THE CANADIAN BUSINESS TRAVEL ASSOCIATION
TORONTO. APRIL 22, 1994
HAVE FUN. WILL TRAVEL
The conventional wisdom regarding business travel is that it is a drag and something you want to get behind you as quickly as possible. I have never agreed with this. In fact, I actually enjoy travel whether for business or pleasure. Despite the occasional hassles, travel nearly always provides the opportunity to see new places, meet different people or try out a new restaurant.
The fact that I enjoy travel is a testimony to the generally high level of service provided by the Travel Industry in general. However, I have been asked to discuss some of the technical trends that can help the service suppliers, travel agents and corporate travel coordinators to do an even better job.
My theme is basic. If you see new technology as a threat, then it will be.
New technology could threaten your business or your job. Fortunately, if viewed in the right way, it offers unbelievable opportunities.
Like most changes, the name of the game is “to capitalize on the inevitable”. In a word, you can exploit the opportunities by getting out in front of the trends.
Furthermore, you will enjoy the process. As David Leadbetter, the preeminent golf teacher in the world, always points out ‘mind set is everything’. If you look at technology as your partner in new opportunities, you will be amazed at the results. Hence, the topic of this talk:
First, let me congratulate you on the work being done by your organization. From the topics on the agenda today, you are certainly addressing the right topics.
Secondly, let me express my admiration that you still have such an organization! I was advised that the membership is made up of 60% service suppliers, 40% corporate travel managers and a smattering of travel agents. It seems to me that you have survived a major conflict. If the corporate travel managers are doing their jobs, then they should be reducing the need for the services of the suppliers. It is very altruistic of you to get together, but I suspect that you may be pulling in somewhat opposite directions – minimizing costs on the one hand versus maximizes revenues on the other.
Despite this observation and the fact that the trend to corporate travel cost cutting will not go away, it actually does make sense to have both of you in one organization because the best way to prosper is to concentrate on what the client needs. In this, you all have a vested interest.
Members of the CBTA already make good use of high technology. For example, the use of major multipurpose reservation systems, e.g. ADS or GEMINI, have been in place for some time. More and more hotels, car rental agencies and others are providing specialized systems for their particular needs, and these are usually interfaced with the multipurpose systems. The back office operations of travel agents were perhaps later in getting attention, but these too are now far ahead of where they were, even two or three years ago.
We will look at some of these in more detail, but let’s start with the needs of the business traveller, and how some of the new technological trends can improve on the service you provide to him or her.
Let’s start with the role of the Corporate Travel Manager.
CORPORATE TRAVEL MANAGER
Your personal goal is probably quite straight forward – in this time of right-sizing, it is to preserve your job! After all your company has set up your position to reduce costs and increase convenience to the company staff.
Unfortunately, both of these functions can be outsourced very easily.
Modern computer reservation systems can and do:
• store company travel profiles and policies;
• keep track of personal profiles of individual employees;
• cost optimize routings, hotel rates and car rental promotions.
At Rogers Communications, we have already outsourced this, and have effectively done away with any internal travel management, even though the outsourcing service supplier is on premises.
But in case you are all now running to the exits to dust-off your resumes, let me suggest that if you view your job differently, there is a vital role for an internal travel consultant. This is not to book reservations, but rather to advise on the optimum way of meeting the communication needs of your company’s executives.
If you examine why people travel, and then take as your mandate all of the alternatives that might be more cost effective, suddenly your job has grown dramatically.
For example, if videoconferencing is on the upswing, why are you not promoting this? This should be in your area as a corporate communications alternative to travel.
If executives travel to conventions to see new products, why cannot most of this be brought to them electronically? When you can easily accommodate an entire encyclopedia, or The Complete Oxford Dictionary on a single CD-ROM, it is logical that most of the information you could pick up at a convention could easily be viewed on your PC.
If deals need to be cut, much of this could be done through teleconferencing and videophones (although, I will admit that the latter need some work yet).
This is what the Information Superhighway is all about. If you view your job as being the information provider and the communicator, as opposed to just a travel purchasing agent, then your job would not only be secure, but dramatically more fun.
The significant trend leading to all of this is the falling cost of telecommunications. In a similar manner to the declining cost of computer cycles that lead to the PC Revolution, the advent of multi-transnational fibre optic systems is dramatically reducing the cost of telecom. The digitization of everything from voice communications to video to graphics, still pictures and text together with dramatic data compression will mean that the cost of communications, together with the cost of computer power, should become almost free in the decades to come.
Again, you could look at this as your competition, or you can look at this as the greatest opportunity you will have. Just look at the dramatic changes that are reducing the need for travel:
• In the past couple of years, fax traffic has exceeded voice traffic on transoceanic communications. It is marvellous because it gets around time changes and allows you to send messages anywhere in the world 24 hours a day.
• Voicemail has been even more revolutionary. I regularly make calls on weekends or at night knowing that I will not reach the person, but simply leave them a voicemail message. This vastly expands my productivity, and is another reason why I do not have to travel as much as I used to.
• I used to travel a great deal to give direct talks to employees. When this became unwieldy because of the number of offices I would have to cover, I moved to videotaped fireside chats. These are not ideal as they are one way; and more and more, we are using videoconferencing to accomplish the same thing.
• Just look at what has happened with Internet. Perhaps 15-20 million people are now hooked-up on this network of networks to exchange ideas, retrieve information or simply electronically to get to know other people better.
• The new trend is for individuals to make their own travel arrangements by booking these on PC’s or laptops. Having the OAG online makes this simple. You had better not be trying to compete with this type of convenience. However, what you could be doing is counselling your staff on the best type of software, and most appropriate ways of using this new facility.
Just look at all this for a minimal cost and no jet lag!
As we all know, travel is the third largest controllable expense a corporation has. You can provide a real service to your organization by using computers to provide better analyses of why and where people travel, and then recommending the least cost high tech alternative.
When travel is still needed, computer data-bases can help you in analyzing the travel patterns, negotiating the best deals by coordinating travel, and even such things as feeding back how many people are planning to go to a conference. You would be amazed at how seldom this is well coordinated in companies.
All of the above are not nearly as easily outsourced as your current role, and you are adding real value to your corporation.
• You are no longer just a buyer of services.
• You become your company’s Corporate Communications Coordinator.
• You can promote your job into one of the most exciting and rewarding in your organization simply by getting out in front of the trends.
THE SERVICE SUPPLY SIDE
If the Corporate Communications Coordinators are doing their job, what is there left for those in the airline, hotel or car rental businesses? Once again, let’s get out in front of the technology, and I predict you can have even more fun in the future.
Let’s first look at what you do not have to worry about. We can do this by examining why business people travel.
Of course, they will tell you that it is to visit plants, press the flesh, cut deals, establish personal relationships, see new products, etc. Obviously, this is true. However, business people are just people and beyond what they have to do for business, they like to socialize – share a good meal, have a drink, talk in a relaxed atmosphere.
If they are even more honest, they will tell you they like to travel to:
• Get away from the kids, the boss or possibly their spouses.
• Fit in a game of golf.
• Expand their horizons by seeing some place that is new and different.
• In a word, despite everything I suggested for the Corporate Communications Coordinators, people will still travel. I can assure you that nothing in the field of Virtual Reality is going to change this in the near future!
But if individuals are now in direct PC contact with the major multipurpose reservation systems, or directly with hotels or car rental agencies, you have a great opportunity for direct selling.
In most offices, PC’s are now as common as the telephone (although, I might point out that most of us do not make as good use of either the phone or the PC as we should, but this is changing).
• 30% of households have a PC.
Think of what you can now do in terms of micromarketing – knowing in advance what your customer will likely want based on past requests and being able to communicate to him or her at their desks or in their homes.
If people are still associated with corporations, and I believe this will become less and less the case in the future, corporations can put forth profiles of limits on individual’s ability to book certain classes of travel. Beyond this, given the flexibility of new high tech multimedia communication, consider how well you could package travel. For example, if an individual is travelling to a new location, why not provide a map of the area around the hotel showing the best restaurants, theatres or other amenities. The individual could book the restaurant of choice and even select the meal, as there would be no problem in displaying the menu. For example, if you were going to Dallas, the menu for the Mansion on Turtle Creek could be displayed and the meal preordered.
The same would apply for theatre tickets, fitness clubs, or any other amenities the customer may want (well, almost anything!).
As service providers, you could easily put together a full package for the client tailored directly to his or her interests. You would be selling the sizzle directly to the client.
I can assure you that even sophisticated travellers do need lots of information. These days my usual question when I book a hotel is “are you still Four Seasons, or is this still a Ramada?” If one does not already exist, you really need an online OHG (Official Hotel Guide) just to keep up with the changes.
Of course, you can help the client even more when hotel rooms are booked. There is no reason you could not show on the PC a picture of the room, the view from the window, or the banquet facilities in either still or full-motion video.
Before we get carried away with the “gee-whiz’ possibilities, I am reminded of the old story of the farmer whose son had just come back from agricultural college. After outlining all the things his Father could do, the old farmer replied, “that’s interesting, but I already don’t farm half as well as I know how to”. In many cases, we are not even using the available technology as well as we could.
I’ll bet that half the time I check into a hotel, I still have to fill out data that could and should have been electronically forwarded at the time of booking. This is getting better. Recently, I booked into an Ottawa Hotel and received a nice letter indicating that this was the tenth time I had booked there in the past twelve months. They also provided a gift in the room. But this is the exception, and customer retention is going to become increasingly important to all of you.
The same applies to many car rental operations. Some of the executive services are now getting more sophisticated. But with a little effort, when you arrive at an airport, you could have a screen display, “Mr. Fierheller your car is in slot A-12 at Terminal 2”. Of course, you would still have to have some control, such as showing your Driver’s Licence, as you exit the parking lot. But with everything electronically prebooked, this should be a simple update of current systems.
Perhaps one of the greatest irritations of the business traveller, is the feeling that he or she is not getting the best or even a reasonable deal for a seat on the plane or a hotel room. You feel somewhat cheated when you read in travel magazines that if you just ask, you can probably get a lower rate at a hotel, for example, because they are underbooked. Just think of the positive impact it would have, if you offered this without question to your regular customers. But to do this, you must know who they are.
In a word, I believe we should start by making better use of what we already have available in our systems.
For example, I am sure the airlines know the cost of an empty seat. I am not sure that hotels use computers to model the cost of empty hotel rooms, or the impact of no-shows, which likely runs 10%. The same applies to car rental agencies. If you really knew who your regular customers were, perhaps you could bonus them, if they have a record of never being a no-show.
The investment in both using current technology better, and anticipating the new multimedia possibilities will work wonders in selling additional services and retaining a loyal customer base.
THE MIDDLE GAME
Where does all this leave the travel agents? You are in a tough business, but once again, technology can come to the rescue. I was advised that the commission earned by travel agents when averaged over hotels, airlines and car rentals is about 9%. Someone also noted that it costs about 7.5% of revenue to run an agency. Your margins look something like the grocery business.
But then, come to think of it, this is exactly as you would expect, because you are delivering a largely undifferentiated product. You all deal with the same suppliers, and you all access them over the same reservation systems.
About the only way you can increase the margins is through volume incentives from suppliers, and this would seem to mean that only the very large agents will survive. I have heard predictions that by the end of this decade, there will likely only be about five very large agencies, plus a smattering of the ethnics serving particular cultural communities who are able to survive on very low margins.
So what does the new technology hold out for you?
Even if more and more people are booking directly via PC, there is case that from the corporation standpoint, these bookings are better made through a single source. This more likely to ensure that the best discounts are taken, and just as importantly, corporate statistics are collected.
Travel agents can also add deals for personal travel, which might otherwise be lost if all bookings are made in an uncoordinated fashion directly by individuals.
However, the real added value will come from up-to-date, on-site experience, which the agent can pass on to the traveller. I would predict that the major surviving travel agents will use the Information Superhighway to connect the traveller directly with highly informed regional offices, e.g. the Singapore desk. All of the multimedia capabilities I discussed earlier, could be made available supplemented by current comments in conditions in that city.
If you have ever tried to book on Intourist in Russia, you will understand the value of such experience, and the frustration of trying to book direct.
I also believe travel agents will still prosper in the pleasure travel area, and can use the new multimedia marketing techniques very effectively, but that is another topic.
NEW COMPETITION AND NEW OPPORTUNITIES
More and more, travel agents need to sell in competition with increasingly impressive local alternatives. We all know that Toronto is the world’s most cosmopolitan and multicultural city. The world is coming to us more and more in terms of variety of food, cultural events and even travel documentaries. A video on The Learning Channel on the architecture of Notre Dame is frankly far more informative than an actual visit.
To combat all this, we need the best in multimedia to sell the joy of travel.
To illustrate this, it is my pleasure to introduce Andrew Mahoney, of SiliconGraphics, who is going to give you a demonstration of some of the capabilities of this remarkable new technology. SiliconGraphics is one of the leaders in this latest technology. Although not all of the illustrations will relate directly to the travel business, I believe you will quickly see for yourselves how this might be applied in your area. (A demonstration of technology followed.)
I have not begun to cover all the areas where new high tech devices can improve business travel. One only needs to look at the in-flight services becoming available allowing business travellers to use fax or other communications media in the air, even when flying across oceans, to get some idea of what is available. The opportunities are great for new technology to make business travel better for the client and more profitable for those in the industry.
If people Have Fun, they Will Travel.