Invisible spend and supplier-direct bookings

In recent months, incentives to book direct with suppliers have been on the rise, bringing additional challenges for managed travel programs. As a result of these challenges, corporations have been trying to balance having travelers book directly to achieve greater savings while still ensuring that they can fulfill their duty of care obligations and consolidate their data.

 

The BTN Group and Concur brought together several stakeholders for a discussion regarding the realities, strategies, challenges and solutions of this emerging trend during a one-hour long webinar. Following are some of the key takeaways from the industry, lodging, corporate travel manager and TMC perspectives.

 

The industry perspective

 

Charlie Sultan, Senior Vice President of Supplier Services at Concur, shared his insights into direct booking t trends and the impact on the industry and companies. Current industry studies show that 50-67% of hotel reservations are made outside of the booking tool or TMC channel. Sultan shared:

 

Direct bookings are occurring more frequently and the trend to book-direct is only going to get worse.

 

While corporate travel is very important to suppliers, they also have other technological, economic and strategic challenges which they are trying to address. 

 

  • The trends started over a decade ago with carriers such as Southwest Airlines and Air Canada. 

 

  • In more recent years, the new-entrant sharing economy players like Airbnb and Uber have continued to draw consumers to book business related expenses direct.

 

  • Now multi-National companies such as Lufthansa, Hilton, Marriott and other hotels have also created special rates or benefits for booking direct.

 

Combine these factors with the fact that 25 year old millennials represent the largest single age group in the U.S. workforce (NYT, Younger Turn for a Graying Nation 5/23/2014) and it looks like direct bookings will become an even greater part of corporate travel.

 

When employees book direct, companies face greater difficulty in:

 

  • Administering travel policies

 

  • Fulfilling duty of care obligations 

 

  • Delivering complete reporting and analytics

 

  • Taking advantage of negotiated benefits or corporate discounts

 

Sultan went on to describe how Concur’s TripLink® product can help solve these issues. “For companies such as IHG, Marriott, Starwood, Airbnb, and many others ,  who have taken the time  to integrate with TripLink, the corporate travel manager can get visibility into their travelers’ bookings as soon as the booking is made, can administer their travel policy, and can have the data for duty of care.”

 

The corporate travel manager perspective

 

Andrew Hepworth, Chief Procurement Officer and Travel & Expenses Director at U.K.-based Sopra Steria, shares the challenges and solutions he faces, as well as insights gathered from the traveler’s experience. “It’s not only making sure your company is getting the best [rate] possible, but making sure your traveler is also getting the best experience.”

 

Some of the challenges include:

 

  • Large population of frequent and experienced travelers, spread across geographies, and a need for a program that caters to all of the nuances of different employees’ needs

 

  • Desire to make life as simple as possible to those travelers who should be spending their time on revenue-earning activities, not booking travel

 

  • Needing the best value without additional booking fees

 

  • Wanting to allow freedom, but not lose sight of spend or where employees are

 

  • Leverage spend as best as possible in matters of spend leakage, duty of care, invisible spend, management reporting and data received

 

Solutions to their challenges to resolve issues around duty of care and spend include:

 

  • Working with Concur to implement TripLink to capture all essential data when travelers book direct and ensure that travelers have access to their negotiated benefits or rates

 

  • Giving travelers the included TripIT Pro, which has been a big hit with frequent travelers

 

  • Using data to drive negotiations, assist with duty of care compliance, and facilitate anti-fraud reporting and link travel data with expenses more effectively

 

Andrew stated that “costs actually have not increased at all” as travelers are booking directly with IHG and that “costs have come down in some cases” since travelers know that the corporation can see the data.

 

The lodging perspective

 

Doreen Burse, Vice President of Global Sales, Corporate Accounts at Marriott International, speaks to Marriott’s strategy in competitive changes, price strategies and customer loyalty, “Strengthening our direct channels is a top priority for us, and it’s one of our top concerns due to the competitive landscape changes we’ve been observing and the traditional lines between channels blurring, especially in the eyes of the consumer.”  Marriott is trying to address member booking behavior, namely:

 

  • More than 50% of members who booked via a wholesaler or OTA never visited marriott.com before they decided to book

 

  • Growth of competing loyalty programs

 

  • General confusion of all the choices available to travelers

 

Burse explains that although their target market is consumers who are able to choose hotel booking channels, Marriott’s direct programs are intended to reinforce the member benefits of considering direct channels when they are able to choose where they book, and is not meant to encourage any traveler to break corporate policy or to book out of compliance.

 

The travel management company perspective

 

Patrick Linnihan, President of Gant Travel Management, shares what challenges supplier-direct bookings pose and how to support customers, “It’s a balancing act between productivity and risk management to harness the goals and norms of a company.”

 

Challenges that TMCs face include:

 

  • Reporting

 

  • Duty of care

 

  • Policy enforcement

 

  • Services including unused tickets and after hours care

 

Ways they are supporting customers with invisible spend include:

 

  • Obtaining direct booked travel data from TripLink

 

  • Concur® Risk Messenger, that acts as a safety net

 

  • Concur® Compleat, to help enforce policy compliance

 

  • Pre-paid cancellation protection, where pre-paid hotels can be partially refunded

 

Linnihan shares what the future holds for TMCs in light of the evolving travel ecosystem:

 

“…Hierarchical travel programs where the travel manager interacts with purchasing/company executives and they’re pushing down travel policy to the company… is the old way of working. Instead, networked organizations are going to adopt a new method of managing travel which will look much more fluid… and the TMC of the future will insert itself into these [network] nodes to properly serve the customer and enhance their productivity and drive down risk.”

 

These are just some of the key takeaways from the different perspectives of this invaluable group of travel industry stakeholders.

 

To listen in on the full length webinar, including an insightful Q&A session, please visit: Invisible spend: Identifying and managing supplier-direct bookings. Ready to give your workforce freedom from receipts, and your business a big-picture view into company spend? Head here. 

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