"Reprinted with permission from
author."
There has been some recent discussion in Europe
and North America about the efficacy the globalization of managed-travel
programs.
Business Travel Coalition (BTC) offers additional perspective regarding what
can be termed a “centralized” versus a “distributed” model for modern
managed-travel programs.
When U.S. airline industry deregulation moved forward in 1978, many large
corporations pursued a strategy of consolidating to one national travel agency
– that eventually morphed into today’s travel management company (TMC). The
goal was to bring some control to an exceedingly complex, if not somewhat
dysfunctional airline distribution system.
Since the early 1990s, this national strategy has evolved into “globalizing”
with one mega TMC. A strong case has been made for centralized oversight
of a corporation’s worldwide travel activities. However, it is not clear if
centralizing to one TMC, for all global services provided, produces justifiable
incremental benefits for a large corporate, university or government managed-travel
program. Indeed, such a strategy can deprive travel departments of the
expertise, relationships and problem-solving resources of best-in-class
regional agencies and TMCs around the world.
The promises of nationalization, and then globalization, included quality
travel data consolidation, superior customer service and lower airfares via
larger TMCs’ purchasing leverage.
Some travel departments, however, have not been satisfied with either the
results of national consolidation, or globalization efforts. Today they 1) look
to third parties for expert data consolidation, 2) experience uneven global
customer service levels from some mega TMCs, and 3) leverage their own
purchasing volumes and expertise in negotiating airline and other supplier contracts.
Moreover, local corporate field-office managers are often unimpressed with the
benefits of globalization and can be resistant to such programs. They sometimes
see beneficial local supplier deals canceled, often feel that cultural business
practices from the Home Office are forced upon them, and where problem solving
was once a relatively simple process, it can become bureaucratic. It is
exceedingly important to the success of a globalized managed-travel program
that local managers buy into and actively support such a program.
What true quantifiable value, for example, is there in service standards being
determined for a travel agency “affiliate” in Vitoria, Brazil by a mega TMC
based in the U.S.? Furthermore, how could a homogenized American approach to
travel service standards across various regions of the world and cultures be
expected to be workable?
There is a technology-enabled viable alternative to globalization as it is
currently conceptualized and practiced. Low cost structures, personalized service
for the business traveler, responsiveness to management needs and good
technology have always been the hallmarks of regional TMCs within the U.S. and
around the world, and what many corporations want.
A single TMC can be tasked with coordinating a global travel management
strategy that includes regional travel agencies run by service-oriented
entrepreneurs who are 1) expert in local markets, 2) low-cost producers and 3)
able to drive superior value for an overall program.
Communications, data parsing, the Internet and other emerging technologies will
continue to be the enablers of new ways of solving travel industry problems and
driving beneficial change. Travel managers and senior executives considering a
global travel program should consider the benefits and drawbacks of both a
“centralized” and “distributed model.”
www.premieretravel.com
