buying business travel - cips events/buying business trav… · –corporate deals –virgin...
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Buying business travel
Perth, March 2015
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• Business travel procurement
• Air travel
– Overview of Australian aviation
– Air fares
– Corporate deals
– Virgin Australia
Agenda
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Business travel procurement
Key components
• Travel policy
• Travel management
• Accommodation
• Car rental
• Other components
• Air travel
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Business travel procurement
Travel policy • Preferred suppliers
• Air travel class and fare types
• Hotel room types
• Rental vehicle types
• Booking methodology
• P
• M
Measurement and compliance
Expense management
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Business travel procurement
Travel management
• Travel Management Companies (“TMCs”)
– Travel agencies who book and manage business travel
– Not household
names, not at retail locations, and don’t generally book holiday or leisure travel
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Business travel procurement
Travel management
• What can TMCs do?
– Manage travel policy
– One stop shop for all business travel bookings
– Provide online travel technology (eg. OBT, MIR)
– Provide management information reporting
– Secure/support preferred supplier discounts
– Recommend savings and efficiency improvements
– Traveller tracking
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Business travel procurement
Travel management
• Factors to consider
– Effective Service Level Agreement
– Fee modelling
– Sophistication of management reporting and online booking technology
– Effective account management
– Other service enhancements and value adds
– 24 x 7 service
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Business travel procurement
Travel management
• How do TMCs make their money?
– Customers pay TMCs a fee for their services
– TMCs can earn commission from suppliers
• Who are the TMCs?
– Indicative examples follow (Not complete list and in random order)
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Business travel procurement
Accommodation • Location
• Rates (model types)
• Value adds
• Security
• F&B facilities
• Business services
• Booking channels
• Payment methods
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Business travel procurement
Car rental • Locations
• Fleet size/availability
• Rates
• Value adds
• Payment methods
• Vehicle types and special equipment
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Business travel procurement
Traveller security • Traveller tracking
• Emergency communication
• Emergency assistance providers
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Business travel procurement
Ground transportation
• Taxi vs car rental
• Charter vehicle
• Hotel transfers
• Coordination of share rides
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Business travel procurement
Expense management
• TMC invoice account
• Corporate credit cards
• Charge card business travel account
• Enhanced data
• I
Integration with expense management systems
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Business travel procurement
Air travel • Australian aviation
overview
• Air fares
• Corporate deals
• Virgin Australia
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Australian aviation overview
Domestic - Qantas group
1992
Eastern Australia
Sunstate
Airlink
Southern Australia
Jetstar
Australian Airlines
Impulse Airlines
Qantas Airways
Qantaslink
2002
Regional RPT
Low Cost Carrier
Full service
Network Aviation Charter
2011
Qantas purchases Network Aviation
Australian Airlines and
Qantas merge
Qantas buys Impulse Airlines
Qantas owned regional carriers re-
branded as Qantaslink
Jetstar launches
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Dry lease Regional RPT
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Australian aviation overview
Domestic - others
Kendell
Hazelton
Skywest
Ansett Australia
2001 2002
Regional RPT
Full service
Regional RPT Skywest
Regional Express
Charter
Ansett collapses
New ownerships
emerge
Ansett ceases operations
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Australian aviation overview
Domestic - Virgin group
2000
Virgin Australia
Skywest
Tiger Air Australia
2014 2013 2011
Low Cost Carrier
Full service
Charter Virgin Australia Regional Airlines
Virgin Blue
Change in business model and branding, from LCC Virgin Blue to full service Virgin Australia
Virgin Australia purchases and
integrates Skywest
Interstate & Regional
Low Cost Carrier
Virgin Australia purchases
60% of Tiger Air
Virgin Australia purchases 100% of Tiger Air
2007
Tiger Air Australia launches
Virgin Blue launches
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International - WA
Australian aviation overview
Air Asia Bali, Indonesia
Air Asia X Kuala Lumpur, Malaysia
Air Mauritius Mauritius, Mauritius
Air New Zealand
Auckland, NZ Christchurch, NZ
Cathay Pacific Hong Kong, PR China
China Southern Guangzhou, PR China
Emirates Dubai, UAE
Etihad Abu Dhabi, UAE
Garuda Indonesia
Bali, Indonesia Jakarta, Indonesia
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International - WA
Jetstar Airways Bali, Indonesia Singapore, Indonesia
Malaysia Airlines
Kota Kinabalu, Malaysia Kuala Lumpur, Malaysia
Qantas Auckland, NZ (seasonally)
Qatar Doha, Qatar
Scoot Singapore, Singapore
Singapore Airlines Singapore, Singapore
South African Airways Johannesburg, South Africa
Thai Airways Bangkok, Thailand
Virgin Australia
Bali, Indonesia Phuket, Thailand
Australian aviation overview
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Air fares
Typically…
Fully flexible
Discounted
First Class
Business Class
Premium Economy Class
Economy Class
• Most expensive • Delayed purchase • Fully changeable • Fully refundable • Last seat availability • Fully inclusive
• Cheapest • Instant purchase • Limited/no changes • Non-refundable • Restricted availability • May exclude baggage, meals
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Air fares
Typically, what customers want
Deeply discounted
Fully flexible
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Air fares
Typically, the reality
Fully flexible
Deeply discounted
Somewhere in between
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Air fares
Airline revenue management
Demand Discount
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Air fares
Peak demand, typically
Leisure travel • Weekends • Public holidays • School holidays • Special events • Seasonal factors
Business travel • Weekdays • Early morning • Late afternoon
FIFO travel • Weekdays • Tue/Wed to site • Wed/Thu from site • Early morning • Late afternoon • Shift-specific
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Air fares
Typical FIFO demand
To Site
To Site
To Site
To Site
To Site
Monday Tuesday Wednesday Thursday Friday 26
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Air fares
Typical FIFO demand
From Site
From Site
From Site
From Site
From Site
Monday Tuesday Wednesday Thursday Friday 27
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Air fares
Typical FIFO demand
To Site
From Site
To Site
From Site
To Site
From Site
To Site
From Site
To Site
From Site
Monday Tuesday Wednesday Thursday Friday 28
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Corporate deals
Mid-large business
• Revenue / share target
• Point of sale discounts
• Other support
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Air charter
• Ad hoc or ongoing
• By negotiation
SME business
• Revenue target
• Annual travel credit
Block bookings
• By negotiation
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Corporate deals
What to consider
• Your travel policy
• Ability to mandate policy compliance
• Expenditure level
• Key routes required
• Comparison of: – Fare type conditions – Published fare levels
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• Costs and savings
• Products and services
• On time performance
• Supplier engagement
• Account management
• Terms and conditions