Black Car Cost Control

Jeff LaFave, founder and CEO of SummitQwest, has mastered the art of controlling black car costs for his corporate clients.  If you’re keen to see 15% savings in this category, read on…

A big pain in black car spend management is dealing with messy invoices from lots of suppliers. There can be dozens of price-related fields and factors.  Lots of rides need to be charged back to clients or business units.  Rides may not comply with travel policies…like the guy who took a black car to and from work for a year, yes, you guessed it – outside of company policy.

SummitQwest tackled this messy problem by creating SummitGround, a standardized black car invoicing platform. It makes a lot of sense for these reasons:

It’s Time For a New Generation of Travel Management

Next year will mark the 20th anniversary of the dawn of modern travel management.

In 1994 Delta cut commissions to travel agents, turned travel departments into cost centers overnight, and ushered in the need for more sophisticated management of the travel category.

Our industry responded well.  It developed a core set of best practices.  Online booking technology and Prism’s airline contract management tool accelerated the importance of having an effective travel policy.

Consolidation of TMCs, use of procurement techniques, improved data reporting, duty of care – all these and more are now well-known hallmarks of managing a corporate travel program.

We’ve learned how to add value. The body of knowledge is solid, stable, strong.  The castles of best practices have been built.

But castles have limits.  They are neither mobile nor flexible. They aren’t suited for exploration and discovery.  After 20 years, we need explorers willing to chart new courses, to explore new frontiers.

It’s time to search beyond the diminishing returns of Managed Travel 1.0.  

AA-US Merger Implications for Gov and Biz Travel

This morning I pointed out some new frontiers in managed travel to the Society of Government Travel Professionals.  Things like traveler friction, trip tailoring, edit rights, Managed Travel 2.0 and traveler dashboards, along with their implications for the government travel program. (here’s the full deck)

Then I shared this slide to make the point that airfares will go up after the AA-US merger:

Fewer competitors in a market result in higher profit margins for the suppliers. Looks like that basic economic theory holds true in the airline category. (For non-government readers, YCA fares are the U.S. Government’s equivalent of full Y fares – fully refundable, last seat availability in coach.)

The significant implication for the U.S. Government and businesses

Will Managed Travel 2.0 Do Away With Discounts?

A colleague recently asked if travel suppliers will continue to offer discounts in the world of Managed Travel 2.0.

“Why would suppliers offer discounts under this open booking format?  Why would they simply not let their revenue management team set prices and do away with all discounts?”

Discounts won’t go away in MT 2.0. Here’s why:

Let’s assume that suppliers would still want more than their fair (i.e., unmanaged) share of a corporate account’s business. How will they get that extra share?

Suppliers can expect to get their fair share by

What’s the airline’s cost of your ticket?

How helpful would it be to know the airline’s cost of any ticket?

Procurement pros often use cost modeling to estimate profit margins, then use that as  context for price negotiations.

But airline pricing doesn’t depend much (some would say at all) on costs – it’s all about supply and demand.

Evan Konwiser and I are developing a website aimed at this issue.  The initial focus is on the consumer market, but we are keen to understand the potential for the corporate travel market as well.

Your feedback will be greatly appreciated!  Click here to weigh in using this 8-question, 3-minute survey: https://aytm.com/r762623

Feel free to share the survey link as you wish.  The survey will close out after 250 responses.

Alternatively, your comments here are most welcome, as always.

The End of Travel Data Darkness

Ending Travel Data Darkness with a Switch

This is the year in which travel data darkness begins to die.

By data darkness, I mean the opacity of travel booking data made outside of company-approved booking channels.  Exhibit A – hotel bookings made on Brand.com. Given that most companies can’t see 40-50% of their hotel bookings, this is a big black hole for most travel managers. And safety/security managers. And tax managers (more on this later).

Sure, you may get this data via the corporate credit card, or eventually via the expense report, but by then that data’s wattage is pretty dim.  Surely you need brighter data – more detail, in real time, regardless of how or where your travelers book.

No problem.  The solution – conceptually – is so close and so simple. And it has tax benefits to boot.

It’s your company’s

When To Greenlight an Open Booking

(click for a larger view)

When does it make sense for travelers to book outside the corporate channel?  Whenever you can get through each of these three gates:

1) Will the open booking data be acquired quickly by the corporate traveler security system?  This is a show-stopper for a lot of sites.

Some solutions are to use a tool like ProcureApp, or getting travelers to forward their bookings to an itinerary management tool, like TripIt.  Soon, we’ll see data capture solutions from Concur and GDSX, among others.  If getting the data is not a problem, then onward…

2) Will the  consumer site provide cost-competitive prices?

The Future for Travel Management Companies

Managed Travel 2.0 has a huge implication for travel management companies (TMCs).

Namely, the business model for TMCs is going to change.Here’s how I see it:

Fifth in a series on Managed Travel 2.0

First, let’s start with the core issue – the booking transaction.  It’s the center of the TMC’s universe.  They organize and price their business around this function.  Everything else is basically an ancillary service. It’s all about the transaction fee.

No surprise that clients view the transaction fee as a bull does a red cape.  It’s highly visible, a tempting target, and instinctively from a procurement perspective, it’s something to attack.

Key Principles of Managed Travel 2.0

Fourth in a series on Managed Travel 2.0

Freedom. That’s the big difference between managed and unmanaged travel. Under a managed travel program, travelers have some fence posts to abide by. The question is how much room to roam do you give your travelers?

In Managed Travel 2.0, travelers have a great deal of freedom, bounded by a few vital limits.    Let’s look at each of MT 2.0′s key principles:

1. Shop anywhere – period.  Why ride against the tide?  Your travelers are doing this anyway.  Let’s acknowledge it, accept it and move on.

2. Book anyone – so long as the supplier is safe.  Travelers need to know who to avoid. Classifying suppliers on safety is a core responsibility of travel managers. Not much of a restriction, practically speaking.

But that “book anyone” bit – does that include non-preferred suppliers?  Oh, yes.

The Rise of Managed Travel 2.0

Third in a series on Managed Travel 2.0

Creativity is often born from conflict.

For two decades, modern travel management has preached the virtues of travel policy compliance, use of preferred suppliers, and booking through the proper channels.

See GE’s description of its global travel program as Exhibit A.  It’s six sigma production line thinking at its best.  It’s the pursuit of travel program optimization via the logic of travel management.

But that policy-first approach frustrates travelers who have access to plenty of good consumer travel tools, who know the value of their time and their trips, and have no problem staying within their travel budget. For them, it’s all about the art of traveling.

Michael Tangney, Google’s travel program manager, gets credit for pioneering a new approach in 2008. Give travelers a target airfare.  If they book