Concern over trust and transparency in relationships with travel management companies represents an evergreen problem for corporate travel program managers. There aren’t many easy answers for the multitude of questions, but it’s clear that buyers need to pay attention.
That’s the advice from a trio of travel management veterans speaking during the October Business Travel Executive Town Hall broadcast via LinkedIn. The three included Cathy Sharpe, ITW director of strategic sourcing for global travel and expense management services, SAS Institute director of travel operations Richard Clowes, and Mark Ziegler, senior travel manager at NetApp.
The current environment is introducing a litany of challenges causing corporate travel managers to grow more apprehensive. Some are concerned as they see full-content deals between airlines and distribution system providers fall from favor. Consolidation in the TMC space and the rise of models that blur the lines between TMCs and self-service booking tools can exacerbate the trepidation.
Travel managers strive to be comfortable with access to content and the arrangement of fare and rate displays. Behind the scenes, the multitude of revenue streams coming from both buyers and suppliers raises questions.
For Cathy Sharpe, the challenge of travelers finding lower fares outside the program grew during the COVID recovery. With airline websites offering international business class fares sometimes thousands of dollars cheaper than what travelers see in Concur, she explained, “We’ve had to find workarounds to ensure that we are able to track that traveler for safety and security purposes, for unused ticket purposes, etc.”
The situation weighs heavily on ITW’s long-time travel consultants. “Travelers ask if the agent can match it,” she said. “They can’t, and it makes them feel so bad because they can’t service their clients up to their expectations. It’s forced us to find different avenues to get those direct fares.”
Buyers expect the problem to get worse. Direct connects furnished by some booking platforms could be a solution for some programs.
Sourcing the Content
“Content is key,” according to Richard Clowes at SAS. “Without the content, you don’t have the trust in the tool, and people will go offline and do their own thing.”
SAS in August ended its ARC-accredited Corporate Travel Department operation after nearly two decades. Part of the reason was that transaction volume hadn’t recovered to more than 50 percent of the pre-COVID level and the company could no longer justify that financial model. Another reason was the need to access content from sources other than GDSs. With its direct connections to some airlines, Spotnana was the choice.
NetApp was poised to start its own Spotnana pilot. “The majority of the airlines that I work with can be direct connect,” said senior travel manager Mark Ziegler. With an eye on cutting costs incurred from using GDSs, “all the airlines eventually want to do that.”
Sharpe reckoned that a large majority of ITW’s bookings could be handled by direct connections. Without them, she said, “I don’t believe that we’re ever going to receive that lowest fare content moving forward.”
Enter AI
Without that confidence, noise from travelers will continue as they discover more attractive offers elsewhere. The buyers worried that AI would further complicate some things.
Ziegler suspects that AI bookings will be driven more by a traveler’s history, preferences and characteristics than their employer’s preferences and policies. “We’re going to have to find ways to get around that,” he said. “With AI, unless we have some control over how it’s programmed, it’s going to leave us perhaps in the lurch.”
Clowes expects AI to “drastically” transform booking tools as airlines continue pushing NDC. “How are you going to be able to sell your NDC deal that you’ve got with XYZ Airline and emphasize it in the tool so that it showcases whatever deal you’ve got with them that may include certain things?” he asked. “The tools will have to adjust. Are they adaptable to all these changes that are going to take place over the next few years that are really going to push the limits?”
Positioned to help sort all this out, TMCs have their own interests to consider. “Working with TMCs, there is a conflict there because of that revenue” they receive when processing bookings via a GDS, Ziegler said. “If we were to remove that, we’d end up having to pay more for their services. And it’s frustrating.”
By operating as a CTD – serving as its own agency and taking in any resulting supplier revenue for itself – SAS was able to see the associated dollar figures. Regarding hotel commissions, “the floodgates opened,” Clowes said. “It was like four times what we expected. It makes you wonder, from that whole trust thing, where was that money going before? It was going to the TMC, and it certainly wasn’t making it into the revenue share” agreement between SAS and the TMC.
Both Ziegler and Sharpe said they didn’t like the idea of a TMC, through its “marketplace,” collecting content and deciding if and how to present it. “The power of the information that they have on every single one of my travelers is great,” Sharpe said. “I used to think of Concur as an agnostic platform, but there are a lot of hands trying to grab a piece of candy. It’s very convoluted and very difficult.”
Who Manages the Content?
Trying to manage content preferencing in Concur is “a daily battle,” Sharpe said, referring to GDS tools that enable TMCs to promote or suppress fares. “The TMCs are trying to figure out how to maximize their revenue, which many times conflicts with the things that we want to display to our travelers.”
Given all that, and ITW’s inability to stand behind a previously “firm” statement to travelers about offering the best fares, “we had no choice but to go back to our TMC and start flushing out what’s happening,” she said. “It’s not just a TMC conversation. It’s an airline conversation as well. How are these airlines partnered with the TMCs, but sometimes undercutting the fares that you might see through your TMC? And then it gets back to the GDS agreements. That’s what led us to auditing and trying to fix this problem,” she explained.
“Take control of your program,” Sharpe advised fellow buyers. “Make sure that your TMC is not managing your tool. Question your configurations. Do an audit of your configuration. Don’t let others choose that path for you.” Consider new entrants, she added.
That’s what Clowes did with the SAS implementation of Spotnana, a relatively new platform, in conjunction with Direct Travel, a travel management company. “Because we’re working with a TMC again, we are starting to build that trust again,” he said.
“The bottom line is, I want my travelers to have the best source of fares and inventory,” Ziegler said. “I want them to have the easiest experience they can in their booking because they have better things to do, and if they need help from a counselor, they get the best service they can from my partners at my TMC.”
Visit businesstravelexecutive.com to listen to this complete LinkedIn Audio session and find details about the next BTE Town Hall.
