BBT asks a Travel Management Company: An agency which manages business travel for a company., a consultant and a travel buyer if technology is best for rate audits or whether human input is needed
Rate auditing is crucial to keeping on top of travel budgets, but in this brave new world of algorithms picking hotels and flights, how well does the technology work in practice?
One of our experts is certain that technology can perform a good audit to provide worthwhile savings on hotel rates and is trialling tools to audit rates for one-off, long-term projects; another says complex itineraries need human input to source the right information to obtain the best prices, while a third uses human resources to benchmark a UK hotel programme. Here our experts explain why they rate audit in the way that they do.
The Travel Management Company: An agency which manages business travel for a company.: Vanessa Bailey, director of client partnership, Business Travel Direct
We use Tripbam to audit hotel rates, which can be defined to each client. If rooms are booked well ahead, but closer to departure the hotels are slashing rates because they have excess inventory, the technology flags the lower tariff and we rebook at that rate. We can also look at alternative hotels within a half-hour’s radius, so if there is a cheaper property nearby of the same standard and with the same room type, the tool will flag that to the traveller or booker by automated email, who can vote via buttons in the email to keep the original or book the new one.
If they choose the latter, it cancels the first reservation, rebooks the lower rate and a message goes to the travel manager or booker. A dashboard shows where offers have been accepted or rejected. Travel managers can use the information to inform their Request for proposal and include nearby hotels that come in with a cheaper offer. We put corporate rates into the system and even after they have been booked, Tripbam will check whether on the day there were lower rates and keep that information in the system for further analysis.
Flights are more complicated because of the cancellation restrictions and penalties. We have algorithms which look at the cost of a flight, even when ticketed. If the airline has reduced the cost, we can check the cancellation penalties, flag any saving, rebook it, including seat requirements, and tell the client.
Some of our clients run big projects, where they have long-term, high-volume requirements in a specific region or city. We are working with one client to help it set the budget from when it tenders for work. We look at how much it will cost to have, say, 20 people in Newcastle every night for six months, plus rail fare, and we are creating software to give live reporting against a budget, so that clients can see how they are doing. We have tested it with a new client and the feedback has been positive.
The Consultant: Louise Miller, managing partner, Americas, Areka Consulting
Companies with concentrated spend and big volumes tend to get fewer benefits from rate auditing; if they are using a preferred carrier on their top five routes and most of their traffic is in two or three big cities, a rate auditing tool is not as effective.
However, a lot of companies don’t have such concentrated spend, either geographically or in suppliers, and they do get good value. But the devil’s in the detail, which is why I advise clients that it has to be a combination of tools and human expertise; I see the biggest value when a person gets involved. This applies to any trip that has a complex itinerary – that is where the big money is. Three or four trips between the US and Asia or the US and Europe could cost US$10,000 to US$15,000 per trip and there is a lot of room to make savings but it takes expertise because the content for the trip is not always in one place, so it requires someone to understand what type of content you could pull and from where; you cannot save on a trip like that through a tool.
When technology is involved, you can save 1 or 2 per cent maybe, but the reason clients are sceptical about it is because it generates a lot of emails and intensive communication with travellers for that saving. If I travel every week for work and twice a year I have a complicated trip and someone calls me to say, I know you booked this way and we can get a much better price for you, I am appreciative because it is probably thousands of dollars’ saving. Conversely, with generic tools, if there is a threshold of, say, a minimum US$50 saving, you get an email saying you have been rebooked and you have to update your confirmation code, re-save the details to your calendar, the ticket number is different, and all because of a US$61 saving over the US$50 threshold. Processes through technology can provide minimum value compared to the hassle they cause.
On the hotel side, if rooms are booked two or three weeks out, we can often find a lower rate in distressed inventory a couple of days from departure. We see less distressed inventory in air – most savings are within 24 hours of the initial booking because air fares usually change every day around midnight and you don’t have to pay a US$200 change fee when you can void the ticket. Otherwise, it is rare you can find a lower fare that generates sufficient savings to cover the cost of paying a Travel Management Company: An agency which manages business travel for a company. to change a ticket, plus the change fee, unless it is a complex transnational trip.
All these things are important to travellers; they want to feel confident but not hassled. There are still around 18 months before many business travellers will be affected by New Distribution Capability - a new system of technology standards to allow the distribution of airfares and ancillaries through third parties which is being developed by airline association IATA with..., but that will make it even more confusing.
The Travel Buyer: Karen Lewis, procurement manager, international law firm
Our travel liaison manager is ex-leisure and she does a benchmarking audit on our hotels. We have 12 locations in the UK and we use the same hotels around these areas. We benchmark against a number of comparable properties and look at the soft benefits for a number of nights over the last quarter or 12 months; it probably takes about two months.
We get the best available rate on the night or a fixed rate and soft benefits. We are generally happy with what we pay but we have a cap and if hoteliers are not in line with that, we will speak to them once and then look elsewhere. We are not affiliated to one chain. We have 20 hotels in the UK and have just under 3,000 staff members, up to 2,000 of whom could be travelling over the year. We have very little travel outside the UK. We don’t audit air fares because travellers are mainly equity partners, who own the firm, and they use the airlines they prefer, usually British Airways. For a lot of our domestic travel, we use low-cost carriers.