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YOUR
OPPORTUNITY TO MEET FACE-TO-FACE WITH YOUR COLLEAGUES AND
DISCUSS THE FUTURE OF THE BUSINESS TRAVEL INDUSTRY
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Canal Plus
In late September 2004, senior business travel industry leaders gathered to discuss local and European issues impacting their daily business at the Holiday Inn in Amsterdam.
They all agreed that our industry is the only sector to have undergone so many radical changes in the recent months.
Attendees debated about two major issues: Multi-channelling and the impact of airlines commission termination.
Herman Mensink, Vice President, EMEA, PRISM Group, Inc., kicked-off the day by presenting the result of a survey and travel procurement.
See Herman's presentation
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Survey results
- Do you allow your travelers to book their travel outside of a preferred channel (agency, self-booking tool)?
If yes, please indicate the main reasons for doing so:
- Lower Costs - 20%
- Vendor does not participate in GDS - 20%
- Vendor agreement is based on direct booking - 20%
- Company culture - 0%
- No mandate to use preferred channel in the travel policy - 0%
- N/A travelers may not book outside of preferred channel - 40%
- Does your agency use any other technology tool besides the GDS and phone to access travel vendor inventory and make bookings?
- What is the primary drawback currently to booking outside of preferred channels?
- Security and locating traveling employees in an emergency - 18%
- Consolidated reporting - 82%
- Credit card reconciliation - 0%
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Peter Bost, Director, International Business Development, ATP International, session's was entitled "The implication of zero commission".
It investigated the new pricing structures resulting from airlines commission termination.
See Peter's presentation
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After a morning of passionate debates Peter Sijbers, International Category Manager, at Philips Electronics gathered notes from the round-table and summarized them in a fascinating wrap-up presentation.
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Here are notes taken during the PowerTalk discussion:
Session 1. What you need to know about multi-channelling
From a multi-channeling perspective:
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1. What is the future of the GDS's?
There is a role for inventory consolidation, but traditional GDS's are no longer the only one in this market.
There is a need for specific technology partner for the future for "customer". (Customer = TMC, Corporate & agency)
We are moving toward diversification, vertical distribution.
Yes there is a future but through consolidation. ICT provider for suppliers and airlines. Decrease of market share to e-tools and market places.
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2. How should low-cost airlines be managed?
Depending on contracts with other suppliers low cost carriers are an interesting alternative for corporations.
'One Stop Shop" integrated fashion.
Direct Booking- Data warehousing. Interface listing lowcost with together with traditional airlines.
Future only +/- four airline groups.
E-tools linked into old GDS model (transparent/multiple suppliers), MIS, credit card and enhanced data.
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3. How do you ensure consistency in data provision?
All travel through one channel.
Having a technology partner that delivers reliable data.
Single Graphical User Interface, various data feeds- data warehouse.
More credit card use, more enhanced data feeds within the industry, use data consolidators, through the use of expense management systems.
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4. What is the impact of airline alliances vs individual airlines?
Currently more added value for travellers than corporates. The added value is depending on the travel policy and routes/destinations and how many airlines you deal with. The financial advantages are more for airlines themselves, not yet for corporates.
Necessity for accurate data becomes vital.
Consolidated sellers platform, MIS and enhanced data results in decreases of overhead costs on supplier and buyer. Low cost airlines will be left out, brands will disappear
5. Will this complex distribution chain be overall a cheaper solution from a corporate cost-perspective?
The new distribution system has positive cost effects on travel process, but in order to profit from them you need to direct all offers through one channel in order to keep a global view.
Increases transparency, but it is not necessarily cheaper.
Airlines cannot ignore their role and responsibility in the distribution. Internet only works if you've done your homework and defined your specs (e.g. eBay)
Session 2. The Implication of Zero Commission
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1. Who will benefit from reduced commissions- will this translate in reduced fares- what to do to ensure savings flow back to travellers?
Overall attendees agreee that If we don't do anything (fight it) airlines will gain from it.
A KLM representive said; it will flow back to the corporate. Our opinion; cost reduction for the carrier, not beneficial for the corporate/traveller.
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2. Zero-commission - if property implemented with industry support - the best pricing structure for the future?
In principle it is a good initiative (transparency) but will it happen in the long term? Will all the airlines do the same?
Zero Commission has not relation to fare structure.
It has to be done through out EMEA otherwise we run the risk of cross border issuing; loss of local business for carriers.
3. What advantages will result from un-bundling of prices? What are the pitfalls?
Unbundling of prices will result in transparency. The pitfall are more kickbacks and more charges.
Transparency and benchmark are an opportunity, but do they give the total picture on costs?
Advantage: transparency for end-user and modular pricing. Pitfalls: You could end up with a very basic package and paying for every extra module- pricing complexity.
End user will pay more. Pricing power to the supplier.
4. Will central EU IATA and BSP initiatives lead to better services and lower prices?
Yes, an example is cross border tickets. Travel agencies can work cheaper (more efficient).
5. Is single EU pricing policy- like zero commission- essential for achieving a single European travel market? Are national initiatives- like KLM's zero commission- still relevant in today's marketplace?
Yes, depending on competition and EU support.
It has no contribution to today's market place!
Changes in IATA regulations will move over benefit a EU pricing policy. KLM initiative is not seen as a local initiative but rather as an industry initiative.
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| PowerTalk
Location |
Holiday Inn
De boelelaan 2
1083 HJ Amsterdam
The Netherlands
Tel: +31 (0)20 646 23 00
Fax: +31 (0)20 517 23 51
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Planning Committee |
Peter Bost, Director International Business Development, ATP International
Annelies Krebs, Director Account Management, Carlson Wagonlit Travel
Ralf Mebius, Travel Manager, MA-BE-US
Herman Mensink, Vice President EMEA, PRISM Group Inc.
Peter Sijbers, Global Commodity Manager, Philips Electronics
Lian Wolfs, Associate Director Benelux, AirPlus International
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