TMC

Business Traveller (Africa) - - CONTENTS -

The travel man­age­ment in­dus­try has changed sig­nif­i­cantly in the past 10 years and the ma­jor play­ers in the space are hav­ing to re-look their of­fer­ings and em­brace tech­nol­ogy, just to stay rel­e­vant and at­trac­tive to clients, never mind cost­ef­fec­tive.

As client needs change and with the al­most con­stant pres­sure on spend, never mind the im­pact of tech­nol­ogy, the travel man­age­ment in­dus­try has had to roll with the punches and re-look its of­fer­ing, in a bid to re­main rel­e­vant and at­trac­tive to cus­tomers.

De­pend­ing on your source, it's widely ac­cepted that the global travel man­age­ment in­dus­try is worth ap­prox­i­mately $1.2 tril­lion, and ac­cord­ing to the Global Busi­ness Travel As­so­ci­a­tion (GBTA), spend is ex­pected to reach $1.6 tril­lion by 2020.

That's a se­ri­ous chunk of change and a snapshot into just how big this in­dus­try is, glob­ally. As that travel spend rises, so too does the role that travel man­age­ment com­pa­nies play, and they are an in­te­gral part of the cor­po­rate travel value chain, re­gard­less of your ap­proach to out­sourc­ing this ser­vice, and re­gard­less of the im­pact of tech­nol­ogy on this in­dus­try.

The fig­ures above are use­ful in giv­ing ‘colour' to a global view, but there's no doubt that Africa is a big part of that view, with some of the world's big­gest TMC brands en­joy­ing a pres­ence on the con­ti­nent, in the form of the likes of HRG, Carl­son Wagonlit Travel, Wings Travel, Amer­i­can Ex­press Travel Ser­vices, and Flight Cen­tre and its as­so­ci­ated busi­ness travel brands, such as FCM Travel So­lu­tions.

That's largely due to Africa's nat­u­ral re­sources and the no­tion that the con­ti­nent re­mains rel­a­tively un­tapped, in terms of its po­ten­tial. You just have to take a quick look at the de­vel­op­ment pipelines of the world's big ho­tel groups to get a sense of how these play­ers view Africa, in terms of po­ten­tial and op­por­tu­nity.

Africa re­mains a vi­brant busi­ness travel des­ti­na­tion and the world's big TMC brands want a slice of that ac­tion. With that in mind, any global TMC trend is likely to ap­ply to Africa as well, with very lit­tle in the way of ‘lag' cur­rently ex­ist­ing, as the world­wide in­dus­try re­mains firmly en­trenched on the con­ti­nent.

With all of this in mind, I'm in­ter­ested in the global TMC view on Africa, as a se­ri­ous player in the cor­po­rate travel space, and whether or not some of the key prin­ci­ples across the world ap­ply to the en­vi­ron­ment here, notwith­stand­ing what I've al­ready said about global trends.

Yes, the African con­ti­nent is unique, but just how dif­fer­ent is it from the other ma­jor markets?

“In­fra­struc­ture, com­mu­ni­ca­tion, po­lit­i­cal sta­bil­ity, ex­change con­trols and tech­nol­ogy adop­tion are some of the chal­lenges that make the African con­ti­nent a more unique en­vi­ron­ment than many oth­ers are fa­mil­iar with,” says Louis van Zyl, CEO of Carl­son Wagonlit South Africa. “Our ma­jor ob­jec­tive is to en­sure we are as in­formed as pos­si­ble and are able to work with and around these chal­lenges, while arm­ing our cus­tomers with the in­for­ma­tion, prod­ucts and pro­cesses to de­liver the ser­vice they ex­pect.”

Whilst it's dif­fi­cult to ar­gue with any of those sen­ti­ments,

there are some TMCs that be­lieve that when it comes to the is­sues fac­ing the African TMC in­dus­try, there are some con­sis­tent themes that ap­ply across the board, par­tic­u­larly when it comes to more cur­rent themes and trends.

“Keep­ing a close eye on travel costs and look­ing for ef­fi­cien­cies in pro­cure­ment and ways for staff to travel most ef­fec­tively will be a top pri­or­ity in the African re­gion dur­ing 2018,” said Frank Palapies, Wings Travel Man­age­ment COO for Africa and the Mid­dle East, speak­ing ear­lier in the year.

Sure, but that doesn't sound too dif­fer­ent from the some of the chal­lenges faced in other re­gions, does it?

Wings has carved it­self a bit of a niche in the oil and gas space, so it was no sur­prise to see Palapies ref­er­ence this seg­ment, as Wings has a vested in­ter­est in it, and the knock-on ef­fect of the per­for­mance of this seg­ment can be felt in many re­lated ar­eas. The themes he men­tioned could quite eas­ily ap­ply to the more de­vel­oped markets, as well.

“Wings fore­casts that oil prices will con­tinue to climb steadily in 2018, bar­ring any ma­jor dis­rup­tive geopo­lit­i­cal in­flu­ences,” said Palapies. “This would reignite in­vest­ment in oil and gas ex­plo­ration, which en­ergy clients put on hold at the start of the en­ergy sec­tor down­turn in 2014. As a re­sult, Wings an­tic­i­pates travel spend by oil and gas clients to in­crease by 2019.”

“Un­prof­itable rigs will now be­come more prof­itable in ar­eas like West Coast Africa, where knock-on ef­fects im­pact travel pos­i­tively. Oil and gas also has a rip­ple ef­fect on the cor­po­rate travel sec­tor, specif­i­cally in as­so­ci­ated and re­lated in­dus­tries, as was ev­i­dently seen in 2014.”

So, hope you're watch­ing that oil price.

SPEND

Palapies men­tioned a closer fo­cus on cost, and there's no doubt that this has be­come one of the ma­jor is­sues in the global TMC space.

That's as cer­tain economies have con­tracted and cor­po­rates have relooked their travel bud­gets, go­ing care­fully through each line item to see where they can shave some dol­lars, rands, euros, pounds etc.

Al­most across the board, the cor­po­rate travel in­dus­try has seen a sig­nif­i­cant amount of ‘belt­tight­en­ing' in the past few years.

“In these eco­nomic times, there will al­ways be pres­sure on the ser­vice in­dus­try to val­i­date and jus­tify our value,” says Van Zyl. “We are not see­ing it any more or less than usual, and our re­sponse is to keep striv­ing to ex­ceed ex­pec­ta­tions and pro­vide the ser­vice that our cus­tomers know are to their ben­e­fit, adding the value they re­quire.”

Aah, value. That re­ally is the magic word in the ser­vice in­dus­try, and the TMC space is no dif­fer­ent.

“The TMC's role is not to save money on ser­vice fees,” says Ni­cole Ado­nis, Gen­eral Man­ager of FCM Travel So­lu­tions South Africa. “Short-term gains de­liv­ered through lower trans­ac­tion fees do not nec­es­sar­ily trans­late into sav­ings in the longterm. A TMC needs to add value by pro­vid­ing sav­ings, but also by adding value in other ar­eas. For ex­am­ple, in­ter­pret­ing data

to proac­tively in­form your travel policy, sup­plier ne­go­ti­a­tions, delivery of tech­no­log­i­cal tools, help­ing ful­fil your duty of care re­spon­si­bil­i­ties, and re­duc­ing trav­eller fric­tion, among oth­ers.”

“The jus­ti­fy­ing of fees has been around for many years,” says An­neke Gelden­huys, Gen­eral Man­ager of Har­vey World Travel South­ern Africa. “The se­cret is in the ne­go­ti­a­tion thereof and the value-adds you give to your customer. Our mem­bers have es­tab­lished well-priced mod­els for their busi­nesses and of­fer ser­vices ac­cord­ing to the customer's re­quire­ments/needs.”

All of this is no prob­lem for Palapies of Wings Travel, who be­lieves it's only right that TMCs con­tinue to look for cost-sav­ing mea­sures for their clients. For him, it comes with the turf.

“Our role as a spe­cial­ist travel man­age­ment com­pany is to help clients keep travel costs down in terms of air­fares and ho­tel rates,” said Palapies. “Us­ing our tech­nol­ogy, not only to source the best fares but also to stream­line the book­ing process, saves more time and ul­ti­mately cost to the client. This pro­vides us with the abil­ity to sim­plify com­plex­i­ties and re­duce to­tal cost of own­er­ship.”

TRENDS

We touched on a few trends ear­lier in the piece, but let's delve a lit­tle deeper, in­ter­ro­gat­ing some of the con­ti­nent's big TMC brands to see what the talk­ing points are and where they are fo­cus­ing their ef­forts.

For Ado­nis of FCM Travel, there are five ma­jor trends worth not­ing, namely trav­eller fric­tion, ar­ti­fi­cial in­tel­li­gence, man­ag­ing data, late book­ings and per­son­al­i­sa­tion.

“We've seen an in­creased fo­cus on trav­eller fric­tion, which ar­gues the mer­its of a trav­eller-cen­tric pro­gramme that boosts em­ployee well­be­ing and job sat­is­fac­tion over a cost-cen­tric travel pro­gramme, to achieve bet­ter busi­ness per­for­mance and higher ROI,” says Ado­nis. Com­pa­nies in­creas­ingly un­der­stand that busi­ness travel and busi­ness

per­for­mance are in­trin­si­cally linked. The less trav­eller fric­tion ex­pe­ri­enced by a busi­ness trav­eller be­fore, dur­ing and af­ter the trip, the more pro­duc­tive the jour­ney and the greater the re­turn on in­vest­ment from that trip.”

FCM Travel has em­braced ar­ti­fi­cial in­tel­li­gence and in­tro­duced a chat­bot in the form of Sam (see Tech­nol­ogy).

“Travel com­pa­nies have been us­ing AI for some time to im­prove searches and han­dle sim­ple customer trans­ac­tions, so that con­sul­tants can fo­cus on more com­plex trans­ac­tions,” says Ado­nis. “In the world of cor­po­rate travel, AI has the po­ten­tial to an­tic­i­pate trav­eller needs, per­son­alise the user ex­pe­ri­ence and re­duce trav­eller fric­tion.”

Ado­nis also men­tions trav­eller safety as one of the ma­jor chal­lenges cur­rently fac­ing TMCs. It's some­thing that Palapies of Wings Travel picks up on, iden­ti­fy­ing it as a space to watch in 2018, when look­ing at his predictions for the year.

“Wings Travel Man­age­ment is fore­cast­ing an even greater fo­cus on trav­eller safety, not only due to the on­go­ing threat of ter­ror­ism, but also geopo­lit­i­cal in­sta­bil­ity which will add to the com­plex­i­ties of travel in 2018, mak­ing per­sonal safety and duty of care a top pri­or­ity for com­pa­nies,” he said. “It goes with­out say­ing that safety will still be a pri­or­ity given the na­ture of the des­ti­na­tions that en­ergy sec­tor com­pa­nies are send­ing their trav­ellers to. That in­cludes air­line safety, ground trans­port, trans­fers and the as­so­ci­ated risks.”

An­other po­ten­tial area of in­ter­est is the data space, which has be­come a hot topic in the TMC in­dus­try over the past few years.

“The ben­e­fits for travel com­pa­nies, cor­po­rates and busi­ness trav­ellers are vast,” says Ado­nis. “The in­dus­try has evolved from col­lect­ing data and gen­er­at­ing a stan­dard range of re­ports on a cor­po­rate's cur­rent travel sce­nario, to un­der­stand­ing the pre­dic­tive an­a­lyt­ics to shape a travel policy.”

What should also be shap­ing

“It goes with­out say­ing that safety will still be a pri­or­ity given the na­ture of the des­ti­na­tions that en­ergy sec­tor com­pa­nies are send­ing their trav­ellers to. That in­cludes air­line safety, ground trans­port, trans­fers and the as­so­ci­ated risks. ”

policy is a bet­ter un­der­stand­ing of the ac­tual trav­eller, if I'm un­der­stand­ing Ado­nis cor­rectly. That would make a lot of sense, as much of mod­ern-day travel is fo­cused on per­son­al­i­sa­tion and de­liv­er­ing a much more per­son­alised ex­pe­ri­ence.

“Busi­ness trav­ellers are be­com­ing in­creas­ingly tech­savvy and dis­cern­ing and are ex­pect­ing a per­son­alised travel ex­pe­ri­ence, even in the cor­po­rate travel sphere,” says Ado­nis. “Many travel busi­nesses are quite late on the pick-up when it comes to per­son­al­i­sa­tion and are strug­gling to max­imise the po­ten­tial of trav­eller data and be­hav­iour.”

Here there ap­pears to be a big dis­crep­ancy be­tween the per­son­al­i­sa­tion be­ing de­liv­ered in the leisure space, ver­sus what is cur­rently found in the cor­po­rate space, and busi­ness trav­ellers just want that same level per­son­al­i­sa­tion, re­gard­less of whether they're on a work trip or hol­i­day­ing with the fam­ily.

For Van Zyl of CWT, the ma­jor trend catch­ing his eye - and fur­ther to his ear­lier com­ments re­gard­ing the TMC jus­ti­fy­ing its value – is that of cost.

“Cur­rent trends we see are in­creas­ing down­ward cost pres­sure, which in turn re­quires us as TMCs to con­tinue to look for ad­di­tional pro­duc­tiv­ity and ef­fi­cien­cies in or­der to re­turn ac­cept­able mar­gins to our share­hold­ers.”

“Busi­ness trav­ellers are be­com­ing in­creas­ingly tech­savvy and dis­cern­ing and are ex­pect­ing a per­son­alised travel ex­pe­ri­ence, even in the cor­po­rate travel sphere. ”

NDC

An­other trend to emerge has been the space around the In­ter­na­tional Air Trans­port As­so­ci­a­tion's new air­line dis­tri­bu­tion stan­dard known as New Dis­tri­bu­tion Ca­pa­bil­ity. It's been five years since IATA first started talk­ing about NDC. Now the ball is rolling as air­lines have be­gun im­pos­ing sur­charges for book­ings made through non-di­rect chan­nels. Lufthansa were the first a cou­ple of years ago, and the likes of Bri­tish Air­ways and Ibe­ria fol­lowed suit in Novem­ber last year, charg­ing a $10 fee for tick­ets

booked via GDSs.

IATA touts that the NDC stan­dard will im­prove the customer ex­pe­ri­ence, en­abling air­lines to sell all their nu­mer­ous an­cil­lar­ies they've been of­fer­ing di­rectly through their web­site – such as seat al­lo­ca­tion, fast-track board­ing, on­board meals, etc – through in­di­rect chan­nels. While the in­dus­try has been very slow in adopt­ing NDC, it's now pick­ing up steam, with an ex­pected 45 air­lines live by year-end, ac­cord­ing to a white pa­per com­mis­sioned by IATA.

As a re­sult, TMCs have had to get up-to-speed on NDC, and it's clearly an is­sue oc­cu­py­ing the minds of the ex­ecs at some of the big play­ers.

“Dis­tri­bu­tion is one of the chal­lenges we are stay­ing ahead of,” says Ado­nis. “The ball re­ally started rolling when more air­lines be­gan im­pos­ing sur­charges for book­ings made through non-di­rect chan­nels. Fol­low­ing Lufthansa's foot­steps were Bri­tish Air­ways, Ibe­ria Air­lines, and Air France/ KLM. The Flight Cen­tre Travel Group has now signed multi-year dis­tri­bu­tion deals with most of these air­lines to elim­i­nate the book­ing sur­charge. This means our FCM Travel So­lu­tions clients will be ex­empt from the sur­charge. The re­al­ity is that NDC could have a pro­found ef­fect on how air travel is booked and mar­keted to trav­ellers in the next few years.” Van Zyl picks up on this point “The IATA ini­tia­tive to pro­mote di­rect con­nect ca­pa­bil­i­ties through the NDC plat­form is some­thing we see as a sig­nif­i­cant trend worth fol­low­ing,” he says. “As with all new and pos­si­ble dis­rup­tive tech­nol­ogy, the NDC ini­tia­tive is go­ing through the typ­i­cal ac­cep­tance and sta­bil­ity curve, so at the mo­ment it is ex­pe­ri­enc­ing its own chal­lenges. I have no doubt that this will be ad­dressed, re­sult­ing in a higher level of ac­cep­tance and in­cor­po­ra­tion in our in­dus­try.”

TECH­NOL­OGY

In or­der to main­tain and/or in­crease their own prof­itabil­ity, TMCs need to raise ef­fi­ciency lev­els and re­duce spend­ing.

Tech­nol­ogy can play a vi­tal role in achiev­ing this goal, by au­tomat­ing man­ual pro­cesses in the mid and back-of­fice. Man­age­ment so­lu­tions as­sist agents in work­ing pro­duc­tively, while also al­low­ing them to de­liver an en­hanced con­sumer ex­pe­ri­ence and en­sure com­pli­ance. As such, it's fair to say that it's a short-sighted TMC that isn't cur­rently fo­cus­ing on the busi­ness case for tech­nol­ogy in­vest­ment, as they aim to po­si­tion them­selves for growth.

“Ev­ery TMC is cur­rently un­der pres­sure to show­case their value to clients due to en­hanced

tech­nol­ogy avail­able in the mar­ket,” says Ne­manja Krstić, Head of Tech­nol­ogy at Wings Travel. “This re­quires a con­sis­tent ap­proach in terms of man­ag­ing the clients' travel spend and demon­strat­ing in var­i­ous ways the true value of our part­ner­ship. TMCs to­day have a re­spon­si­bil­ity to con­stantly im­prove in line with the new tech­nol­ogy which is be­com­ing avail­able to trav­ellers al­most on a daily ba­sis.”

To this end, Tour­vest Travel Ser­vices made the de­ci­sion some years ago to in­vest heav­ily in a prod­uct called Travelit. It's a com­plete end-to-end travel man­age­ment so­lu­tion, pro­vid­ing ser­vices to pro­cure­ment, HR, fi­nance, IT, travel ar­rangers, au­tho­ris­ers and the ex­ec­u­tive man­age­ment team.

In 2018, Travelit has taken a sig­nif­i­cant step in the evo­lu­tion of its of­fer­ing, by de­liv­er­ing an app to its ex­ist­ing cus­tomers.

“We wanted to cre­ate a seam­less ex­pe­ri­ence for our cus­tomers,” says Travelit CEO Philip Katz. “But the whole travel process is quite bitty and drawn-out, so we wanted to spoon-feed them as much as pos­si­ble. We re­alised that the eas­i­est way to do this was to cre­ate an app that fit­ted prop­erly into our book­ing plat­form.”

The app it­self works for both Ap­ple and An­droid, and starts with the trav­eller's pro­file. That cov­ers ev­ery­thing from per­sonal in­for­ma­tion and con­tact details to pref­er­ences, loy­alty num­bers, policy group, card in pocket, and copies of ID, pass­port, visa, vac­ci­na­tion and car li­cence doc­u­ments.

Ad­di­tional func­tion­al­ity in­cludes all the trav­eller's trips and itin­er­ar­ies, and an easy-to-use ex­pense claim sec­tion. Here, for ex­am­ple, the trav­eller can take a picture of a par­tic­u­lar slip – in any cur­rency – and file it away.

There are a cou­ple of other key fea­tures of the Travelit app. Firstly, its ex­ten­sion from the on­line por­tal means that it's cus­tom­iz­a­ble to spe­cific cor­po­rates and their travel poli­cies, which was the main rea­son why Katz and his team couldn't – or didn't want to – take a white la­bel app so­lu­tion off the shelf.

“We be­lieve it's ex­actly the fu­ture of where travel is go­ing,” says Katz.

The same could prob­a­bly be said for ar­ti­fi­cial in­tel­li­gence, and it's here that FCM Travel has in­vested.

It re­cently launched its chat­bot, Sam, which is an in­ter­ac­tive “Smart As­sis­tant for Mo­bile” that sup­ports users with all as­pects of travel via a con­ver­sa­tional in­ter­face to an­swer questions, make rec­om­men­da­tions, and per­form ac­tions.

“The launch of Sam comes at a time when mod­ern and tech­savvy cor­po­rate trav­ellers are in­creas­ingly de­mand­ing more free­dom within frame­work and the power to man­age el­e­ments of their trips on their own,” says Ado­nis. “The travel bot is the per­fect tech­no­log­i­cal an­swer to ad­dress these mod­ern busi­ness trav­ellers' needs.”

Ac­cord­ing to Ado­nis, Sam is de­signed to sim­plify life for cor­po­rate trav­ellers, 24-hours of ev­ery day. The bot as­sists busi­ness trav­ellers pre, dur­ing and post-trip with ev­ery­thing from itin­er­ary man­age­ment, air and ho­tel book­ings, flight up­dates, lo­cal city and coun­try in­for­ma­tion, lo­cal weather and restau­rant sug­ges­tions, to se­cu­rity no­ti­fi­ca­tions, ground trans­porta­tion, driv­ing di­rec­tions, im­mi­gra­tion ad­vice and vac­ci­na­tion sta­tus.

Once in­te­grated with the on­line book­ing tool, all book­ings made via FCM con­sul­tants au­to­mat­i­cally ap­pear in the trav­eller's itin­er­ary. It's also con­fig­ured in line with the cor­po­rate's travel guide­lines and prompts the user to take ac­tions that are within policy, “thus im­prov­ing com­pli­ance, con­trol­ling costs and sup­port­ing duty of care,” says Ado­nis.

Wings Travel launched goSe­cure in 2017 – a travel risk man­age­ment so­lu­tion for its clients that al­lows them to track and com­mu­ni­cate di­rectly with their trav­ellers via a mo­bile ap­pli­ca­tion, cou­pled with a so­phis­ti­cated Wings24 emer­gency con­tact cen­tre, which proac­tively man­ages risk and trav­eller safety on be­half of its clients.

There's also a big fo­cus on data.

“The travel bot is the per­fect tech­no­log­i­cal an­swer to ad­dress these mod­ern busi­ness trav­ellers’ needs. ”

“Our Wings glob­ally-owned op­er­a­tions and stan­dard­ised IT plat­form al­low us across the globe to pro­vide our clients with con­sis­tent and re­li­able real-time data, of­fer­ing them ac­cess to all our pro­pri­etary prod­ucts,” says Krstic. “Wings boasts a ‘bestin-class' re­port­ing tool which is ac­ces­si­ble via URL and in­cludes live data with many en­hanced fea­tures, of­fer­ing clients a snapshot view of their travel spend, travel pat­terns and de­tailed in­sights into trav­eller be­hav­iour, al­low­ing for a proac­tive ap­proach in terms of man­ag­ing their spend.”

How­ever, not ev­ery TMC is de­vel­op­ing its own tech­nol­ogy.

“We pre­fer to take our cus­tomers ‘by the hand' and lead them to the most ef­fec­tive and rel­e­vant tech­nolo­gies un­der­ly­ing the most prom­i­nent ob­jec­tive of ex­cel­lent ser­vice delivery,” says Van Zyl. “Our new prod­ucts are not so much new ap­pli­ca­tions or sys­tems, as we be­lieve there are great tech­nol­ogy com­pa­nies out there de­vel­op­ing the prod­ucts. We see our role as in­tro­duc­ing the en­abling tech­nolo­gies and bring­ing our cus­tomers in to con­nect with the lead­ing-edge tech­nol­ogy prod­ucts in our in­dus­try.”

CON­CLU­SION

Chal­lenges re­main, but in this re­gard, the travel man­age­ment in­dus­try is just like ev­ery other in­dus­try out there, try­ing to get ahead.

The trick is to stay abreast of the trends, adapt ac­cord­ingly, lis­ten to one's clients, and make the smartest use of tech­nol­ogy, in or­der to stay rel­e­vant.

The travel in­dus­try is chang­ing rapidly, so only the most nim­ble play­ers look likely to sur­vive. ■

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