When the eruption of Iceland’s Eyjafjallajokull volcano shut down European air space this past April, it stranded more than 10 million travelers across the globe. As travel management professionals know all too well, it was their company’s responsibility to provide reasonable accommodations during the crises for their business travelers, as well as a safe return home. While most companies worked hard to live up to this responsibility, doing so came at a cost, according to a recent online poll of travel buyers and suppliers conducted by AirPlus International.

With the advantage of hindsight, however, many companies are revising policy and process to reduce the impact of future transportation crises on their travel programs.
Eyjafjallajokull crippled the operations of European airlines, as well as intercontinental flights originating in countries from the United States to South Africa to Thailand. Nearly 100,000 flights were cancelled during the height of the crisis, costing airlines more than US$2 billion. As the volcano continued to choke up ash into May, pockets of additional cancellations and delays rippled through the European airways. The full impact of the eruption on the airlines has yet to be calculated – and the same is likely for the companies whose business meetings were cancelled or postponed.

More than 73 percent of the companies surveyed by AirPlus indicated their travelers or travel management program was affected in some way by the eruption. The majority of respondents indicated that extra travel expenses incurred by stranded business travelers had a significant impact on their travel programs. While additional costs may have been the most widespread concern, respondents revealed several others.

Communication is key during a crisis and, thanks to technology, most survey respondents (nearly 88 percent) cited adequate communications with grounded travelers. Cell phones proved essential to the effort, with 28 percent of survey respondents indicating they were the most effective method of communication. The company email address was the other essential tool, and with 70 percent business travelers now carrying smartphones, receipt of these messages was likely supported by this type of mobile device.

Still, nearly one-third of survey respondents indicated they wanted to make sure their communications plan during a crisis is more clearly defined and easier to execute. They will be revising their communications policies and procedures in response to the weaknesses in their travel programs.

Download the free PDF for full survey results.
AirPlus…The Wire July 2010 (PDF, 250 KB)

Additional Resources:

Air Industry Experts Discuss Volcanic Ash Lessons

Europe Easing Air Restrictions

The Days the Earth Stood Still

The Department of Transportation in early May released final figures for 2009 airline ancillary fee revenues. The report showed that as a group United States airlines pulled in $7.8 billion in ancillary fees, a large increase over the $5.5 billion collected in 2008. That increase alone makes it clear why more than 72 percent of respondents to AirPlus International’s The Wire survey last month chose airlines as the supplier category most affecting their travel budgets with fees. DOT numbers, however, do not tell the entire story.

 
The $7.8 billion as tallied by the government agency does not include many of the fees that continue to vex travel managers. For DOT, ancillary fees include baggage fees, reservation change fees and miscellaneous operating revenue. The revenue pocketed from seating assignments and on-board sales of food, drink, pillows, blankets, entertainment, or any other ancillary items are reported as transport related revenue and cannot be identified separately.

That’s a situation that travel buyers know all too well and they are looking to airlines, their travel management companies and, particularly, credit card partners to help them break ancillary charges out of the total ticket price in order to gain visibility and begin to manage the fees. Indeed, wherever buyers are challenged by unbundled fees – whether from airlines, hotels, car rental, payment or TMCs themselves – there is a clear opportunity for suppliers to fill the travel management gap.

Among survey respondents, half indicated that their travelers have no visibility into ancillary fee charges at the time of booking a business trip through their travel management company. Nearly 29 percent of respondents said their TMCs outline all the fees associated with a given trip at the time of booking. Under 8 percent, however, responded that their TMC partner is able to outline the fees and help manage them, while more than 13 percent of respondents did not know if possible airline, hotel or car rental fees were addressed in any way at the time of booking a trip.

Indeed, the AirPlus survey showed that nearly 38 percent of travel buyers found their supplier relationships more difficult to manage as a direct result of the complicated fee landscape. An equal number of respondents said that fees have eroded supplier value propositions, and more than 27 percent said they have considered shifting share away from fee-heavy suppliers or dropping them altogether. Respondent comments indicated that share shifting, at least, had gone beyond the consideration stage to taking action.

Download the free PDF for full survey results.
AirPlus…The Wire May 2010 (PDF, 265 KB)

Additional Resources:
Ancillary Fee Implications Vex Travel Pros
http://www.management.travel/news.php?cid=ancillary-fee-ancillary-fees.Mar-10.25

Aiming For A Budget: Continuous Cutbacks, Fees, Transformations Test 2010 Forecasting
http://www.procurement.travel/news.php?cid=budgeting.Sep-09.01

The buzz about mobile travel tools and applications is reaching a fever pitch. From online booking to payment and expense management, suppliers are rolling out mobile travel management tools one after another – even opening technology platforms that were previously closed in order to capture more share of this emerging market opportunity. In a recent online survey, AirPlus International asked travel stakeholders about their current mobile travel management strategies and found widely divergent attitudes and practices. While this is clearly an indication of a segment in its infancy, fast-paced changes and easy access will necessitate the development of best practices.

While mobile travel management tools have held promise for some time, development of the space lagged for several years, waiting for mobile operating systems that could handle robust technologies.

Recent advances and a spike in adoption of smart phones – especially among the corporate population – has brought mobile travel management tools out of development and into the leading edge corporations. Among survey respondents, 35 percent estimated that more than 90 percent of their travelers carry a smart phone or other wireless-enabled device that allows them to access web-based travel tools on demand. Another 29 percent pegged smart phone usage at 70 percent to 90 percent among their travelers.

Technology adoption like that doesn’t happen overnight; corporate travelers have been using smart phones for a few years and they are likely a few steps ahead of their companies when it comes to mobile travel tools. Availability in the marketplace bears this out: While there are probably under 75 mobile tools that are built for companies to manage their corporate travel programs (booking, expense, etc.) there are more than 2,000 traveler-oriented applications currently available for the iPhone alone. There are plenty of free and low-cost services targeted specifically to the corporate traveler as well, from itinerary aggregators and sharing sites to mobile services offered by airlines and other travel suppliers. Such sites as Kayak and Yapta, with email alerts about low-cost flights and hotels for traveler-defined trip parameters, have literally put alternative sourcing channels into the hands of managed travelers.

An interesting statistic that emerged from the research was how few travel stakeholders had any influence over their company’s mobile travel management strategy. More than 54 percent of respondents said they had no involvement in mobile. There are risks associated with turning a blind eye to the changes underway. As on-demand technologies and services permeate the consumer space, managed travelers are likely to migrate away from old-school tools, often with the best intentions that 1) they are finding better deals through their own sources and 2) they can be more productive when supported by technologies that fall outside the universe of corporate sanctions.

For full results, please download the free PDF:

AirPlus…_TheWire_April 2010 (PDF 245KB).

Industry buzz around green travel initiatives has quieted over the past year as companies focused on reducing travel in the face of a weak economy. As the economy begins to recover and companies put their travelers back on the road, those with genuine corporate social responsibility programs will need to refocus their green travel efforts.

A recent survey conducted by AirPlus International revealed that while almost 30 percent of responding companies are measuring the greenhouse gas emissions produced by their travel activities, only about half as many companies – 17 percent – have taken the next step to create and implement policies around managing the carbon footprint of managed travel. In the next 12 months, however, another 17 percent of survey respondents said they would be implementing such policies.

Those numbers suggest a catch-up phase for eco-friendly corporate travel efforts that may have been derailed by a faltering economy. The green travel movement was hitting the mainstream in 2007 just as the economy began its decline into the recession of 2008 and 2009 when travel managers seem to have dropped everything in order to turn their attention to cutting budgets, increasing demand management, applying travel alternatives and responding to pressures to increase value with suppliers.

Interestingly, while many survey respondents may have turned attention away from their internal eco-efforts, they have still been keeping an eye on their suppliers‚ efforts. Within the year, more than 53 percent of survey respondents will consider green criteria in their RFP processes.

Download the free PDF for full survey results.

AirPlus…The Wire March 2010 (PDF, 244KB)

Additional Resources:

Top 10 Challenges to Greening Corporate Travel

Green? Prove It.

Corporations are leaving both direct and indirect travel savings on the table by not implementing best practices around comprehensive travel policies and use of a single expense reporting platform, according to a recent online survey of travel management professionals fielded by AirPlus International. While a majority of respondents clearly understand the potential benefits, under 40 percent of survey respondents confirmed that they both utilize a single travel and entertainment policy throughout their organizations and supply a single T&E expense reporting platform for all travelers.

Corporations that have embraced industry best practice by creating comprehensive travel policies, benefit by having a means by which to encourage specific travel behaviors. Many of these companies have also invested in the technologies and tools that make it easy for travelers to comply with policy, including but not limited to the following: Online booking tools, corporate cards and automated expense reporting platforms.

According to the AirPlus survey, more than 79 percent of companies surveyed link credit card data to their expense reporting systems – a signal that they recognize the relationship between spend visibility and compliance. That compares to only 42 percent of respondents whose companies link their booking data to the expense tool, which can provide enhanced visibility into out-of-policy bookings and fewer expense reports submitted with critical policy violations.

Above traveler convenience and compliance, however, 56 percent of respondents to the survey pegged increased back-end efficiencies as the most important benefit of automated data feeds and integrated expense reporting platforms. Indeed, automated expense technology facilitates approval, reconciliation and reimbursement almost 30 percent more efficiently than companies that use manual processes, according to a June report from Aberdeen Group.

With all its potential benefits, automated expense reporting has its challenges. The biggest challenge among survey respondents was simply the diverse lines of business within their companies requiring different processes. Fewer companies experienced setbacks in the form of local statutory requirements, lack of senior management’s support and non-standard reimbursement and accounting processes. Still, moving toward best practices is likely worth the effort, and automated expense reporting has become more accessible – even for midsize companies that in the very recent past could not justify investing in these types of tools.

Download the full report for complete results:

AirPlus…The Wire January 2010 (PDF, 248KB)

Additional Resources
Coca-Cola Automating Expense Audits

In this issue of The Wire…from AirPlus, we asked 142 travel management professionals in September for their thoughts. They hope to capitalize on the weak hotel markets which in fact may not be so difficult to do. The overall hotel market projected to decline further next year, and hotel suppliers looking to lock in corporate travel and meetings contracts that will help keep their occupancy levels up.

Not surprisingly, more than 72 percent of respondents to the survey revealed that 2010 corporate travel budgets for hotels would either stay the same (40.1 percent) or decrease (32.4 percent). The good news for travel managers under the intense pressure to buy more travel with less money is that hotel volume based on total nights would remain fairly steady as well: 43 percent of respondents indicated that hotel volume would stay the same and 28 percent said that volume would decrease. Although, some travel managers will feel the pressure with 28 percent of respondents who said their hotel budgets will stay the same also expect volume to increase; and only 4 percent of respondents will grapple with falling budgets and rising volume. For a small percentage, volume will fall, while budgets will increase (3.2 percent of respondents).

Despite this, the majority of respondents in all budget categories said they will focus on getting additional room rate discounts in their contract negotiations. The next most popular negotiation method will be obtaining for more value-add items within the room rate. Dynamic pricing, which came in at the bottom of the list, but still will be negotiated by nearly 20 percent of survey respondents, is an interesting approach that may work well in a hotel market that is not expected to regain its footing until well into 2010.

Download the full report for complete results:

AirPlus… The Wire September 2009 (PDF, 257 KB)

Additional Resources:

Buyers Eye 2010 Hotel Challenges, Opportunities

Hotels Renegotiating Rates to Preserve Corporate Business

U.S. Lodging Turning Point Arrives But Growth Remains on Distant Horizon

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)

In the most recent survey conducted by AirPlus International, more than 190 travel professionals weighed in on their company’s current use of travel alternatives, from virtual conference technology to increased conference calls. While many companies have ancillary motives for offering technology solutions to reduce overall corporate travel – such as employee quality of life and CSR initiatives – the resounding message was that steep budget cuts are forcing travelers to find new modes of connecting to colleagues and clients.

When the economy began its dramatic decline in last quarter of 2008, the idea of demand management had already made headway in many corporate travel departments. An ACTE survey conducted in June 2008 indicated that corporations were already researching opportunities to reduce travel by offering technology alternatives. The current survey shows that many have implemented changes since then.

When asked to rate the rationale behind their travel alternative strategies, more than 63 percent cited budget cuts. Nearly 44 percent indicated that increased travel costs were their most pressing concern. Only slightly more than 9 percent of respondents submitted employee quality of life as their top rationale for the change. In addition, corporate social responsibility – i.e. the effort to reduce the company’s carbon footprint—was cited by more than 22 percent as “urgent.”

The ultimate question, of course, is how effective virtual travel is when compared to actual face-to-face meetings, and the jury may still be out on this issue. Only about 6 percent of respondents characterized virtual travel as “almost always” as effective as meeting in person. And almost 4 times that, at nearly 25 percent of respondents wrote off travel alternatives as rarely or almost never as effective as face-to-face meetings. Over half at 67.4 percent stated only “sometimes.” This could depend on the priority status of a meeting. It may be higher priority if it’s a new business contact or where necessary to finalize a contract. Whereas video conferencing might be an alternative for meetings internally or with well-established partners. However, as the data clearly shows, these are not overall substitutes for face-to-face contact. Business travel is still relevant even in today’s economic climate.

How well the technology enables corporations to forward their business relationships, while cutting costs today, will determine its long-term viability. Ultimately, it’s the economics.

For more results, click here:

AirPlus…The Wire June 2009 (PDF, 225KB)

Additional Resource:

Autodesk Pulling Demand Management Levers to Optimize Global Travel Program