Upgrade Magazine - Issue 1 by Flight Centre

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Autumn 2017 FCM TRAVEL SOLUTIONS UK

Elevating business travel intelligence

Futurologist Strategic

Life coach

Data scientist

Collaborator

Innovator

TRAVEL MANAGER OF THE FUTURE:

What kind will you be?

Welcome

ew magazines are always fun. A clean slate. No need to provide something because ‘it’s what people expect’.

That’s the philosophy too of FCM and this, the inaugural issue of its new quarterly magazine. Travel management is changing and changing very rapidly.

Autumn 2017

Upgrade Contents 4

Travel manager of the future Automation has begun to circle round travel buyers, Mark Frary considers which specific job skills will be in demand tomorrow

Traveller centricity v traveller safety A recent GBTA survey unveils some new management challenges for corporates

Dubai Dubai is the Gulf’s business capital and home to many leading financial and business service companies

FCM news

Companies still want savings but leveraging volume in supplier negotiations may no longer be the easiest way. Travellers still want a better experience but that may no longer mean an upgrade. Clients don’t expect their TMC to say “We’ve always done it this way”. But some things don’t change. FCM has always been about partnership and listening to what its clients want to achieve. Welcome to Upgrade and let us know what you think.

Betty Low, Editor

14 A seamless performance Is corporate travel still a long way from being an efficient and seamless process? Linda Fox explains why it matters and what help is in sight 16 A travel manager’s guide to NDC After years of waiting IATA’s NDC booking capability is real. Mark Frary’s guide will answer all your questions 18 Room to move It’s hotel rate negotiation season. What options are right for your programme? 22 Five of the best Places for Christmas cheer Where will your organisation be hosting its holiday drinks?

PRINTING ASTON COLOUR PRESS | Ed Cooling ©FCMUPGRADE 2017 Images sourced from suppliers, FCM Travel Solutions, and stock photography

New business enquiries: salesuk@fcmtravel.co.uk Editorial and advertising enquiries: enquiries@fcmupgrade.com FCMUPGRADE.COM

TRAVEL MANAGERS

Travel manager of the future First they were travel managers, then they were procurement. As automation begins to circle round travel buyers, Mark Frary considers which specific job skills will be in demand tomorrow.

eing worried about your job is not a new concern for the travel manager – the fear that the P45 would land on the doormat in the recession of the early Nineties and economic crisis of the late Noughties was very real. The changing business model of the airline industry also proved potentially deleterious to the continuing career of the travel manager, as commissions fizzled out and what was once a healthy profit centre became a drain on corporate cash. The maturing of the internet also heralded the rise of the online booking tools which had the potential to take over much of what a travel manager did. Yet travel managers have proven surprisingly resilient. They have largely moved their position inside companies into procurement but they are still there and still doing a great job thank you very much.

Autumn 2017

But what of the future? Business models continue to change in the travel sector, again putting jobs under pressure, but there is also the concern that what travel managers do might easily be taken over by a ‘robot’ or AI algorithm. Is this fear ungrounded? Perhaps not. PwC’s March 2017 UK Economic Outlook forecast that up to 30% of UK jobs could be replaced by automation by the 2030s. John Hawksworth, chief economist at PwC, said: “Automating more manual and repetitive tasks will eliminate some existing jobs, but could also enable some workers to focus on higher value, more rewarding and creative work, removing the monotony from our day jobs.” Some job roles are more at risk than others. According to 2013 research by Carl Frey and Michael Osborne at the University of Oxford, you would not want to be a telemarketer or watch

repairer in the years ahead - they predict a 99% likelihood that your role will be automated. Travel agents and clerks have a 61% likelihood of disappearing, the research says. Things look far from bleak for purchasing managers, then, with just a 3% likelihood of their jobs being taken by robots or automation. Jon Andrews, PwC’s head of technology and investments, says: “In the future, knowledge will be a commodity so we need to shift our thinking on how we skill and upskill future generations. Creative and critical thinking will be highly valued, as will emotional intelligence.” In its Supply Century position paper on the future of the procurement sector, CIPS group CEO David Noble highlights one of the main causes of this: “The more transactional activities will simply disappear and will become automated,

What this means is that future travel managers will have powerful technological tools in their armouries but to survive they will need to know how to turn the output of those tools into strategically valuable insights. One example could be in applying the power of artificial intelligence (AI) to your organisation’s travel data. Some forms of AI are very good at identifying patterns that people cannot see and an AI-powered system could make a number of recommendations on how to change a travel programme. However, it takes a real person to understand the effect of those changes on individuals and so the future travel manager will be the person who can evaluate scenarios in terms of traveller satisfaction and the organisation’s strategic business objectives. DATA SCIENTIST The future travel manager is likely to need to be a data scientist. Research by professional service consultancy Procorre found that the number of data scientists in the UK grew by 32% in the first half of 2016 and a 45% rise across Europe. To paraphrase Elizabeth Barrett Browning, “How do I buy thee? Let me count the ways”. In short, travel distribution has become and is set to get more fragmented and it means that buying travel is no longer about going to a single source. Think about an air ticket for the moment. You can still contact your TMC’s travel consultant

to book it but is that going to be best for the company? Would booking on brand.com, using a direct connect or finding a web fare be better? It is not just a question of cost but more of value. Equal fares with unequal benefits show this – a £200 fare with a flexible cancellation policy and the right to fasttrack through the airport is better than a £200 fare with no frills. This means the future travel manager is going to have to be a master at understanding the value each channel can offer. FUTUROLOGIST Predicting the future is hard, particularly when it comes to technology – just rewatch some of the science fiction movies of the 1980s to see this in action. In part this is a result of Moore’s Law – the Intel boss’s observation that computing power tends to double every year, which means that computers today are a thousand times, rather than just ten times, more powerful than they were ten years ago. If we believe that Moore’s Law will continue to hold – very few people predict it will not – then what advances can we predict for ten years hence? Just remember that Apple’s first iPhone came out in 2007 and look where we are now. Looking ten years ahead may be hard but the future travel manager can look at shorter timescales, keeping up with the latest technological developments and asking the question ‘How will business travel be affected by that?’

so we need to be adapting now – not when it is too late.” To survive and thrive, I contend that the travel manager of tomorrow (and they are unlikely to be called that) will need to be a person blending a number of different roles. If you don’t have these skills under your belt, now may be the time to start thinking about acquiring them. STRATEGIST If transactional is not the way of the future, what is? “Predictive analytics and increased dynamic modelling will be the way of the future, but the ability to translate this into strategic business plans is where the true value of procurement and supply lies. The value professionals can bring in this arena is second to none as it draws on their market experience and their strategic capability,” says PwC in its automation paper.

“

If you don’t have these skills under your belt, now may be the time to start thinking about acquiring them”

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TRAVEL MANAGERS Having teenage children who grow up with this new technology will also be a must.

business trips and be a champion of the methods to maintain a healthy lifestyle while on the road.

COLLABORATOR The travel manager of the future is likely to be a more collaborative and less adversarial individual than in the past. As organisations move towards supplier relationship management, where the relationship is based on openness and trust and mutually beneficial goals, managers who can work in this way rather than scoring points by demanding lower prices will thrive.

Tomorrow’s travel manager may also be asked to encourage employees to go on bleisure rather than simple business trips. They will also need to have an inherent feel for authenticity, whether this means staying in a local’s home rather than a chain hotel, eating at a trendy pop-up restaurant in someone’s kitchen rather than in yet another Pizza Hut or taking a tour of the city with a local rather than following the wellbeaten path around the key sights.

Collaboration will not just be external either. Business travel is being identified by more organisations as a strategic lever and while we may never see companies appoint a CTO – chief travel officer – to their board, there will be scope for travel managers to work more closely with other parts of the business: finance, IT, HR, marketing, sales and beyond. LIFE COACH People entering the workforce today are the business travellers of tomorrow and the desire to maintain a work-life balance will only grow stronger. This means that the travel manager of the future will need to be cognisant of the effects of regular business travel on an individual’s well-being and the organisational costs involved if toofrequent travel causes them to leave. They will also need to understand how diet and exercise are affected on

“

There is also the concern that what travel managers do might easily be taken over by a ‘robot’ or AI algorithm”

Autumn 2017

INNOVATOR If there is one overriding skill that future travel managers will need, it is the ability to manage change and innovate. Companies of today are leaner and meaner than they have ever been.

The top ten US companies of 50 years ago needed an average of 8.5 employees to make a million dollars; today that number is down to 2.8. Apple employs just over 100,000 people today compared with AT&T’s three quarters of a million in the Sixties. Fewer employees, less business travel. The last decade shows that Western economies may be entering a very longterm period of stagnation in terms of growth and new regions are providing more of the new business opportunities. At the same time, the world’s population is ageing and the working population will get older too. Savvy travel managers need to be aware of changes outside their own companies. If all else fails, accept that change happens and go and run a bed and breakfast. At least some of your skills will come in handy there. 

TRAVELLER INSIGHT

Traveller centricity v traveller safety A recent GBTA survey unveils some new management challenges for corporates

ttending a concert in Manchester or going to Borough Market for a drink on a Saturday night are both pretty ordinary activities. But

it was what happened next when people were doing just that this past summer in the UK which highlights how risky going about everyday life can be. It’s an example of how challenges are increasing, not decreasing, for those responsible for looking after corporate travellers. And it’s not only because of dramatic incidents. Remember you’re more than 100 times more likely to have a fatal car accident than be killed in a plane crash. When employees are working – whether it be sitting at an office desk or travelling for a meeting – their employer is responsible for their safety. And that means minimising risk and being able to provide support when they’re away from home. A recent research report from the GBTA (the Global Business Travel Association) has identified some new risk management challenges for travel managers. And the driving factor is the growth of traveller centricity. Changes in traveller booking behaviour are causing gaps to emerge in travel managers’ duty of care programmes.

Autumn 2017

INTEGRATING DATA Two booking trends, namely the increasing tendency for the traveller to be in fact the booker and the increase in the use of different booking channels, whether they be sharing economy sites, OTAs or, indeed, suppliers’ own sites, available to travellers, may be inadvertently introducing duty of care challenges. The GBTA’s How to close risk management loopholes contends that when travellers use their travel management company or a corporate self-booking tool, there is no risk issue emanating from a lack of information because all the data has been collected. Pip English, FCM’s Global Risk Product Leader, agrees that travellers using different booking channels can be problematic. “Having your data through one TMC is the best way forward because it reduces all the risk points to one. Even if you have a data consolidator, they’ve got to get data from multiple sources.” Data integration tools or consolidation does not seem to be a popular solution. According to the GBTA report, “Only one in five travel managers report using technology to capture traveller data booked outside their travel programme.” In fact the report’s author found that 31% of travel managers simply said, “We are unable to support travellers who book outside our programmes.”

English believes there are ways other than booking data, such as location sharing, which enable managers to track travellers. FCM’s mobile app, for example, allows travellers to share their location. The practice may, however, lead to other issues. For example, a corporate instructing its travellers to have their GPS on at all times could be legally problematic in some countries. Nonetheless, the GBTA report, based on 148 travel manager responses to an April survey, found that not knowing the location of a large number of travellers meant the majority – 3 in 5 – of travel managers relied on travellers to contact someone in the company if they needed assistance while travelling.

REACTIVE OR PROACTIVE?

Another piece of GBTA research shows

Despite duty of care now being a legal obligation rather than mere good practice, many companies don’t have proactive policies but merely respond once contacted.

the unintended consequences when

It’s not a policy that FCM’s English would endorse. He says, “There needs to be a joined up approach. The more centralised the response process is, the more efficient it will be. Let your travellers know how to communicate with the organisation, not just one name because they could be away or at a meeting but a central point of contact like one number that goes to a team or if one person is absent that someone else will answer.”

travellers contact work in the event of

the corporate culture expects travellers to communicate with the company rather than vice versa. The chart “Who do they call first?” shows that when an emergency they are more likely to communicate with their line manager than the travel department. The GBTA believes “This is a dangerous strategy given that more than half of travellers say they would call their supervisor if they were in need of support – not the travel manager or security department.”

Who do they call first?

68% Family or friends

58% My supervisor

36%

29%

My organisation's My organisation's Travel Security Travel Manager Department

26%

My organisation's Human security firm (3rd resources party company) hotline

25%

My TMC/Travel Agency

None of the above

I don't know

Source: GBTA, Risk on the Road Note: Chart based on 798 responses to the question “Who would you call if you were in need of support/assistance due to an emergency or safety and security situation when on business travel? Please select all that apply.”

This is also not what FCM considers best practice. “I wouldn’t consider my business line manager the person I’d go to if I were in trouble on the road. The best travel risk management will have one number, often to your TMC or security company,” says English. THE DANGERS OF A FRAGMENTED RISK MANAGEMENT STRATEGY The GBTA research also points out some possible unintended consequences of travellers making their own bookings. Travel managers often concentrate on ensuring that travellers make use of preferred suppliers, book the appropriate class of travel and respect rate ceilings. All those criteria can be met by independent booking; duty of care obligations might not be. Having access to an out-of-hours service can be costly and not every organisation will be willing to fund it. “We need to recognise that there can be an inherent conflict between the need to get savings and the need to ensure the safety and security of one’s

travellers,” says English. Half of all travel managers who responded to the survey can account for all their employees within two hours.

Average time elapsing between security incident and confirmation of every employee's safety

Two hours may seem an eternity if you’re a loved one clinging to a phone in anticipation of news. But it is acceptable. But is being in the other 50% of this chart really where you want to be? 

29%

26%

7% 24%

14%

Source: GBTA, How to Close Risk Management Loopholes

Less than 1 hour

6 or more hours

1-2 hours

Don't know

3-5 hours

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DESTINATION

Dubai

DOING BUSINESS IN

Dubai is one of most popular business destinations from UK airports as it’s home to the regional offices of leading financial and business service companies. GETTING THERE British Airways, Virgin Atlantic and Qantas all fly between the UK and Ireland and Dubai but Emirates has more than 25 flights daily from Birmingham, Newcastle, Glasgow, Manchester and Dublin as well as Heathrow and Gatwick airports. Upon arrival at Dubai airport there are hundreds of public and limo taxis outside the terminal which are managed by concierge staff. There are also taxis for women only, managed by female drivers. STAYING THERE Traffic can be heavy in the city so choose a hotel or serviced apartment near where you’ll be doing business. Here are three of our favourites: DIFC/Downtown Financial and professional services are based in DIFC. Recently opened in Al Haboor City and next door to the Westin and the St Regis is a classy W with an American bar and DJ sessions. The result is pure funk. Media City and the Marina Media City, whose name suggests its inhabitants, and the Marina are about 20-30 minutes from the airport and about 5 minutes apart. A number of

INSIDER’S TIP Ciarán Kelly, General Manager, Middle East & Africa, FCM “Given that there are areas such as the Jebel Ali Free Zone (Jafza) where you can’t just hail a taxi it’s worth considering hiring a driver for the day. You might pay 100250 dihram for 2-3 hours but this is all negotiable and will depend on the time and where you want to go. “The traffic on all of Sheikh Zayed Road between Media City and Downtown between 4 and 6 on a Thursday is just crazy. Remember – it’s the beginning of the weekend.”

serviced apartments have sprung up in the area in the last two years including the Amwaj Suites and Suha Apartments. JLT/Jumeirah Lake Towers If your idea of a business trip includes a glass of Guinness in a sports bar, the Bonnington is for you. EATING AND DRINKING With chefs like Gordon Ramsey, Jason Atherton and Gary Rhodes all mainstays you know there’s no lack of great restaurants in Dubai.

Here are three different kinds of places in Dubai’s three main locations: Downtown – Prime 68 at the J W Marriott If you need to ensure that the person at the next table isn’t listening to every word, try Prime 68, a steakhouse on the hotel’s 68th floor. Great view, great food and perfect for a private business dinner. Media City – Bubbalicious at the Westin Friday is brunch time and a Dubai favourite is created when three of the Westin’s famous restaurants merge into Bubbalicious, one spectacular location on the ground floor. Check out the carved fruit – it’s spectacular. JLT – Jazz@PizzaExpress The first Pizza Express to open outside the UK nestles between skyscrapers in the iconic Jumeirah Lakes Towers in Dubai. Munch a pizza while listening to live music from world class musicians seven nights a week. BUSINESS CUSTOMS Don’t be surprised if someone is late. All sorts of things can affect travel in Dubai including new migrants working as taxi drivers so they often don’t always know the route. It’s the custom when meeting a woman not to shake her hand unless she takes the initiative. Many local women believe that they should not come into physical contact with a man outside her family.  FCMUPGRADE.COM

NEWS

TOP STORY

FCM Connect launch enables access to personalised tools package FCM has launched FCM Connect. The TMC’s clients will now be able to benefit from an innovative suite of interconnected business travel tools which can be tailored globally, regionally or locally, for use by travel bookers, managers or travellers. They can access FCM Connect via a single sign-on point – ‘HUB’ – which will enable the user to use any of a variety of tools specifically chosen to suit their objectives. The tools include: ff APPROVE – Pre-trip approval ff BOOKING – Online booking ff MOBILE – Itinerary and travel updates

GETTING READY FOR GDPR

ff ANALYTICS – Dashboard and data analysis ff SECURE – Traveller tracking and risk management ff EXPENSE – Expense management ff REPORTING – Data collection ff PROFILE – Customised profiles for use with GDS or online booking tool FCM Connect can be customised and configured to meet the needs of the user and be accessed on any device. Global Brand Leader FCM Travel Solutions Marcus Eklund said “After extensive client consultation, we have channelled the results into product

FCM UK is actively working with highly regarded cybersecurity consultancy CNS Group to prepare for the EU’s General Data Protection Regulation (GDPR). The aim is to ensure FCM is fully compliant when GDPR comes into effect on 25 May and replaces the current EU Data Protection Direction. FCM is working with CNS Group on a comprehensive GAP Analysis exercise of its operations to identify and understand current gaps to GDPR and

Autumn 2017

extensive client consultation, we have channelled the results into product development and refined our end-to-end solutions to give travellers, bookers and managers the optimum framework that addresses their respective desire to be more connected to the entire booking, travel and management process. "FCM Connect also supports our clients across the spectrum of their travel programme priorities, from cost reduction strategies and data compliance to duty of care responsibilities and global, regional or national fulfilment."

determine what steps are required to meet their obligations under the new regulation. CNS Group is scoring FCM within each of the recommended controls for GDPR and will advise on any remedial action that might need to be taken. If remedial action is recommended, FCM’s specialist team will then work with CNS to implement any measures the consultancy suggests within an agreed timeframe.

FCM’s Marcus Ekland spoke on ‘Buying air travel’

MICHEL ROUSE NAMED CTO EUROPE

FCM’s Kavon Bagheri Air Product Manager accepts Award from Travelport’s Paul Broughton

SAM WINS GTMC INNOVATION AWARD Sam, FCM’s chatbot-based mobile tool for business travellers, has been named winner of the GTMC’s prestigious innovation award. Sam is an app which uses both artificial intelligence and the expertise of FCM consultants to support travellers on the road. It makes life easier for the business traveller pre, during and post trip by providing everything from itinerary management and information about air and hotel bookings, flight updates, destination, weather and restaurants, security notifications, ground transportation, directions, visa and vaccinations. The Guild of Travel Management Companies’, which represents the UK’s travel management companies, Technology Panel of travel industry experts judged the entries for the award which was presented in association with Travelport and is given annually to a travel management company which has designed a piece of technology that enhances productivity and delivers greater efficiency for customers. Jo Greenfield, UK general manager, FCM Travel Solutions, said: “We are thrilled to be named as GTMC Travelport Innovation award winner. This is a true endorsement of our pioneering approach to business travel technology with the development of Sam. FCM is the first TMC in the market to introduce chatbot technology and the next generation of smartphone application.”

THE LONDON BUSINESS TRAVEL SUMMIT FCM was headline sponsor of the London Business Travel Summit which took place on 14 September. Marcus Eklund, FCM global leader, joined a morning

panel session on ‘How to buy air travel in 2017’ to discuss whether NDC is finally starting to affect how travel managers negotiate and buy air travel and how TMCs are working to offer access to the widest range of air content. Chris Gamlin, head of mobile product, gave a demonstration of FCM’s Sam ‘Smart Assistant for Mobile’ in a session called ‘Battle of the Bots’ about how AI and chatbots are changing the business travel landscape

Michel Rouse has been appointed by FCM parent company, Flight Centre Travel Group, as Corporate CTO EMEA to drive strategic development of FCM’s technology solutions. He joins from leading global travel technology provider Amadeus where since 2006 he has held diverse high-level roles spanning research, development,

product management, solution design and sales. His extensive career in the technology sector also includes eight years as Product Manager at Oracle Corporation. Michel’s experience will bring direct benefit to FCM customers as the TMC continues to innovate and enhance its technology offering in the corporate travel space.

FCM CLIENTS EXEMPT FROM BA SURCHARGE ON GDS BOOKINGS FCM has reached a multiyear agreement with British Airways and Iberia meaning customers in the UK and Ireland will be exempt from the airlines’ new £8 surcharge per fare component on GDS bookings from 1st November 2017. FCM’s other European and global markets will follow suit over the coming months where technically feasible. The farreaching agreement also means that FCM will work closely with British Airways and Iberia on developing the future roadmap of New Distribution Capability (NDC) with a view to begin integrating content via this channel during 2018.

“We have been working closely with British Airways, Iberia and our technology partners since 2016 on developing new ways to integrate airline content into our existing booking platforms,” said Marcus Eklund, Global General Manager, FCM. “Our ultimate goal is to ensure FCM delivers the widest most relevant choice of travel content to our clients, whilst maximising cost savings and personalising the booking experience.”  FCMUPGRADE.COM

TECHNOLOGY

A seamless performance Is corporate travel still a long way from being an efficient and seamless process? Linda Fox explains why it matters and what help is in sight.

e often hear managers wanting to make the travel experience as userfriendly and seamless as possible for their travellers. However, the definition of seamless is “happening without any sudden changes, interruption, or difficulty.” Apply that to corporate travel and you realise that we’re still a long way off. When airline X suffers a technology outage or is grounded because of inclement weather, seamless is left in the clouds. The airline is blasted on mainstream and social media and the brand takes a hit. Stranded business travellers join lengthy queues for rebooking and paper-based accommodation vouchers. Information on the itinerary changes eventually filter back to beleaguered travel managers. There is no knowing the true cost to the business travel community and corporates in terms of loss of time and productivity and not having employees where they need to be. However, a

Autumn 2017

report published by Amadeus last October put the annual cost to the airline industry at $60 billion. And, cost is not the only driver for developing a more seamless experience. Rising passenger numbers in general will put pressure on suppliers and intermediaries alike to make things more efficient. No wonder then that there is currently a lot of discussion about seamless travel – end-to-end, door-to-door, through airports, the buzzwords continue… But, what’s actually happening? FCM’s SAM was launched last year to enable corporate to have a more seamless travel experience. It combines the automation of chatbots and artificial intelligence with the expertise of its consultants to deliver personalised information to business travellers via their mobile devices. SAM – “Smart Assistant for Mobile” – assists business travellers pre, during and post trip with everything from itinerary management, air and hotel bookings, flight updates, local city and country information, weather and

“

Millennials are the least likely to use online booking tools according to GBTA research.” restaurant suggestions to security notifications, ground transportation, driving directions, immigration advice and vaccination status. SAM can make use of accumulated information such as travel patterns and preferences and update travellers accordingly. For example, when a traveller lands at the airport, Sam will message the carousel number for collecting baggage and ask if the user needs to arrange transport from the airport to their hotel. The more a traveller uses Sam, the more intelligent the chatbot becomes, so that information delivered to the user is even more personalised. Other industry partnerships are also being formed and technology being integrated to provide travellers with access to the content they want and the tools that make travel management easier. A good example is Lyft’s recent announcement that it can automatically email receipts to expense management systems including Certify, Chrome River and Concur. Automatically feeding the expenses data into the company system makes life easier for travellers by eliminating the need for a manual expense reporting process. These technologies are about joining dots to create a seamless experience for corporate travellers and managing disruption more efficiently for all stakeholders. There are also plans to enable airlines and hotels to use predictive analysis to be more proactive in terms of procuring the right room for the right passenger. Again, that might seem like a small thing, but in these days of traveller centricity, the ability for travellers to be recognised and taken care of is a big plus. It also ticks boxes for corporate travel managers with support to meet duty of care obligations as well as the potential for increased efficiency through automation. The potential cost and productivity

savings which developments such as these can deliver has meant a veritable rush of suppliers wanting to develop in this area. Amadeus recently unveiled a service which integrates with Salesforce to provide information on the need and value of a business trip. Return on investment is a measure which travel managers have long sought. Most of these developments would not exist without mobile, demonstrating that it is mobile that will go furthest in joining the dots to a more seamless travel experience for business travellers. Consumers now turn to mobile devices for so much in their daily lives and the business travel community is no different. And, here’s another interesting thought. Millennials are the least likely to use online booking tools according to GBTA research released earlier this year. That might not be surprising, the segment is far more used to living their lives on mobile and consumer-grade technology which is easier to use and more user-friendly. But what might make travel managers sit up more is that according to the same research, frequent travellers are almost as likely to reject booking tools. The study, which surveyed travellers from Germany, the UK and France,

shows they too are embracing mobile, so-called sharing economy services and booking direct. All these factors will continue to drive technology companies and suppliers to try and improve the process for travellers from booking, through to the trip and post-trip. All these developments, whether from established players or startups looking to disrupt, have got to be good. There are gains to be made in terms of cost and savings, increased efficiency and duty of care implications for travel managers. And, happier travellers are generally more productive. It is the idea that change and innovation are good. There is recognition from very large companies, both within and outside the travel industry, that there are different ways of doing things and sometimes the answer might come from outside At an ACTE/CAPA event in Amsterdam last year, PwC Strategy & partner Stefan Stroh summed it up nicely. He said that if the industry doesn’t work things out then someone will come in from the outside “with a better user experience that forces others to play with them. “If the industry is not evolving, there will be a player that disrupts.” 

Ten common causes of air travel disruption 1. WEATHER Fog, ice, snow, or heat can negatively impact infrastructure.

6. CIVIL UNREST Rioting and terrorism. Any threat to passenger safety will bring operations to a halt.

2. STRIKE ACTION Staff from the airline, airport ground handling company or local public demonstrations.

7. LOCAL ANOMALIES Regional problems – animals obstructing runways, for example.

3. THIRD-PARTY ISSUES Problems with local transport networks connecting to the airport, for example, can lead to a build-up of late passengers in departures.

8. MECHANICAL AND TECHNICAL PROBLEMS Technical issues with aircraft or support systems that take time to resolve.

4. CREW LOGISTICS Legal measures to protect staff can prevent them from working overtime to tackle disruption. Flight crews have duty limitations that must be observed. 5. NATURAL DISASTERS Strain on operations involving mass evacuation during treacherous weather conditions.

9. OPERATIONAL ISSUES Incidents affecting the airport or airline operation systems. 10. HEALTH Passengers being taken ill can cause delays or the spread of a major viral infection can isolate a country or region. Source: Amadeus, Shaping the Future of Airline Disruption Management FCMUPGRADE.COM

SUPPLY CHAIN

A travel manager’s guide to NDC After years of waiting IATA’s NDC booking capability is real. Mark Frary’s guide will answer all your questions

WHAT IS NDC? NDC (or New Distribution Capability) is a standard developed by IATA to facilitate communication and trade in travel. The idea is that everyone, airlines, travel management companies and self-booking tool providers, involved in the business of distributing content – such as airline seats and fares – are all talking the same (technical) language and are using the same syntax to exchange messages on shopping and booking components of travel. WHAT IS THE OBJECTIVE OF NDC? IATA believes NDC will transform the way air products are sold to companies and individuals by allowing airlines to bring more differentiated and personalised products to market more quickly than traditional distribution channels allow, give buyers access to a full and rich range of content and introduce more transparency into the shopping process. IATA says, “The primary driver for NDC is the revenue opportunity. NDC will unlock value through the travel agent channel by providing it with features and content that is difficult to access today.” 16

Autumn 2017

WHAT DOES THIS MEAN IN PRACTICE? Customers of British Airways, for example, will soon be able to pay for a preferred seat, add additional baggage and –re-order catering on BA flights via their TMC directly in the GDS or other NDC route. Currently the TMC would book this on ba.com. ARE THERE BUYER BENEFITS FROM NDC? The rise of low-cost carriers, which were traditionally outside the GDS, have seen travel managers lose visibility and control of a growing proportion of their air spend. This is particularly challenging in regions such as Asia Pacific where LCCs make up more than half of air traffic. Ancillary revenues have also been growing sharply – from US$22.6 billion in 2010 to US$67.4 billion in 2016, according to IdeaWorks. Proponents of NDC say that it will also better personalisation of offers – in exchange for more information on the individual traveller, something that not everyone is willing or able to give. IT ISN’T JUST ABOUT BEING ABLE TO SHOP FOR ANCILLARIES SURELY? IATA hosted what it called a “Propathon”, or proposition

Fair-Insight2

Connected

Fair-Insight FlexiPax FlyX PlanePoint

Booking

Contracting Dimensional-Deal

Payment

HAVE TRAVEL BUYERS BEEN INVOLVED IN SHAPING NDC? IATA has been engaging with travel buyers and the wider business travel community in the shape of two Travel Manager Advisory Groups, one in Europe and one in the US. Major TMCs, incuding FCM, have also been heavily involved in discussions.

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At the second of these Summits in May 2017, 130 corporate buyers, TMCs, airlines, self-booking tool and IT providers met in Geneva to discuss positive and negative outcomes of adopting NDC.

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marathon, involving 15 buyers from large organisations. The 24-hour session came up with 60 ideas for new airline products and services which buyers would like to see and which NDC could enable. The ideas typically fell into three categories – better traveller experience, better cost management and better data. Some examples of the ideas generated in the Propathon are a system for automatically recognising corporate travellers at the airport to give them fast track services, a service where the airline contacts the corporate to offer lower fares on alternative flights, dynamic pricing of lounge access, a corporate notification service for traveller no-shows and a data feed showing total contribution to airline (including up and downgrades).

HOW MANY COMPANIES HAVE ACTUALLY SIGNED UP TO NDC? Airlines that make all of their content available through an API, essentially an access pipe that others can use, that complies with the NDC standard as well as TMCs and other aggregators that are able to understand and use the content from that API are said to be NDC Certified. IT providers that offer products to compliant airlines and agents/aggregators are said to be NDC Capable. There are three levels of certification for each of these, 1 being the lowest level of compliance and 3 being the most complete. At the time of publication, some 100 companies are designated as either NDC Certified or Capable. The number of airlines signed up is currently 45, out of the 275 membership of IATA; this number includes British Airways, Lufthansa and American Airlines. IATA says that more than 75% of major airlines have committed to adopt NDC although many of these are at the very early stages. WHAT ABOUT THE GDSS? All GDSs are working to become NDC ready Travelport became the first GDS to gain NDC Capable status early in 2017 and is currently registered as a level 2 provider, the second highest available and is capable of offer management. Amadeus is registered at the highest level of NDC compliance – offer and order management – while Sabre is only registered at the at the lowest level, which covers post-booking ancillaries. WILL NDC MEAN HIGHER SPEND? Possibly. You only have to look at Amazon to realise that a slicker shopping experience often means spending more. IATA recognises that widespread adoption of NDC could make it easier for TMCs to upsell additional services.

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Participants in the Propathon recognised that additional products and services based on the ideas they created may be charged for or negotiated as added value as part of traveller or corporate recognition. WHERE CAN I FIND OUT MORE? Go to http://ndcbiztravel.iata.org  FCMUPGRADE.COM

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TRAVEL PROGRAMME

Room to Move Itâ&#x20AC;&#x2122;s hotel rate negotiation season. What options are right for your programme?

Autumn 2017

Background Autumn is traditionally hotel RFP time, the time of year when both TMCs and corporates with large hotel spends gather their figures, combine that information with all their upcoming needs and then set about trying to use this data to secure the best possible accommodation for their travellers and rates for their employers.

if managers choose to work with a chain rather than a specific property, travellers are capable of then selecting the specific property at the destination. VOLUME Rather than having a comprehensive programme with named properties at every location, buyers are increasingly focused on their key destinations, ie ones where they have sites or clients and consequently strong volumes, and then working with groups or suitable

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properties with a presence in the locale to get the best value. Rachel Newns, Hotel Product Manager, Flight Centre Travel Group “Favouring corporate rates over dynamic rates can have more to do with certainty than savings. Don’t reject dynamic pricing out of hand. “A lot of customers are wary because they think that if hotel groups are pushing it, it must mean higher rates but dynamic pricing is worth considering. “Corporate rates are set on the basis of peak night (Tuesday, Wednesday, Thursday) rates at peak times of the year but a lot of corporates do book

accommodation on other nights of the week and low periods such as London in August.

Given the challenges faced by managers

“If you have only 100 room nights a year with a property you won’t be getting a big discount on your corporate rate but if you can consolidate your spend and get 15% off BAR on some of it, you will make savings.

the trend is to focus on consolidating

“Make use of dynamic rates on shoulder and low rate times. You might pay a bit more on a peak night but overall your average rate will come down.”

in achieving the uptake required to negotiate the keenest corporate rates, spend with one or two chain-wide deals. Managers can assess which UK and global locations their travellers are visiting and leverage all the volume to negotiate a sizeable discount with a couple of big hotel groups. Then even when only one traveller is booking one night with a contracted chain that traveller will still be able to benefit from a discounted corporate rate. The buyer trend is to focus on destinations in which they either place – or know they will be placing because of

But buying is no longer about negotiating corporate rates with hotels. Here are some trends to look out for:

a new company location or client

Corporate hotel trends

Buyers with significant extra spending

CUSTOMER EXPERIENCE, NOT JUST CORPORATE SAVINGS Some companies still focus on the spend but more are looking at traveller needs and thinking instead of value for money.

should consider negotiating to include

An accommodation strategy is as much about the traveller experience as it is about savings through negotiation. Some places that travellers might want to stay, such as sharing economy properties, may meet corporate budget criteria but not its duty of care requirements.

a hotel every night they stay. Customers

Traveller experience is not only about the overnight stay itself. Travellers now commonly book their own travel online so consequently have visibility of what else the market has to offer. Travel managers are recognising that travellers are becoming more expert which is a strong argument for devolving more decision-making. For example,

line. Better integration of data means

– a significant number of room nights. TOTAL COST OF TRAVEL on items such as parking and WiFi, them in the room rate. More importantly, a corporate should highlight their travellers’ total spend in who have a relatively high TRevPAR (total revenue per available room) are generally more valuable to a property. Buyers can leverage this extra spend to get a lower room rate. In the past F&B might have been a separate expense that manager can encourage a change of behaviour, such as travellers eating their evening meal in the hotel, to achieve a lower room rate. Flagging meeting spend with a property is also evidence of a more desirable corporate customer. FCMUPGRADE.COM

TRAVEL PROGRAMME

Corporate hotel programme options

CORPORATE RATE A negotiated rate available at specific groups or properties for that companies’ travellers. Rate are typically for certain room classes, eg a standard room with LRA, or inclusive of specific extras such as WiFi or parking Suitable for: Large-budget corporates who value rate certainty

DYNAMIC PRICING A corporate-specific discount which can be applied to all the hotel’s BAR rates Suitable for: Managed programmes that are able to negotiate aided by good insight into their volume and pattern of spend

A customer whose travellers need room nights on a Sunday or Monday should similarly be able to negotiate a keen rate. Hotels have no incentive to offer a corporate room rate to a company offering 100 room nights on a Tuesday because popular, big business cities are regularly oversold on peak business travel nights. Travel managers need to make use of any data which shows them to be an attractive customer.

benefits cost the corporate customer

GROUP OR CHAIN PROPERTIES Most travel programmes seek discounts on rates and choices for travellers.

Companies can maximise the value

A corporate might typically have a tiered programme to cover as many requirements as possible such as a few chain deals for their big cities and, where possible, negotiated rates for specific hotels which reflect the chainwide deals.

uptake. This is especially important for

The goal for any programme is to achieve as much volume as logical to support an overall discount.

points as an incentive to achieve greater programme compliance. Points can also be a keen retention tool for frequent

Suitable for: Smaller volume business measured either by total accommodation spend or per destination or property

travellers because as the traveller accumulates points and moves through tiers, they will receive more benefits such as upgrades and free WiFi. REPORTING of corporate rates by using reports and audits to check availability and corporates relying on only a few chains. The TMC should check to ensure negotiated rates have been loaded and available to book and if not, resolve the issue. It should also investigate any

RATE CAPS/PER DIEMS Freedom to choose any hotel based either on a cap for the room rate or a ceiling on daily subsistence spending Suitable for: Companies that value traveller choice and autonomy and are less concerned about compliance for purposes such as duty of care or consolidating spend

bookings which reports may reveal have been made at 5 or 10% above the negotiated rate.

As travellers increasingly do their own bookings it is important to encourage them to use the company code when using the supplier site or, as when they use third party consolidator or OTA, they won’t be recognised as a corporate traveller.

A classic issue is that a negotiated

POINTS MEAN PRIZES People who travel a lot for business can earn significant loyalty rewards. Such

of rate unavailability or because of

Autumn 2017

TMC RATE The rates available to customers of a specific travel management company.

nothing and a company can use these

rate is unavailable because of limited stock. For example, the property may be designating only a small number of rooms as standard and eligible for LRA. If a hotel is unable to comply with a corporate’s needs over time because traveller choice, it might be time for a programme change.

And finally . . . Much can be written about pricing and negotiating but an increased emphasis on traveller choice means paying close attention to the uptake of a programme. If there is leakage it may be because the properties might not be matching traveller taste which could be looking more for smaller, boutique properties, serviced apartments or sharing economy accommodation. 

Welcome to a new daily service between London and Tokyo A new direct service between London Heathrow and Tokyo Haneda is launching on 29 October 2017 by Japan Airlines (JAL), increasing the daily total to four flights between the two cities.

The new outbound flight is the earliest direct service to depart from London to Tokyo: perfect for the savvy traveller who wants to beat the morning rush. The return flight gives you a full day in Japan,

comes with lounge access for all, and is the only direct flight from Tokyo to arrive in London early in the morning.

With morning arrival times in to both cities, this new flight is ideal for

those who have onward connections to catch, business to conduct

on their day of arrival, or for those who simply want to get back home. Contact your FCM Travel Solutions Consultant to book now.

EVENTS

Five of the best places for Christmas cheer

Christmas is the time to raise a glass to celebrate and thank your loyal commercial supporters – fellow workers, clients, suppliers. And now is the time to book the perfect venue for your event.

Here are five of our favourites places in the UK where your guests can share a glass of fizz in style.

MANCHESTER Emirates Old Trafford If you want to emphasise positive postBrexit messages, you could do worse than choosing a British sporting venue. Manchester is home not just to two of the most iconic teams in football but also to one of England’s test cricket grounds. You can choose a room here that’s right for your numbers and then tailor a Christmas party to reflect your style but still give your guests the opportunity to gaze out and imagine they are Sachin Tendulkar hitting his maiden hundred in 2013.

LONDON Royal Botanic Gardens, Kew London businesses – and their clients! – are not all concentrated in the Square Mile or Canary Wharf. If you want a

Within the most famous gardens in the world are a number of galleries and conservatories suitable for sit-down dinners or stand-up drinks for a wide range of numbers to suit your guest list and event.

emiratesoldtrafford.lccc.co.uk/ events/

venue that’s accessible to both clients who travel by tube and those that drive

www.kew.org/venue-hire/kewgardens/corporate

events@lccc.co.uk

around the M25 or up the A3, Kew could

venues@kew.org

+44 (0) 161 282 4020

be your answer.

+44 (0) 208 332 5641

Autumn 2017

LONDON The Yard, Shoreditch If you’re a new business, being disruptive and forging new boundaries – think about hiring an empty space where all of London’s start-up businesses and go-to restaurants are located. You can transform it completely to reflect your style for one fairy-tale party evening. www.theyardshoreditch.com jessica@iprlondon.com +44 (0) 207 739 0272 Whether you’re a new business or old, small or large, remember that a Christmas corporate reception shouldn’t look like just another drinks bash. Many Christians and Jews celebrate significant religious holidays at this time of year and some historical places of worship also double as beautiful event venues. GLASGOW Kelvingrove Art Gallery and Museum Glasgow’s Kelvingrove Art Gallery & Museum is one of the Scotland’s most spectacular settings and is perfect for a large event. Centre Hall has space for up to 1,000 guests to view the museum’s world famous collection while scoffing canapes at your Christmas drinks. www.glasgowlife.org.uk/museums/ kelvingrove/pages/default.aspx venuehire@glasgowlife.org.uk +44 (0) 141 353 8050

LONDON Westminster Abbey There’s more to the Abbey than Poets’ Corner. Chapter House or Cloisters are only two of the areas for hire which are steeped in history, stunningly beautiful and have a special resonance during December.

www.westminster-abbey.org/ venue-bookings bookings@westminster-abbey.org +44 (0) 207 654 4823

Christmas is also a time of giving so you could entertain clients while helping a worthy cause if you hire a venue from a charity or charitable foundation such as the Wellcome Collection Medicine Now Gallery. Corporate parties don’t have to be lavish to send a message and be effective. There has been a climate of austerity in the UK since the Global Financial Crisis so if, like many others, your business has had to tighten its belt, remember that many spectacular parties actually happen in what is also someone’s club or place of employment. If you have access to somewhere like the Gherkin, the Temple or the nearby British American Tobacco building, you might be able to save your company money and still wow your guests. That’s perfect venue management!  FCMUPGRADE.COM

WIFI UP HIGH Weâ&#x20AC;&#x2122;re the first European airline to offer WiFi across our entire fleet, so when you fly Virgin Atlantic or with our partner, Delta Air Lines, you can stay connected on all your transatlantic flights. To find out more and book, contact FCM.