As an industry, we have our own set of nuances and acronyms that sometime need explanation when in a meeting (virtual or live) with business managers who are not primarily responsible for travel. I’d like to address two of them, and propose a refresh for each.
New Normal: This is an over-used expression and I could fill this article with the various website definitions. The best came from Wikipedia: “The term has been employed in relation to World War I, the financial crisis of 2007-2008, September 11 attacks, the aftermath of the 2008–2012 global recession, the COVID-19 pandemic and other events.”
I’m proposing that the aftermath of COVID-19 is unlike that of any war, financial crisis or terrorist event. So let’s consider replacing “New Normal” with “Neo Normal” to reflect the unique impact of the pandemic globally and its long-term repercussions on travel, especially business travel. Everyone agrees that we will see a slow recovery of business travel, and the same ‘everyone’ seems to have settled on 2019 as a baseline. However, I’m on record as saying that some aspects of business travel will not repeat past performance for the foreseeable future.
The two areas of business travel that will be under financial challenge and C-level oversight are internal meetings and external conferences and events. The virtual meetings platforms of Teams, Webex and Zoom (plus some really cool event platforms), have demonstrated that you don’t have to congregate with thousands of attendees to have a “successful event.” As to internal travel costs, it will be hard to justify flying cross-country (or over a body of water) to meet with colleagues in-person, unless you can demonstrate a clear ROI for the need to travel and incur air/hotel/meal expenses for purely internal discussions.
Which brings me to the second topic: ROI The typical definition of Return On Investment presents challenges in justifying certain types of meetings, and is a huge challenge to quantify during a travel management company RFP process (for every bidder other than the incumbent). An attempt to quantify the ROI on an internal meeting is at best subjective, and cannot conform to a financial model that shows the true ROI of that meeting.
As far as TMC RFP’s, I’ve sat through hundreds of hours of TMC presentations, and it’s extremely challenging for the (non-incumbent) TMC to show that switching to their TMC has a robust and identifiable ROI. The challenge in that ROI model and definition, is the difference in TMC fees alone cannot provide an ROI to justify the switch in TMC providers. This is uniquely challenging because there is a definite “cost of change” that does not have an independent methodology for computation (the incumbent always comes up with a much higher COC than the bidders).
In a Business Travel Executive article a year ago, I touched on ROI at the end of the article, so this is an opportune moment to expand on the acronym. In guiding our clients during the TMC selection process, we help them to focus on a different definition of ROI: Reduce, Optimize, Improve
Here are a few areas where you can in fact measure the ROI whether it’s to justify an internal meeting, or more widely to make selection of a TMC based on metrics beyond their transaction fees:
Reduce: 1. Cost of travel 2. Number of preferred hotels 3. Time spent by travelers and travel arrangers on research 4. Number of offline calls that could have been online or via chat
Optimize: 1. The number of preferred airlines to provide the best contract metrics 2. The number of preferred hotels in key markets 3. Traveler productivity (pre-trip and on the road) 4. The OBT performance (show the most relevant inventory)
Improve: 1. User productivity for online and offline 2. User experience and therefore the travel program ratings/internal assessments 3. Traveler safety and security 4. Destination knowledge and nuances
Hopefully this expanded definition will resonate and result in more tangible ways to measure the improvement in a travel program or the value of a discretionary travel event. I remain optimistic that we will soon see a continued improvement toward the normalization of business travel for the benefit of all buyers and providers, as we are all this together!
Andrew W. Menkes, CTC, is the Founder & CEO of Partnership Travel Consulting, a global corporate travel sourcing and strategy company. A business travel pioneer, Andrew has led technology innovation in the industry, including the first internet-based electronic ticket purchase. He was the first travel manager to be accredited by ARC to operate a Corporate Travel Department. He has been named Travel Manager of the Year, listed twice in the Top 25 Most Influential Business Travel Executives, and was the first travel buyer to be inducted into the Business Travel Hall of Fame.