Press Release

For Immediate Release
21 April 2010

ACTE Executive Forum in Stuttgart Raises Questions and Recommendations from Business Travel Leaders on Unbundled Ancillary Fees, ROI, and Total Travel Costs

Alexandria, Va --

Issues regarding unbundled ancillary fees, return on investment (ROI), and the total cost of a business trip drew 111 business travel management executives, from some of the largest corporations in Germany (BMW, Siemens, Bosch, and IBM) to a forum held under the aegis of the Association of Corporate Travel Executives (ACTE) and the Verband Deutsches Reisemanagement e.V. (VDR) in Stuttgart, Germany, 23 March 2010. According to a statement issued by ACTE President-Elect, Chris Crowley, few topics have been as compelling as these in uniting business travel managers and buyers in a search for answers.

“These issues not only represent some of the most significant costs encountered by business travel management executives today, but also encompass the overall reason for travel in relation to expense incurred, and the cost of the individual processes that must support business travel,” said Crowley. “This event hit the mark by initiating a truly interactive and practical discussion amongst top travel managers, suppliers and industry experts from throughout Germany.”

The Executive Forum opened with a welcoming address by ACTE’s Regional Director, Europe, Christine Dunton-Tinnus and Hans-Ingo Biehl, Managing Director of the VDR, who welcomed registrants and stressed the need to work toward common objectives. “The issues under discussion at this event went far beyond the elements of business travel management, in that they entail dealing with new business models developed by our industry partners and that they also call upon us to develop new means of measurement to gauge the value of a trip as opposed to it’s expense”, said Biehl. “These are difficult matters and the answers we are looking for can only be reached by working together.”

Moderated by Dirk Rogl, Deputy Chief Editor of Business Travel FVW, the program opened with a Keynote assessment on unbundling and ancillary fees. Presenter Stefan Fallert, Director, Solutions Group, Policy & Compliance, Carlson Wagonlit Travel, detailed the history of this topic and its impact on the business travel management profession. He was followed by a panel discussion by three experts — Michael Fürer, Director Sales Germany, AirPlus International; Jochen Leibfritz, Sales Manager Germany, Swiss International Air Lines; and Rainer Waldmann, Regional Director Sales & Account Management Süd, BCD Travel Germany — who each added a different perspective to the initial analysis.  

The opening session was a prelude to a series of “Three Scenario Thinking Workshops,” designed to extrapolate additional data on the new primary elements of travel costs. The first of these focused on unbundled ancillary fees and their likelihood of becoming a permanent trend. The discussion was moderated by Franziskus Bumm, Vice President Sales, FCm Travel Solutions. Points of contention raised by forum participants included:

- The list of additional fees was increasing and likely to increase;
- That there was no common approach, either in the merchandizing nor in the pricing of unbundled services or products;
- That unbundled ancillary fees are extremely difficult to manage and presently offer no transparency for the travel manager.

While the majority of the participants understood the need for the airlines to develop new revenue streams, many had strong recommendations to reduce or eliminate the frustration of trying to manage these fees (which in some extreme cases, account for up to 20 percent of a corporate travel budget). These suggestions called for including unbundled ancillary fees in ongoing supplier negotiations, which would then lead to further adjustments in travel policies. But it will all hinge on transparency. Travel mangers were unanimous in their enthusiasm to work with suppliers to gain access to data.

“This discussion was especially useful in detailing all of the parts of the unbundled ancillary fee issue, but came into its own for creating consensus on recommendations for the supplier community,” said Rüdiger Krenz, Travel Category Management, AXA Service AG. “Furthermore, the whole Stuttgart Executive Forum raised the bar for frankness and purposeful dialogue. It exceeded my expectations.”

The “Second Scenario Thinking Workshop” dealt with return on investment (ROI), and how this process has become a critical part in justifying the expense of a trip during this fragile economic recovery. Moderated by Marion Klar, Head of Consulting Mainland Europe, HRG, this presentation helped to define parameters establishing the value of a trip, and “clusters,” which differentiate between revenue generating and non-revenue generating travel. The consensus was that any ROI procedure must not result in greater complexity for the traveler. Travel managers are undecided about trips that may not generate revenue, but which may prevent a company from losing money. Participants expressed the difficulty in devising common definitions and formulas to simplify the ROI process. It was suggested that ACTE should set up a benchmarking mechanism to assist in this evaluation or create an “ideal” platform.

While the agenda for the Stuttgart Executive Forum was designed to forge ahead into new areas of dialogue, the most surprising of these was in the “Third Scenario Thinking Workshop.” titled “The Total Cost of The Trip,” the discussion swerved from the more predictable source of business travel costs (such as the lack of consolidation) and tackled two that are far more difficult to manage: a) Processes, and b) Employee Costs. Each process for control and tracking comes with its own set of expenses, which must be significantly offset by savings to be practical. Employee Costs now represent a myriad of expenses that have begun to play a substantial role in the overall travel equation.

The final session of the day was a session dedicated to merging Meetings, Incentives, Conventions & Expositions (MICE) and transient business travel. The discuss focused on opportunities to propose and develop efficient processes and beneficial policies for Corporate Travel and Meetings departments to reduce spending while maintaining the generation of revenues from their activities. Veteran travel industry presenters Dale Beckles, President & CEO, Arcaneo Inc. (Developers of Metron) provided the strategic view of merging both activities together under one central process while Holger Thiede, Director of Sales EMEA, StarCite GmbH, European Headquarters presented the operational approach to how to successfully do so. Rounding out the panel was Dr. Katja Havemann, Global Shared Services/Procurement, Mobility and Logistics, Siemens AG, who related her considerable experience in integrating their marketing and events activities into existing travel management and procurement processes. Each emphasized that success in this endeavor required the support of a clear management mandate and strong policies.

The Stuttgart Executive Forum was one of four ACTE educational events held in Europe this spring that drew exceptionally large crowds. “It’s one thing to set about defining the challenges, but ACTE forums are aimed at bringing the right people together to produce practical, workable solutions” stated Dunton-Tinnus. “With unique insights and recommendations that cannot be dismissed discussions are to be continued in interactive forums as well as at the ACTE Global Education Conference (3-5 October) which will also be held in Germany (Berlin) later this year.”

For more information, contact:
Debbie Flynn
CEO
Brighter Group
The Pod, London's Vertical Gateway
Bridges Wharf, Battersea
London SW11 3BE England
T: 020 7326 9880
F: 020 7326 9890
E: [email protected]
W: www.brightergroup.com