2015 Global Corporate Travel Overview and Trends...

©2014 Partnership Travel Consulting, LLC

2015Global Corporate Travel

Overview and Trends

Partnership Travel Consulting November 11, 2014

Presentation Copy- Not for distribution


Phil DunphyTom Kallas

Andrew Menkes

Partnership Travel Consulting


Strategic Partners» Payment Systems» TMC» OBT» Expense SystemsPreferred Supplier» Airline» Hotel» Car Rental» Meetings DMC’s» Ground Transportation


4

Airfare

Class of Service

Upgrades

Frequent Flier Bias

Routing

Preferred Property

Room Category

Room Charges

Car Company

Car Type

Refueling

Liquidated Damages

Audio Visual Charges

Meals

Comps

Card Used

Use of Card

Payments

Preferred TMC

Online Booking Tool

Fees

Mobile

Airlines Hotels Car Rental MeetingsPayment &

Expense

TMC &

Technology


5

» Founded in 2000, in New York City, with Consultants based in the US, UK, EMEA and APAC

» Subject matter experts in business travel program optimization

» Prior management positions with:Air France, American Express, Avis Budget, BCD Travel, BTI, Bristol-Myers Squibb, BritishAirways, Daimler, Eos Airlines, Expedia, IVI Travel, Lufthansa, Mitre, Open Skies, Pan Am,Pfizer, Republic National Bank, Rosenbluth, System One, TWA, United Airlines, Wal-Mart

» PTC’s business model is focused exclusively on Corporate Traveland we service more than 20 of the BTN top 100 companies


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300+ years of travel industry experience

Steve

Armstrong

Phil

Dunphy

Andrew

Menkes

Duane

Futch

Don

Murphy

Tom

Kallas

Tanya

Racz

Tom

Stone

Brigitte

JakubowskiMark

Williams

©2014 Partnership Travel Consulting, LLC 7



Ancilliaries


15 Regulation Deregulated New Era

10

5

0

Industry Cost of Capital

Industry Avg. ROIC

-5

1963 66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 11 2014F1

2014 ROIC calculated using consensus estimates for EBITA margin and assuming constant capital turnover and taxes relative to 2013Source: McKinsey corporate performance analysis


2005 2014

8 major carriers with approximately 90% of the market share

4 major carriers with approximately 87% of the market share


Source: IATA


For every

increase in oil price…

…airline industry costs increase by $1.6 billion annually.

Fuel has added $70 billion in industry costs since 2010Source: IATA



Page

15

15

Employee NeedsCompanies Needs

• Regulate/Monitor T&E policies and compliance

• Limit cash expenses

• Streamline expense reconciliation process

•Manage spend globally and negotiate vendor discounts

•Acceptance, everywhere

• Streamlined expense reporting & payments

• Adherence to T&E policies

• Travel assistance services

• Business Travel Accident Insurance


Corporate Card ProgramHighlights

Benefit employees

Developed reconciliation guide for card members

Provide dedicated customer services through Pfizer-dedicated Amex staff

Provides door to door Business Travel Accident insurance

Utilized fee free Premium card issuance

Supported colleagues during Shared Services migration

Membership Rewards Program if allowed by Company

Drive savings

Maximize global cash incentive levels

Drove compliance with Corporate Card usage through the development of specific country targeted programs

Utilized a wide range of data available to negotiate contracts and monitor contract compliance

Minimize delinquencies in individually and central billed accounts through ongoing monitoring and communication with responsible individuals

Maximize control

Supports a client defined hierarchy to enable global divisional level reporting and transparency of spend

Initiated wide-spread project to identify appropriate payment solutions to capture an report on spend DATA globally –includes participation from company. Corporate card provider and online management tools.

Supports the streamlining of reporting to maximize efficiency of company processes

Insights to spend and categories to help provide a purchasing decisions modeled and enhanced by spend data

Minimizes Risk, Fraud, and non-compliance

Manage globally

Will support the successful and timely rollout of automated expense management tool and migration to Shared Services

Ensures all colleagues have access to an appropriate payment tool program around the world,

Standardization and alignment of global processes and payment solutions

Supports a Global communications plan to include procedures, policy, and processes that streamline the financial process, thus reducing risk and cost.

Drives compliance


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17

By using corporate/ purchasing cards instead of checks companies save time… and money

Source: Accounts Payable Network, Key Accounts Payable Benchmarks, 2009

$69 per transaction saved and 68% reduction in procurement cycle time






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22

Automated expense reports integrated into back-end accounting systems provide significant organizational efficiencies

56%

Source: Corporate Travel Card Benchmark Survey Results; RPMG Research Corporations

increase in expense report efficiency


» Traditional˃ Well established. Buyers still seeking nirvana for price and service

» OBT˃ Established based on generational gaps. Never reached the potential

market penetration predicted. Slow to develop, slow to adopt.

» Mobile˃ In 2012 mobile reached 5% of online booking transaction. That was a 166%

increase YOY. Expect to be nearly $40B in 2015. (source PhoCusWright)

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» PhoCusWright conducted an online survey of more than 2,000 travelers who had taken at least one trip in the preceding 12 months and found that 32 percent of "mobile web users researched air options, while 14 percent made a reservation" on their mobile device.

» Mobile's position as a point of sale has yet to mature, but it's coming of age. PhoCusWright projected that airlines last year generated $2.7 billion from bookings through mobile devices, representing 5 percent of online transactions. "Mobile provides a compelling opportunity for airlines to foster direct relationships with travelers”.

» Carriers have focused on delivering to consumers what United Airlines executive vice president of marketing, technology and strategy Jeff Foland called the "right offer, right time, right place, right price." Mobile increasingly helps accomplish that, he said.

» Eighty Three (83) percent of airline respondents to its survey "have the ambition to sell ancillary service on smart phones by 2015.

26



Defining Social Media

Broadcast Media

Interactive Media

Social Media

“We tell you.”

“Tell us what you think about what we tell you.”

“Tell each other.”


900,000

310,000

255,000

250,000

120,000

110,000

100,000

80,000

65,000

42,000

1. Increased Brand Recognition..2. Improved brand loyalty.3. More Opportunities to Convert.4. Higher conversion rates.5. Higher Brand Authority.6. Increased Inbound Traffic.7. Decreased Marketing Costs.8. Better Search Engine Rankings.9. Richer Customer Experiences.10. Improved Customer Insights.

Top Impact Points of Social Media


NDC is a travel industry-supported program (NDC

Program) launched by IATA for the development and

market adoption of a new, XML-based data transmission

standard (NDC Standard).

The NDC Standard will enhance the capability of

communications between airlines and travel agents and

will be open to any third party, intermediary, IT provider or

non-IATA member, to implement and use.


Product differentiation

• Marketing the richness and uniqueness of airline

products

• Marketing personalized offers

Access to full and rich Content

• Compare flight products based on schedule, price AND

value

• Work with real-time product and fare data

Transparent shopping

• Deliver the right products at the right prices

• Offer each traveler the opportunity to shop based on

what they value – be it anonymous or personalized

Airline

Airline

Agent

Customer


AREA FOCUS

Airfares Ticket accuracy (not PNR quotes)

Transaction Fees # of Transactions, “No Touch”

HotelApplication of corporate rate, commissions, rate loading, squatters

Car Rental Commissions, Upgrades, Refueling

Corporate Cards Direct-bills, double-payment, personal

Policy Use of preferred suppliers

TMC Staffing, Revenues, Expenses = Invoice

Data Integrity, Protection, Resale

Meetings How much time to you have????


Benchmark vs. RFP1. Speed and cost of project

2. Validate assumptions

3. Will to change

4. Price

5. Service configuration

6. KPI’s and SLA’s

7. Revenue validation


» Cancel for cause/convenience

» Conditions surrounding commission return

» “Industry Change” clauses and revenue transparency


Hig

hest

Lo

west

Agent Productivity

Adoption Rates

Compliance Levels

Ticket Accuracy

Average Expense Report

Transaction Cost

Talk Time

Cost Per Mile

Turnover

Customer Service Issues


» Airline

» Hotel

» Car Rental

» Meetings

» Charge Card

» Travel Agency

» Ground Transportation


» Policy

» Compliance Channel

Rate

Room Type

» Per Diems

» Value-Add Services

» Live Directory




» Limos

» “Black Car”

» Yellow Cab



The travel policy is a living document that is readily accessible to all employees; travelers, travel-arrangers and travel enablers. The policy clearly communicates the Travel Purchasing System and the reasons behind the decision. The travel management company assists in policing the policy, but the ultimate tool is corporate responsibility and the expense reporting system.


» Employees can book travel from any source they want

» Employees can fly any class of service they want

» Employees can book any airline they want

» Employees can stay at any hotel of their choosing

» Employees can rent any car type they want from any supplier

» Employees can use their own person credit cards to get triple mileage

» Employees can fill out their expense reports whenever they have time to do so


» Has not been updated in several years

» Is not easily found on the company intranet

» Is not required reading for new employees (especially those who travel on company business)

» Has not been adequately communicated to the company approved travel agency (Travel Management Company)

» Is not enforced prior to commencement of travel

» Is loosely and/or randomly enforced in the major spend category areas of airfare, hotel, car rental


4 TMC’s manage the majority of the Corporate Travel 100.PTC will ensure that there is a mix of bidders, to include OTA’s and Regional TMC’s

45

2013



1. Policy and service level

agreement compliance

2. Rationalized supplier base

3. Pricing and contract deals

4. Traveller, supplier, and

sourcing organization

productivity

Segment travel directives

that accelerate savings

through:

Global

Consolidated

Data

Repository

Discount

Programs &

Negotiation

Strategies

Optimal

Preferred

Supplier

Base

Integrated

Enabling

Technologies

Innovative

Practices &

Effective

Policies

Performance

Analysis &

Contract

Audit

Travel Industry Trends & Influencing Drivers


2015Global Corporate Travel

Overview and Trends

Partnership Travel Consulting November 11, 2014

Presentation Copy- Not for distribution

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2015 Global Corporate Travel Overview and Trends...

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