Travel managers by 2020 might have an extra syllable to add
to their title.
During the past several years, procurement has taken an
increasing role—some now consider it to have full control—in travel management.
A laser focus on extracting cost savings from travel, however, has a limited
shelf life as organizations optimize spending and implement more efficient
processes. So travel managers, particularly those overseeing mature programs,
in the coming years likely will evolve to traveler managers, focused more on
employee comfort and safety than their company's bottom line. As such, they may
no longer fall under procurement, shifting (or perhaps shifting back) to human resources,
security and perhaps a host of other masters.
When travel managers look back from 2020, they may see "the
procurement years" as a phase that followed corporate travel department
restructuring. "The travel department used to be a profit department,
because of all the commissions they got," DHL regional category manager of
travel services Michelle Hunt said. "Now, it's a cost department, and if
you're lucky, you break even because of your rebates and incentives."
With that shift, the sourcing side became more pronounced:
managing contracts, managing traveler behavior and reporting savings. The
latter has been increasingly difficult, according to Maria Chevalier, former
travel manager at Hewlett-Packard and Johnson & Johnson.
"You've got enormous pressure in procurement to drive
incremental savings, and it's a shell game, but you do it because you have to
prove your worth to the procurement gods," she said. "In the old
days, [with hotels] you'd benchmark against that flat rate, but now it doesn't
exist, so you look at year-over-year, and you factor in inflation or deflation
and see how you did in comparison to that."
As many travel managers become procurement officers, they
are rewarded on their ability to save a company money, said consultant and tripBam
founder Steve Reynolds, and one could "argue whether travel managers
really exist [by 2020], as you already are seeing a pretty dramatic drop."
But don't write the career's obituary just yet.
Despite the challenges presented by open booking, negotiated
programs always will exist, and someone will need to manage those contracts,
said DHL's Hunt. Those individuals will need to "know the ins and outs,
especially when it comes to groups and meetings," and demonstrate the
value of those contracts.
For procurement, housing that becomes a less attractive
proposition as programs mature, Chevalier said.
"Once you have best-in-class buying behavior and
best-in-class contracts, where else do you go?" she asked. "I don't
think there's any other big disruption out there that will yield enough to keep
it under the procurement house. Procurement as a whole has an aggregate of what
[amount of savings] they need to get to, and travel is going to pull them down."
Similarly, Jörg Martin, owner of CTC Corporate Travel Consulting,
predicted that travel managers would steer procurement teams rather than be
responsible for procurement themselves. Much of that work would go to travel
management companies and other consultants, he said.
At the same time, several industry leaders said managing
travelers and the traveler experience will become more emphasized within the
travel management role. As such, it increasingly could become a function of
human resources rather than procurement.
While it might seem like a softer role, it would be one of
no less value to a company's success, particularly as demographics shift, said
Hans-Ingo Biehl, executive director of German travel management association
VDR. In Germany, for example, demographic trends indicate companies might soon
not have enough younger workers, he said.
"There will be a shortage of talent, so we need to
offer better working conditions, of which one part is travel," Biehl said.
"At the same time, older workers are working to a later age, and we need
to look after them when they travel."
Much of this ties into what travel managers already do. A
key part always will be educating travelers on behavior and policies that keep
them safe and comfortable during travel, Chevalier said. Such tactics as
gamification will need to become a bigger part of the travel manager's arsenal
as they seek to carry that out, she predicted.
"A part of the workforce will care, and it drives the
behavior you need," Chevalier said. "For those that don't, you have
to find a way to get through to all of them. Sitting them in a classroom and
teaching them about travel isn't going to happen."
Travel managers also will have to stay on top of consumer
products for travel booking and execution. Regardless of the degree to which
open booking become a factor in managed travel, travel managers will need to
make sure booking and other policies are not seen by travelers as hindrances.
"If I work for a company and I travel for a living,
that can't be a hardship for me. It's got to be good," said senior vice
president of Starwood Hotels & Resorts Worldwide's sales organization
Christie Hicks. "[Hoteliers] have to do that through product, and
corporate travel managers have to make that happen through options of the
how-to."
Safety and security usually will trump all. DHL's Hunt said
her ideal would be a travel department that reported directly to security, a
structure that is fairly rare today.
"You're still going to have to liaise with legal, HR
and procurement people, because of the function you perform, but [security] is
where you're going to get your support, influence and compliance, if that's
important to the company," she said. "That's where it belongs,
because that's the driving force and the biggest opposition, when you talk
about open booking."
It's also possible that travel management could become a hub
role, with collaboration spread across several departments.
"Travel management will become more about teamwork,
involving such departments as corporate security and IT, who can add their
expert knowledge," Martin said. "That will be much more sensible for
dealing with issues like data security."
Orbitz vice president of strategy and account management
Mark Walton concurred, saying travel managers should serve as a "center
point of functionality" among the various related silos, including expense
management.
Monitoring and advancing sustainability efforts also could
be one of those functions as companies increasingly report on the environmental
impact of their travel programs, VDR's Biehl said.
Even though the travel industry is cyclical—essentially
coinciding with macroeconomic cycles—Starwood's Hicks added that tougher
economic times would not necessarily drive travel back to procurement. "Once
people get traveler comfort as a big piece of what matters to their companies,
they're not going to go back to this rudimentary 'do it my way at the lowest
price,' " she said.
On balance, it's not a bad outlook for a role that some have
been calling obsolete in the face of open booking opportunities and the pull of
business-to-consumer products and services. These changes, however, will make
it more crucial that travel managers become masters of data: not just their own
company's travel data, but also industry knowledge of practices, trends and
technology, Chevalier said.
"You have to make yourself valuable, make sure you're
seen as a trusted advisor, the consultant to the business," she said. "Really
be the expert in your profession, and always be learning."
This report
originally appeared in the Nov. 11, 2013, edition of Business Travel News.