Trip Friction and Managed Travel 2.0
-
Upload
scott-gillespie -
Category
Business
-
view
701 -
download
5
description
Transcript of Trip Friction and Managed Travel 2.0
![Page 1: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/1.jpg)
Trip Friction and Managed Travel 2.0
Scott Gillespie
30.10.2013 Helsinki
![Page 2: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/2.jpg)
Scott Gillespie
• Co-founder of tClara, a travel data analytics
firm focusing on Trip Friction
• Founder and former CEO of Travel
Analytics, a pioneer in airline sourcing
• Author of a U.S. Patent on airline contract
analysis
• Speaker and writer on innovation and best
practices in managed travel
14.3.2014 2
Managing Partner, tClara
Author, Gillespie’s Guide to Travel+Procurement
Pushes the corporate travel industry to think
new thoughts and create more value
![Page 3: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/3.jpg)
Little change in
100 years
3/14/2014 3 Gillespie’s Guide to Travel+Procurement
![Page 4: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/4.jpg)
Where we’re headed
Discuss and Debate
Traveler Friction
Open Booking
We Need New Frontiers
Managed Travel (MT) 1.0 has Peaked
![Page 5: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/5.jpg)
• 1994: Delta Air Lines caps commissions,
triggers TMC transaction fees and cost center
mentality
• Late 90’s: Strategic sourcing, corporate online
booking tools and Prism put travel management
in spotlight
• 2007: UK’s Corporate Manslaughter Act makes
duty of care a high priority
Key Drivers of Managed Travel 1.0
![Page 6: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/6.jpg)
Consolidate TMCs
Consolidate T&E card programs
Consolidate travel data and reporting
Comply with duty of care
Use KPIs and benchmarking
80+ % online adoption
90+ % travel policy compliance
Optimize air, hotel and car programs
After 20 years, best practices for Managed Travel 1.0 are well known
![Page 7: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/7.jpg)
Managed Travel 1.0 has reached
diminishing returns
3/14/2014 7 Gillespie’s Guide to Travel+Procurement
1995 2015
High
>
Incremental
Value
Low
The
castles
have been
built
![Page 8: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/8.jpg)
Solid, safe, enduring – a valuable base
Immobile,
inflexible
![Page 9: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/9.jpg)
value
3/14/2014 9 Gillespie’s Guide to Travel+Procurement
it’s time
new sources
to find
of
![Page 10: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/10.jpg)
3/14/2014 10
not
Castles
Ships
We need
![Page 11: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/11.jpg)
Where are the new frontiers?
3/14/2014 11 Gillespie’s Guide to Travel+Procurement
Open Booking Traveler Friction
![Page 12: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/12.jpg)
Open Booking’s Four Principles
3/14/2014 12 Gillespie’s Guide to Travel+Procurement
1. Shop anywhere – period.
2. Book anywhere – so long as data is captured quickly
3. Book anybody – so long as suppliers are safe
4. Book anything – so long as it is in budget
![Page 13: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/13.jpg)
• “I have had open booking for several years. It can and does work but it was
a lonely trail until recently. Conversations with TMCs, airlines, expense
tools, hotel chains and other partners have exploded in the last 12
months though.
• There is a realisation amongst all of these groups that they need to get a
handle on the drift away from traditional policies in many corporates and
find new value propositions - ones that focus more on the traveller than
the travel manager in many respects.
• There is a need for TMCs and travel managers to move from enforcement
to empowerment... you can only fight a tide for so long and the question "I
can get it cheaper on XYZ.com" still remains unanswered by most
companies and travel 2.0 is searching for a way forward pulling the
customer and the data into a virtuous environment.”
Mike Tangney at Google says: (emphasis added)
Published on “Managed Travel 2.0” discussion group, LinkedIn, 12 Jul ‘13
![Page 14: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/14.jpg)
Evidence supports Open Booking
GBTA’s “Global Business Traveler 2012” study of
840 U.S. managed and unmanaged travelers:
1. Unmanaged travelers were happier with their
trips
1. For traveler comfort and convenience
2. For interesting and enjoyable trips
3. For getting the best prices
2. Unmanaged trips cost 3% less than managed
trips
![Page 15: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/15.jpg)
Open Booking is NOT Unmanaged
Brand.com
or OTA
Corporate
Traveler
Corporate
Booking
Data
Traveler’s
Expense
Report
Net of
Discounts
Duty of Care
Provider
3/14/2014 15 Gillespie’s Guide to Travel+Procurement
![Page 16: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/16.jpg)
Edit Rights will be essential
3/14/2014 16 Gillespie’s Guide to Travel+Procurement
Corporate
TMC
Trip
Changes
Right to edit or
cancel the
booking
Everybody is
happy!
Corporate
Booking
Data
Corporate
Traveler
Brand.com
or OTAs
Net of
Discounts
![Page 17: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/17.jpg)
The data channel trumps the booking channel
Data Channels
over Booking Channels
![Page 18: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/18.jpg)
Payment Providers
become
essential
data suppliers
![Page 19: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/19.jpg)
morph into
Traveler
Subscription fees
TMC Booking
fees
Security and Service
![Page 20: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/20.jpg)
Where are the new frontiers?
3/14/2014 20 Gillespie’s Guide to Travel+Procurement
Open Booking Traveler Friction
![Page 21: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/21.jpg)
How do we optimize a travel program?
![Page 22: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/22.jpg)
Travel Program KPIs
Spend Savings Prices Variances
Finance,
Procurement
Policy Compliance Traveler Satisfaction.
Travelers Operations
Agent Productivity Call Service Quality
![Page 23: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/23.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
Travel Supplier Costs Are Controlled by Travel Policy and Procurement
Source: Scott Gillespie
![Page 24: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/24.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
Traveler Friction Is The Hidden Cost of Travel. It’s an HR Issue
Source: Scott Gillespie
Human Cost, or Traveler Friction
• Lost productivity • Reluctance to travel • Negative impacts on recruiting & retention •Traveler health issues
![Page 25: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/25.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
The Total Trip Cost Is What Matters
Source: Scott Gillespie
• Lost productivity • Reluctance to travel • Negative impacts on recruiting & retention •Traveler health issues
Total Trip
Cost
Supplier Cost + Human Cost = Total Trip Cost
Human Cost, or Traveler Friction
![Page 26: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/26.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
So We Must Measure Human Costs To Find The Lowest Total Cost and Optimal Policy
Source: Scott Gillespie
• Essential • Not well understood
Total Trip
Cost
Human Cost, or Traveler Friction
![Page 27: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/27.jpg)
Listening for
Traveler Friction
Is this the best we can do?
Traveler Complaints Business Leaders’ Complaints
![Page 28: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/28.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
If Human Costs are high, then the optimal travel policy is lighter
Source: Scott Gillespie
Total
Trip
Cost
Human Cost, or Traveler Friction
![Page 29: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/29.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
If Human Costs are low, then the optimal policy is harsher
Source: Scott Gillespie
Total Trip
Cost
Human Cost, or Traveler Friction
![Page 30: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/30.jpg)
Companies
spend about
the same on
travel as
they do on
turnover:
1-3% of revenues
Source: “Retention of Key Talent and the Role of Rewards”, Scott, Hay Group, June 2012. tClara analysis
![Page 31: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/31.jpg)
Human Resource KPIs Turnover Rate
Cost per Hire
Sick Days
Healthcare Costs
Productivity Metrics
Engagement Scores
Performance Ratings
Employee Potential Ratings
![Page 32: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/32.jpg)
Measuring
human costs
travel-related
is a
New Frontier
![Page 33: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/33.jpg)
Trip Friction™ - a measure of the traveler’s experience
6-hour non-stop in Business Class, arriving home on Friday afternoon, after 2 nights away
Trip A 6-hour red-eye flight, with a 4-hour layover, connecting on a regional jet, both legs in Coach, arriving home on Saturday afternoon, after 5 nights away
Trip B
300 Trip
Friction
Points
900
Points
![Page 34: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/34.jpg)
10 Firms in tClara’s 2013 Trip Friction
Benchmark Study
By Industry
High Tech 5 firms
Consulting 3 firms
Financial 1 firm
Manufacture 1 firm
By Annual Air Spend (USD)
$1<10MM 2 firms
$10<25MM 5 firms
$25<50MM 1 firms
$50+MM 2 firms
Avg. Annual Air Spend, USA POS $36MM
![Page 35: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/35.jpg)
35
44%
27%
10%
19%
Work Time 8a-6p, M-F
Home Time 6p-10p, 6a-8a M-F
Sleep Time 10p-6a, M-F
Weekend Time Sa-Su
When Do Travelers Fly? Share of Total Flight Hours
56% on Personal Time
Source: tClara’s 2013 Trip Friction Benchmark study
![Page 36: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/36.jpg)
Distribution of Trip Scores
42% are Harder Trips
27% 31%
20%
11%
4% 3% 2% 3%
Easy Moderate Fairly Hard
Hard Very Hard Fairly Extreme
Extreme Very Extreme
Source: tClara’s 2013 Trip Friction Benchmark study
![Page 37: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/37.jpg)
Next Step: Calculate scores for each
traveler, and benchmark entire programs
![Page 38: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/38.jpg)
A high score indicates a higher travel-
related retention risk, and perhaps the
need for a softer travel policy.
Our Firm’s
Trip
Friction
score is in
the 87th
percentile.
That’s not
great.
![Page 39: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/39.jpg)
Should you treat high-friction travelers differently?
Illustrative
![Page 40: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/40.jpg)
Should traveler friction be a
basis for tiered travel policies?
14.3.2014 40
Rank by Trip
Friction
Points
Traveler
Traveler's
Trip
Friction
Points for
2013
Traveler's
Percentile
Among All
Firms in
2013
1 Veera 22,560 96%
2 Riku 21,730 95%
3 Johanna 21,690 95%
4 Juho 20,370 95%
5 Lida 18,650 92%
6 Sami 18,120 92%
7 Jenni 17,600 88%
8 Teemu 17,360 88%
9 Sonja 16,920 84%
10 Oskar 16,840 84%
“18,000 points,
or the 85th
percentile”
Use industry-wide
percentiles
![Page 41: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/41.jpg)
Should managers understand
each traveler’s recent travel
workload and trends?
41
High
Very High
Extreme
![Page 42: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/42.jpg)
Can firms avoid losing their most
valued travelers?
Trip Friction Level
Very High
High – Med. High
Medium or Low
Circles represent employees High Value
Talent
at Risk?
![Page 43: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/43.jpg)
Travel Policy None Harsh
High
Costs
Supplier Cost
Goal: Predictable Impact of Travel Management
Source: Scott Gillespie
Traveler Friction
Retention Rates Health, Safety Costs Productivity Levels Engagement Scores
Ticket Prices Room Rates Travel Spend
![Page 44: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/44.jpg)
Summary, then Debate
• Managed Travel 1.0 has peaked
• We need ships, not castles
• Open Booking and Traveler Friction
are new frontiers
• Open Booking’s first challenges are
about technology
– Will change the role of TMCs
• Traveler Friction’s first challenges are
about HR costs
– Will change the role of Travel Managers
44
![Page 46: Trip Friction and Managed Travel 2.0](https://reader034.fdocuments.in/reader034/viewer/2022051514/5480c70ab4af9fd3158b5f8e/html5/thumbnails/46.jpg)
Traditional travel metrics don’t work
6 trips between
San Francisco
and Seattle
6 trips between
Phoenix and
Frankfurt
$24,000 buys 12
round trips between
L.A. and San
Francisco in coach
$24,000 buys one
first class ticket,
NYC to Sydney
6,000 miles flown
between D.C. and
NYC in a quarter
(30 one-way trips)
6,000 miles flown
between D.C. and
Seattle, a one-week
trip
Trips?
Spend?
Miles?
Higher Trip Friction
or
or
or