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Travel and Expense Management

An Introduction to Online Booking Tools for Corporate Travel

A study from Microsoft found that U.S. workers use their computers for an average of seven hours a day. That’s more time than they devote to any other activity, including sleeping. If your job requires you to travel, chances are that some of that computer time is taken up by planning business trips.

Technology has disrupted the travel industry as dramatically as it has most people’s sleep cycles. Online travel agencies (OTAs) such as Expedia and Priceline, along with meta-search engines like Kayak (which aggregate listings from travel booking sites), have replaced human agents for most leisure travelers. Today it’s far more likely that you begin planning your next vacation online, and not on the phone.

What is an OBT?

The same shift to online booking has occurred for business travel, though not as quickly or as thoroughly as it has in the consumer space. The majority of corporate travel is now booked online, whether directly with an airline or hotel, through an OTA, or through an official corporate system known as an online booking tool (OBT). In contrast to consumer-focused sites, an OBT is a specifically designed to meet a corporation’s needs around policy compliance, reporting, duty of care tracking, and preferred vendor usage.

Business Traveler Booking Preferences

From the perspective of travel managers, OBTs offer several benefits over corporate agents and open market alternatives. But what about the business traveler’s perspective? Surveys indicate that most employees generally prefer self-service booking, but not necessarily through their company’s OBT.

In a 2011 study by the CWT Travel Management Institute, 52% of travelers said they believed the advantages of OBTs outweighed the drawbacks. Coincidentally perhaps, the same survey found that 52% of booking transactions were initiated online - a number that has increased in subsequent years. This year, research from the Global Business Travel Association provided an updated look at travelers’ preferred booking methods:

  • 82% of travelers surveyed had a company-provided OBT and had used it within the past year.
  • 33% of those travelers had also worked with an agent at a travel management company (TMC) to book a trip.
  • 40% had also booked a trip online outside of their OBT, either directly with a supplier or through a travel site.

OBTs have replaced travel agents as the standard approved booking channel for companies with managed travel programs: the survey findings mean that more than four times as many business travelers had used an OBT as those who hadn’t. However, only 36% of travelers reported being “very satisfied” with their OBT, significantly less than the slight majority of travelers who reported being very satisfied with direct booking. Indeed, when asked to compare the two options, an overwhelming 84% of travelers said that at least in some cases, they preferred booking directly with suppliers. In other words, business travelers use OBTs, but they don’t love using them.

Benefits of Online Booking Tools

Still, companies have compelling reasons to encourage or mandate that employees use an official booking tool, including:

  • Lower Booking Fees: Purchases made through an OBT have lower transaction costs than those made with an agent: a TMC that charges a fee of $30 or more for a full-service air booking might charge a fifth of that for self-service booking through an OBT.
  • Reduced Employee Spending: Travelers who use OBT’s tend to purchase less expensive flights and hotels than what they ordinarily would when speaking to an agent. “Visual guilt” naturally pushes travelers to avoid expensive options when they see a range of cheaper alternatives. Various studies suggest the savings are on the order of 5% of total cost, or $80 per trip.
  • Travel Policy Enforcement: OBTs can also provide savings relative to booking on the open market. That’s because OBTs can be configured to highlight preferred vendors, flag or remove out-of-policy options, provide employees with policy reminders, and refuse non-compliant bookings.
  • Duty of Care Compliance: A centralized booking system allows for the type of detailed itinerary records that are necessary to track employees and communicate with them during crisis situations. 
  • Improve Data Capture and Reporting: The larger the portion of a company’s travel bookings made through an official channel, the more complete its record of travel spending. Comprehensive data capture is critical for accounting purposes. It also has a positive impact on supplier negotiations, since a company’s rate discounts increase with its verifiable travel volume. 

OBTs and Employee Convenience

The best OBTs can offer a happy medium between the full-service TMC agent model and the every-man-for-himself world of open booking. Though the survey data covered above indicates that business travelers have reservations about making their travel reservations through an OBT, attitudes could change as clunky tools get updated interfaces and add a wider range of inventory.

Innovation in leisure travel has raised employees expectations of corporate booking systems. If OBTs don’t keep up, employees will reject them. But if OBTs continue to improve, they can streamline the booking process and help control travel costs.

All Tags: Travel and Expense Management, OBT

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