managed travel 2.0 - explanation and implications

Managed Travel 2.0:Explanation and Implications

Scott GillespieIndustry ObserverGillespie’s Guide to Travel + Procurement

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MT 2.0 Perspectives from

Co-Founder, FlightCaster, sold to Next Jump

Independent consultant in corporate and leisure travel

Expert in travel and technology

Formerly of Bain & Co and Kayak

MBA, Dartmouth

Founder, former CEO of Travel Analytics

Author, “Gillespie’s Guide to Travel + Procurement”

Expert in travel procurement, analytics

Consultant, speaker, trainer

Formerly of A.T. Kearney

MBA, Univ. of Chicago

Evan KonwiserScott Gillespie

Managed Travel 2.0

Trendy topic, or strategic shift?

What is it?

What are the implications?

Managed Travel 2.0

What is it?

Who is a

Travel PolicyExpense Report

Business Traveler?

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The Cost of Traveler Friction

Travel PolicyLoose Tight

High

Costs

Trip Cost

Traveler FrictionTotal Trip Cost

• Lost productivity• Reluctance to travel• Recruiting, retention

Source: Scott Gillespie

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Economic Rationale for MT 2.0

Travel PolicyLoose Tight

High

Costs

Flatter Program Savings

Stronger Traveler FrictionTotal Trip Cost

Source: Scott Gillespie

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The Optimization Problem

Trip’s Expected Benefit

vs.Trip’s Cost, net of

Policy Savings and Traveler Friction

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Optimization Candidates

Can Optimize

Traveler

Traveler’s Manager

Travel Budget Owner

Cannot Optimize

Travel Manager

Procurement Mgr.

TMCa Convenient

Fiction

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The Optimization Problem

Trip’s Expected Benefit

vs.Trip’s Cost, net of

Policy Savings and Traveler Friction

Logic of Travel Management

MT 2.0 springs from this conflict

Art of TravelingVs.

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Key Principles of MT 2.0

1. Shop anywhere – period.

2. Book anyone – so long as the supplier is safe

3. Book anywhere – so long as employer gets the data fast

4. Book anything – so long as the trip is in budget

5. Pay with the corporate cardSource: Scott Gillespie and Evan Konwiser, 2012

Managed Travel 2.0

Trendy topic, or strategic shift?

|

Change Is Happening

Strong personal preferences

But - significant security issues

and resistance from domain experts

Many options in the market

Bring Your Own

Device (BYOD)

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Bring Your Own Travel Tools

Hotel Tonight

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Freedom works in other industries

Free Range

ChickensChickens Travelers

Culture of Control

Low and LightHigh and Tight

Savings&

Policies

Budgets &Satisfaction

Priority

Which Companies Are Ready for MT 2.0?

YES!

NO!

Maybe

Culture of Control

Low and LightHigh and Tight

Savings&

Policies

Budgets &Satisfaction

Priority

YES!

NO!

Maybe

Today’s Market for MT 2.0?

NO!

Maybe

YES!

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3 Requirements for

Growth of

Managed Travel 2.0

Robust Data Acquisition

Short’s BookIt

ProcureApp

KDS’s Maverick

Concur’s Open Booking

GDSX’s TripLink

ConTgo

Thaw

Cultures

In

Corporate

Evidence

Valueof

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Hard Evidence from GBTA

1) Unmanaged travelers feel more successful at getting convenient and comfortable trips

- and at getting the best prices

2) Unmanaged trips cost 3% less than those under “Guideline” travel policies. Wow.

Source: GBTA’s report “Global Business Traveler 2012”

Unmanaged trips

Managed trips

How??

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Conclusion:

Free RangeTravelers

are

Happier, Healthierand Cheaper

Managed Travel 2.0

What are the implications?

Traveler Welfare

Reshapes Travel

Policies

• Safety

• Productivity

• Satisfaction

Budgets are more important

than

Savings

New Metrics for

____Trip Value

The data channel trumps the booking channel

Data Channels

trump Booking Channels

Corporate Booking Toolsneed

better

juice-to-squeeze __ratios

GDSs lose

to Brand.com sites

transaction volumes

Travel Managers

Collaborate

Champion

Coach

Suppliers

Brand Value Packages

displace corporate

discounts

Payment Providers

become

essential

datasuppliers

TMCs

replaced by

Brandbenchmarking

Price benchmarking

TMCshave a window

Travel Datato become the

hub

TMCs

morph into

Traveler

fees

Booking fees

Security and Service

TMC stands for

Traveler Management

Company

of

The Traveler’sView

Changes

Managed Travel

tothis

Now for some discussion, debate, and dissent

Thank you!

Evan Konwiser

ekonwiser@gmail.com

@evankonwiser

Scott Gillespie

Scott.gillespie2008@gmail.com

@gillespie4111

1 = Very Unsuccessful, 5 = Very Successful

Mandates Guidelines Unmanaged

Having Right Technology 3 4 5 Yes

Feeling Safe 5 5 5

Policy Compliance 4 4 4

Budget Compliance 4 4 4

Comfort and Convenience 2 2 3 Yes

Getting Best Prices 2 3 4 Yes

Interesting and Enjoyable Trips

2 2 4 Yes

Earning Points and Using My Preferred Suppliers

2 3 5 Yes

Minimizing My Carbon Footprint

1 1 1

Is Unmanaged Better?

Source: Scott Gillespie’s analysis of GBTA’s report “Global Business Traveler 2012”

How Successful Are You at Achieving Your Goals?