At the 38th annual U.S. Business Travel Association International Convention and Exposition, American Express Business Travel announced that its 2006 business plan for North America is on track. Through June 30, the company signed more than $1.5 billion in new sales and renewals from North America headquartered clients.
This represents an increase of $418 million or 63 percent over the same period last year. Through mid-year, online penetration in the U.S. grew to nearly 43 percent of all transactions processed.
“Our steadfast commitment to delivering purchase and process efficiencies and savings, service excellence, and heightened program controls continues to add real value to our clients’ managed travel programs,” said Andy McGraw, Senior Vice President and General Manager of American Express Business Travel. “Prospects and existing clients alike are pursuing the benefits of global consolidated and advisory services, which have powered our successful mid-year results. The Company’s focus on network rationalization, client engagement and change management remains right on course.”
Pursues Patent for Savings Calculation System and Methodology
In another innovative move, the Company is pursuing a patent for its system, method and computer product for calculating savings derived from several expense categories relevant to managers of travel related services, such as online adoption, advance ticket purchase, use of non-refundable tickets, class of service, meetings, among others. The invention allows American Express Business Travel’s client managers to evaluate, quantify, and present the actual savings value provided to a client during a period of time, and produce savings summary worksheets and reports to guide future spend decisions.
Prepares Next-Generation Global Data Reporting Solution
Of note, the Company also revealed a strategic framework for the delivery of next-generation global management information (MI) data reporting in 2007. The development process will be based on client-defined needs and built upon six key criteria: global data integrity, core reporting, dash-boarding custom reporting, benchmarking and consultative insights.
The MI solution will innovate how American Express Business Travel’s clients receive and manipulate data for mining, benchmarking, analysis and reporting. The tool will employ a highly accessible graphic interface for a more beneficial user experience.
“Six years ago, American Express pioneered travel and payment expense reporting with the introduction of @Work Reporting. Today, we are readying next-generation MI solutions to help our clients take fullest advantage of the billions of dollars worth of payment, purchasing, and travel spend data that flows through American Express’ global data warehouse,” said McGraw.
The Company is already soliciting participation from clients to help bring this enhanced reporting solution to the marketplace next year.
Global Advisory Services Unit Progressing to Plan
Sixty days after officially launching in May, the Company’s newly integrated global consulting unit, Advisory Services, reported strong demand across its unified specialty-practice lines, with sales volume up nearly 18 percent for the six months ending June 30.
“Having now created a global advisory services solution to wrap around our client relationships, we are seeing strong demand for our holistic, end-to-end approach to policy consulting, strategic sourcing and process management,” said Mike Streit, Vice President and Global Leader of Advisory Services.
Interestingly, middle-market clients are showing significant interest in consultative offerings due to trends including travel purchasing commoditization, globalization and business consolidation.
In 2006, of all business signed in the middle-market segment, 100 percent of new clients and 94 percent of renewing clients chose the Company’s advisory service package as part of their traditional service offering. “In terms of size, buying power, and managed travel decision-making, the middle-market is most representative of companies worldwide,” said Streit. “Undoubtedly, this favorable trend speaks volumes to the level of sophistication now being brought to managed travel programs, regardless of a company’s organizational size or geographic scope of operations.”
Advisory Services is developing a range of solutions - from diagnostic tools to full-on engagements - specifically tailored to the middle market, including for example:
—Hotel RFP Management to support bid preparation and hotel program selection, and to perform rate-load audits of GDSs
—Policy Strengths & Opportunities Assessment to address critical areas of risk management and program control, and to identify savings opportunities through, for example, peer benchmarking
—Policy Design Guide, a plug-and-play travel policy builder
“Middle-market travel programs display similar characteristics as found in large and even multinational enterprises. However, middle market travel managers often lack the resources and specialized expertise that is necessary to fully manage travel spend,” said Streit. “We believe our dedicated solutions for the middle-market will help these organizations unlock more program savings and efficiencies.”
More than one-third of the Company’s total portfolio of North America headquartered clients has adopted advisory services in addition to traditional travel booking services since 2004.
Weighs in on TMC Global Consolidation Debate
In other news, the company unveiled a white paper entitled “Transforming Your Travel Program Worldwide: Strategies for Consolidating to a Single Travel Management Company” to stimulate debate about consolidation under one travel provider worldwide.
By examining key criteria and objectives such as centralized information management, leverage with suppliers, cost-avoidance via integrated servicing platforms and policy compliance, the white paper enables organizations to assess both the suitability of such a step, and their readiness to take it. While the paper finds that “globalization” of a travel program may not be appropriate in every case, the potential benefits can be significant, with representative American Express clients achieving savings of up to 25% as a result of consolidating their processes, technology and sourcing with one TMC provider.