FlightStats discussion with Jay Campbell on disruption management

“Trip Disruption” is a common discussion point in travel. Being able to demonstrate proactive management of disruptions is fast becoming a competitive imperative. Where traditional duty of care solutions monitor the conditions through which travelers must pass, FlightStats’ trip disruption monitors the actual transit status of each and every traveler in motion. Where 1 in 10,000 travelers might be impacted by a bad storm or volcano, or one in millions by a serious incident, about 1 in 12 of your travelers experiences a disruption such as a cancelled flight or missed connection. Disruption management adds value, demonstrable cost deflection, real-time traveler visibility and service and generates new revenue for your agency business.

In our conversations with Jay Campbell, travel industry expert, we discuss duty of care and disruption management which has become a highly valuable service to TMCs. Enjoy the article and let us know your thoughts. We would be happy to schedule a conversation about how trip disruption management might work in your business. Contact us today!

Coming From A TMC Near You: Proactive Trip Disruption Services

By Jay Campbell

If you’re a global travel manager and have not heard from your big travel management company about “proactive care” or “disruption services,” you likely will. American Express Global Business Travel and Carlson Wagonlit Travel are rolling out programs now. BCD Travel has had one for three years. The details differ, but what’s behind them is the same: operational intel and tracking from FlightStats. The question for many clients is, at what cost?

First of all, what is it? Say there’s a storm. You deplane from the first leg of your one-stop trip, and the connection is canceled. You’re staring at a huge line. The airline might be reaccommodating you already, but your meeting is first thing in the morning and its next flight with open seats won’t help. (Remember, airline load factors are off the charts.) There are options. You consider running around the airport, but then call your TMC. After waiting on hold for a bit, you learn they’re only just hearing about the disruption from you. Fingers crossed …

Now imagine powering on your phone and seeing a message saying you’ve been rebooked, go to this gate. Or, at least, a question: “We can rebook you in this way, would you like to accept?” Maybe it’s even within policy. It keeps duty of care data intact.

This is the pitch from FlightStats, a service provider so ubiquitous among TMCs that it would be easier to list which don’t use it than the more than 60 that do. FlightStats takes passenger name records from client agencies and watches for calamities among 98,000 flights a day. It uses data from more than 500 sources — weather, schedules and aircraft positions, for example — in an effort to hedge against data failure. It informs travel agents of what’s going on, ideally before travelers even know there’s a problem.

Sounds great, but clients are challenging the TMCs with questions: What’s the ROI? What if it fails? Shouldn’t the TMC be doing this anyway?

Pricing for these services is all over the map. Midsize TMCs often say it’s included. But as with TMC pricing generally, apples-to-apples comparisons are difficult. Some TMCs do not charge a discrete fee for proactive services. For others, it’s a few dollars on top of a typical booking transaction fee, or a monthly enterprise subscription fee in the hundreds.

For buyers, any additional fee is a struggle.

“It’s an interesting concept, but it’s also service I expect them to provide,” said National Instruments global travel manager Eric Brown. “For me, cost would be a huge component of it.”

“My CFO thinks it’s already their job to do that,” said Carey Ann Pascoe, senior travel manager at Dolby Laboratories. “Whenever there’s a fee involved with the TMC I try to offset it with an ROI. It would be difficult to do that with this.”

“Soft” benefits like being at home with your family when you’re supposed to be aren’t typically quantified despite the potential impact on job satisfaction. Being a hero and saving a key meeting is awesome, but anecdotal and occasional. Improvements in service and comfort are hard to sell. Historical service data to help at the negotiating table could come in handy — a twist on new airline performance guarantees, perhaps.

But these are all fuzzy. More transparent is the cost of a new ticket or extra hotel night, car-rental day or meal. Travel managers can make an estimate like that. FlightStats has ROI calculators for these extra costs. It says nearly 10 percent of flights last year were interrupted.

For TMCs, being more proactive means paying FlightStats on a transaction basis or monthly fees, but the brunt of the “cost to them isn’t what they pay us for monitoring and delivery,” said FlightStats vice president of business development Meara McLaughlin. “It’s how they staff it.”

“When the people are sitting idle, it’s costly,” said chief product officer Robyn Grassanovits. “We’re working to develop the next generation with a focus on [early warning signs] so TMCs can better prepare for the unexpected.”

Scaling up and down on staffing is tricky. Having excess capacity intuitively seems like the wrong way to go when so much new economic value nowadays is created on improved utilization, à la Airbnb and Uber.

FlightStats offers a task center to triage passenger issues, allowing for more agents to be trained and to step into the storm, as it were. American Express Global Business Travel aims to train lots of agents and offer the service to every traveler for no added fee (for now). Carlson Wagonlit Travel is creating a dedicated team, admittedly risking some idleness. BCD offers kind of a mix.

Whether to centralize a department or broadly train agents is a big question.

CWT in October finished a three-month pilot of its Disruption Services program with three large clients. It’s not meant to be for every traveler. Think of it as a version of VIP services but for road warriors and without the white gloves.

“We’re fully staffing it as a separate entity within our traveler services group,” said a communications official. “They’re not managing regular TMC calls. It’s a dedicated group of people.” These are at-home workers reporting to CWT’s Phoenix call center. The TMC will charge a yearly fee for access to the team, depending on client size, as opposed to an add-on per trip. Customers can create limits on how much can be spent to reaccommodate. Although getting clients to spend money is a challenge, about 10 expressed strong interest. The service launches next month.

American Express Global Business Travel is taking a different approach. With more than 6,000 travelers already enrolled from more than 20 U.S. clients, its Proactive Traveler Care is part of the core service offering.

“It’s not viewed as a revenue driver, really an efficiency and satisfaction delivery play,” said VP digital traveler Evan Konwiser. “It does involve training. Obviously when you have proactive service, it requires a different type of flow. They can’t be taking calls in the same way. When it gets to 100 percent of travelers, we’ll work out the workflow management process. But we’re not viewing it as a separate group or specialty at this moment. We view it as just good service.”

BCD Travel started its FlightStats-powered program more than three years ago.

“It’s a service we charge for,” said vice president for digital and product planning Will Pinnell. “There are different ways to pay for it, but when a traveler not enrolled in this service calls in, their company will incur a fee to talk to an agent. A lot of clients justify this investment because it’s offsetting the cost they would have had to pay. It’s a proactive service for travelers who more than likely would have dialed in anyway.”

He said some clients enroll certain travelers while others include every booking. As for the staffing configuration, some customers have dedicated agents who are trained on the disruption tools. Others are served by agents in the general BCD population, some of whom received disruption training.

If the other two are charging, there must be a string attached to Amex’s offer, right?

Some of FlightStats’ TMC clients may see the opportunity to capture more transaction fees just by being in the middle of things. Some might go for merchandizing and affiliate revenues, such as through promotions sent at the moment they matter. “Flight canceled? Going nowhere? Eat at the steakhouse you’re now going to be sleeping next to.”

But for Amex it’s not about that, Konwiser said. One thing that is valuable is the data, particularly for risk management purposes.

“We are trying to change the whole service paradigm,” said Amex GBT vice president for global service delivery Vinod Varma. “Customer effort goes down substantially. We believe customer effort is an important element driving customer satisfaction. We believe there’s value not just for customers, but also for us. If we can be predictive and scale up the service effectively, then we can take out a lot of inbound calls and be more efficient.”

Raison D’être

The perceived value proposition of travel management companies is constantly evolving. Authors of a November paper by the Global Business Travel Association indicated they were surprised that “improving the traveler experience/traveler satisfaction” was high on the list of what U.S. travel managers want from TMCs. It was in the top three of about ten priorities whose importance respondents rated in the context of the next five years. “This suggests they want TMCs to continue expanding beyond their traditional role,” GBTA wrote, as if servicing travelers is not a traditional TMC function.

GBTA asked about TMCs’ 24-hour services. These are the departments or outsourced partners often tasked with reacting to traveler contacts during disruptions. Nine in 10 U.S. travel managers told GBTA their companies rely on TMCs for such services. Buyer satisfaction with 24-hour services ranked 12th out of 16 categories — higher only than meetings and various data management functions. Second on the list, however, was VIP services.

Consultant Scott Gillespie of tClara wasn’t surprised that TMCs are looking to either close the gap or create a new tier between concierge and standard services.

“This will be table stakes for TMCs in a short amount of time,” he said. “File under ‘Traveler Success.’ It’s a good step. As for the client, this is not the CFO’s call. It’s the budget owner’s call — the EVP of sales, the VP of field services, whoever has travelers on their payroll.”

The comments echoed one suggestion from a veteran travel manager speaking during a conference call described as “off the record.” She suggested travel managers bring it to department heads as a chargeback.

FlightStats’ McLaughlin, of course selling but also knowing the market, sees this in more dire terms.

“Travel managers and TMCs are losing ground, but this is the moment,” she said. “How will machines take these irregular events and have empathy and savvy and negotiating power to fight the fight, understand the complexity and make a judgement in the way a human can?”

But agents are only human. Is there a danger here of setting expectations too high? In some situations there’s only so much an agent can do. What if the FlightStats info is wrong?

“The challenge TMCs will have is articulating what it is and putting fences around what it can and can’t do,” said KesselRun Corporate Travel Solutions partner Brandon Strauss. “Travelers already complain about things airlines do that are outside the control of the TMC. ‘I was 10 minutes late and they wouldn’t hold the flight for me!’ At the same time, it’s clearly a service enhancement. If they can do it, it does become a competitive advantage.”

Additional info: Polled by GBTA in September, more than 200 travel managers and a set of more than 7oo American, Australian and British business travelers also answered questions about online booking tools. Concur sponsored the research.

Related Resources

Airlines Ease Disruptions With New Systems, TMC Processes

http://www.thecompanydime.com/airlines-disruption/

The Company Dime’s risk archive

http://www.thecompanydime.com/category/risk/

United Trying To One-Up Delta On Performance Guarantees

http://www.thecompanydime.com/united-performance/

From Data Management Firms, Clients Demand The Future

http://www.thecompanydime.com/data-management/

Meet The People Behind The New Virtual Agents

http://www.thecompanydime.com/virtual-agents/

GBTA Study: Business Travelers Less Satisfied With Online Booking Tools Than Supplier Sites

http://www.thecompanydime.com/gbta-study/

REPUBLISHED WITH PERMISSION FROM THECOMPANYDIME.COM