It's easy to see why Expedia is chomping at the bit to start building a bigger profile in the $9.5-billion corporate travel market in Canada.
Omar Ahmad, managing director of Expedia Corporate Travel Canada, acknowledges it's frustrating to know the online travel service's leisure website( www.expedia.ca) is regularly used as a research tool for business travellers while other travel agencies end up making the actual bookings and getting paid for them. The situation arises from the clash between company policies that dictate all business travel must go through a specified travel agent usually a traditional one with an office and phone and the desire of many travellers to see a range of options and prices online before making a booking commitment.
So following the template that Bellevue, Wash.-based Expedia has already been using for its successful corporate travel service in the United States, Europe and the U.K., the company's Canadian division launched a new business travel service on Feb. 1. It will initially cater to those responsible for managing travel at small and mid-sized businesses “our sweet spot,” as Ahmad puts it though it can accommodate the needs of companies of any size.
The service is designed to allow business travel managers who sign up to compare a variety of options online. It can also be customized to give results that match a particular company's policies for business travel, such as who can fly business-class and under what circumstances. The site still pulls up search results outside those policies, but gives options on what would be permitted when trying to book beyond those parameters. For instance, customization can allow or prohibit anyone from make bookings, while sending notification to a designated manager for final approval.
The big advantage for companies using Expedia Corporate Travel? According to Ahmad, the fees for making an online booking will be “substantially less” than the $40 average that a traditional agent charges for providing the same service perhaps as much as 70% on total transaction fees. Users also able to play around with various options to cut costs the same way other Expedia users do. For instance, they can see whether there are substantial airfare savings by going a day earlier or later, or taking a red-eye flight. Expedia Corporate Travel will also allow managers to generate reports that can detect travel patterns and ways of making more efficient use of travel budgets.
World Access Canada Inc., an insurance company based in Kitchener, Ont., was one of the first companies to sign on. “We think it will be a great tool when it comes to managing corporate travel,” says Nichole Schickler, vice-president of strategic partnerships at World Access.
There's nothing to stop someone from researching travel options on an online travel website, then go to their regular agent to make the booking, but according to Ahmad, the cheaper transaction costs and ability to track corporate patterns makes for more efficient one-stop travel shopping.
Expedia Canada's newest product reflects the growing popularity of the “self-service” travel model. Toronto-based Business Travel International Canada (BTI Canada), which has eight travel agent offices in Canada as well as a web-based self-service booking tool, reported in December that the self-booking option represented about 11% of the airline tickets it issued between January and June of 2005. BTI says clients using self-service booking typically save $167 on domestic tickets, $160 on cross-border travel and $30 when travelling within the U.S.
Michele Ferrari, senior vice-president of client management at BTI Canada, points out that one reason why self-service is cheaper is the “guilt factor” in other words, travellers feel obliged to purchase a lower fare when presented with options. Ahmad notes that a lot of business travellers must either be very specific about what they want with their designated travel agent (which often means doing their own research anyway), or taking the agent's first recommendations, which may not be the cheapest. While it's possible to spend time on the phone going through possibilities, traditional travel agents, he adds, are geared towards completing the booking “as quickly as possible” so they can go on to the next customer. Self-service models like Expedia Corporate Travel, Ahmed says, are simply an extension of the trend towards cutting out the middle man and putting the traveller and the company footing the bill in the driver's seat.