The goal is simple: Get everyone to use approved airlines, rental agencies and hotels. The more you use them, the more you can save through volume discounts and negotiated rates.
The problem is getting everyone to follow directions. Last minute flights, misunderstandings and well-meaning discount hunters can all lead to a travel office nightmare. By using a custom online booking package, such as Oracle’s eTravel, companies can save money and enforce the travel policy at the same time.
“It allows for corporations to enable their travelers to book air, train and hotel reservations via a desktop computer,” says Rick Lifsitz, vice president of applications development for Oracle. “They do it in complete compliance with the corporate policy in a fashion that can coexist with an existing agency relationship.
“Some corporations use agencies to have all their travel booked by phone, while others have them handle the reporting. What we don’t want to do is interrupt that cycle. We want to supplement it with a low-cost technological solution. The agency reduces the cost structure and passes the savings on.”
The average cost to book corporate travel ranges between $30 and $70. The online solution drops that to about $10.
The system also has a direct link to several suppliers, allowing you to bypass the central reservation system and book directly with the supplier. You save the transaction fee from the reservation service, which can be about $2.50 for each segment of your trip.
eTravel charges $1 for the entire itinerary. If your trip has four segments, Cleveland to Chicago, Chicago to New York, New York to Boston, then back to Cleveland, you would probably be charged $10 in transactions fees. By doing it online, it only costs $1.
“When connecting directly, you also get better information on airport taxes, dropoff taxes and what kind of car you are renting,” says Lifsitz.
The application handles all the reporting and shows specifics on how much the company is saving, the cost per mile and many other measurements that can be customized.
To make the application worthwhile, a company needs about $3 to $5 million in air sales, but smaller companies shouldn’t be discouraged. Many travel agencies are buying the product and using their volume to allow smaller firms to get the same savings and reporting abilities without the investment in technology, so check with your local agent.
While there are many Web-based travel agencies employees could use, control is always a problem.
“The issue has always been for a corporation to try to control what supplier the traveler uses, and in what way it is used,” says Lifsitz. “If they are allowed to go to Expedia or Travelocity, you are losing control of purchasing. The name of the game is to shift the market share to suppliers to get improved negotiated rates.
“That’s all lost, along with no capability to track costs, if that person goes out and uses a third-party Web site.”
Todd Shryock ([email protected]) is SBN’s special reports editor.