29 April 2010 - Although no one denies that virtual conferencing is a "growing area of the business," as one travel management company official called it, what's less certain is how and whether TMCs would support their corporate clients in such initiatives. Some actually have decided against doing so, focusing instead on their core competency in physical travel, while others have lined up partnerships with public telepresence providers and are exploring pricing models for both tactical and strategic elements of the practice.
TMCs could help clients determine whether virtual versus actual travel (
or a hybrid) is warranted, manage inventory and/or make bookings for virtual conferencing rooms, consult on improving optimization of corporate-owned conferencing facilities and provide savings reports--but it's all nascent.
In the United Kingdom, travel management industry leaders are openly discussing and embracing what Institute of Travel and Meetings CEO Paul Tilstone calls "anti-travel," but unknowns center around pricing and expertise. "You can either be someone who facilitates the movement of people or someone who facilitates the interaction of people," said Tilstone. "Some are focusing only on travel, and others are taking a broader view. We believe this is an opportunity to be much more strategic in examining why people travel and facilitating the business mission, rather than focusing on getting people from A to B. It doesn't surprise me that different TMCs are at different levels."
According to Nigel Turner, Carlson Wagonlit Travel U.K. director of industry affairs, "We work more and more with customers to look at alternatives, [but] there needs to be a remuneration model with customers as well, where we are offering and looking at savings we can make through videoconferencing." Asked for his response to
PricewaterhouseCoopers head of business services Mark Avery's comments that TMCs have not demonstrated competency in supporting travel alternatives, Turner said, "It's an evolving situation. No, it has not been our core business, but that is an area that we continue to move on. It needs a remuneration model to start offering those types of services. It needs the corporates to work more closely with us and pay us for different services than they have paid us in the past."
According to CWT global product manager for emerging products Eric Bausman, the TMC's role should be no less obvious than
the travel manager's role. Although he agreed it is not core, Bausman argued that CWT's
partnership with Tata Communications, its experience in meetings management and the focus on return on investment--in which buyers are "tasked with revising travel policies to address the relevance of certain kinds of trips" using travel data from their agencies--all point to a place for the TMC.
"We definitely do see a role for us in it," said HRG client management director Stewart Harvey, citing help for clients with policies, planning and budgeting, emission reduction and consulting on the choice of platform for a meeting. "We see it as quite compatible to what we're supposed to be doing. We're still helping people conduct their business, but in another medium."
It is new territory for the TMC, Harvey acknowledged. He said Avery was right to say that helping clients manage inventory and make bookings for telepresence rooms was not core for TMCs. "With our home-grown technology, which is not GDS-dependent, we have the ability to store room allocations and non-GDS inventory. It's no great twist of the imagination to say it's the meeting rooms on client premises, and you're selling that, if you like," said Harvey. "We do it with a few clients, but it's not across the board--it's truly a handful; it is in its infancy.
"The real challenge, and part of Mark's point, is that our skills need to be more fine-tuned to understanding the type of meeting to conduct, and 'I'll tell you the best medium in which to carry that,' " added Harvey. "Some clients are asking us to help filter it out, where employees are [merely] using telepresence because it's there. But what's optimal? We need to start guiding people through why they're having a meeting, and effect the way people think and approach their meetings, and change their behavior. One challenge is to get the corporate customer to understand that this is our new role, too. We're moving away from technical competencies of fare experts to needing advisors and counselors."
American Express (which also partners with Tata, as well as office suite provider Regus) completed a pilot program for its Virtual Meetings Expert and now has travel consultants "helping clients make decisions around virtual meetings or traditional transient travel, versus holding a meeting," said Issa Jouaneh, vice president for global meeting solutions in Amex's Advisory Services consulting unit. Although Amex last year indicated it hoped this year to integrate virtual options into online travel booking tools, the target is now 2011. "It is in the works," said a spokeswoman.
Jouaneh declined to indicate how many clients were using the offline consultant service; he said pricing varies. "It depends on how they are integrating the solution within the client's program," said Jouaneh. "Our approach is that VMX as a category is an important and complementary solution as part of a strategic meetings program, so when you look at the spectrum of services that we provide clients to manage their meetings spend, we range from the very small simple meetings that can be automated and managed on a transactional basis online, to the more complex meetings that are large and focused on very specific objectives and outcomes, whether it be product launches, incentives or changes in the organization and communication. So we look at virtual meetings as a solution that can enable any of those different meeting types. Depending on whether it's a standalone solution or integrated as part of a broader solution, which is what we recommend, then it's priced as part of that service. We do provide transactional pricing for clients looking for that, we provide pricing that is integrated within the broader program and that can vary from management fee type pricing to expense-based pricing, or expense-plus."
Pricing is a mix for HRG as well. "It's not a transaction-based model," said Harvey. "It's more in a management fee model where a client pays for our services. With one client, we're awarded on a cost-avoidance basis, so we get a gain share."
BCD Travel declined to comment for this article. A company official last year said that while clients were seeking consultative services related to maximizing utilization of virtual options, they were not asking the company to help facilitate, for example, telepresence use.
Egencia does not offer virtual conferencing support, according to a spokeswoman. "Egencia, as well as our clients, still find tremendous value in face-to-face meetings, and that is where we have focused our investment/resources in the near term," according to an emailed statement.
