The travel industry is embracing technology at every turn and exploring how best to use this now integral part of everyday modern life to further its interests and keep customers coming back for more.
Conduct a search of the top five or 10 corporate travel trends out there and regardless of the platform you’ll find those lists dominated by one element – technology.
No surprise there considering life is not what it was 20 years, dominated by technology that has found its way into every facet of our lives. Some – in fact many – will argue that technology is all too pervasive, with people often glued to their smartphones to the detriment of human interaction.
But there’s no doubt that the benefits outweigh the negatives and technology has the ability to change lives for the better.
There is no better example of this than the travel industry, with a raft of ever-changing technological advancements rendering the industry unrecognisable for those who knew it decades back, and all the more for the better.
Quite simply, technology has made life easier for travellers and those who manage travel.
As tnooz says, “in the constantly changing digital travel economy, new entrants disrupt the status quo, established players consider how best to adapt and grow, and technology is always at the heart of this evolution.”
Tnooz is a global provider of news, analysis, commentary, education, data and business services to the travel, tourism and hospitality industry. It claims to be “the leading voice to the industry for all areas related to travel technology.”
I’m sure tnooz had the likes of Uber and Airbnb (see sidebar)
in mind when it first referenced “new entrants” disrupting the status quo, and there’s no doubt that these entities have shaken up the industry and forced the more established operators to re-look their models and see how technology can benefit them and help them keep pace with these ‘disruptors’.
Regardless, every sector of the travel industry is now affected by technology and below follows a look at just some of the more prominent areas, where they are in terms of their technological advancement, and what some of the major players are doing to stay ahead of the game.
Travel Management Companies
It’s an interesting time for TMCs, who find themselves in the position of having to both embrace technology to keep up, whilst also going right up against the very technology that could ultimately render them obsolete.
“Evolving technology is providing more choice for consumers than ever before,” says Maurice De Vries, Business Development Director at HRG Rennies Travel. “This has changed the game and today TMCs are now also competing against technology developers, search engines and non-GDS content managers.”
So, how does the TMC remain relevant, in demand and still of use to the corporate client?
“Corporates are looking for an end-to-end fully automated solution that will save them time and money,” says Wayne Muirhead Travelit Chief Sales Officer at Tourvest Travel Services. “The system must be easy to implement, manage policy, provide workflow approval and provide an end-to-end matching solution that can interface into their financial system.”
To that point, Tourvest has over 300 clients operating its Travelit technology, and for Muirhead it’s all about cost savings and streamlined processes, whilst retaining that sense of personalised service through its consultants operating the technology.
“The key behind the technology is that Tourvest owns the system, and therefore it is locally developed and tailored for the African market place,” he says.
BCD Travel has identified three main areas for technological investment: analytics and forecasting, mobile, and data. Specifically, it appears to be on a big mobile drive, thanks in large to the launch of its TripSource Mobile app, which offers a host of features, including itineraries, alerts, calendar synching, itinerary sharing, hotel booking, receipt capture and instant messaging.
“We think the relationship between the TMC and travellers has never been more important, as more buying decisions fall upon travellers,” says Kagiso Dumasi, Commercial Manager: Africa at BCD Travel. “With mobile and social tools, we can engage travellers on the road at just the right moment to tell them exactly how to make better buying decisions.”
TripSource Mobile is now available in 16 African countries, where there is obvious synergy.
“Africa presents a great opportunity for technology providers to exploit the high mobile phone penetration,” says Dumasi. “Technology companies and TMCs need to continue providing Africa-specific content-rich applications and technology to travellers in the same way, look and feel that travellers would normally navigate consumer content.”
No surprise that ‘data’ pops up on the BCD radar, as every TMC is looking to offer products that will equip their clients with more information with which to inform their travel policies and behaviour. Whilst some TMCs are integrating this service into their overall offering, others have gone as far as to develop their own data products.
Wings Travel recently launched its goData reporting tool, which it says has helped clients identify areas for improvement in their travel programmes related to indirect costs.
“goData is an intuitive, self-service, and mobile-enabled business intelligence tool that helps you measure and improve the performance of your travel programme,” says Kim Parker, Head of Business Development, Corporate, Sub-Saharan Africa.
And Parker has a warning for those TMCs not focusing on this area of the travel business.
“TMCs that do not analyse data to unlock cost savings opportunities for their clients will find it difficult to retain cost-conscious corporate clients,” she says. “In the current market, there is a lot of suspicion about whether the products and services TMCs offer are really transparent. A high level of technology can answer these suspicions.”
‘Duty of care’ is another topical issue in the TMC space, and technology also has a role to play here.
“It’s essential to know where travellers are, and without cellphone GPS tracking it’s very difficult to assist in a crisis situation,” says Club Travel MD Wally Gaynor. “Staff safety is the primary concern for both the corporate client and the TMC. If there’s an issue, the TMC needs to be able to liaise with a specialist company like International SOS which looks after medical assistance, emergency services, health care, evacuation and repatriation services.”
Arguably the most topical and fluid space, as it relates to TMCs and technology, is the payment sector, with just about every serious player now offering a virtual card solution (see more on virtual cards in ‘The Card Space’ section)
in an attempt to assist their corporate clients with control and a more streamlined process.
“Every TMC and corporate’s nightmare is supplier bill backs,” says Gaynor. “We are working with a company that uses technology to make the whole process much more streamlined. We are also using virtual credit cards to pay suppliers where possible. Both have made life easier, as reporting, payment and reconciliation are really enhanced.”
For Muirhead, the virtual card has proved a game changer.
“Reconciliation has leapfrogged forward with the introduction of virtual card solutions,” he says. “The largest challenge is receiving the correct information on the lodge card statement, and many card companies still do not provide customers with access to sufficient third level data on their card statements. This lack of information makes the reconciliation of the card more complicated and time consuming.”
As with the data space, Wings Travel has gone as far as to develop its own reconciliation product.
goReconcile matches invoices to the statements, merges all data and provides supporting documentation. Transactions are reconciled, with company-specific data such as employee numbers and charge codes. Its customisable format integrates easily with a variety of back-office systems, and it manages multiple currencies with ease.
“The single biggest issue for clients in the reconciliation space is ensuring that travel charges are paid for timeously, and that all transactions are captured into the back office efficiently,” says Parker. “Clients loathe reconciling their credit card statements at the end of each month, because it involves substantial time and effort to capture data using manual processes. goReconcile automates this process for clients.”
Whether it’s self-booking tools, mobile applications, traveller tracking, data and reconciliation tools, today’s TMCs are having to work even harder and invest considerably more just to stay ahead of the game and ensure that technology continues to work for them.
The Card Space
This travel technology space appears to be hotting up, particularly in South Africa, where two major players have recently launched new virtual card solutions.
For Diners Club, the launch of its Dynamic Virtual Card product followed the news earlier in the year that Diners Club cardholders would be able to use their cards in Nigeria and Mozambique by the end of the year. So, two significant new markets for Diners Club and now a major play in the virtual card space.
“The DVC integrated solution is designed to fit as seamlessly as possible into the TMC booking procedure,” says Kevin Lomax, Head: Commercial Card, Diners Club and Standard Bank SA. “We are working closely with a number of IT departments at TMCs to configure our offering according to their requirements. The most important thing is that the DVC solution does not require pre-funding, but uses the lodge card facility, therefore there are no needs to manage third party accounts.”
According to Lomax, what this means is that the TMC does not have to “procure” the virtual card number in advance. Secondly, there is no need to run accounts with suppliers or corporates. Also, unlike the billback process, the TMC does not have to pay commission to the merchant. Reconciliation is improved by providing enhanced data to the TMC, and ultimately the corporate client.
Obviously, on top of all of this, security is key.
“It offers all the features of a credit or debit card – 16 digit card number, CVV and expiry date,” says Lomax. “However, these are kept in separate flows. The most important features are that the cards are single-use, with a limited time span, and issued to a single supplier. The card numbers and details can never be used more than once and can only be settled by the supplier to whom they are issued.”
Security is arguably of even greater importance on the African continent, which doesn’t have the best reputation in the card space, with fraud more prevalent in some of the continent’s most prominent business travel markets. Not even agrees with that sentiment, though.
“I don’t think that the African market has unique challenges when it comes to security – any vulnerabilities that may exist are true in any market,” says Mark Elliott, Division President for South Africa, MasterCard.
“Electronic payments are changing the game and helping to make transactions safer, quicker and more convenient for everyone. Innovations such as chip technology and enhanced e-commerce security, among others, have also played a great part in combating fraud.”
The other major player in the South African market making a play is Absa, a member of Barclays, which has teamed up with MasterCard to launch its Virtual Pay for Travel product, which provides corporate clients with an integrated solution that enables TMCs to request Absa ‘Virtual Account Numbers’ via the GDS.
Travel operators can request virtual account numbers for each travel booking with specific controls for each purchase type and individual payment, whilst capturing all required customer-specific data to ease reconciliation and integration into company financial systems.
According to Absa, it’s “the only solution in the market providing enhanced card control and easier internal reconciliation for corporations, without heavy financial investment or systems integration effort.”
Other Virtual Pay benefits include:
• Drives compliance with travel policies
• Controls, monitors and improves corporate T&E programmes
• Manages infrequent travellers and contract workers
• All VCNs are restricted by Merchant Category Group
• Eliminates manual processes
• 100% matched data
• Booking & custom data collected at POS before transaction completed
• Automated integration to back office
• Enriched quality of data
• Real time visibility of data
• Automated processing reduces costs
• Bespoke reporting
Whilst the travel card space is another of those sectors of the industry that continues to innovate and evolve with a host of new products, there’s no doubt that the virtual card is front and centre right now.
“The virtual card has become the way to do business,” says Shariefa Allie-Nieftagodien, Operations Director at XL Nexus Travel in South Africa. “The risks are lower. The customer can be rest assured that their company card information is safe, and more importantly that loss due to fraudulent transactions is no longer a headache of the TMC.”
Lomax goes a step further.
“We believe the virtual card will improve the way TMCs service their customers by enabling improved payment control and information management,” he says.
And that’s ultimately what it’s about. Any technological innovation has to impact the bottom line, because corporate customers are so much more focused on controlling costs than they’ve ever been.
“We have found that companies are moving towards a single-purpose payment solution when it comes to travel expenditure,” says Elliott. “This gives businesses complete control over every aspect of the payment process, including the amount loaded on to the digital payment solution, the person permitted to use the funds, and how the information is tracked and shared.”
Watch this space.
Arguably the biggest story in the GDS space this year has been the Lufthansa Group’s decision to add a fee of 16 euros to every GDS booking from the 1st
The Lufthansa Group airlines (Lufthansa, Austrian, Brussels, Edelweiss, Swiss) are not adding the ‘Distribution Cost Charge’ (DCC) to tickets purchased through their own websites or at its service centres and ticket counters at airports. The company said that travel agents can book tickets without incurring the DCC by using its online agent booking portal.
As you can imagine, the response from the industry and the GDS companies in particular, was explosive.
“LHG have chosen to go in a different direction by introducing charges that will penalise travellers based on the shopping channel they use,” said an Amadeus statement. “Travellers will either pay more for the same service or, in the case that travel agencies are forced to accept this new commercial strategy by modifying the way they access content just for LHG, there will be extra IT costs that may ultimately be passed on to the traveller, putting the travel agent, and/or the end consumer, at a disadvantage.”
“Also, this new model will make comparison and transparency more difficult, because travellers will now be forced to go to multiple channels to search for the best fares. Ultimately, the industry overall stands to lose from this distribution model.”
The Travelport response was along similar lines.
“Lufthansa’s proposed surcharge is not in the interests of either the end-traveller or the airline group, and we continue to remain focused on providing our travel agency customers worldwide with the broadest possible travel content and providing our airline partners with cost-efficient and highly effective global distribution,” said George Harb, Regional Director, Southern Africa, Zambia and Zimbabwe.
Harb went on to add that Travelport had already seen a change in booking patterns.
“Initial early data is indicating some drop-off in Lufthansa Group bookings,” he said. “At the same time, we’re also seeing a volume shift towards other airlines and Lufthansa codeshare partners. Early indication is therefore that Lufthansa Group airlines are beginning to lose bookings in the third party channel. We do not believe they will be making up for these lower volumes in their direct agency portal which has very limited functionality and numerous impracticalities for agents.”
Lufthansa, though, are forging ahead, despite the negative response from the industry.
“We are aware that it is very disruptive,” said Lufthansa Chief Commercial Officer Jens Bischof. “Now is the right time for new technology.”
The Travelport argument disputes that.
“Ironically, Lufthansa is live in our Rich Content and Branding solution, our merchandising technology for airlines which enables them to market and retail their products more effectively, fully displaying all of their fares, ancillaries and brand proposition to travel agencies,” said Harb. “It includes rich product descriptions and graphics, optional or ancillary products for sale, including fares families, as well as ‘the next product/price point up’ offers to encourage more upselling.”
“In some of their media commentary, Lufthansa has been claiming that GDS technology cannot do this kind of thing, which we take exception to as clearly Travelport has invested heavily in this area and can,” he said. “They have reinforced their belief in us by becoming a participant. Clearly, this debate is not around our technology capabilities.”
Airlines have for some time had a difficult relationship with GDS companies, and the big question remains whether or not other airlines will follow Lufthansa’s lead.
According to tnooz’s Kevin May in early October, “an informal poll of IATA members at a recent event suggested 96 out of 118 members thought their airlines might go the same way.”
Away from the Lufthansa issue, GDS companies remain at the forefront of much of the technological advancement in the travel industry, with the big players now positioning themselves as so much more than just GDS operators.
“Travel technology, and in particular the growth of mobile technology, has greatly empowered travellers, to the point that they are now in the driver’s seat,” says Santiago Jimenez, Director: Sub-Saharan Africa at Amadeus. “We believe that this shift to a far more customer-centric model has ushered in a new era – what we refer to as ‘Managed Travel 3.0’.”
“Managed Travel 1.0 was characterised by a single, corporate-driven and offline servicing model, which evolved to Managed Travel 2.0 which focused on self-booking technology, approval flows and the advent of consulting as a service,” he says. “Managed Travel 3.0 is a far more complex landscape, with the blurring of boundaries between business and leisure travel. Now, the traveller has taken centre stage and it is all about making the experience seamless for them via desktop and mobile.”
Jimenez goes on to identify ‘the rise of mobile’ as one of the four most topical areas in travel technology. In this space Amadeus recently developed its Amadeus Mobile Messenger tool, which enables two-way communication between companies and corporate travellers in the case of any disruptive events such as adverse weather, political unrest or natural disasters.
According to Jimenez, the other three areas worth noting are ‘new and more relevant content’, ‘big data and personalisation’, and ‘digital payments’ – and it’s here that Amadeus seems to be on the same page as the world’s big TMCs. (see Travel Management Companies section)
Travelport is also making a play in the mobile space and has gone as far as to acquire Mobile Travel Technologies, a private company based in Dublin, Ireland. MTT’s product set allows airlines, hotels, corporate travel management companies and travel agencies to engage with their customers through tailored mobile services, including apps, mobile web and intelligent mobile messaging. MTT’s mobile apps and services are delivered, under the customer brand, to smartphones, tablets and wearable devices, including the Apple Watch.
“Mobile technology continues to grow in importance as more and more travel agents look to mobile technology for business solutions,” says Harb, who also identifies airlines pushing to introduce ancillaries – led by low-cost airlines – and the ‘open source’ nature of the travel technology industry, as other areas of interest.
In terms of the latter, Travelport has positioned itself well.
“Travelport’s open platform allows customers and developers to access all of Travelport’s products and development tools to allow anyone to develop applications within our desktop solution, SmartPoint,” says Harb. “These applications are run as a plug-in within SmartPoint. This has allowed agents to drive efficiencies and realise new revenue opportunities.”
Expect more from the GDS companies in both the short and long-term, as they continue to innovate and develop new products, as, like everyone, they seek to remain relevant and of value to their customers.
Airlines & Hotels
There’s no doubt that airline technology has taken a giant leap forward with the emergence of Boeing’s 787 Dreamliner and the Airbus A380, but the average traveller out there, or even travel manager, is arguably more interested in the technology that is having a material impact on the actual travel process, from booking through to arrival.
In this way, it seems incredible to think that onboard wi-fi is so ‘last year’ or even ‘the year before’, with many airlines now offering this service and not blinking at the opportunity to keep pace with their competition.
And what about apps? Surely these are now commonplace and a natural part of the booking and check-in process? So what’s the next step? Well, maybe an airline app with a difference.
Have a look at KLM’s Delft Blue houses app.
Since the 1950s, KLM has given every business class passenger a unique gift: a Delft Blue miniature traditional house, filled with Dutch gin (known as genever). Each miniature depicts a real house in the Netherlands, with a new model being introduced on 7 October each year. Over the years, the miniature houses have become desirable collectors’ items – with some passengers even trading among themselves.
Today, there’s even a KLM Delft Blue houses app to help frequent flyers keep track of their collection and view a list of all houses ever produced. Here you can swipe through the entire collection, wandering through the history of each house and viewing photos and videos of many of the real houses. Passengers can also find the location of each house and maintain their collection by marking and unmarking houses – including those they might have double of, or have their eye on for the next flight.
British Airways is another airline looking to differentiate itself. BA looks like it is keen to push the boat out and has developed something completely ‘out of the box’, in the form of its virtual reality ‘Try-Before-You-Buy’ experience. It allows customers to experience US destinations in a virtual world before booking.
The virtual reality experiences are part of an investigation designed to trial how technology could be used by the next generation of travellers.
“This is just the start of what could be a huge breakthrough for future travellers,” says Edward Frost, BA Commercial Manager, South Africa. “Imagine being able to walk around the hotel that you are about to book, or look around Time Square to see what attractions are nearby. It is the ultimate try before you fly. Today’s travellers are checking out their destinations on TripAdvisor, street view and maps, and this is the next step to let the customer actually experience destinations in the virtual world.”
Frost is excited about the possibilities this type of technology presents.
“Virtual reality technology is developing fast and will be a game changer for the travel sector,” he says. “It is taking researching a business trip or holiday to the next level and soon customers will be able to view their travel destinations from their homes as never before.”
So, what’s changing the game in the hotel space?
Again, the app space appears very competitive, with each hotel group looking to go one better than their closest competitors.
Four Seasons has one of the more recently-launched (June) apps, which it hopes will help it keep pace with the changing demands of its clientele.
“Its capabilities are unique in our industry and truly revolutionise personal travel,” says David Barillot, Director of Sales and Marketing at Four Seasons Hotel Westcliff in Johannesburg. “Behind the app there are Four Seasons people who ensure the expected high touch service we are known for.”
Those capabilities include enabling guests to check in, check out, order room service, request a car from the valet or turndown service from housekeeping, request toiletries, make dinner reservations and book tickets to a show, whilst a ‘Four Seasons Recommends’ portion lists cultural events, shopping streets, and neighbourhoods to visit, curated by the hotel’s concierge and front office staffers.
Four Seasons is not first to market with a hotel app, but it believes it has raised the bar.
“I think we’re going out with the best app right now,” Marco Trecroce, Chief Information Officer and Head of IT, said during a round-table preview at corporate headquarters in Toronto in May.
The app is impressive in design, with high-gloss images of its 94 properties across 39 countries, and unlike some hotel chains, it’s available to all users, not just those in the loyalty programme.
Minor Hotel Group has gone a step further, with its Anantara Siam Bangkok Hotel and Anantara Riverside Bangkok Resort now offering a complimentary smartphone called ‘handy’ in all guest rooms. The device is pre-loaded with destination-specific features and interactive travel solutions for leisure and business travellers. It also offers unlimited local and international calls to ten destinations from each hotel, and unlimited 3G data connectivity comes with a wi-fi tethering capability to other mobile devices such as laptops and tablets and also pre-installed popular social media apps like Facebook, Twitter and Instagram. These features negate the hassle and expense of data roaming and high phone bills.
Handy also has a selection of pre-installed travel apps, including currency conversion, maps, GPS, news and translation services, enhanced by the option of installing additional apps from the Google Play Store. An informative digital city guide includes recommendations and promotions for restaurants, shops and tourist attractions. Returning to the hotels is made easy using the handy taxi card feature, which details the hotels’ addresses written in Thai with a location map included for easy reference.
Guests can also look up hotel information and handy delivers message notifications about hotel news, events and special offers. In addition, guests also have instant access to the hotel concierge, allowing for special requests and reservations to be made on the go.
At check-out, the browsing history and any additional apps that have been installed and all personal information is removed and the device reset.
Another group at the forefront of technological advancement in the hotel space is Starwood Hotels & Resorts, which piloted the first ‘keyless’ offering with SPG Keyless. The group is proud of its approach to embracing technology.
“We were the first in our industry to leverage state-aware technology on our mobile applications, the first to build an iPad app on Apple’s iOS 7, the first to launch SMS capabilities, the first to integrate user-generated Instagram into our property pages, the first to introduce a Chinese Android app and the first in the hotel industry to launch a mobile app,” says Martina Boettcher, Regional Director of Marking: Africa & Indian Ocean.
Starwood has gone as far as to set up ‘Select Serve Brands (mid-market) Concept Rooms’ at its global headquarters in Stamford in the United States, where it is testing several new innovations. For example, in the Aloft concept room it has:
- Controlled HVAC unit – adjust the temperature of your room using your smartphone
- Mobile controlled lighting – all options you can program with your smartphone
- Custom wake-up with coffee – program your lighting, morning playlist and even the start time to brew your morning cup of coffee – all from your smartphone
- Personal content + sound systems – finish the movie you were watching on the plane or binge-watch your favourite show using Apple TV. Listen to your playlists using a bluetooth music player set up to a hidden sound system in the room
“More and more, today’s tech story is all about mobile, and we’re making a big bet on Starwood’s mobile future,” says Boettcher. “Mobile connectivity is everything — six billion cell phones worldwide, all soon with internet connectivity. Emerging markets and next generations are starting with mobile first — completely bypassing landlines and PCs. In our business, mobile will become more pervasive and will change the way we market and operate our hotels, enabling us to better customize the guest experience.”
Arguably Starwood’s most ambitious project to date involved the August 2014 appointment of A.L.O. as the Aloft brand’s first Botlr (robotic butler). It made its debut at Aloft Cupertino, making Aloft the first major hotel brand to hire a robot for both front and back of house duties. In this role, A.L.O. will be on call as a robotic operative and assist Aloft staff in delivering amenities to guest rooms.
You’ll be pleased to know that A.L.O accepts tweets as tips!
“This newest Aloft associate will not only free up existing talent’s time, allowing them to create a more personalized experience for guests, but will enhance the hotel’s current tech-forward offerings,” says Boettcher.
So, hotel robots? Is this the future?
It seems that when it comes to travel technology and the road ahead, nothing is off the table.
These are relative newcomers to the travel game, who have come in with incredibly innovative ideas, taken a look at the travel industry and turned various sectors of it on its head…thanks to technology.
Uber and Airbnb.
Ranked fourth and fifth, respectively, in CNBC’s 2015 ‘Annual Disruptor 50’ list, these two start-ups have already made inroads into the car rental and hotel markets, providing customers with cost-effective, easy-to-use tools with which to make their travel more efficient and even more enjoyable.
As most ‘disruptors’ find, it’s no surprise that both have run into trouble, with Uber battling regulators and the taxi industry, whilst Airbnb has butted heads with officials in San Francisco and New York, who have questioned whether their rentals are being taxed properly.
But before you feel sorry for them, consider that Uber is currently valued at $50 billion, whilst it’s estimated that Airbnb will generate revenues of $675 million this year.
Interestingly, despite what we may think, Airbnb doesn’t believe it is a threat to the hotel industry, which is something I put to co-founder Brian Chesky on his visit to South Africa earlier this year.
“I don’t think they would use the word ‘threat’,” he responded. “I think they’re more intrigued. They are doing very well – hotels have record occupancies, record profits and record revenues, while Airbnb has pretty much come out of nowhere and grown.”
“Not all hotels love us, and we have certainly seen a backlash in some cities, but when it comes to the vast majority of the global hospitality companies, they all say that they welcome us to the market. You can decide how they really feel, but I don’t think you’re going to find a lot of CEOs speaking out against it.”
I may not be convinced, but Chesky believes that Airbnb is actually filling another gap, and it’s not in the hotel space.
“One of the biggest areas we are disrupting isn’t necessarily the hotel industry, but rather people staying with friends and family,” he said, “which currently makes up roughly 40% of travel in the United States.”
However you look at it, disruptors like Airbnb and Uber are here to stay and it seems pointless fighting their existence. Further to that, what’s more likely to happen is the spawning of similar enterprises, which in turn will give the more traditional operators even more of a headache. That should be good for the consumer, with an emphasis on innovation across the board.
With technology playing such an ever increasing role in all aspects of business travel, it’s perhaps no surprise that a South Africa-based outfit, made up of a small group of former travel industry members, has seen a gap in the MICE space and developed a product specific to this industry.
What is MiceMaster?
MiceMaster is a web-based corporate procurement system that is custom built to allow corporates to enforce transparency of supplier quotes and regulate DCP rates, venue costs and other supplier expenses relative to MICE business. The MiceMaster system allows planners, authorisers, procurement people and finance personnel to quickly identify where true value lies in multiple venue quotes, in real-time. MiceMaster also enforces procurement strategies, while rewarding quality, professional suppliers with increased business.
Simultaneously, the MiceMaster system will quickly expose PCOs and other suppliers who are contracted to corporates at an agreed percentage, but may be hiding additional margins in management fees, commissions and overrides. Users who practice maverick spending, who are directing business in ‘favourable directions’, will also immediately be flagged by the system.
MiceMaster conservatively aims to save corporates 12.75% of MICE spend in year one, over 20% in year two, and depending upon how aggressive the corporates’ procurement department and travel managers are, 28% in year three.
“MICE, as the fastest growing travel sector, is plagued with rogue PCOs, non-compliance, excessive mark-ups, inexperienced event planners, vague quotes and little or no reporting,” says MD Andrew Millar. “The transparency that MiceMaster delivers will change behaviour rapidly”.
Millar says that Phase 1 development was completed in September, but that MiceMaster has been actively engaging companies for almost a year to adopt the system.
“We had a live quote scenario recently where four PCOs, all contracted to the firm at a 10% management fee, quoted on the identical very tight MiceMaster brief, and the one PCO was 39% more expensive than the lowest quote for the same venue, same services and same facilities,” he says. “That is what MiceMaster does well – it forces transparency and allows users to easily compare apples with apples”.
Millar agrees that it is not always about the lowest quote, and that quality of services and expertise are critical, yet he claims that MiceMaster helps redirect business to quality suppliers and doesn’t just drive down rates and lower costs.
“This cannot be a cart before the horse scenario,” he says. “We cannot over-promise and under-deliver, which has been the case with so many travel technology systems in the past. If we on-board the suppliers too early and we do not deliver conference RFPs, the hotels, venues, PCOs and other suppliers will not be enamoured.”
MiceMaster is currently engaging with various parties, including GDS companies, to accelerate local and regional market share and to deploy the system internationally.