Sabre Real Savings Business Travel

Real Savings in
Business Travel
July 2013
Sponsored by
Page 2 Real Savings in Business Travel
2013 Egencia, LLC. All rights reserved. Expedia, Egencia, and the Egencia logo are either registered trademarks or trademarks of Expedia, Inc. in the US and other countries.
Introduction
The corporate travel function is expected to embrace and leverage
innovation while growing savings and securing more value out of travel
expenses while improving the traveler experience and enhancing
collaboration with procurement, nance, and a number of other internal
and external entities. While that sounds ambitious, it is a worthwhile pursuit
with proven results. In todays environment, travel programs are looking for
ways to broaden their impact and grow savings beyond the more traditional
pursuits of managing suppliers and travel policies. At the same time, an
increasingly mobile and online savvy workforce expects travel tools similar
to those they use in their everyday lives.
This focus on expanding program impact and addressing evolving
user expectations is the topic of many discussions across the industry
today, and rightly so. Travel and technology are a proven combination
in generating innovation, but as our industry integrates these new
expectations and emerging capabilities over the near-term and longer, it
is also essential to identify and remain focused on proven behaviors and
capabilities that deliver real savings today. Not as a nostalgic exercise,
but as an active effort to make sure the key elements that deliver
savings directly to the bottom line are not inadvertently overlooked or
compromised. A small, positive change in the most inuential elements
of your corporate travel program will still deliver signicant savings, or,
conversely, can eliminate them.
When managing monetary, productivity, and other intangible costs within
your travel program, there are material, avoidable costs that can be
converted to realized savings with the right focus and tools. Effective
corporate travel programs will capitalize on these new opportunities while
reinforcing the proven ways they add value, avoid costs, and support both
company and traveler requirements to get the most out of their travel
spend.
Real Savings in Business Travel
Introduction 2
Part 1: Monetary Costs
of Business Travel
3
Air Travel 3
Hotel Spend 4
Service Fees 4
The Real Cost of
Business Travel: A
Case History
5
Part 2: Productivity
Costs of Business
Travel
6
Online Booking Tools
and Productivity
6
Fast and Flexible The
Base Expectations
6
Poor User Interface
and Experience Lowers
Productivity
7
Fragmentation is Very
Expensive
8
Part 3: Avoiding the
Intangible Costs
of Business Travel
9
Personalization The
New Expectation, and
an Opportunity
9
The Model Has Flipped 10
Effective Travel Tools
are a Great Start
10
Summary 11
About Egencia 12
About Sabre Travel
Network
12
Part 1: Monetary Costs of Business Travel
These costs represent the classic expenses of business travel. Airline
ticket prices, hotel rates, and so forth have historically been the primary
focus of savings within travel programs. This focus is rightly placed as they
typically represent the largest contributors to total trip cost and proven
cost containment tactics can deliver signicant savings. While this is often
the most mature aspect of most travel programs, signicant savings result
when increasing and reinforcing the following:
Air Travel
When possible, book in advance, minimize changes, and use exible
scheduling to secure the lowest cost. While these key principles make
intuitive sense, they are certainly worth reiterating given the proven savings
they deliver.
Advance purchase is one of the most inuential variables on airline ticket
prices and yet recent Egencia studies show that up to 74 percent of
travelers failed to maximize possible advance purchase windows that in
some markets could have reduced costs by over 40 percent.
1
In addition, non-refundable tickets typically save 50 percent or more on
U.S. domestic routes vs. refundable tickets, and up to 60 percent on many
international routes. To the extent possible, predictability and planning are
the keys to securing and realizing the value of these lower fares.
Routing and policy exibility deliver signicant savings as well. Some
airfares drop by up to 65 percent when considering a minimum two-hour
window between connections in eight out of ten tested North American
city pairs.
2
While it is not always possible to book in advance, minimize changes and
be exible in scheduling due to requirements for last minute trips or the
lack of optimal fares at the time of purchase which are correlated
the opportunity remains, and the results proven when these criteria are
optimized whenever possible.
1 Cost Avoidance Strategies, Egencia 2011
2 Cost Avoidance Strategies, Egencia 2011
74%
Travelers not maximizing possible
advance purchase savings
windows.
Cost Avoidance Strategies,
Egencia, 2011
Hotel Spend
Hotel planning is often a personal process that considers more variables
based on brand preference, destination proximity, available services, etc.
Hotel planning tools and policies should accommodate these additional
variables while still ensuring the savings and trip information required by
the program. Developing or securing access to a corporate hotel program
that provides preferred supplier discounts and included amenities has
shown signicant savings; however, these benets are often lost or sub-
optimized when reservations are made outside the program. The negative
impacts of purchase fragmentation are not only reected in the current
rate and amenities, but also through loss of integrated support and trip
information blind spots that dilute supplier negotiations, compromise
program analysis, and create risk with traveler duty-of-care. Providing
adequate coverage of preferred properties that can be easily accessed
through quality tools is essential to ensuring travelers book within the
travel program whenever possible. With the right property options, user
experience, and policy exibility, the number of hotels booked within the
program, often referred to as the attachment rate, increases accordingly,
and so do the savings.
Service Fees
Quality self-service tools that seamlessly integrate the business travel
expectations and requirements of both the traveler and corporation are a
key driver of traveler satisfaction and savings, however, the need for expert
integrated service is equally essential. A traveler who needs expert support
or intervention on demand might argue that quality support is even more
essential than a quality tool. At that moment, he or she would be right.
Service fee savings from the use of online booking tools is well
documented and the benet grows proportionally as the overall adoption
of those tools continues to grow. That said, the goal is not to eliminate
service fees at the expense of support that could benet the productivity
of the traveler; the goal is to better align those fees with scenarios where
value is truly delivered.
The two main drivers for direct support include complexity and
convenience; these needs vary by traveler and trip and both are legitimate
in their own circumstance. Providing easy-to-use tools that travelers can
access with condence will minimize those unnecessary support calls and
better align service fees with value.
Developing or
securing access
to a corporate
hotel program that
provides preferred
supplier discounts
and included
amenities has shown
signicant savings;
however, these
benets are often
lost or sub-optimized
when reservations
are made outside
the program.
The Real Cost of Business Travel: A Case History
BrainJuicer, an innovative, international market research agency, found that
their ofine travel program was failing to meet the needs of the companys
staff. Due to the lack of an online solution, the organizations travelers
were becoming frustrated by poor inventory visibility and the difculty they
faced if trips needed to be amended or cancelled.
Due to the intuitive, consumer-focused design of Egencias online booking
tool, it was immediately utilized by BrainJuicers travelers. The familiar,
leisure-style booking experience encouraged uptake, with users enjoying
the control, visibility, and exibility they gained from integrated products,
such as SeatGuru, TripAdvisor and Egencias Mobile App they could now
make the most informed choice for their trip. Assigned agents continue
to provide BrainJuicers travellers expert advice and assistance for any
complex or unfamiliar bookings.
The functionality of Egencias technology was also utilized by BrainJuicers
management team. Customizable reports, automated compliance controls,
and pre-trip approval provided the companys Travel Managers with greater
insight and control over their travel policy. Traveler tracking and travel
alerts also enabled BrainJuicer to better anticipate risk and ensure duty of
care to travelers.
Egencias technology-
based service enhanced
traveler satisfaction
within the company,
allowing the business to
concentrate and improve
the higher level aspects
of our travel program.
Denise Barrett
Travel Coordinator
BrainJuicer UK
Part 2: Productivity Costs of Business Travel
A classic measurement of productivity, according to the U.S. Department
of Labor, relates output to labor hours used in the production of that
output. Measuring true productivity of business travel is much trickier and
includes many contributors, but for our purposes we will focus on the time
spent in the business travel planning and support process.
Online Booking Tools and Productivity
By 2009 the corporate online channel accounted for just over half of all
corporate travel bookings. The recent recession and emphasis on cost-
cutting continued this adoption growth with companies promoting the use
of self-service tools to reduce service fees. At the same time, users were
becoming more comfortable with online experiences and tools overall. As
a result, online corporate travel bookings have risen tremendously and are
expected to continue to grow aggressively through 2013.
1
Use of online
tools is clearly not new and the proven cost benets are not surprising,
but there are still many opportunities to capitalize on signicant savings.
With users becoming more adept and comfortable with these types of
tools, and with mobile and tablet apps quickly gaining popularity, many
companies now nd themselves seeking to accommodate their travelers
preferred modes of booking behavior, not trying to encourage one over
another. This new dynamic and continued improvements in booking tools
can be used to further accelerate online adoption, capturing activity that
was formerly resistant, and lower total service fee costs.
Fast and Flexible The Base Expectations
If an employee is forced to use tools that take a long time to load, appear to
access limited inventory, or are cumbersome to use, productivity will take a hit
and increase costs, in one way or another. Travelers should be able to easily
submit a request and quickly see intelligent, applicable options in seconds.
Within the corporate space, the applicability of travel policy and company
objectives further complicate this requirement by incorporating things like
preferred suppliers, schedule expectations, or other parameters as applicable.
Regardless of these corporate complexities, the online booking tool must
provide an intuitive interface where users are immediately comfortable and
condent with the experience and options provided. This is their expectation
with personal technology interactions and they expect no less from their
corporate tools.
1 GBTA, 2010.
Regardless of
these corporate
complexities, the
online booking tool
must provide an
intuitive interface
where users
are immediately
comfortable and
condent with the
experience and
options provided.
Poor User Interface and Experience Lowers Productivity
We dened productivity as time spent on travel planning and support. Given
the expected rise in self-service corporate reservation activity (adoption
growth), it is essential these tools enable efcient travel planning, or there
will be increased productivity costs that easily offset any potential service
fee savings.
How long does it take your business traveler to book a trip? How much
training did it take for them to get comfortable with the booking tool
itself? How many phone calls were placed, emails sent or questions asked
regarding information or services that were available in the tool?
To keep things simple, well measure productivity costs for business
travelers or travel managers as time spent the more hours spent, the less
productive they are. Note that this could also apply to opportunity costs
(what they did not do while planning travel), but for our purposes:
{Hours Spent Travel Planning} x {Average Cost Per Hour} = Productivity Cost
In a recent GBTA study, one business traveler commented: It [the booking
tool] is extremely slowany money saved by using the online booking tool
is more than spent in the time it takes to make a reservation. Sometimes,
Ive spent a couple of hours researching various options. I go to the airlines
websites to look at ight options because the booking tool is so user-
unfriendly.
1

Travel productivity erodes when travelers, Travel Managers, and those
that support or interact with them, are forced to spend unnecessary
time planning and supporting travel. These lost hours should not be
underestimated as they add up to signicant costs. Before moving to their
new booking platforms, Lacoste, for example, documented a loss of up
to 160 hours a year on travel planning, while Australian auto company
Club Assist reported some staff spending 25 percent of their time on
unnecessary tasks associated with managing their employees travel time
that could have been well spent on other work duties.
2
These behaviors can
often be directly attributed to a poorly designed and unintuitive interface on
the booking tools that delivers a poor user experience
3
.
1 GBTA, (Dis)Satisfaction with TMCs and SBTs: Research and Remedies (July 2012)
2 Club Assist Case Study (March 2012)
3 Harvard University Case Study (August 2011)
Fragmentation is Very Expensive
Another risk of a poor booking tool or a perceived lack of content is
encouraging a fragmented purchase process. Effective travel programs
manage the purchase process, integrate quality support, utilize
comprehensive data and ensure safe and satised travelers. In program
reservations integrate processing, support, and data management to
achieving that effectiveness, securing savings with maximum value and
ensuring the safe and informed travelers that companies expect.
Travel programs that support optimization of published and negotiated
rates through the GDS marketplace and are supported by Travel
Management Companies (TMCs) and technology providers has been
constructed to meet those requirements. When users go outside the
program to purchase travel for business, these integrations and the
related benets and controls are compromised. So while user productivity
(or perception) may slightly improve at the front end of the reservation
process, the total cost increases signicantly. Studies have shown the
cost, lost savings, and increased risk can easily add $40 or more for
each item secured outside the program
1
. We do not attempt to quantify
the intervention and duty-of-care risks associated with unknown itinerary
information, but they are signicant and incremental to the costs above.
To address this often well-intended activity, it is essential to quantify and
communicate the benets (savings) of the program overall to an individual
traveler, and how their behavior directly impacts those benets. Since the
bottom-line savings and benets are based on broad discounts, minimized
processing costs, integrated support, and effective data management,
a seemingly low fare can incur a net cost that is actually signicantly
higher.
1 Susan Steinbrink, The Hidden Cost of Fragmentation (PhoCusWright, April 2011)
Effective travel
programs
manage the
purchase process,
integrate quality
support, utilize
comprehensive data
and ensure safe and
satised travelers.
Part 3: Avoiding the Intangible Costs
of Business Travel
Tangible costs include the things that a business is asked to write a
checkfor; this includes salaries, leases, operational inputs, employee
benets, insurance etc. For many companies, travel expenses are among
the top three controllable expense items, so the checks written for
business travel can be large and justify a focus on managed business
travel. They are also a business requirement that can drive signicant
intangible costs as well.
Intangible costs are by denition more difcult to measure than tangible
ones. Some relevant intangible costs might include a drop in employee
morale or dissatisfaction with working conditions or business tools that
negatively impact contribution and behavior. While intangible costs
often result from identiable sources, the associated costs are often not
budgeted or captured but can be very expensive nonetheless
1
.
For our purposes, the denition of intangible costs or benets will
reect the impact of a travelers perception of, and their reaction to, the
company travel program. For employees who take a trip for business, their
experience and the tools provided reect on the company and directly or
indirectly affect an employees behaviors. Those behaviors can consciously
or with no intent cause immediate, adjacent or downstream avoidable
costs like those we have discussed here. Efcient planning tools help
demonstrate an overall understanding and commitment that provides
condence to the traveler. That condence affects participation, which is a
key to enabling other benets of a managed program.
Personalization The New Expectation, and an Opportunity
Personalization technologies enable users to handle information overload
and make the experience more pleasant and productive. (e.g. better user
satisfaction). Users feel identied and understood. On the consumer side,
personalization helps businesses establish personal relationships with their
customers.
2
Recognition of the individual traveler and providing condence
that their needs are clearly understood, if not always accommodated, are
critical requirements of a successful program to maximize perceptions and
minimizes intangible costs.
1 Houston Chronicle, Business Management: What Are Tangible Costs & Intangible Costs,
2011
2 ICEC Study: The Efect of Personalizaton on the Perceived Usefulness of Online Customer
Services: A Dual-Core Theory, 2009.
The Model Has Flipped
Companies that have developed comprehensive travel program
participation have done so in various ways. Some pursued more structured
and mandated methods that could be characterized as push models,
including the potential of non-reimbursement, while others encouraged
participation in less direct, but often as enthusiastically driven ways.
Placement on that spectrum has been a function of culture, cost focus,
user base, size, and a number of other factors unique to each company.
With the continued convergence of consumer and corporate experience
expectations and users more comfortable online, the model is ipping.
There is a new emphasis on pull methods that entice users with better
options, faster processing, and a positive experience that meets their
expectations. Companies nd they are not trying to push travelers to the
tools, but trying to keep up with the expectations of a new user-base that
wants to book online rst.
Effective Travel Tools are a Great Start
As mentioned, the intangible impacts of a happy traveler are very difcult
to quantify, but the efforts and conclusions just make sense. A recent study
found that employees are happier, when they perceive that the company
environment supports them.
1
Happier employees make better decisions
and there are many discretionary decisions made in business travel.
We all know that business travel is demanding. Long hours, late nights,
security lines, infrequent meals, and time away from family can sap the
energy and drive from even those with the strongest constitutions and
commitment. However, knowing their company supports them with the
best possible tools, understands their needs, and acts on them, can
directly impact morale and those intangible costs. Those available yet often
overlooked capabilities like automatically providing travelers with critical
travel information (storms, closed airports, etc.) provides both actionable
information and a more connected feeling.
Of course it is not just about the technology, but that is a big part of it. As
the industry continues to evolve, smart and friendly technology has become
table-stakes required to address many of the avoidable costs in travel
management identied here. A deep and comprehensive understanding
of traveler needs and company objectives and a network of service and
technology providers working together to address those needs is essential.
1 Forbes, A Happy Workplace Really Is Crucial, April 2012.
Efcient planning
tools help
demonstrate
an overall
understanding and
commitment that
provides condence
to the traveler. That
condence affects
participation, which
is a key to enabling
other benets of a
managed program.
Summary
Travel is an ever evolving and innovative industry and corporate travel
management is, and has been, on the forefront of those changes.
Companies continue to focus on cost pressures and incorporate the
expectations of a growing mobile and online workforce. As we forge
ahead, it is worth an inventory of and focus on the fundamental
elements of a travel program that deliver bottom-line savings today. These
integrated capabilities and services are continually optimized by multiple
key participants that make up the corporate management ecosystem. This
partnership has proven results and value to companies, travelers, and all
those that depend on or interact with the travel program. In ongoing efforts
to improve our ecosystem, the fundamentals that really move the needle
on the bottom-line must not be overlooked, compromised, or inadvertently
diluted.
Innovation is a positive dynamic and corporate travel eagerly embraces
these opportunities to nd new ways to increase value and grow savings.
Within these efforts, it is absolutely essential to identify and protect
current proven dynamics and elements that deliver signicant value and
savings to the bottom line today. There are unrealized savings still to be
achieved by optimizing the fundamentals and efforts to innovate should
consider the potential impact to those fundamentals carefully.
About Egencia, an Expedia, Inc. company
Egencia is a leading full-service travel management company delivering
innovative corporate travel solutions and expert local service to over
10,000 clients in 60 countries around the world. As part of Expedia, Inc.,
(NASDAQ: EXPE), the worlds largest travel marketplace, we provide
forward-looking companies with the ability to drive compliance and cost
savings in their travel programs, while meeting the needs and requirements
of the modern business traveler. For more information please visit us at
www.egencia.com or connect with us on Twitter @Egencia.
About Sabre Travel Network
Sabre Travel Network provides technology to the travel industry.
It operates the worlds largest travel marketplace, connecting travel
buyers and sellers through the Sabre global distribution system (GDS). Its
innovative technology connects 370,000 travel agents to more than 400
airlines, 100,000 hotels, 27 car rental brands, more than 50 rail providers,
14 cruise lines and other global travel suppliers. More than $100 billion of
travel is purchased through this channel annually.
Sabre Travel Network is part of Sabre Holdings, a global travel technology
company serving the worlds largest industry- travel and tourism. Its
innovative technology is used by more than a billion people around the
world to plan, book and get to their destination at a time and price thats
right for them. For more information, please visit www.sabre.com.

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