Changes Are Coming to Government Travel

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

04/13/2023 3Gillespie’s Guide to Travel+Procurement

Countries

T&E Spend

$$$

$

20% of Global T&E Spend

Worth going after?


Airlines

Air Spend

$$$

$

20% of Air Spend

Worth going after?



$$$

$

20% of Spend

Worth going after?

Spend

City pairs, or hotels, or travelers, or trips


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


The castles have been built

Travel PolicyNone Harsh

High

Costs

Trip Cost

Solid, safe, enduring – a valuable base

Immobile, infl exible


notCastles

ShipsWe need

Where are the new frontiers?




High

Costs

Trip Cost

Traveler Friction

Traveler Friction is a new frontier

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

problems



High

Costs

Trip Cost

Traveler Friction

Traveler FrictionNew metrics could

reduce traveler burnout

Implications for Government

Managed Travel 2.0 is a new frontier


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


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


Traveler Dashboards are a new frontier

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Traveler Dashboards

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Potential for significant impact


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


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


Corporate Traveler

Brand.com

Corporate Booking

Data

Corporate TMC

Right to edit or cancel the

booking

Everybody is happy!

Trip Changes


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


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

[email protected]

Changes Are Coming to Government Travel

Business

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