Corporate Travel moves Online

In 2003, corporate travel bookings made on the Internet compared to the conventional direct bookings by telephone, fax or through the traditional travel agent was at only 12%. But research consultancy marketSHARE predicts that this number will skyrocket to 28% by 2008.

The growth in online travel management by businesses can be attributed to the increasing necessity and prevalence of business travel, and to the growing reliance by business travellers on the Internet and technology on their trips.

A recent survey of more than 450 travellers in the United Kingdom by consulting firm Accenture, revealed that business travellers are becoming increasingly dependent on the Internet with some 53% of the respondents booking their trips online, 90% of them using the Internet to search flight times and availability, and two-thirds checking-in online.

Abacus President and CEO Don Birch agreed that online corporate travel in Asia is becoming more prevalent, “Following the region’s growth and uptake in online travel, we anticipate the needs of corporate travellers will become increasingly demanding and complex. It is crucial now, more than ever, for corporate business travel agents, service providers and suppliers to equip themselves with a wide range of the best travel products and solutions to get the most out of the corporate travel spend.”

And while the needs of each corporate traveller are unique, companies all around the world want just two things when it comes to managing corporate travel – choice and convenience. 

Not surprisingly, corporations have embraced the Internet as a major distribution channel. According to MasterCard MasterIndex and Insights Reports, 43% of corporate travel arrangements are done by an in-house travel department. However, for those not trained in online travel systems, booking through the Internet can be time consuming and challenging. The costs vary depending on the booking channel used, either directly from airlines or through intermediaries. Each channel also offers a choice of sub-channels. Corporations therefore usually have to search through several travel suppliers’ websites before getting the best value fares.

Reducing annual corporate travel spend

“Over the past few years, we have noticed a growing trend towards online travel management as companies seek to maximise cost-savings while balancing an increasing need for corporate travel in today’s inter-connected world,” notes Mr Birch. “Which is why we took the initiative to launch Abacus GetThere – providing companies with the tools they need to get the best value out of their travel programmes and giving business travellers easy access to corporate rates.”

Eighty-five percent of financial executives surveyed in January 2005 feel their companies will spend more or the same on corporate travel in the coming year, according to a recent independent business travel survey conducted for the Association of Corporate Travel Executives (ACTE), an organisation dedicated to the science of business travel management. Survey results also revealed that more financial executives are starting to base travel budgets on a company's expected sales, revenue and marketing goals.

Abacus’ online corporate booking solution, GetThere, provides corporations with a cost-effective travel management programme. It consolidates and assists on a number of levels to analyse travel policies and supplier relationships, identify cost-saving opportunities, manage and monitor travel programmes closely as well as leverage technology to streamline the programme and process the data. 

Direct benefits to the corporate traveller when using a corporate booking tool include:

- The provision of easy-to-identify icons on search pages that direct the traveller to preferred air carriers, hotels, and auto providers.

- The ability to outline the company’s travel policy, reducing the need to understand complicated and lengthy booking guidelines.

- The ability to create a trip template for regular trips to certain locations, allowing for preferred times, flights and even seat allocations.

- The ability to book all elements of their trip; including air tickets, car rental and hotels reservations, ultimately saving time contacting three different service providers.

- Providing reports on travel undertaken and savings made for the company.

The online travel management tool also supports the role of travel agents. Once bookings on the corporate travel system are made, any ticketing, whether paper or electronic, must be generated by a travel agency. One of the benefits for travel agents is that with the basic bookings fare search component removed, travel agents can turn their focus on building more business and upgrading themselves to travel consultants – providing increased value to their customers.

“This is a value add for both companies and travel agents”, said Don Birch. “With a corporate booking tool such as Abacus’ GetThere, there will be higher retention of travel agents by companies as the online travel management systems used by them are fully integrated with that of their travel agents. In addition, some corporations will still pay for on-site travel services for more complex tour options – meaning more revenue for the travel agents. Certainly, there is a whole host of opportunities in the corporate travel market for travel agents to tap into.”

First introduced to Asia in 2002, the GetThere solution has more than 3,000 corporate clients worldwide, representing more than US$15 billion in annual corporate travel billings. 

One of the world’s largest financial institutions, Bank of America, spends some US$125 million annually on domestic travel for its 50,000 frequent travellers. Bank of America implemented the GetThere system to create more efficient travel processes for its employees. At the same time it has achieved significant cost savings for the company, including 94% traveller usage of online system, 10% reduction in average domestic ticket and an 8% reduction in average international ticket.

Vice President, Supplier Manager of Bank of America, Michael Lucontoni said, “The travel team will continue to research and implement additional ways to increase adoption and further reduce travel costs as part of a company-wide initiative. The more that GetThere automates different aspects of the travel experience, the less our travellers feel the need to pick up the phone for assistance. This creates a win-win situation for everyone which we are looking forward to.” 

Other key benefits of a corporate booking tool include cost savings and improved traveller experience. It offers lower airfares and hotel rates, increased use of preferred suppliers to better leverage negotiated rates, and better travel selection with multiple low-fare options. Staff productivity is improved as travel managers are aided with automated profile, policy and contract management controls, as well as better reporting and monitoring tools. The business traveller also enjoys more convenience, flexibility and efficiency, empowerment and better information and choices. 

“Abacus GetThere provides instant returns and benefits for businesses. For example, in the UK, companies using GetThere are achieving between 50 and 80% online adoption within their first three months of usage and reducing their overall annual travel spend by over 15%,” said Mr Birch.

Eastman Kodak Company, a world leader in imaging, deployed the system in 1999 and has achieved more than US$1 million in savings in its travel budget. Kodak has 12,000 travellers in the US and spends around US$28 million in air travel annually. In 2002, the company achieved 61% online adoption by its corporate travellers with more than 25,000 tickets booked on the internet, and a 71% reduction in the average ticket price.

Travel Coordinator of Eastman Kodak Company, Barb Bunting said, “Our message to travellers was that using the online booking system was the right thing to do for the company because of the cost savings it could provide us.”

Mr Birch added, ”Global agents are relatively receptive to online travel management tools. With the growing Internet accessibility in Asia, online booking engines are becoming increasingly common - there is a whole host of opportunities in the corporate market for travel agents to tap into. And we’ve only just begun to scratch the surface.”

In Asia, Abacus GetThere has recently added 11 new corporate customers, with more potential customers set to come online in the next 3 to 6 months. With the bulk of initial customers located in Singapore, India and Hong Kong, other Asian markets are quickly beginning to understand the benefits of providing the business traveller with the flexibility and freedom of making their own reservations.

Future outlook in corporate travel environment

As the Asian economic environment becomes more stable, more corporations will be influenced to book travel online for greater convenience. Travel agents will, at the same time, take the opportunity to evolve themselves to become consultants to provide more value to the customers, and build more business to compete effectively in the ever-changing travel landscape. They will continue to be the main partners for corporations to fill their seats, through GDSs such as Abacus.

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