Practices in managing corporate travel are changing. These changes, along with structural weaknesses in some of the U.S. Government's approach to procuring hotels and rental cars, will lead to new travel management practices.
2. 2
• Managed Travel 1.0 and its
Diminishing Returns
• New Frontiers in Managed Travel
• Impact on Government Travel
• Discussion
Where we’re headed
3. Managed Travel 1.0 has
diminishing returns
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Gillespie’s Guide to Travel+Procurement
Countries
T&E Spend
$$$
$
20% of Global T&E Spend
Worth going after?
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Airlines
Air Spend
$$$
$
20% of Air Spend
Worth going after?
Managed Travel 1.0 has
diminishing returns
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$$$
$
20% of Spend
Worth going after?
Spend
City pairs, or hotels, or travelers, or trips
Managed Travel 1.0 has
diminishing returns
6. Consolidate Bookings with Travel Mgmt. Co’s.
Consolidate T&E card programs
Consolidate travel data and reporting
Comply with duty of care
Use KPIs and benchmarking
80+ % online adoption
90+ % travel policy compliance
Optimize air, hotel and car programs
6
After 20 years, best practices for
Managed Travel 1.0 are well known
7. Trip costs have been mastered
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The castles
have been built
Travel Policy
None Harsh
High
Costs
Trip Cost
10. Where are the new frontiers?
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Travel Policy
None Harsh
High
Costs
Trip Cost
Traveler Friction
Traveler Friction is a
new frontier
• Frustration
• Stress
• Safety, security
• Lost productivity
• Reluctance to travel
• Recruiting, retention
problems
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Gillespie’s Guide to Travel+Procurement
Travel Policy
None Harsh
High
Costs
Trip Cost
Traveler Friction
Traveler Friction
New metrics could
reduce traveler burnout
Implications for Government
13. Managed Travel 2.0 is a new frontier
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1. Shop anywhere –
period.
2. Book anywhere –
so long as data is captured quickly
3. Book anybody –
so long as suppliers are safe
4. Book anything –
so long as it is in budget
14. Managed Travel 2.0
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1. Shop anywhere –
period.
2. Book anywhere –
so long as data is captured quickly
3. Book anybody –
so long as suppliers are safe
4. Book anything –
so long as it is in budget
Concur’s Open
Booking initiative
should help capture
Hotel data
Implications for Government
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Gillespie’s Guide to Travel+Procurement
True O&Ds – not
airport to airport
Pre-selected door-
to-door itineraries
Best trip by main
feature:
• Lowest cost
• Least travel time
• Most compliant
• Greenest
Trip Tailoring
is a new frontier
See Rome2Rio, KDS
Neo, Rearden’s Deem
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True O&Ds – not
airport to airport
Pre-selected door-
to-door itineraries
Best trip by main
feature:
• Lowest cost
• Least travel time
• Most compliant
• Greenest
Trip Tailoring Implications for Government
Could help reduce
cost, complexity for
infrequent travelers
19. Edit Rights
are a new frontier
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Corporate
Traveler
Brand.com
Corporate
Booking
Data
Corporate
TMC
Right to edit or
cancel the
booking
Everybody is
happy!
Trip
Changes
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Corporate
Traveler
Brand.com
Corporate
Booking
Data
Corporate
TMC
Right to edit or
cancel the
booking
Everybody is
happy!
Trip
Changes
Edit Rights
are a new frontier
Implications for Government
Will allow Authorized
Travel Agencies to better
serve travelers
21. • Higher airfares = more cost pressure on entire
travel budget
• Need better travel procurement
– City Pair Program has superior sourcing strategy
– FedRooms and Rental Car Program have structural
weaknesses
• Need better data and KPIs
21
Impact of US Air and
American Airlines Merger
22. 22
CPP Fares
won’t be
affected until
FY15
Public and
corporate
fares will rise
soon after
merger
Preliminary
analysis
Source: Scott Gillespie
Domestic US airfares will
rise after AA-US merger
24. Better Data and KPIs
24
Spend visibility, with granularity
good enough for
• Negotiations
• Policy compliance tests
• Savings lost or achieved
25. Spend Visibility
Metrics
25
* FY13 Object Class 21 Total Budget
(less Fleet and Relocation budget)
= Managed Travel Budget
SmartPay $
Managed Travel Budget*
TMC MIS Bookings $
Air, Hotel Voucher $
Corporate
Best in Class
Card Visibility > 90%
Air > 90%
Hotel > 60%
Booked Visibility
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Cost Over Best Available Rate - COBAR
Example: Rental Car Booking
Rate Allowed = $75
Traveler Books at $70
Best Available Rate = $50
-> Saved Gov’t $5
-> Could have saved Gov’t $25
COBAR= $20 ($70 booked minus $50 Best Available Rate)
Key Performance
Indicator Example
Set a goal: COBAR as % of Managed Travel Budget
28. Summary and Q&A
28
Travel Management is at a point of diminishing returns
New frontiers include:
•Trip Friction
•Trip Tailoring
•Managed Travel 2.0
•Edit Rights
•Traveler Dashboards
US-AA merger will put
cost pressure on entire
Gov travel budget
Hotel and Rental Car
Procurement Strategy?
Better Data and KPIs!
Scott Gillespie
Gillespie’s Guide to Travel+Procurement
Scott.Gillespie2008@gmail.com