1996 Autumn ACTE Quarterly: President's Message | Automated Booking Systems | Countering Terrorism

Advances in travel technology + the reforming of the airline ticket distribution system = Viable Agentless Bookings.
What you need to know to make the new math work.

Travel managers have been hearing about "agentless" reservations for years, so it's not a surprise that the recent spate of news about the latest generation of automated, or self-booking reservation products has been met with either yawns or skepticism.

Thanks to dozens of launches of several different kinds of systems in the past six months, many of them developed in close cooperation with agencies, corporations, CRSs and third-party software developers, the yawns are being replaced by wide-eyed wonder. And while the skepticism remains, the early success of some of the new systems has led some industry players, including

Rick Lifsitz, Vice President of Marketing and Sales for E-Travel, a technology company, to estimate that 40-50% of bookings will be made this way five years from now.

In Europe, interest in self-booking products is growing as well. Speaking at the ACTE Global Conference in Madrid, Jose Antonio Tazon, CEO and President of Amadeus Global Travel Distribution, estimated that in Europe, 20% of total bookings will be generated on-line over the next five years. "Traditional" agency bookings will plummet to 45% of total bookings during this time, Tazon predicted. In the U.S., that number may be much lower much sooner.

Why the ongoing appeal of do-it-yourself bookings, even after years of less-than-workable products, an irritating amount of hype and plenty of vaporware? In a post commission-cap environment, where companies and agencies are taking very hard looks at transaction costs, self-booking systems can be substantial cost and time-savers. Patricia Stack, Vice President of Marketing for BTI Americas, predicts that these systems may save as much as 68-80% of the agency cost in processing a reservation. And that number, she added, doesn't put a number on the amount a company can save in increased productivity, now that those 30 minute per reservation phone calls to agents can be avoided.

For a big company, those numbers can quickly add up to millions saved every year. Wal-Mart, for example, which is beta-testing a customized version of Rosenbluth International's E-Res system, estimates that it will save 10% off its $30 million annual U.S. travel budget if the system is used to book 60% of domestic reservations.

Another advantage, besides improved efficiency, is tighter control over policy, since virtually all of these systems can be programmed to use negotiated fares as a default setting, and to only offer booking choices with preferred vendors. Ultimately, that gives companies much greater leverage come global-agreement time.

Agencies, once threatened by the technology that can render transactions "agentless," are, in the post-commission- cap era, far less threatened by them than ever before. "On the contrary," said Andy McGraw, Vice President of Sales for Travel One, 'we view self-bookings as a real opportunity to expand services and the consultative nature of our business. Besides," he pointed out, "we don't think there's such a thing as a 100% agentless system, where travelers never have to talk to an agent ever again. There always will be times when you need customer service, and a live, skilled agent on the other end of the phone. These systems don't replace call centers. Rather, they're additional tools to add value to our customers."

ACTE Quarterly took a look at some of the systems making news. The list is not meant to be exhaustive, but rather to reinforce the diversity of types of configurations, and the customization possibilities available to corporate customers.

TravelNet Voyager. Voyager allows employees to automatically book air, hotel and car reservations from a personal computer or workstation. Since its release, Voyager it has been available as a client/server application running on UNIX, Windows and Apple Macintosh operating systems; it can be deployed as either an Internet or intranet application and accessed through Netscape and other Web browsers. Once a flight selection is made, the booking request is routed to the travel agency to process the tickets.

New is Voyager Phase One, an "entry-level" version designed for companies that want to automate the travel booking process but don't yet need some of the advanced reporting features of Voyager.

Plusses: Ability to easily play out what-if scenarios (as in what if I stayed over a Saturday night). An e-mail message can be sent to alert the traveler's supervisor about the trip purpose and estimated costs before ticketing.
Also of interest: Interfaces with Apollo, and since August, with Sabre.
Agency users: Carlson-Wagonlit, Mutual Travel. Corporate clients: Chiron Corporation, Sybase Inc., Aerospace Corp.

SABRE BTS is a software "suite" of four integrated applications from the GDS giant that provides travel booking, travel policy management, expense reporting and MIS reporting tools.

The reservations product, "Travel Planner," allows reservations to be easily made on a PC. The reservations template looks like a daily planner page; you drag air, car or hotel icons to the calendar and drop on the desired date to begin the booking process. There's real-time access to the Sabre CRS.

Plusses: The "Frequent Trip" feature allows users to book and confirm similar trips in less than a minute.
Also of interest: Sabre and IBM have announced their intent to jointly develop a Lotus Notes implementation of Travel Planner, which can be delivered via either Domino, Lotus's Web server, or a Web browser. Agency users: McCord Travel, American Express.

E-Travel, a privately held travel management and software company, develops and sells desktop reservation and management solutions tailored to corporations, travel agencies, travelers and suppliers nationally and internationally.

Its Windows-based client-server application allows users to view, in real time, a wide range of available travel options. Policy parameters and preferred travel vendors are loaded so the display only shows what the travel manager wants users to see. (Corporations can establish up to 100 different classes of travelers, i.e. "executive," CEO, marketing manager level 2, which determine which options will appear on a traveler's screen.)

For frequently used city-pairs, "Packaged Trips" can programmed in advance by the travel manager. Pretrip authorization is available between reservation and booking; the supervisor will be also be see lower cost alternatives that may have been declined, and trip justification from the traveler who wants to book out of policy. Supervisors are immediately notified whenever the monetary value of a trip exceeds a pre-specified value. Real-time reports and queries are available to the travel manager or agency to track spending before and after the travel actually occurs.

How Much?
Price is, of course, a major issue to consider when comparing systems�or even to automate in the first place. Fees can vary dramatically, from $3 per transaction (defined as a booked ticket) on the low end to $10 on the high end. Both figures are still substantially lower than the industry average for a booked ticket done the old-fashioned way�with an agent over the phone. And when installation, training and service are factored in, the return on investment may seem less rosy than these low fees may suggest. Remember too that the $3-10 fee may only be for the booking, and may not include the CRS fee, charge card or other fees.

Internet Travel Network. The Palo Alto, Calif.-based company specializes in building online travel reservation services on the World Wide Web, but has just debuted a corporate booking product, Internet Travel Manager, to be used as an intranet-style booking system. ITN is the first and so far only company to use commercial Internet purchasing technology in an intranet network environment. Corporate travel management features include support for negotiated contract terms; low-fare search capability; automatic trip approval at point of sale; and elaborate site security measures.

Plusses: Software is accessed from a desktop using a standard Web browser, not proprietary software.
Also of interest: Users pay a one-time set-up charge, plus monthly fees for technical support and network maintenance.
Users: Harris Corp., Netscape, Varian Corp, Charles Schwab, NationsBank.

American Express/Microsoft have joined forces to create an interesting alliance of travel management and technology expertise. The electronic booking application will be accessible by PCs and laptops, and will offer access not just to a booking mechanism but to destination information and travel advice through Microsoft's new Expedia on-line travel service.

The Microsoft Travel Technologies platform includes both the back-office server and the end-user application for making air, hotel and car rental reservations on-line. It's compatible with Microsoft Office and links with American Express's Expense Manager, an automated PC expense reporting system.

Plusses: Can operate within Internet, intranet and client server environments. Fits into Amex's suite of automated corporate travel management products, including PDQ Power (for pre-trip identification of savings opportunities); CardPower and TripPower for customized management reporting, and T&E; Mail for e-mail-based trip reservations.
Also of interest: Full roll-out is expected in the first half of 1997.

USAIR's Priority TravelWorks, an on-line personal reservations and information service, was introduced in October 1995. The corporate version, Corporate Travel Works, is being beta-tested by Nationwide Insurance, which has wired 34 of its most frequent travelers and their assistants as a test before a company-wide rollout begins later this year.

Plusses: Advance seat selection, first-class upgrade capability, access to Frequent Traveler Program account information, and flight arrival and gate information. There's an E-ticketing option, and users don't need to dial up a modem to use the system.
Also of interest: Nationwide has been researching automated booking products for four years, according to Michael D. Maier, the company's director of corporate money management, as part of a company-wide effort to reduce paperwork. Maier has been working closely with his agency, Peoples Travel, which is co-owned by Nationwide and is subject to the same ambitious cost-cutting goals as its parent company. One reason Maier is so enthusiastic about the prospects of the test is that if it's successful, Nation-wide could receive a 9 percent commission for direct bookings, which could easily trim $1 million off the company's $12 million annual outlay. AQ

Choose or Lose
As Amadeus's Jose Antonio Tazon put it, electronic booking systems are the wave of the future. Companies that put off considering them, or those that reject them outright, stand to lose millions in hard and soft dollars.

But choosing a program is a "daunting process," said Colleen Guhin, corporate travel manager at Texas Instruments. Guhin turned to automated booking systems when her travel department could no longer count on rebates to pay for travel administration, and the burden for saving money was now on her department.

Guhin stresses that although the choices are "many, complex, and expensive," travel managers should make the decision sooner rather than later. "You can't wait for a perfect solution," she said. "It doesn't exist." Technology consultant Bob Langsfeld put it another way: "No single product exists that's perfect for your company�but that doesn't mean that an automated solution isn't right for your company now. There are tremendous opportunities out there, if you're clear on your goals and expectations."

Advice from experts

• Be cautious. "There are very few automation products actually deployed and working right now," said Tom Wilkinson, president of the consulting company Travel Management Group, "and there are plenty in development which may or may not have better applications for your company."
  
• Talk to your agency. Any form of automation, agentless or not, affects your relationship with your agency. There are issues of systems compatibility to discuss; pricing; MIS; implementation and service desks. If your agency already private-labels a reservation system, they can share first-hand knowledge about, for example, software glitches, traveler resistance, and implementation.
  
• Keep your expectations about cost savings modest. Before you boast to your CFO that you'll be able to save millions the first year, consider the resources you'll need for training, hardware, deployment, service contracts, etc. Know your targeted return on investment.
  
• Stay flexible, since travel management application technology is still changing rapidly. One of the most pressing questions about automated reservations systems is how they will integrate with the company's operating platform, and whether they are compatible with other automated "solutions," like expense reporting, that are already in use by your company or soon will be. Bob Langsfeld puts it simply: "Consider how you are going to position yourself today to buy tomorrow."
  
• Once the system is up, start with a group of frequent travelers to test the new system. Have them be the "sponsor" of the new system and the champion of it before you roll it out. Many travel managers report that resistance to the new system is more formidable than getting corporate funding.
  
• Keep other departments in the loop. Systems, accounting, training, etc. will all be involved in installation and beyond. Stay in touch with the chief information officer as well.