TRANSFORMING TRAVELFULFILLMENTBy Steve Reynolds, President - The R GroupJune 14, 2012 Proprietary and Confidential. Please do not distribute without permission.
Agenda Introductions Travel Fulfillment Process Defined Estimated costs and drivers Path way to lower cost fulfillment $10 - $5 - $0 Summary Q&A
Introductions The R Group Steve Reynolds, President, Steve.Reynolds@thergroup.net Technology, Supplier Management, Procurement, and Transformational BPO TMCs (Amex & BCD), OTAs (Expedia, Orbitz, Priceline, Travelocity) CTD Systems Joe Monaghan, Executive Vice President, Joe@ctdstravel.com HP Sandy Prosser, Global Travel and Meetings Service Delivery, email@example.com PTC Kathy Briski, SVP PTC, Kathy@partnershiptc.com
Travel Fulfillment DefinedOnlineBooking PN Mid-office MI Back-office R RSystem Quality Control ARC Report Recon Itineraries Credit Card Recon Reservation Commission Tracking Improvement Data Feeds (reporting) Ticketing Misc. Processes Pre-Trip Approvals International Rate DeskReservations Exception ProcessingHelpdeskAfter Hours
Current Cost Estimates andDriversOnlineBooking PN Mid-office MI Back-office R RSystem $3-$5 $7.00 $1.00 80% 100% $20.00 20%ReservationsHelpdeskAfter Hours Average costs online, touch-less $8.00$25-$50 Average costs traditional, touched $28.00 Total average fee $12.00 (80%) $10M = $185K
Phase one – Costs < $10.00 Standardize, Simplify, and Automate processes Complexity and touches increase costs Are they worth it? Reduce calls to agents High exception rate (1:1) Educate travelers on when to call (or not) and costs Reduce exceptions Online = touchless Profile Management Tool Any tasks that stop a reservation from ticketing/kick-out Remarks entered by traveler thru online booking – “Prefer first floor room”. Missing or invalid documentation – CC’s, accounting codes, approval codes. Lack of reason code and/or logic Missing or invalid comparison fares International/complex itineraries AAirpass, SWA, Direct Connects, etc. Improve touchless by 10% = savings of $1.20 per ticket
Reduce costs per transaction (<$2.50) Discuss fulfillment costs with TMC. Fully understand the definition for each transaction Touched, Untouched, Hotel/Car Only, PNR/Ticket Remove exceptions from the process, automate everywhere possible Move exception handling offshore/at home agents Possible to cut costs in half - $20 to$10 Reduce backoffice and ARC reporting costs Purchase reporting solution directly from vendor File weekly ARC report using offshore labor Potential to reduce the costs in half - .50 Saving total Processing - $1.00 Exceptions - $10.00 Backoffice - .50 Average 90% = $2.40 (versus $9.90)
Radical cost reductions ($0 fee) Reduce dependency upon TMC back-office data Use Expense, Card, and Vendor data instead Examine the purpose for reporting – is it worth it? Move all calls offshore (VIP, After Hours, IRD) Potential for 50% cost savings on high cost transactions Allow TMC to keep all commissions and incentives Commissions, overrides, listing fees, Pay For Performance, etc. Use their contracts and discounts, not yours Expect better fare and rate discounts (audit and benchmark) Allow travelers to book direct Go the OTA route Capture data thru Card, T&E, third party, email, and supplier feeds Establish a low cost culture using game theories
Summary(From $12 to $0) Reduce calls thru online adoption and education Reduce manual exceptions thru simplification and automation Reduce dependency upon TMC back-office data Allow agency to use offshore staffing where appropriate Allow TMC to keep all commissions and incentives Allow travelers to book direct thru OTA or supplier sites
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