Roughly a decade after its birth, corporate online self-booking in the United States is reaching maturity.
In its latest study of the corporate market, released this month, PhoCusWright predicted that more than half of corporate travel transactions would be created online by 2008. While PhoCusWright said it should still exceed 11 percent each year through 2008, the growth rate for online managed travel bookings is expected to slow over the next three years as administrators and users focus on the final frontiers of hotel bookings and exceptional air transactions.
Meanwhile, case studies offered at the National Business Travel Association convention here in July showed that nowadays, new programs can be implemented and adopted with amazing speed, and online booking as a function can be among the most invaluable tools for travel managers attempting to assert influence.
A big part of the function's establishment as a norm has been increasing acceptance by users. "The middle man being cut out has become a desirable way to book" for Mattel Inc. travelers, said senior manager of global travel services Kay Steele. "A good 80 percent of our users have actually said they prefer this method."
Steele sounded surprised by her own statement, partly because of how "terrified" she had been of the prospect of attacking what she called a "sacred cow" in her company: the close relationships between travelers and travel agents. Apparently, people are getting over it.
"Our company culture was not exactly an embracer of change," said Steele. "I was told by employees and even the head of human resources that 'We don't like change.' Our people loved to call the agents, and we had great agents, some of whom had been there 15 to 20 years. They would spend 20 minutes on the phone, mostly just relating to each other." Still, Steele said "the evidence was there and the savings was real and profound, and it was time to take our company into the 21st century. We were behind and playing catch-up."
After a 2004 experiment with "the wrong tool," Steele's team selected Cliqbook (now owned by Concur) for a pilot in Oct. 2005 with a planned Jan. 2006 rollout and mandate for use on all domestic travel. Travelers liked the tool, thanks partly to some training and a reward and recognition scheme. Severing the relationships with agents was "the hard part," said Steele, as her company "had to immediately downsize" its two on-site offices.
"We found we could not maintain the same level of agents financially and psychologically," she said. "If we wanted users to rely on the tool and break the bond of picking up the phone and saying 'You do it for me,' we had to have less of an option there. This is change management."
Acceptance of change, despite the company's conservative culture, rewarded Mattel with a 6 percent reduction in average ticket price and a 38 percent cut in travel management overhead. Mandating usage produced an astonishing 85 percent adoption rate within 30 days; three months later, Mattel was at 94 percent with more than 80 percent of tickets processed without human intervention.
Mattel has roughly 4,000 frequent travelers, and spent more than $9 million on air travel in North America last year and $34.4 million globally on travel and entertainment. If its example shows how online booking in general has matured to the point where brand new users can ramp it up in virtual no time, Verizon exemplifies a firm whose longtime use of such tools gives its travel department clout.
According to comments by Verizon senior travel management specialist Debra Goldmann, her company's six year-old online booking program offers its travel department the kind of control and influence that also allows flexibility for travelers when appropriate. She noted that one view of the system gives travelers the sense that the travel department has a direct line to the executive suite, so "they know we can email all the way to the top. It's not usually necessary, but it ... shows [our] 'Big Brother' capability."
The company's policy asks users to book online "whenever possible," but also lets them book elsewhere on the Internet if travelers can prove savings of greater than 20 percent. Roughly 1 percent of reservations are made that way, Goldmann said, and policy compliance generally is monitored using exception reports. At the same time, her department "reserves the right to mandate the use of suppliers through the tool or traditionally--whether a particular supplier or just a supplier in a particular market."
Verizon's adoption rate ranges between 87 and 92 percent with a touchless average of 84 percent, said Goldman. The company is now working to identify ways to enable self-booking of travel products previously deemed "ineligible," including groups and meetings, international and VIP travel. "We're looking at trip templates for more simple international reservations, and the other thing we just introduced is online ticket exchange," said Goldman. "Our big push for 2007 is meetings. We have preferred suppliers now, and are trying to mandate use of them and identify meetings spend, which is so often so maverick."
Verizon started carefully in 2000 after selecting the GetThere tool from Sabre by managing implementation through a cross-functional team; communicating and training through the Web and email; employing American Express agents to suggest that travelers use the system; and integrating travel onto internal Web pages that were already used by some employees to buy office supplies and other commodities.
As adoption grew despite no companywide mandate, Verizon found that the users' own "visual guilt" helped drive online fares down 14 percent compared with those booked by phone. Transaction costs fell 30 percent, Goldman said.
The company of late has been tweaking the system to improve certain metrics. For example, it eliminated the opportunity for travelers to type comments into their records, which increased the touchless rate by 20 percentage points. Verizon also improved adherence to contracts by removing the airline selection box, "since we fly the lowest cost provider [and] don't want frequent flyer programs driving traveler behavior," Goldman said.
Such technology-enabled controls may help Goldman keep the glue on a travel program that will soon experience major changes which are causing at least a little consternation. Following Verizon's recent merger with MCI (now Verizon Business), Goldman's immediate tasks include handling a $60 million increase in the company's travel budget and making decisions on multiple vendors in each category.
"We have a three-person [travel management] team, and it's going to stay a three-person team," Goldman said. "So the move from $100 million to $160 million is an interesting one."