases.
Noting that some foreign carriers have elected to not accept certain forms of payment, Houston said, "You'll see more of this."
On the regulation front, Houston noted that Australia has capped credit card merchant fees and the European Union is exploring similar regulation. Among the possibilities are differential surcharges, employed in such countries as Denmark, through which various surcharges correspond with the form of payment—in other words, the higher the merchant fee, the larger the surcharge to credit card users.
However, several buyers in the audience said airlines exhibit a conflict of interests, as they are reaping cash from credit card companies through mileage programs on one hand, and demanding lower costs on the other.
Lihou said buyers and airlines could work together to make such payment alternatives as Universal Air Travel plan palatable to both parties. As such, Lihou said payment has become an element of corporate negotiations, as Continental can "share savings" with customers that use cheaper forms of payment.
"Continental can give back 1 percent on merchant fees fro UATP," Lihou said, noting that Continental has added more than 500 UATP accounts in the past five years, where there is the "possibility for better discounts or rebates."