Sophisticated information reporting tools and the power of bulk purchasing have put travel consultants back in control.
BY: YOKE HARE LEE
In June 2007, a terrorist and his accomplice drove a dark green jeep loaded with several propane canisters – their mission: to bomb the Glasgow Airport in Scotland. The terrorist were stopped but not before some damage was done. A Kiwi businessman was in transit at London’s Gatwick, on his way to Glasgow. His corporate travel agent, alerted to terrorist attack on Glasgow, was able to quickly locate him, and help plan his next flight path.
This, says, HRG Travel NZ’s Lynn Adams-Pearce, is one of the real reasons why companies still use corporate travel agents who seemed to have survived the onslaught of self-help online internet booking systems.
Travel management companies have been investing in upgrading their travel management systems to provide better services to their ever-demanding customers who not only want cost effective flights, hotels, car rentals but also other more modern-day imperatives such as records of their carbon footprint. “We have had companies that have come back to us after trying to sort out their own travel arrangements. Very quickly, they realise they don’t have the same access to the type of systems we have in place,” adds Adams-Pearce, general manager (operations and corporate services) at HRG Travel, a local affiliate of the international firm of the same name.
A typical employee travelling who makes his/her own travel arrangements would have to spend time combing online booking sites or airline sites to find the best fares.
Adams-Pearce says that the average time taken to complete a transaction, according to one estimate, is about 22 minutes. “Travel management companies – with the different tools available to them – can do that in two minutes. It has been shown that in the long run, we are still able to provide the best and most appropriate fares – although not necessarily the cheapest.”
For larger corporations with many frequent travellers, travel management companies also bring on what internet booking sites cannot offer. One is the ability to keep a close watch on a company’s carbon footprint from its travel activities. “The more socially responsible companies have specifications on what type of cars they rent. One company has a specification that their rental cars have to be of l.6-litre capacity or less. Others like to keep track of what type of aircraft they board. Travel management companies are able to keep companies aware of the suppliers that they are using,” she says.
Over the last four to five years, airlines have started to provide online booking facilities for customers. The mushrooming of other internet travel sites has also lured business from travel management companies. In fact, global travel sites such as Travelocity, Orbitz and Expedia have cranked up the competition, some by reducing the fees they charge on flight bookings, others by offering free bookings for limited promotional periods.
Others, such as Flight Centre New Zealand, have realised that increasingly, not only larger companies have travel needs. Small and medium sized enterprises (SMEs) serve as an attractive niche as well. Flight Centre started its new brand Flight Centre Business Travel (FCBT) in 2008 with an outlet in Albany, North Shore, and has quickly added three other stores, one each in Greenlane, Hamilton and Tauranga.
Marie Pilkington, public relations manager for Flight Centre in New Zealand, says FCBT provides SMEs a place to get professional travel help. “It is a very cost efficient way for small businesses to get our expertise.”
Customers have various levels of complexity in their travel needs. “The way each client likes to engage with FCBT and FCm Travel (Flight Centre’s other corporate travel brand) solutions differs greatly according to each business’ needs,” Pilkington adds.
EYE ON EXPENSE
Corporations are more intense in scrutinising their travel expense. What corporate travel management companies are now offering are sophisticated reporting tools that can centralise myriad travel expense items under one system so companies can analyse their spending patterns.
And the cost of accessing all this – according to Adams-Pearce – is fairly small relative to a company’s overall travel expenses. She cites as an example, a company that spends $3 million in annual travel expenditure would assign between 1 and 2% of that to their travel management company.
- Travel consultants can execute transactions in less time than what a company employee is capable of.
- Carbon footprint arising from corporate travel is now regularly measured by socially responsible companies.
- A key question to ask for those seeking to do online booking themselves is: are you able to compare costs across all key components of your business trip?
- Powerful cost analysis and reporting tools from travel management companies can be integrated with a company’s reporting system, taking away a mountain of audit trail a company needs to do.