Changes Are Coming to Government Travel
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GENERAL SESSION:Change is Coming to Managed TravelPRESENTER: Scott Gillespie, Industry Consultant
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• Managed Travel 1.0 and its Diminishing Returns
• New Frontiers in Managed Travel• Impact on Government Travel• Discussion
Where we’re headed
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Managed Travel 1.0 has diminishing returns
04/13/2023 3Gillespie’s Guide to Travel+Procurement
Countries
T&E Spend
$$$
$
20% of Global T&E Spend
Worth going after?
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04/13/2023 4Gillespie’s Guide to Travel+Procurement
Airlines
Air Spend
$$$
$
20% of Air Spend
Worth going after?
Managed Travel 1.0 has diminishing returns
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04/13/2023 5Gillespie’s Guide to Travel+Procurement
$$$
$
20% of Spend
Worth going after?
Spend
City pairs, or hotels, or travelers, or trips
Managed Travel 1.0 has diminishing returns
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Consolidate Bookings with Travel Mgmt. Co’s. 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
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After 20 years, best practices for Managed Travel 1.0 are well known
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Trip costs have been mastered
04/13/2023 7Gillespie’s Guide to Travel+Procurement
The castles have been built
Travel PolicyNone Harsh
High
Costs
Trip Cost
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Solid, safe, enduring – a valuable base
Immobile, infl exible
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04/13/2023 9Gillespie’s Guide to Travel+Procurement
notCastles
ShipsWe need
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Where are the new frontiers?
04/13/2023 10Gillespie’s Guide to Travel+Procurement
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04/13/2023 11Gillespie’s Guide to Travel+Procurement
Travel PolicyNone Harsh
High
Costs
Trip Cost
Traveler Friction
Traveler Friction is a new frontier
• Frustration• Stress• Safety, security• Lost productivity• Reluctance to travel• Recruiting, retention
problems
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04/13/2023 12Gillespie’s Guide to Travel+Procurement
Travel PolicyNone Harsh
High
Costs
Trip Cost
Traveler Friction
Traveler FrictionNew metrics could
reduce traveler burnout
Implications for Government
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Managed Travel 2.0 is a new frontier
04/13/2023 13Gillespie’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
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Managed Travel 2.0
04/13/2023 14Gillespie’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
Concur’s Open Booking initiative
should help capture Hotel data
Implications for Government
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Traveler Dashboards are a new frontier
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Traveler Dashboards
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Implications for Government
Potential for significant impact
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04/13/2023 17Gillespie’s Guide to Travel+Procurement
Tr u e O & D s – n o t a i r p o r t to a i r p o r t
Pre-selected door-to-door iti nerar ies
Best t r ip by main feature:• Lowest cost• Least t ravel ti me• Most compl iant• Greenest
Trip Tailoringis a new frontier
See Rome2Rio, KDS Neo, Rearden’s Deem
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04/13/2023 18Gillespie’s Guide to Travel+Procurement
Tr u e O & D s – n o t a i r p o r t to a i r p o r t
Pre-selected door-to-door iti nerar ies
Best t r ip by main feature:• Lowest cost• Least t ravel ti me• Most compl iant• Greenest
Trip Tailoring Implications for Government
Could help reduce cost, complexity for infrequent
travelers
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Edit Rightsare a new frontier
04/13/2023 19Gillespie’s Guide to Travel+Procurement
Corporate Traveler
Brand.com
Corporate Booking
Data
Corporate TMC
Right to edit or cancel the
booking
Everybody is happy!
Trip Changes
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04/13/2023 20Gillespie’s Guide to Travel+Procurement
Corporate Traveler
Brand.com
Corporate Booking
Data
Corporate TMC
Right to edit or cancel the
booking
Everybody is happy!
Trip Changes
Edit Rightsare a new frontier
Implications for Government
Will allow Authorized Travel Agencies to better
serve travelers
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• Higher airfares = more cost pressure on entire travel budget
• Need better travel procurement– City Pair Program has superior sourcing strategy– FedRooms and Rental Car Program have structural
weaknesses• Need better data and KPIs
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Impact of US Air and American Airlines Merger
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CPP Fares won’t be affected until FY15
Public and corporate fares will rise soon after merger
Preliminary analysis
Source: Scott Gillespie
Domestic US airfares will rise after AA-US merger
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Airlines
Hotels
Rental Cars
Corporate Procurement
Government Procurement
Discounts Firm Fixed Price
Multi-market bids Single city pair bids
Firm Fixed Price
Firm Fixed Price
Individual properties
Multi-market bids
Per Diem Rates
Ceiling Rates + GARS
Policy directs purchase volumes to specified suppliers
Better Travel Procurement?
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Better Data and KPIs
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Spend visibility, with granularity good enough for• Negotiations• Policy compliance tests• Savings lost or achieved
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Spend Visibility Metrics
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* FY13 Object Class 21 Total Budget(less Fleet and Relocation budget)= Managed Travel Budget
SmartPay $Managed Travel Budget*
TMC MIS Bookings $Air, Hotel Voucher $
Corporate Best in Class
Card Visibility > 90%
Air > 90%Hotel > 60%
Booked Visibility
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Cost Over Best Available Rate - COBAR
Example: Rental Car Booking
Rate Allowed = $75
Traveler Books at $70
Best Available Rate = $50
-> Saved Gov’t $5
-> Could have saved Gov’t $25
COBAR= $20 ($70 booked minus $50 Best Available Rate)
Key Performance Indicator Example
Set a goal: COBAR as % of Managed Travel Budget
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Secondary Sourcing Opportunities
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Groups and Meetings
Black Cars, Limos
Meals
Taxis, Parking
Mobile Phone Service ?
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Summary and Q&A
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Travel Management is at a point of diminishing returns
New frontiers include:• Trip Friction• Trip Tailoring• Managed Travel 2.0• Edit Rights• Traveler Dashboards
US-AA merger will put cost pressure on entire Gov travel budget
Hotel and Rental Car Procurement Strategy?
Better Data and KPIs!
Scott Gillespie Gillespie’s Guide to Travel+Procurement