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Companies that use a self-booking tool as part of their travel management programs on average save more than 25 percent on travel agency fees and 9 percent on airline tickets, according to a recent survey. The survey also found that while 66 percent of respondents said they already use some form of self-booking tool, "only 53 percent of air travel tickets were purchased online." The research reinforced that policy mandates are among the most effective ways to achieve satisfactory adoption.
The Business Travel Research Centre at Cranfield University in the United Kingdom conducted the study, commissioned by Amadeus, in collaboration with the Association of Corporate Travel Executives. Travel managers at 424 companies across Asia, Europe and North America responded to an online survey during Sept. 2006.
"What the study confirms is that while self-booking tools are helping many organizations save time and money across a range of areas, many other companies are still missing out on the benefits due to the tools not being properly adopted and used internally," according to the report.
More than half of all survey respondents said their companies define adoption rate as the percentage of total company bookings that are completed within self-booking tools. Twenty-nine percent measure adoption based on "eligible" bookings (typically for simple, point-to-point itineraries) while another 14 percent said they were not measuring adoption rates.
An Aug. 2006 PhoCusWright studydefined adoption in the same way as the majority of respondents in the Cranfield report--"the number of online transactions divided by the total number of transactions able to be booked online" without any exclusions--but found different results. For example, PhoCusWright said online adoption reduced travel agency transaction fees on average by 48 percent, compared with the 25.6 percent average savings reported by Cranfield survey respondents.
Meanwhile, the Cranfield study found that 55 percent of air bookings go through self-booking tools in North America and Asia. In Europe, that number is 48 percent. PhoCusWright estimated U.S. adoption at 42 percent.
One reason for the variance between the findings of the two studies may be the respondent sample. Unlike the client study conducted by ACTE and Cranfield, PhoCusWright based its findings on interviews with executives at travel management companies, technology firms and other industry suppliers.
The Cranfield study also detailed average adoption by industry sector, with high-tech, consulting services and logistics companies reporting the highest levels, and public utilities and agricultural companies reporting the lowest.
Meanwhile, "despite common opinion, variations in adoption rates do not seem to be driven by company size or by location, but by company organizational structure and internal culture," the report stated. Still, Cranfield found that companies with smaller travel spending volumes "have been most successful at driving up booking via self-booking tools, reaching an average adoption level of 72 percent." The study cited "much shorter" lines of communication between travelers and their managers in such firms, and "quicker" word-of-mouth communication between travelers.
Cranfield also concluded that "adoption levels for air travel, surprisingly, did not correlate well with the length of time using the system." The highest adoption rate growth generally occurs in the first year after implementation, "then falls back year-on-year as each progressive level of adoption becomes harder to achieve."
By component, air transactions were most likely handled by self-booking tools (53 percent of all tickets), according to survey respondents, followed by car rental and hotel (both at 38 percent). "Very few" rail tickets are bought through such systems, owing to the "low level of demand" for rail services in North America, limited available inventory and a tendency by travelers to buy tickets at stations on the day of travel.
Overall, 65 percent of respondents said they were very satisfied or reasonably satisfied with their companies' online booking adoption. The study suggested several reasons for unsatisfactory adoption, including "organizational and social issues ... lack of senior managerial buy-in [and] a distrust of the capabilities of technology." Three in 10 respondents also said their travelers "regularly reported" that systems were slow or difficult to use, and did not list cheaper airfares available directly from airlines and other third-party Internet sites.
The study also found that almost 70 percent of self-booking tool deployments "seem to be operated independently of companies' other IT systems and are not integrated with expense accounting systems, which would be a logical extension of system functionality."
To overcome such challenges and perceptions, Cranfield offered a variety of methods to boost adoption, including travel policy mandates, senior management support, traveler education and training, regular progress reports and integration with expense management, human resources and other IT systems. The report also suggested managers seek to include their travel management companies' negotiated rates, which "may offer spot rate discounts over corporate rates and may provide TMCs with an opportunity to provide demonstrable value to their clients by gaining access to otherwise unavailable fares."
Policy mandates are key. Companies that use them reported average adoption rates of 65 percent versus 41 percent at companies that do not require travelers to use self-booking systems. Moreover, adoption averaged 70 percent at companies in which senior managers use the system, versus 36 percent adoption at other companies.
"Given the savings that can be achieved, it is remarkable that 38 percent of companies do not have a travel policy recommendation about employee use of the tool," the authors wrote.
Among all responding companies--which, on average, spend $35 million annually on travel--two-thirds have deployed a self-booking tool. Another 25 percent said they were implementing such a tool, or planned to do so.
Related resource: Cranfield, ACTE, Amadeus study
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