Squeezed budgets boost use of on-line booking tools
Corporate Web-based programs cut travel agent fees, push employees to cheapest flights, car rentals and hotel rooms
Tuesday, October 15, 2002
Special to The Globe and Mail
With her budget squeezed by rising air fares, taxes and security fees, corporate travel manager Josť Guillette has found some breathing space with an on-line booking tool that saves her company about $100 for each ticket.
"There are so many add-on costs in travel today that we have to find all possible avenues in order to save money," says Ms. Guillette, administration and travel manager at Montreal-based Fujitsu Consulting (Canada) Inc.
She says the American Express Web-based booking tool Corporate Travel Online (CTO) helps cut costs by reducing fees to travel agents and giving employees a quick and easy way to book the cheapest available flights, car rentals and hotel rooms.
Besides saving $100 on each flight ticket, she says, her company has cut travel-agency fees in half and saved an average of $10 for every hotel room booked since deploying the tool last year.
While Web-based booking tools have already made a huge impact on leisure travel, they have been slower to catch on in the business world, where employees are in the habit of booking by phone and companies must integrate Internet bookings with internal travel policies and deals negotiated with preferred vendors, says Frank Schnur, vice-president of sales, consulting and business-to-business e-commerce at Markham, Ont.-based Amex Canada Inc.
But the corporate travel business is now abuzz with the dramatic savings that can be had with new corporate booking tools easy to integrate with internal management systems, he says.
"We are seeing a big push from Canadian companies to realize these savings and efficiencies," he says, noting Amex has seen a 300-per-cent rise in the use of on-line corporate booking tools this year over last year and anticipates 20 to 30 per cent of all Amex corporate travel bookings will be made through these tools by 2003.
Similar findings were reported recently in a survey conducted by the on-line booking technology company GetThere LP of Menlo Park, Calif., a wholly owned subsidiary of Sabre Holdings Corp.
Companies responding to GetThere's survey said 41 per cent of their business travel is now booked on-line, up from 24 per cent a year ago. They also reported the tools saved them an average of 15 per cent on air fares and cut travel-agency fees by 43 per cent.
Mark Orttung, the company's vice-president of product marketing, says the cost of setting up the software is low and usage fees are approximately $7 (U.S.) for each transaction. With savings ranging from $75 to $100 for each booking, the return on investment is about 1,000 per cent -- up to 10 times what you spend, he says.
Mr. Schnur says Canadian users of CTO, a version of GetThere's booking engine, are reporting savings of 10 to 20 per cent on air fares, even though there is less competition in the domestic air-travel market.
Companies save money because the on-line tool shows travellers all the different options available for each trip they plan, so they can see at a glance how they can cut costs by booking early or choosing certain flights, while taking advantage of discounts that their company has negotiated, Mr. Schnur says.
"It's what we call the guilt factor," says Marka Jenkins, chief executive officer of Highwire Inc. of Seattle, Wash., a part of Cendant Corp. and another major supplier of corporate on-line booking technology.
She says employees would have a hard time justifying a more expensive choice or a departure from corporate travel policies, once an on-line tool has shown them the cheapest approved flights.
Employees are more accountable on-line than they are when booking by phone, she says. "If you are back and forth on the phone with your travel agent, you don't have to click a button that says, 'I am purposefully taking an out-of-policy trip costing $500 more.' "
Ms. Jenkins says today's tight economy has encouraged the use of on-line tools.
"At the time of the dot-com boom, you could hardly recruit enough employees, so you would never tell them to use a tool they didn't want to use, but now booking tools are taking off because it is time for policy, a time of looking for cost reductions in all lines of business," she says.
While some companies require employees to use on-line tools, others rely on training and persuasion, says Mr. Schnur, noting that Amex offers change-management programs to help companies increase use of the new technology.
"You can't just send out an e-mail, saying 'Here is the URL.' There has to be a concerted effort to drive change in behaviour."
Ms. Guillette says it was a major challenge, even in a technologically oriented firm such as Fujitsu Consulting, to get employees to switch from travel agents to on-line tools.
"We've been in business for 30 years and people are used to picking up the phone to call a travel agent," she says. But, she adds, usage has increased to close to 95 per cent as a result of a comprehensive change-management program in the company's western region, the first in a series of such programs to be conducted across the country.
Once they have got used to the idea of booking their own travel on-line, employees love the convenience of being able to make reservations or change their reservations at any time from any place, Ms. Guillette says.
Corporate on-line booking tools may work better for a routine trip to Calgary than a multi-stage tour of Africa, says Randolph de Gooyer, vice-president of corporate development at Halifax-based Maritime Travel Inc.
"If I'm doing a complex trip to Africa, I probably want to make sure I have my counsellor involved directly, right from the start. If I'm doing routine trips to Toronto or Calgary, every week or every month, that type of travel lends itself to this tool. It's easy to use and I can save some money," he says.
Unlike popular on-line reservation sites for leisure travellers, where users sink or swim without human intervention, corporate booking tools give users the option of calling in the help of a live travel agent, whenever the going gets rough, Mr. de Gooyer says.
"There's an agency in the background and you can call if anything goes wrong. They can see the same thing on their screen that you are seeing on yours. They have your profile and your reservation," he says, noting that transaction fees are higher when a traveller gets help from an agent.
This flexibility is what makes on-corporate booking engines a win-win proposition for everyone involves, says Mr. Schnur, who notes that Web-based tools have helped corporate travel agencies reduce the amount of time counsellors spend on the telephone by more than half. "It is one of those rare occasions where everybody wins," he says.
One recent convert to on-line reservations is Maurice Robichaud, senior vice-president of Corporate Communications Ltd., a Halifax advertising and corporate affairs firm. He's just begun using Highwire's booking tool that is being marketed in Canada by Rosenbluth International and Halifax-based Maritime Travel.
Like many busy executives, Mr. Robichaud relies on his assistant to make travel arrangements on his behalf. But, in the past, this was often a complicated process involving several phone calls or rounds of telephone tag among him, his assistant and a travel agent.
"If you wanted to make some changes, there was a lot of toing and froing and you couldn't look at all the options available."
Now, his assistant can show him all the options for any given trip on a single computer screen, so that he can make a decision and have his travel booked within seconds, he says.
"There is no fuss. It is all done efficiently. And there is a reduction in transaction fees."