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Travel and Expense Management

Why Corporate Travel Management Has to Put Travelers First

Business travelers are people too. That, in so many words, is the key recognition of an “employee-centric” approach to corporate travel. Employee-centricity places user experience at the center of travel management, and holds that systems should be designed around people’s observed travel behavior. It’s an acknowledgement that since everyone has distinct preferences and deep-set habits when it comes to business trips, for a company to achieve its objectives with regards to cost-control and policy compliance, it must be willing to meet employees half-way. Employee-centricity is one of the most important trends in travel management today. It’s also the theme of the 2016 GBTA Ladders program.

What Is GBTA Ladders?

GBTA Ladders connects experienced travel professionals with industry newcomers to facilitate collaboration and mentorship. Mentors and mentees represent all facets of the business travel industry; suppliers, corporate buyers, travel management, and tech providers. Ladders aims to give its participants a complete view of how these different parts of the industry interact. Over the course of several months, groups of Ladders mentees meet with subject matter experts to learn about a range of topics in corporate travel. At the end of the program, each Ladders group prepares a set of findings and policy recommendations, with the winners going on to present at the annual GBTA Convention.

This year’s subject matter experts are Mike Tangney, Global Travel Manager for Google, and Dan Ruch, Rocketrip’s Founder and CEO. Together they’ll be leading discussions on the topic, “The Next Evolution of Travel Management – Driving the Future of the Industry.”

Google, Rocketrip, and the Evolution of Travel Management

Corporate travel is being transformed by the notion of what business travelers experience in their personal lives. Building on last year’s topic of “The Total Cost of Travel,” Ladders participants will explore a consumer-focused model of travel management that balances the needs of employers with employees’ need for comfort and booking choice.

Some of the questions that the Ladders participants will try to answer include:

  • How are corporate booking tools changing?
  • What role do TMCs play in trying to influence and steer traveler behavior and spend?
  • Do travel admins and arrangers play a role in a world where travelers are increasingly wanting to self-serve?
  • How are aggregators, OTAs, and metasearch engines changing the dynamics of where people go to find the right information for their trips?

It’s clear that the dividing line between business and leisure travel isn’t as distinct as it once was. The evolving nature of travel is encapsulated by Google, arguably the company that has had the greatest influence on the whole industry. On the consumer side, Google has quickly become a giant in flight and hotel search; within the relatively niche world of corporate travel management, Google has pioneered incentive-based spend-reduction with its Trips program.

During last week’s GBTA Ladders kick-off call, Mike Tangney talked about how Trips was conceived, how it has evolved, and what he sees in store for behavioral change solutions like Rocketrip.

What Is Google Trips?

Trips is the informal name of an internal program Google uses to manage its employee travel costs. (It's not to be confused with the recently announced travel guide and trip planning app of the same name). Googlers start every trip by getting an airfare and accommodation budget specific to their itinerary. When they make travel arrangements for less than budget, half the difference is credited back to them.

These credits can offset above budget spending on future trips - for instance on premium cabin airfare. Google has iterated on the program since it was launched in 2008. One change has to do with how employees redeem their savings credits; Google’s preferred airlines and hotel partners now contribute travel perks such as cabin and suite upgrades, which employees bid on using an auction system. Only at Google …

What Was the Inspiration Behind Trips?

Tangney said that Trips was developed in response to a challenge from Google’s cofounder, Sergey Brin, who proposed that employees be allowed book an entire row of seats on a flight. This highly specific ask spurred Google’s travel team to look for ways to give employees maximum flexibility while also controlling travel costs.

How Does Trips Compare to Rocketrip?

One topic of discussion was how Trips differs from commercially-available travel management solutions that incentivize employees to spend less, some of which were inspired by the success of Trips.

Google’s program, like Rocketrip, gives business travelers a numerical budget, and a material reward for beating it. In this respect, both differ from gamified booking tools that encourage certain behaviors (e.g. using a preferred carrier), but generally don’t allow employees to share in the savings they generate.

There are important differences between Google’s incentive program and Rocketrip, including what travelers can do with their share of the savings. Googlers use their credits for future travel upgrades, whereas Rocketrip users redeem theirs for gift cards, or donate them to charity.

Trips was designed in response to one company’s specific travel needs. Google made employee choice a top priority, and decided to allow employees to book with any supplier or through any channel. This open booking policy is somewhat atypical for an organization of Google’s size. Though Google does not require employees to book through a travel management company (TMC), it does retain one, and a significant portion of travelers use it to make trip arrangement. Rocketrip clients use a version of the same hybrid approach, leveraging savings incentives to promote cost-effective purchases through their TMC and approved booking channels.

An additional point of differentiation relates to trip budgeting. Google’s spending caps are set using a database of historical vendor rates: for instance, a flight budget on a given route might be set based on average seven-day advance purchase coach rates. Rocketrip’s budgeting algorithms draw on real-time prices and availability, both on the open market and through a company’s TMC. In other words, these budgets are a dynamically generated estimate of what a given trip is expected to cost at the time of booking.

One theme that emerged in Mike and Dan’s discussion for the GBTA Ladders group was the importance of adaptive travel management strategies. By focusing on the end user-experience, corporate travel programs can anticipate and respond to changes in how employees plan, book, and spend on their trips. That not only results in greater traveler satisfaction, but also significant cost savings.

All Tags: Travel and Expense Management, Google

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