The hidden cost of relaxing policy and embracing rogue

Much has been written about the rise of the rogue traveller this year. The fine balancing between policy enforcement and happy and productive business travellers has been the centre of many a debate since it was first raised (to me, anyway) at the ITM Intelligence Conference back in May (you can read my blog on that here) and, most recently, at the GBTA Europe Conference in Budapest (my blog on that session is here). 

Corporate travel buyers are being warned that managing policy too closely leads to traveller friction, which in turn impacts on the wellbeing, productivity, motivation and loyalty of the traveller. Introducing flexibility, on the other hand, can lead to happier travellers; travellers less likely to ‘go rogue’.

On paper, the traveller turned self booker appears to be a no brainer, saving money for the company thanks to religiously booking within policy price parameters or even under budget because of internal incentives and reward programmes.

But it can’t be all win win for the organisation, surely? There must be some pay back? And perhaps the answer is, yes, of course there is, and that pay back lies in the time it takes for these employers to self book. And therein lies the problem: because this cost isn’t visible it can go largely ignored.

Whether the traveller turned self booker uses a self booking tool, an internally-designed travel portal (a la Google), or simply surfs their favourite leisure portals, they are wasting hours and hours of time online booking their trips; time that could be spent working; time that costs the company money. In fact, a company that has 20 senior execs each taking 20 trips a year and each taking a morning to book each trip is throwing away the equivalent of more than £51,000 worth of billable hours.

So what’s the answer? Well, frustratingly, that seems to be far from decided and still very much up for debate. The Business Travel Show will attempt to throw some light on the issue with a panel session called ‘Policy – how vogue is rogue?’ at the event next February, but I’m sure a lot more will be said about it – for or against – between now and then and I’d be interested to know what you think, so why not join the debate on Twitter @abtn_online or @btshowlondon?

David Chapple is event director for the Business Travel Show, which takes place at Earls Court on 5-6 February 2013. Registration is open at www.businesstravelshow.com.

ROGUE IS VOGUE - TALES FROM THE GBTA EUROPE CONFERENCE 2012

I’m in Budapest for the GBTA Europe Conference and, what appears to be this year’s recurring theme in corporate travel, has reared its head once more: Rogue is Vogue.

Max Keegan, a 17 year old ‘digital native’ took to the stage this morning to share his experiences of booking travel in a bid to help buyers understand how they will need to evolve to cater for future travellers. In short, it’s all about digital, and his message to corporate travel buyers is that they need to adapt now to deal with social hungry travellers like him. 

It seems the new generation of business travellers is feeling rebellious. They don’t want to be reined in by regimented booking policies and procedures. They want the freedom to be able to book corporate travel using the types of booking tools – and with the same level of ease – they experience when booking leisure travel.  

What’s behind this urge for rebellion? Technology. Technology has enabled business travellers to pick and choose rather than be directed. It allows them to be flexible. And, according to this morning’s speakers, flexibility is one of the most important messages that buyers should take away from this conference. Closed, structured, mandated and managed policies are dinosaurs. The future is about open travel booking. 

Instead of forcing travellers to stick to very strict procedures, buyers are now being encouraged to allow travellers to book whatever, however as long as they stay within more general parameters of policy, whether that’s financially set or otherwise. By giving travellers this freedom and access to the booking experiences they are used to, it’s more likely they will stay within set parameters and everyone’s a winner.

David Chapple is in Budapest for the GBTA Europe Conference 2012 (#gbtaeurope2012). If you’re there, too, say hi. If not, say hi on Twitter – www.twitter.com/btshowlondon

DEAR PATRICK MCLOUGHLIN, PLEASE PUT PARTY POLITICS TO ONE SIDE FOR THE SAKE OF UK PLC

In the first cabinet reshuffle since the Coalition Government took power, anti-third runway Transport Secretary Justine Greening has been ousted and Patrick McLoughlin has taken her place. Not much is known about Mr McLoughlin transport-wise, apart from the fact he has a fear of flying and he represents the most landlocked constituency in the UK.

 

No doubt, airport expansion, and the issue of a third runway at Heathrow in particular, will be top of his agenda this morning. Speaking on behalf of the business travel industry – if I may – I urge Mr McLoughlin to use this opportunity to put party politics to one side, to not succumb to the NIMBYs (not in my backyards) who will fight against expansion at whichever airport affects them most, and to focus solely on what’s good for UK PLC.

As the Government continues to dither and decisions are delayed, cities like Amsterdam, Frankfurt and Paris – all with world-class, well-connected hubs – continue to attract global corporations and the UK continues to slide down the scale as a centre of global commerce. 

Our lack of airport capacity is also preventing us from introducing new routes to the BRIC countries, which is essential to fuel economic growth long term.

In my opinion, that means putting a plan in place to create a long term transport strategy that will support the UK as a centre for business and fuel its economy over the next 20-30 years. And in the short-medium term look to airports such as Gatwick, Luton and Stansted to ease the capacity issues at Heathrow that everyone is getting so blindsided by.

As event director of the Business Travel Show, I’d like to extend an invitation to Mr McLoughlin to address the business travel industry at our event in London next February where he will meet a very eager audience keen to question him about the issues affecting our business including airport expansion, APD, green taxes, and high speed rail and franchises.

David Chapple, event director Business Travel Show, david@businesstravelshow.com

VIRGIN TAKES OFF AT HOME

Richard Branson and Virgin have somewhat hijacked the news over the last two weeks, haven’t they?

It started with Virgin being outbid by FirstGroup for the West Coast Mainline franchise that it has been running for the last 12 years. You can read our blog post with the details of FirstGroup’s bid here. Branson, it was reported, was livid, issuing an aggressive statement questioning the Government’s decision and FirstGroup’s competence almost immediately. This was followed by the announcement of an appeal and the launch of an online petition, which garnered 150,000 signatures. Branson even offered to run the service on a not-for-profit basis if the Government agreed to postpone the contract signing for two months.

Yesterday (28 August 2012) it was reported that Virgin had its lawyers working over the Bank Holiday weekend and is now planning a last minute legal challenge to prevent the Government from signing the contract, which is due to happen tomorrow and, which, according to the Transport Secretary Justine Keeling, is going ahead.

It’s all very gung-ho for the transport industry and I’m genuinely looking forward to the outcome. But what I find really interesting is the surprise announcement – released in the midst of this melee -that Virgin is proposing a three-times-daily airline service from London Heathrow to Manchester from next March.

When it was announced, many assumed Branson was simply throwing his toys out of the pram having lost West Coast Mainline. But I doubt this very much. I think the domestic airline has been part of the Virgin plan for some time and the timing of the announcement was merely coincidental.

The airline lost £80.2m last year. It has also lost its code share deal with BMI following BMI’s acquisition by IAG and its alignment with BA, which means it’s lost a significant chunk of its feeder routes, so something had to be done. And that something, it would seem, is the launch of a UK domestic network.

My question is: “Does this signal more of a strategic change in direction for Virgin Altantic, or will the IAG competition trustees charged with reallocating the BMI Heathrow slots see it as nothing more than smoke and mirrors to make them look like more of a credible option for those slots?”

The trustees will award these slots from summer 2013 and the decision will be made in the next couple of months, which also makes me think twice about the timing of the announcement.

Whatever the reason, though, the move by Virgin is potentially good news for the corporate travel buyer, as the likes of Virgin and BA start competing on value, service and price leading to increased frequencies and flight options, as well as better value for money.

David Chapple is event director of the Business Travel Show – you can challenge him on Twitter @btshowlondon or at david@businesstravelshow.com  

FARE HIKES AND FIRSTGROUP FRANCHISES - WHAT DOES THIS ALL MEAN FOR BUSINESS TRAVEL?

All eyes were on the rail industry this week following two massive announcements, starting with a proposed 6.2% increase in rail fares and followed by the news that Virgin Trains has lost its West Coast main line operating contract, which it had held since 1997, after being outbid by FirstGroup. FirstGroup is the UK’s largest train operator and it is believed to have bid as much around £5.5bn for the rail franchise.

The company, under the name First West Coast Limited, will take over the franchise from 9 December and is due to operate the service until 2026. The West Coast main line is a lucrative business proposition, having experienced a surge in passenger numbers from 13m to 31m in the last 15 years.

FirstGroup says it will introduce 11 new 125mph six-car electric trains on the Birmingham-to-Glasgow route and provide more direct services between destinations. It’s also promised to add a further 40,000 seats a day on West Coast routes from 2016.

But what does all this mean for the business traveller and business travel buyer? After all, Virgin Trains has done an excellent job of attracting and retaining business travel customers during its 15-year West Coast reign.

If FirstGroup keeps its promises and really does increase direct services and capacity, then this is only good news for the business traveller reducing both journey times and disruptions. And, as FirstGroup owns a substantial chunk of the UK rail network then maybe, just maybe, there will be an opportunity for business travel buyers to negotiate volume discounts for the first time, which may well help to offset those rather steep fare increases.

Of course, it’s very early days, but let’s hope that FirstGroup bears the business traveller in mind when rolling out its franchise strategy in a few months time.

David Chapple is event director of the Business Travel Show. Commuting to central London from the Home Counties each day, he’s a bit of an expert on rail travel. Challenge him on Twitter @btshowlondon. 

TRAVEL AND MEETINGS CONVERGENCE - MYTH OR REALITY? PART 2

My colleague Katy Phelps wrote the prequel to this blog - Travel and Meetings Convergence, Myth or Reality? Part 1 – you can find it here. In her blog, she spoke about the convergence between the worlds of the corporate travel buyer and the corporate meetings buyer and how, on the whole, this crossover was a myth. And it’s true, the cross over is small, especially when it comes to trade shows, but crossover there is.

There are two areas where I believe it is most apparent. The first is at the strategic procurement level (ie where large multinational organisations are spending a lot of money and big savings are to be had). The second is the booking of spaces for regular small meetings (where only the tiniest of margins exist and minimum savings can be made).

Strategic procurement in the meetings industry – also known as strategic meetings management – is mostly the domain of large multinational organisations that have the buying power to procure meetings services in the way they procure business travel. These organisations often have procurement managers that deal with meetings and travel whereas in other, smaller companies, it’s not necessarily seen as a procurement function.    

These category specialists are responsible for agreeing the terms of contract with two or three suppliers in every category – from AV, production and creative, to venues, delegates and, of course, travel. They also look after their organisation’s large meetings. Their purpose is not to coordinate the creative elements of travel and meetings (which is best left to the event managers) but rather to consolidate the procurement of these functions and their suppliers. Do this well and considerable costs can be cut.

The other area where there is crossover between travel and meetings is in the procurement of high volumes of small meeting spaces by an organisation for, for example, sales meetings, training sessions, board meetings. In recent years, this function has increasingly become the responsibility of business travel managers who are able to draw on their experience and knowledge of consolidating large volumes of travel to transfer these procurement skills to the meetings category. Procurement managers are driving this consolidation of meetings spend because it gives them increased buying power, which leads to cost savings.

And so, in my opinion, the convergence between travel and meetings is very definitely a reality; it’s just that it’s a reality that is limited to certain job functions and it’s the business travel managers who are taking on meetings management but not vice versa. This is why at Centaur we have unique exhibitions for each industry and why, at TheMeetings Show UK, you’ll find no business travel content, but at the BusinessTravel Show you will find meetings management suppliers and educations sessions dedicated to meetings management and procurement in the conference programme.

David Chapple is event director of the Business Travel Show. Contact him on Twitter @btshowlondon or on 020 7970 4072.

TRAVEL AND MEETINGS CONVERGENCE - MYTH OR REALITY – PART 1

In recent years, the convergence between meetings and travel has been somewhat of a hot topic with reports that an increasing proportion of business travel buyers are now responsible for meetings spend and vice versa. On paper, it makes perfect sense. In reality, it’s not so clean cut. This blog looks at the myth. Check back for Part 2, when my colleague David Chapple will discuss the reality.

In my role as sales director for the Business Travel Show, I’ve seen firsthand that there is some crossover between the worlds of corporate travel and corporate meetings but on the whole they are very different. In fact, if this blog were a Venn diagram, that little area in between the two circles you’d be looking at would be very little indeed.

A quick look at their job titles reveal just how different corporate meetings and travel buyers are. In the meetings world, buyers are corporate, event and association planners, and professional conference organisers and agencies. In the travel world, buyers are corporate travel managers, travel procurement and category managers, TMCs and HBAs.

They also have very different responsibilities. When corporate meetings buyers book travel, it’s incentive and group travel. Their focus is often on planning amazing trips to amazing places for thousands of people.  When a business travel buyer or TMC books travel, it’s still for thousands of travellers, but these are business travellers flying between major cities and often travelling alone.

And when it comes to supplier needs, the lack of crossover is apparent once more. Corporate meetings buyers want to talk to venues, cities, destinations and destination management companies. Corporate travel buyers want to speak to TMCs, airlines, hotels, ground transportation and travel technology software providers.

This divergence between buyers in the two sectors also explains why there is often very little crossover between visitors and exhibitors at exhibitions and conferences and why, knowing what we now know about the two markets, Centaur decided to launch The Meetings Show UK next July. We already run the Business Travel Show each February, which focuses predominantly – but not entirely exclusively – on corporate travel (more to come on that in David’s blog).

By organising separate shows for the two sectors our aim is to offer buyers and suppliers a more focused experience. Visiting and exhibiting at events are huge commitments in terms of time and resources and providing suppliers, knowledge streams and networking opportunities that are totally relevant means they can get more out of the shows and a much higher return on their investment

Katy Phelps is sales director of the Business Travel Show. Contact her at katy.phelps@centaur.co.uk or on +44 (0)20 7970 4075.