GENERAL SESSION:Change is Coming to Managed TravelPRESENTER: Scott Gillespie, Industry Consultant

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• Managed Travel 1.0 and its Diminishing Returns

• New Frontiers in Managed Travel• Impact on Government Travel• Discussion

Where we’re headed

Managed Travel 1.0 has diminishing returns

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Countries

T&E Spend

$$$

$

20% of Global T&E Spend

Worth going after?

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Airlines

Air Spend

$$$

$

20% of Air Spend

Worth going after?

Managed Travel 1.0 has diminishing returns

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$$$

$

20% of Spend

Worth going after?

Spend

City pairs, or hotels, or travelers, or trips

Managed Travel 1.0 has diminishing returns

Consolidate Bookings with Travel Mgmt. Co’s. 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

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After 20 years, best practices for Managed Travel 1.0 are well known

Trip costs have been mastered

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The castles have been built

Travel PolicyNone Harsh

High

Costs

Trip Cost

Solid, safe, enduring – a valuable base

Immobile, infl exible

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notCastles

ShipsWe need

Where are the new frontiers?

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Travel PolicyNone Harsh

High

Costs

Trip Cost

Traveler Friction

Traveler Friction is a new frontier

• Frustration• Stress• Safety, security• Lost productivity• Reluctance to travel• Recruiting, retention

problems

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Travel PolicyNone Harsh

High

Costs

Trip Cost

Traveler Friction

Traveler FrictionNew metrics could

reduce traveler burnout

Implications for Government

Managed Travel 2.0 is a new frontier

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1. Shop anywhere –period.

2. Book anywhere –so long as data is captured quickly

3. Book anybody –so long as suppliers are safe

4. Book anything – so long as it is in budget

Managed Travel 2.0

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1. Shop anywhere –period.

2. Book anywhere –so long as data is captured quickly

3. Book anybody –so long as suppliers are safe

4. Book anything – so long as it is in budget

Concur’s Open Booking initiative

should help capture Hotel data

Implications for Government

Traveler Dashboards are a new frontier

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Traveler Dashboards

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Implications for Government

Potential for significant impact

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Tr u e O & D s – n o t a i r p o r t to a i r p o r t

Pre-selected door-to-door iti nerar ies

Best t r ip by main feature:• Lowest cost• Least t ravel ti me• Most compl iant• Greenest

Trip Tailoringis a new frontier

See Rome2Rio, KDS Neo, Rearden’s Deem

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Tr u e O & D s – n o t a i r p o r t to a i r p o r t

Pre-selected door-to-door iti nerar ies

Best t r ip by main feature:• Lowest cost• Least t ravel ti me• Most compl iant• Greenest

Trip Tailoring Implications for Government

Could help reduce cost, complexity for infrequent

travelers

Edit Rightsare a new frontier

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Corporate Traveler

Brand.com

Corporate Booking

Data

Corporate TMC

Right to edit or cancel the

booking

Everybody is happy!

Trip Changes

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Corporate Traveler

Brand.com

Corporate Booking

Data

Corporate TMC

Right to edit or cancel the

booking

Everybody is happy!

Trip Changes

Edit Rightsare a new frontier

Implications for Government

Will allow Authorized Travel Agencies to better

serve travelers

• Higher airfares = more cost pressure on entire travel budget

• Need better travel procurement– City Pair Program has superior sourcing strategy– FedRooms and Rental Car Program have structural

weaknesses• Need better data and KPIs

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Impact of US Air and American Airlines Merger

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CPP Fares won’t be affected until FY15

Public and corporate fares will rise soon after merger

Preliminary analysis

Source: Scott Gillespie

Domestic US airfares will rise after AA-US merger

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Airlines

Hotels

Rental Cars

Corporate Procurement

Government Procurement

Discounts Firm Fixed Price

Multi-market bids Single city pair bids

Firm Fixed Price

Firm Fixed Price

Individual properties

Multi-market bids

Per Diem Rates

Ceiling Rates + GARS

Policy directs purchase volumes to specified suppliers

Better Travel Procurement?

Better Data and KPIs

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Spend visibility, with granularity good enough for• Negotiations• Policy compliance tests• Savings lost or achieved

Spend Visibility Metrics

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* FY13 Object Class 21 Total Budget(less Fleet and Relocation budget)= Managed Travel Budget

SmartPay $Managed Travel Budget*

TMC MIS Bookings $Air, Hotel Voucher $

Corporate Best in Class

Card Visibility > 90%

Air > 90%Hotel > 60%

Booked Visibility

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Cost Over Best Available Rate - COBAR

Example: Rental Car Booking

Rate Allowed = $75

Traveler Books at $70

Best Available Rate = $50

-> Saved Gov’t $5

-> Could have saved Gov’t $25

COBAR= $20 ($70 booked minus $50 Best Available Rate)

Key Performance Indicator Example

Set a goal: COBAR as % of Managed Travel Budget

Secondary Sourcing Opportunities

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Groups and Meetings

Black Cars, Limos

Meals

Taxis, Parking

Mobile Phone Service ?

Summary and Q&A

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Travel Management is at a point of diminishing returns

New frontiers include:• Trip Friction• Trip Tailoring• Managed Travel 2.0• Edit Rights• Traveler Dashboards

US-AA merger will put cost pressure on entire Gov travel budget

Hotel and Rental Car Procurement Strategy?

Better Data and KPIs!

Scott Gillespie Gillespie’s Guide to Travel+Procurement

Scott.Gillespie2008@gmail.com