As the trend toward ancillary revenues in the travel industry continues at pace, cost management becomes an even more challenging process.
The idea of a single clear-cut fare for a flight, for example, seems to belong in the distant history of the 20th century. Airlines and hotels, in particular, are charging separately for items or services that were once simply understood to be part of the fare or room charge – a process widely known as ‘unbundling’. We’ve all heard people complaining about paying for food on a flight or to use a safe in a hotel room. “These things used to be free. They’ll be charging us to breathe their oxygen next!”
Travellers may not have been impressed by this trend but unbundling is not going away yet (although steps have been taken for greater cost transparency; the European Commission, for example, has now set out obligatory requirements for the transparency of online airfare pricing).
Technology might seem an odd solution to the problem. Many people still wrongly see online booking tools as solutions that only work for simple bookings – A to B and back, fixed flight times with the same airline for both legs. Surely, you might say, the increasing fragmentation of travel pricing, through unbundling, highlights the rigid restrictions of trying to automate the travel booking process?
Think again. There’s no doubt that the unbundling of travel costs complicates the gathering of total trip cost data. But if you process all your travel and expenses through a single system, you can collate that unbundled data automatically.
Data retention and management alone is a goal in itself, of course, but when you apply that data in a practical way, you start to see real benefits. After all, unless you know the total trip cost, how can you be sure of the return on your investment?
So, take your historic expense management data – showing a real total trip cost including every unbundled item – and turn it into part of the forecasting process for future similar trips. You no longer need to book a trip for what you think is €Y, only to realise that the real cost – when you account for every expense from hotel internet use to heavy baggage on the flight – is actually 2 x €Y. And when you know the probable total cost in advance, you can ask – should I really go? Is this trip justified? Will there be a negative return on my investment? Should I videoconference instead? Everybody looks back on business trips sometimes and says: “Well, that was a waste of money.” Let’s put a stop to that.
In the past, the complexities of travel have been cited as an argument against automated, online travel management systems. Technology may now be the solution.
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