Trip Modeling

The following article includes content from the 2010 Industry Forecast by Advito. For more information on emerging industry trends and air, hotel and ground transportation predictions, download the Industry Forecast from www.advito.com.

The 80/20 rule holds true for many corporate travel programs: an overwhelming majority of trips are between a small number of city pairs. On that basis, it has long been realized that it is sensible to create a trip model – the creation of policy and booking templates for a company’s most frequent journeys, specifying not only the preferred means of travel, but where to stay, ground transfers and possibly additional details such as where to eat.

Business travelers often display a behavioral trait to “shop” on the web prior to booking their trip. This behavior does not necessarily stem from a desire for more options, but rather through a lack of “right” options provided or a lack of traveler trust in the options available.

Trip models are designed to make life easier by reducing complexity yet still providing choices that are within travel policy, support preferred suppliers and/or even promote virtual meetings as an option.

Although trip modeling makes good sense, not many companies do it. Torsten Kriedt, vice president, Innovation and Intelligence for Advito commented: “The challenge is to develop trip components that can be assembled together dynamically, are easy to communicate and (where appropriate) are enforceable in any designated booking channel, whether it is online, mobile or offline.”

Now may be the opportune time to revisit the idea of trip modeling because a relatively small effort could quickly shift traveler behavior for a large proportion of the corporation’s trips. Other reasons why building trip models are timelier than ever are as follows:

Budgetary control
Companies are trying harder to control travelers before they travel, for example through pre-trip approval. Trip modeling helps line managers decide whether to grant their approval by giving them a clear idea of what the likely total cost will be.

Hotel costs
In recent years, accommodation has started to account for a larger share of total trip cost. It is therefore becoming more important to manage all the elements of a trip before departure, not just the flight.

Improved data
Improved management information from expense reports, which can be structured around individual trips, means travel managers now have much more data with which to build effective models.

Improved technology
Booking tool providers are building increasingly sophisticated trip templates into their systems.

Improved traveler security

How to build a trip model
Understand your true costs
The most critical work to be done in trip modeling is specifying the mandated (or preferred, according to corporate culture) means of travel, plus accommodation and transfer. This is not as simple as it looks, because the cheapest individual elements may not be the most cost effective overall. For example, a low-cost airline may be cheaper than a traditional airline, but if the taxi transfer from the airport served by the budget airline is €100 higher, the advantage could be lost. If there is also a rail option, then this may prove cheaper again if, for example, the train station is within walking distance of the hotel.

Look at more than the travel costs
Some companies also build a productivity weighting into their assessment. For example, a door-to-door journey by air and rail may be the same duration, but it may be that 60 percent of the rail journey can be devoted to productive work, whereas the same is true for only 10 percent of the air journey. Some companies use a multiplier based on their travelers’ salary costs per hour to help judge which option is more effective.

Trip models can also improve travel security: By looking at the program from a “door-to-door” trip perspective specific security risks can be identified easier and avoided or mitigated. A good example is the transport to and from the airport both at home and at the destination. Rather than relying on a traveler’s judgment of whether a taxi, rental car or public transport is the right option, travel management can provide clear guidance to only use vetted providers. For companies with stated environmental commitments, the relative carbon emissions of each mode of transport should also be taken into account.

Consider alternatives to travel
Some companies also specify whether certain city pairs, especially between two company locations, should be replaced by virtual conferencing. Anecdotally, one Advito client has rooms equipped for TelePresence meetings which it names after specific key locations. Instead, therefore, of traveling to the Zurich location, employees meet their colleagues from Zurich by attending TelePresence conferences in a room labeled “Zurich.”

Reduce complexity and still provide options
Good trip models do not superimpose just one-size-fits-all packages. Ideally, a company provides a limited number of choices for each of the trip components that reflect an organization’s attitude towards convenience, productivity, price, safety and the environment.

The choices available can either be linked to the reasons for a trip (e.g. training or internal meeting versus revenue generating or client facing) or in more generalized categories, e.g. “value”, “standard” and “premium.” Keeping the traveler in control over which package or mix of components they book still holds them accountable for their choices and makes them feel empowered. Yet by limiting options, trip models can significantly reduce the time needed for travelers and travel arrangers to “shop around” for the best option. It might be tempting to regulate to the nth degree – but try to keep it simple e.g. “take the train” and “never use taxis before 7 p.m.”

Kriedt adds: “The holy grail is ultimately to make models that are not only trip-related, but traveler-specific. For instance, an employee’s home address might be a key factor in narrowing down options for air transport or even determining that rail is a better option for that traveler. Another example is the distinction between someone who is familiar with a given destination and able to speak the local language versus someone traveling there for the first time. Of course, to avoid the danger of second-guessing, tools need to allow a traveler to set their own preferences within the company framework.”

At this stage it is not realistic to force people to think about every single component of their trip at the time of booking, such as restaurant reservations. However, when combined with a mobile platform, preferred options can be sent to the traveler as a reminder at a more appropriate time. Other examples include a reminder upon arrival at the destination airport that the preferred hotel includes a complimentary shuttle service, or that the restaurant with high rating from fellow travelers offers a corporate discount, which accepts the company’s preferred credit
card and is also within walking distance from the hotel.

There are many ways to get started with trip modeling and – given the low penetration of trip models so far – there is no clear best practice. Some companies may benefit from spend and travel pattern analysis and developing trip models top down. Others could benefit from involving their travelers, not necessarily in physical working groups but by establishing a social media platform that allows them to rate suppliers, share tips on destinations and thus provide valuable input to the design of such models.