As the effects on the pandemic wrecked the travel industry and pushed economies into recession, a first wave of industry supplier bankruptcies and M&A activity hit travel management companies and car rental firms. Changes to the competitive set mean travel buyers may need to reassess strategies.
Two of the four largest rental companies in North America, Hertz and Advantage Rent a Car, filed for Chapter 11. Hertz said it would be business as usual across all divisions. Travel managers in early summer corroborated that Hertz had maintained operations and responded to RFPs. Advantage, however, shed several branch locations, including 10 US airport operations that Germany-based Sixt acquired.
Houston-based Frosch International Travel agreed to acquire CorpTrav of Naperville, IL, which had been part of the Radius Travel network. Frosch operates in dozens of locations around the world. It bought TCG Consulting last year and then acquired Luxe Travel, an Irvine, CA-based TMC, in January.
In the global corporate card space, American Express soon may have fewer competitors, according to CEO Steve Squeri. "This market is not as fruitful as it once was,” he said during a Bernstein conference in late May. "You may see others exit the market as they did a number of years ago." It was about five years ago that JPMorgan Chase abandoned the international corporate card market. That left Amex, Bank of America and Citi as key global players. Duty of Care and Risk Management (Staci)
Meanwhile, an American Express joint venture got approval to process local payments in mainland China, the first foreign network cleared for such activity.
Time To Finally Skip the Hotel RFP?
It seems Covid-19 will present an opportunity to ditch the much-criticized hotel request for proposals process, at least temporarily. Buyers may not see the need to initiate a bidding process this year, given severely depressed volumes and uncertain travel patterns. Big hotel companies aren't interested in negotiating new rates with corporate accounts. Even if they are, their resources are stretched thin. Many hotels instead prefer to extend 2020 corporate pricing through 2021. They're also aware that reduced rates in a weak market often beat corporate deals.
Speaking during a Traxo webinar in June, IHG SVP of global sales Derek DeCross said fixed negotiated rates and associated amenities would stay intact but the company switched its focus to dynamic rates and chainwide programs "to ensure customers have market-appropriate rates that stem from each hotel's best flexible rate."
Tripbam founder Steve Reynolds is a longtime proponent of dynamic pricing, which bases prices on discounts off a property's best available rates. "In a high-rate volatility market, which we think we'll have for the next two-and-a-half years, if not longer, let's go dynamic now. You'll probably like it long term," he said during a July video discussion posted by data management company PredictX. "If things stabilize and everyone can predict volumes and average daily rates, then maybe you slide back to static [negotiated rates] if you can get even more of a discount as a result."
Some travel procurement pros still intend to issue RFPs this year or renegotiate deals; that's their job. Several suggested using 2019 data as the baseline and communicating to hotels expected differences for 2021. Another idea is to pull data for the 12 months through February 2020, when travel volumes started plummeting.
OBTs Adapt
Some companies temporarily deactivated their self-booking tools to better control bookings amid cost-cutting efforts and ensure travelers are fully informed. Wherever they fell out of favor, booking tools will back. And they'll have new features to help manage corporate travel in the COVID era. Several now bring in hygiene and safety attributes from ATPCO’s Routehappy, which collects data from more than 100 airlines. They include Serko's Zeno, TripActions and Corporate Travel Management's Lightning system.
Serko, which has been signing reseller deals with US-based TMCs, temporarily waived setup fees and usage minimums during the pandemic. The New Zealand-based company also is making its TMC commission program more robust.
Deem, owned by Enterprise Holdings, now provides funds to partners for tailored marketing programs, training and sales incentives. It enables TMCs to deploy the Deem Rise platform, which allows for "light" customization and lets end users self-enroll. Separately, Deem is bringing its booking and travel management technology to Direct Travel's mobile app. Deem also this year signed Apple and Toyota Motor North America as new online booking tool users.
Sabre GetThere, meanwhile, now integrates with TMC mobile apps built by mTrip. MTrip's TMC clients have included Altour, Atlas Travel, Fox World Travel, MeritBiz, Omega World Travel, Professional Travel Inc. and TravelStore. The current GetThere roadmap focuses on traveler experience enhancements and virtual payment.
Travel Management Consultancies Power Up
Andy Menkes left his executive role at BCD Travel, restarted his travel management consultancy and brought in TMC vet Dee Runyan. Menkes had put Partnership Travel Consulting on hiatus when he joined BCD in 2018. Several former PTC associates renewed their affiliation with the group. Meanwhile, Nina & Pinta appointed another TMC vet, Joe Currie, as director of the Americas. Nina & Pinta also has representation in London, Johannesburg and Toronto. At Get Travel Solutions, run by Karoline Mayr, new consultants include former travel and expense managers Nicholas Battersby and Jason Sportsman.
Remember NDC?
Beginning Jan. 4, 2021, Singapore Airlines will add a fee to "traditional" GDS bookings. The airline told travel agencies they could avoid it by booking through an "NDC channel." New Distribution Capability-enabled sales channels will include the carrier's new Agent 360 portal, scheduled to go live in November. Singapore also noted that it "integrated a comprehensive list of technology partners" to help agencies adopt NDC. Some other carriers levy fees for bookings in channels they disfavor. Those policies often relate to efforts to promote NDC-enabled content. Various agreements between airlines, global distribution system operators and travel management companies protect against some of those surcharges.
