Rosenbluth International have announced a new pricing plan that simplifies the way corporate clients pay for travel.
The core of Rosenbluth`s new pricing plan is the separation of transaction and travel management fees. Rosenbluth clients can now receive an invoice articulating costs per transaction, i.e. ticket issuance, along with a separate fee for management services which include: reporting, data analysis and preferred supplier agreement consultation, among others.
According to Ron DiLeo, senior vice president of Rosenbluth International, “This new Rosenbluth initiative is a bold departure from current industry practices which package consultative fees together with the transaction fees, muddying the value of our consultative services with those basic services like ticket issuances. In addition, the elimination of agency commission fees by a range of travel suppliers, including airlines and car rental agencies, has caused some travel management companies to raise prices without a clear explanation of the new costs passed on to clients and individual travelers. This action has raised a call of alarm among clients and industry analysts. Our clients wanted a simplified pricing model minus any additional charges, which is exactly what we are delivering.”
Because Rosenbluth International
will now bill separately for its management fees, clients will be charged at a much lower rate on a cost-per-ticket basis.
“If the travel management industry continues with its current pricing scheme, we will head down the slippery slope of service commodification and make this a race to the bottom in terms of pricing,” commented Hal F. Rosenbluth, chairman and CEO, Rosenbluth International. “By pairing the value that managed travel programs provide for corporate clients with a ticket issuance transaction fee we are doing clients and our industry a major disservice, and this needs to be corrected. The new simplified pricing plan will help better define our value addition in terms of technology, reporting, industry knowledge, and supplier relationships to our travel manager clients and the companies they represent. We hope other companies will follow our lead on this issue for the good of corporate clients and the travel management industry.”
“On a regular basis I am being asked to justify and quantify using a travel management company for our corporate travel,” said Mike Kabo, director, Global Travel and Fleet Programs, Computer Sciences Corporation (NYSE: CSC). “This new pricing structure breaks out the cost to issue a ticket from the cost of Rosenbluth`s counsel in lowering our overall annual travel spend, and helps our company understand the difference between the two.”
Rosenbluth is offering its new simplified pricing plan to all of its corporate clients and will include the model in all sales presentations going forward. The company expects the new pricing plan to have no effect on its revenue base.
Related stories on ITN:
(03/05/2002) Rosenbluth International Launches Innovative Reporting Tool