Ticket Masters
In the meantime, consumer-oriented travel sites continue to expand their corporate offerings. Last winter, industry giant Expedia rolled out a "Business Tools" tab on its home page. The section has two new services. "Travel Arranger" allows small businesses without a travel department to delegate shopping for a flight, hotel, and rental car to a designated worker. "Repeat a Trip" targets corporate travelers who take the same business trip on a regular basis. "Rather than going through a full search each time you need to rebook," explains Mitch Robinson, product manager at Expedia, "you can go back to a past My Books page and hit the Repeat Trip icon and update the date."
Currently, about 30 percent of Expedia's revenues come from business travelers. Managers at the site, which is majority owned by Microsoft, say they will unveil new features for corporate users this year. At the moment, however, the search engine for business travel returns matches only for direct flights with no advance-purchase restrictions. Robinson acknowledges that business fliers won't find any super-savers on tickets for last-minute travel at Expedia. "I'd love to say we're always the cheapest," he grants, "but sometimes we're not."
Likewise, executives at rival Travelocity concede that business customers tend to use the site more for convenience than cost. The online operator, which is backed by computer reservation giant Sabre Holdings, recently rolled out its own business center. The service enables clients to manage T&E expenditures and book multiple trips for employees.
Still, Michael Stacy, senior vice president of consumer marketing at Travelocity, claims corporate customers can save some money on last-minute tickets at the site. "If there's a lower fare [on a flight leaving] from a neighboring airport," explains Stacy, "you'll get notification of that. Is that something your travel agent would do? Some do, most don't."
One thing that most traditional travel agents will do: Levy membership or transaction fees on purchases. By contrast, many online sites do not tack on these extra charges. For smaller companies, transaction fees can add up.
This may help explain why the bulk of corporate spending at Expedia and Travelocity comes from small-to-midsize businesses. Many of those companies simply don't have sufficient personnel to monitor T&E spending adequately. "Big corporations tend to have managed travel and follow travel policies," says Travelocity's Stacy. "Smaller companies don't have the wherewithal to manage all the complexity of travel."
Debbie Christian can attest to that. Christian, an executive assistant at RC Cement, books about 10 trips a month for 25 employees at the Bethlehem, Pennsylvania, manufacturer. More than a year ago, RC Cement switched from a travel agency to Travelocity. "We started using Travelocity because the travel company we were using was charging us a fee for issuing each ticket," she explains.
After signing on with Travelocity, Christian set up a business travel page for the company using programs available on the site. That way, she says, all bills are charged to RC Cement's corporate card. One feature Travelocity doesn't currently offer — and one that Christian would use — is a report generator showing how much a corporate customer spends on airfares. Many other sites, including biztravel.com, MYOBTravel, and Yatra, as well as American Express, do provide reporting tools.
Nevertheless, Christian says that booking reservations at Travelocity has simplified her job. That's a big plus, given that she has other responsibilities besides making travel arrangements. "For the amount of time I was spending on the phone with the local travel agent," she explains, "it was easier for me to just go on the site and book trips myself." Cheaper, too. "We've saved over $8,000 in processing fees," Christian says.
Arrivals/Departures
If the Internet is proving to be a boon for buyers of travel services, it may turn out to be a calamity for the traditional sellers of those services. To date, the operators of old-line travel agencies have been hard pressed to fend off online upstarts. The numbers are startling, if not downright bleak. According to a report by Bear, Stearns, 1,800 offline travel agencies went out of business in 1999.
Expect the bust-up to continue. And while Net travel companies are headed for a nasty shakeout as well — Bear, Stearns predicts 80 percent will go poof by 2006 — such a consolidation will still leave around 200 sites in operation. Traditional travel agencies that don't offer some virtual services could be headed for that great ticket counter in the sky.
Indeed, some corporate travel heads say virtual travel booking can be downright liberating. Take the case of National Envelope. A few years back, managers at the Lenexa, Kansas-based manufacturer switched from one land-based travel agency to another, believing the change would help the company save money. Executive assistant Lynda LeVan remembers the experience vividly. Grimacing, she says: "It was a complete disaster."
The new agency, LeVan notes, made repeated mistakes. Sometimes a purchased ticket arrived after the flight departure date or got lost in delivery. Worse, service reps at the offending travel agency generally offered no explanation for the foul-ups. On top of that, executives at National Envelope quickly discovered that they weren't saving any money using the real-world agency.
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