Air travel, the potential loss of GDS-derived income and mobile technology are on the minds of business travel leaders as they ponder the opportunities and challenges awaiting travel managers in 2012.
These were the hot button issues cited most frequently by industry experts when asked by Travel Market Report to consider what travel managers are most likely to wrestle with in the year ahead.
Here’s more, in their own words.
Challenge: Airfares and availability
“The challenge is going to be scheduling and availability of seats, as airlines continue to take down inventory. It isn’t going to get any easier as airlines continue to consolidate and right-size. It is going to get more expensive to jump on a plane – if you can get on at all – at the last minute.” – Ed Adams, CEO, Directravel
“If airlines don’t ratchet up capacity, we are going to see fares go up and the potential for overrides to decrease.” – Robert Joselyn, CTC, president, Joselyn, Tepper & Associates.
Challenge: Loss of GDS income
“If American Airlines’ attempt to connect direct is successful, every other airline will do the same thing to get people away from the GDSs. It would be a huge cost savings to the airline, but GDS income is substantial for agencies. Travel management companies have to retool their business model in such a way that a significant loss in GDS income and overrides would not be devastating.” – Robert Joselyn
“There is still a lot of noise about trying to circumvent agency fees, fees to the GDSs, segment fees. The real priority is working through issues with getting information, and our relationships with GDSs and suppliers as they talk about a direct connect approach.” – Ed Adams
Opportunity: Growth in international air travel
“For sellers, (growth in international air travel) is an opportunity to expand any amenities, any services that will attract customers. If you’re on the buyer side, you have to find services that meet both your budget and your traveler needs.” – Mike McCormick, executive director, Global Business Travel (GBTA)
Challenge: Ancillary fees
“The airline credit card fees being put in place in Europe are just another way ancillaries allow suppliers to find margin and profitability. It is also happening in hotels. Ancillary fees will continue to be the way airlines, hotels, and car rental companies continue to build in additional margin.” – Mike McCormick
Opportunity: Show travel is good for business
“We need to continue to focus on helping companies to make that connection between travel and top-line growth. The opportunity is managing the realization that travel creates a huge competitive advantage for companies.” – Lane Dubin, vice president and general manager, American Express Global Business Travel
Challenge: Rising travel costs
“Companies are going to have to continue to sort through how they invest, in order to continue growing their business in the face of price increases and flat budgets. We need to help travel managers carry that message internally and provide the data points to prove the value of managed travel as a strategic investment.” – Lane Dubin