NYTimes.com Article: Online Booking Cuts Costs and Simplifies Trips

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Online Booking Cuts Costs and Simplifies Trips

September 2, 2003
 By SUSAN STELLIN






In the digital dark ages, employees who needed to book a
business trip would either call a travel agent or fill out
a company form with their itinerary and wait for an
envelope to show up on their desk with their tickets and
other documents.

The process might have required several phone calls back
and forth - say, to check a seat assignment or request a
nonsmoking room, or perhaps modify a single-city trip to
include a sales call in a second city.

But just as technology has revolutionized the way leisure
travel is booked and sold, it is just as significantly
changing the way corporate travelers make airline
reservations, book hotel rooms and arrange for car rentals.
Although some organizations still rely on paper forms and
phone calls for most of their travel planning, a growing
number of businesses, large and small, are adopting online
tools to automate the process and cut costs.

"For simple trips, the traveler doesn't need a travel
priest anymore to decipher mysterious code," said Henry
Harteveldt, an analyst who follows the travel industry for
Forrester Research in San Francisco. Businesses, he says,
are going online to book flights and hotel rooms for the
same reasons ordinary Americans do to plan vacations. "It
helps save money," Mr. Harteveldt said. "And it lets the
traveler take control."

Online booking for business trips is just getting off the
ground, by Forrester's estimate, accounting for $13 billion
of the roughly $150 billion that companies spent last year
on travel. But Forrester expects that amount to more than
double by 2007, to $27 billion. That creates what Mr.
Harteveldt described as an "enormous upside in this
segment," and a big opportunity for Internet travel
agencies.

In the last year, the three largest - Orbitz, Expedia and
most recently Travelocity - have created online booking
tools aimed at the corporate market. Orbitz for Business,
Expedia Corporate Travel and Travelocity Business are
essentially souped-up versions of the companies' public Web
sites, customized to incorporate a client's travel policies
(for example "no five-star hotels") as well as any special
rates it has negotiated with travel suppliers.

Employees log on and search for flights, rental cars and
hotels much as they would plan a weekend getaway to London.
The difference is that certain flights or hotels show up in
the results as preferred, based on whatever policies or
rates the company has fed into the software.

"You get a slightly different version of Orbitz," the
company's president and chief executive, Jeffrey G. Katz,
said. "If your company has negotiated air fares, for
example, they show up in your display. The look and feel is
very similar."

The tools also generate detailed financial information to
help travel managers get the best possible deal.
Travelocity's reports, for example, enable companies "to
fully understand how they're spending their money, what
they're saving and what they're losing if they allow their
employees to book outside of policy," the president of
Travelocity Business, Ellen Keszler, said.

It is not just finding the best air fares or hotel deals
that saves money for companies. The online travel agencies
promote their own low fees, which are generally a fraction
of the $25 to $45 a reservation that the traditional
agencies have been charging corporate clients since the
airlines reduced, then eliminated the commissions they
paid.

Expedia, Travelocity and Orbitz typically charge $5 a
reservation booked online and $10 to $20 for reservations
that require help from an agent on the phone. In some
cases, there are additional fees to change a reservation,
set up a company account or upload the rates a company has
negotiated with airlines. Those fees vary slightly - for
instance, Travelocity and Orbitz are waiving setup fees for
their service - but are generally comparable.

The old-line travel agencies are not standing idly by as
the online purveyors enter their turf. In fact, American
Express, the largest, has been serving the corporate market
with online tools for years.

American Express's Corporate Travel Online booking engine,
designed for large companies, allows for more complex
customization. A client, for example, can set different
booking policies for top managers versus rank-and-file
employees or service multinational corporations with
offices in many countries. The company also offers a
service called RezPort aimed at small businesses that do
not have elaborate travel policies or their own negotiated
rates with vendors.

More sophisticated online tools can generally be integrated
with a company's expense report software and programmed to
alert its travel managers about an employee's booking
plans. Tony D'Astolfo, a senior vice president with
GetThere, a company whose booking tool is used by more than
1,000 companies, said the system could be configured to
send a message to an employee saying, "That $2,000 air fare
you're taking - I want you to go back and take that $1,000
air fare."

That is one way online tools can keep costs down. Another
is what Mr. D'Astolfo and others call "visual guilt," or
the impulse that overcomes some employees to take advantage
of bargains that they spot on their computer screens but
probably would not have learned about on the phone.

GetThere is owned by the Sabre Holding Company, which also
owns Travelocity, and focuses on large clients while
Travelocity aims at small to medium-size businesses.
(GetThere's technology is also used for some of American
Express's online products.) Expedia and Orbitz say they are
marketing to any size company, but by most accounts, small
to medium-size companies are the most contested market.

Even some airlines are developing online booking tools
aimed at businesses that do not need much hand holding.
Southwest Airlines, for instance, has had a separate Web
site for corporate booking since May 2000 and is one of the
first carriers to focus on business travelers with a
dedicated online product.

But as Mr. Harteveldt, the Forrester analyst, pointed out,
it is still early in the game, and just as leisure travel
booking services have become much more sophisticated in the
last year, corporate booking tools have room to grow.

"The story isn't what's happening today; this is evolving,"
he said. "In a year I think we'll see very different
products."

http://www.nytimes.com/2003/09/02/business/02BOOK.html?ex=1063510444&ei=1&en=e5d789a84926ae8e


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