end and future of managed travel, updated july 2013

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The End and Future of Managed Travel

July, 2013 Sponsored by

COPYRIGHT 2013 SCOTT GILLESPIE AND EVAN KONWISER 2

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For travel and procurement managers and consultants

Fast, unbiased and expert answers Procurement Analytics Travel Policy Analysis Trip Friction Benchmarking

COPYRIGHT 2013 SCOTT GILLESPIE AND EVAN KONWISER 3 3

Scott Gillespie • Co-Founder, tClara

• Founder, former CEO of Travel Analytics and co-founder of Farely

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

• Expert in travel procurement and analytics

• Consultant, speaker, trainer

• Formerly of A.T. Kearney

• MBA, University of Chicago

Who are we?

Evan Konwiser • Consultant, entrepreneur, and

advisor

• Co-founder of Farely

• Co-founder, FlightCaster, sold to Next Jump in 2010

• Consultant in corporate and leisure travel

• Expert in travel and technology

• Formerly of Bain & Co. and Kayak

• MBA, Dartmouth

Early authors of the Managed Travel 2.0 framework


Little change in 100 years

1/8/2014 4 Gillespie’s Guide to Travel+Procurement


• 1994: Delta caps commissions, triggers TMC transaction fees and cost center approach

• Late 90’s: Strategic sourcing, corporate online booking tools and Prism put travel management in spotlight

• 2007: UK’s Corporate Manslaughter Act makes duty of care – and data - a high priority

Historic drivers of Managed Travel 1.0


Consolidate TMCs

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

After 20 years, best practices are well known


City pairs, or hotels, or travelers, or trips

T&E Spend

$$$

$

20% of Spend

Worth going after?

But MT 1.0 has diminishing returns


The castles have been built

Travel Policy

None Harsh

High

Costs

Trip Cost

Trip costs have been mastered

Solid, safe, enduring – a valuable base

Immobile, inflexible


• Consumerization has arrived

• Traveler demands are shifting

• Business travel industry is adapting

Winds of change are here


Staggering statistics

50b app downloads in 2012,

going to 100b by 2015

30% more time spent on

mobile than desktop

Only device with faster adoption than iPhone: iPad


Bring Your Own Device (BYOD)

70% Employees use personally owned devices

to access company data and systems Source: IDC

Impact in the workplace


Hotel Tonight

Bring Your Own Travel Tools (BYOTT)


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

3. BUT…GBTA’s study update in 2013 recants some of their findings….

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

Hard evidence from GBTA


Online booking started this trend

Pushing hard on online adoption

Has forced the hand in

self-dependence


Travelers themselves are the

“Chief Decision Makers”

of their own travel experience

What has this led to?

Note: As described by Barry Padgett at Concur Fusion 2013


Trip costs have been mastered

Travel Policy Loose Tight

High

Costs

Trip Cost

Source: Scott Gillespie


Travel Policy Loose Tight

High

Costs

Trip Cost

Total Trip Cost

Hidden but real cost of trip friction

Source: Scott Gillespie

Trip Friction

• Lost productivity • Reluctance to travel • Negative impacts on recruiting & retention •Traveler health issues


Publish and

Punish

Optimization Strategies

Teach and

Trust

or


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

Source: Scott Gillespie and Evan Konwiser, 2012

Teaching and trusting travelers is essential in MT 2.0


We convened a group to discuss just that.

Where does MT 2.0 go from here?

The Managed Travel 2.0 Advisory Group ~18 Representatives met in Chicago

Large travel buyers Medium travel buyers Mega and regional TMCs

Airline, Hotel, Car Rental firms Technology intermediaries Travel distribution start-up

Workshop hosted by Glenn Hollister, Principal at ZS Associates


Unmanaged

Brand.com or Personal TMC Personal Card

Yesterday’s View

Data/Safety & Policy Discounts / Amenities Service Corporate Card

Managed TMC Booking (MT1.0)

GDS/CBT/TMC


Unmanaged

Brand.com or Personal TMC Personal Card

Managed Travel 2.0

Today’s View


Managed TMC Booking (MT1.0)

GDS/CBT/TMC


Brand.com / OTA

Managed non-TMC Booking

Unified, channel-agnostic view of all travel


“Comprehensive management of corporate travel and spend while reducing restrictions on traveler choice.”

Definition of Managed Travel 2.0

Managed Travel 2.0 Advisory Group July 2013


Allow travelers increased flexibility about where and what to book, thereby allowing them to optimize their own travel decisions, without compromising the ability of corporate travel buyers to manage spend and provide service

Key Principles: Traveler Choice + Buyer Visibility

Managed Travel 2.0 Advisory Group July 2013


Corporate Traveler

Brand.com, OTA

Corporate Booking

Data

Corporate TMC

Right to edit or cancel the booking

Everybody is happy!

The Expanded MT 2.0 Landscape

Trip Changes

COPYRIGHT 2013 SCOTT GILLESPIE AND EVAN KONWISER 28 1/8/2014 28

Gillespie’s Guide to Travel+Procurement

When to greenl ight an open booking


• Informed travelers: Educated and trusted to optimize

• Data: Delivered to buyer near real-time

• Safety: Better, due to expanded visibility

• Policy: Still sets expectations and influences behavior

• Preferred pricing & amenities: Available in all channels

• Service: Open to the TMC, regardless of channel

• Optimization: Cost and friction data to budget owners

Core elements of MT 2.0 framework


• Concur makes Open Booking a strategic priority • NEC Europe pilots Open Booking out of frustration

with internet fares • Egencia redesigns hotel booking tool to highlight

traveler’s definition of value • Gray Dawes (UK TMC) removes hotel booking fees • Sabre announces TruTrip to capture and serve open

bookings.

Our industry is adapting

“This is the next step in managed travel.” - Sabre SVP Chris Kroeger


Away from Transactions and Channel as the core

And on to Choice and Data as the new focus

In a nutshell, MT2.0 is a shift in the focus of the industry

But much remains intact: Policy, discounts, duty of care, expense management,

business intelligence, etc.


• That policies will go out the window Only certain mandates

• That 100% of programs will do this now But the emerging norm

• That our industry will be kaput Call it: “Reoptimized”

What we are NOT saying…


TMC stands for

Traveler Management

Company


of

The Traveler’s View

Changes from this

Managed Travel


to this


What’s next?

Trip Friction Benchmarking? Fill in the tClara card

Join the “Managed Travel 2.0” discussion group on LinkedIn

Evan Konwiser [email protected] @evankonwiser

Scott Gillespie [email protected] @gillespie411