In a recessionary economy, corporate travel departments have worked hard to cut costs while maintaining service standards for their travelers. A survey of 147 corporate travel professionals conducted by AirPlus International shows that even while under extreme budget pressure, corporations must stay focused on how to keep their travel programs effective — and they are willing to invest in products and services that are central to that effort.

The survey shows that travel departments consider criteria beyond savings opportunities and cost in every major supplier category. More importantly, it is clear that service and other considerations consistently trump cost and savings when sourcing certain types of suppliers.

Data reporting is the most significant standout, far outweighing cost and savings opportunities criteria when respondents choose partners in two supplier categories: travel management company and payment solution. Only 43 percent of respondents indicated that cost was among the company’s most important considerations when choosing a TMC. Savings opportunities were important to only 53 percent of respondents. Rather, more than 72 percent of survey respondents indicated that they looked for experienced TMCs that can provide their travel department with the data they need to make smart decisions about travel program tactics and strategies.

The payment category tells a similar story, with data reporting/compatibility outpacing cost considerations by about 21 percentage points. Nearly 53 percent of respondents indicated the importance of good data reporting when shopping for a payment solution. Convenience, often expressed in terms of the number of merchants where the card can be used, ran a distant second at about 39 percent, while cost and savings were less important to corporate travel professionals.

Product and service excellence proved an interesting criteria. It far outranked cost considerations for TMC partners with a gap of more than 20 percentage points. It narrowly outpaced cost by just 1.5 percentage points in the hotel category. In all other categories, it fell short of cost and savings considerations by a fair margin.

Download the full report for complete results:
AirPlus… The Wire July 2009 (PDF, 267 KB)

Chris Thelen, CEO, Chambers Travel

AirPlus talks with Chris Thelen, CEO and owner of Chambers Travel about the impact of the current economic climate on TMCs, new challenges that face the industry and what Chambers Travel looks forward to…

A+: The current economic downturn saw a reduction in business travel. What are the main changes you have experienced as a result of the recession and do you see any positive outcomes?

CT: Companies really want to drive down the cost of travel and are increasingly examining the whole end to end process including what internal cost controls they have in place. Chambers has always tried to offer pro-active advice to clients, but until recently, proposals to change process and practice have sometimes fallen on deaf ears. That’s certainly not the case now. A good TMC must be prepared to be solution orientated and literally start again with a blank sheet of paper, building a new travel programme around the client’s new objectives. For us it’s a great time to offer consulting services to help achieve this.

A+: Facilitating credit may still be widely practiced amongst TMCs as a means of winning over new businesses, however, many agencies risk bad debt as a result. How has Chambers Travel managed to overcome this common practice in today’s competitive environment?

CT: I could never have grown Chambers at the pace we have over the last five years unless we had partnerships with lodged card providers such as AirPlus. All new accounts and most longstanding customers have been moved to this line of credit. Lodged cards have provided the consistent cash flow to expand the business safely and this is even more relevant in today’s market.

I am still not sure all the agency community has got their strategy right on how to sell the card concept into their client base. Last year Chambers introduced a new incentive scheme for the sales team. They are actively incentivised on winning new clients where payment is card based. There is no reward for cash payment clients. Perhaps not surprisingly, since then all new business won has been on a lodge card basis.

Given the recessionary environment, and IATA being watchful of bonding requirements, the more cash clients you have the higher your probable bond is with IATA. Obtaining a bond in this market is a tough thing to do. By switching accounts to a payment system like AirPlus you can effectively minimise or even eliminate the need for a bond.

Taking all of this on board moving to card payments is an absolute no brainer.

Read full Interview:
Combating Recession with Chris Thelen (PDF, 232 KB)

www.timesonline.co.uk/tol/travel/business/article5752459.ece