IN DEPTH: HOTELS & RESORTS
From the October 8, 2004 print edition

Corporations' Reliance on
Travel Agencies Still Strong
C. Richard Cotton

Changes in the travel industry happen faster than flights landing and taking off during the early-morning rush at Memphis International Airport. One after another, day after day, it's virtually impossible to track all the rate increases, decreases, specials and flight schedule additions and deletions.

Corporate travel specialists deal with a fluid travel world every day. They are force-fed all those changes and digest them into useable data.

In an industry estimated to produce revenues of $200 billion a year, every change has the potential to become an important issue.

"There is never a dull moment, it changes daily," says Amy Marek, regional sales manager for Omega World Travel and secretary of the 51-member Mid South Area Business Travelers Association. During recent years, Marek and others in the corporate travel business have noted that companies whose employees do a lot of traveling generally have instituted travel policies to set standards for taking business trips. A large part of those trips is making the actual reservations.

What seems simple -- making a flight reservation to a destination where a rental car and a hotel room are waiting -- is actually a more complicated procedure than some imagine. And multiplied by scores of employees making trips, the management process becomes exponentially more complex.

One of Marek's clients is First Horizon, formerly First Tennessee bank. The Memphis-based financial institution sends its employees on trips that yearly total millions of dollars. Marek says with that kind of budget, it's natural to want to get a handle on what's happening with the travel funds.

"We just installed an online booking tool for them," Marek says. The Cliqbook software (produced by Outtask), Marek admits, could effectively take her agency, which has a travel management contract with First Horizon, out of the reservations-making loop and mean a loss of a service fee. The agency service fee in Memphis averages about $35 per reservation.

But it's all part of doing business in the corporate travel world.

And it's a world that has changed dramatically over the last decade. Back in the 1990s, the advent of the Internet and the eventual founding of online booking sites like Orbitz and Travelocity all but predicted the quick demise of the traditional travel agency. And, true enough, some did close their doors, but whether the failures were prompted by Internet competition is a matter of debate.

"Well run, adaptable agencies are going to be here. We've actually grown since online booking came around," says Sandy Brewer, general manager for one of three Carlson Wagonlit Travel franchises in the Memphis area.

Brewer has found that business clients still seek the personal touch -- an element that took many in the travel industry by pleasant surprise -- of dealing with a human when it comes to actually making the reservations.

"We offer personal service they'll never get online or from the airlines," Brewer says. "Businesses need agencies to manage travel. We're here to manage their travel dollars."

And that hasn't been lost on companies seeking to institute managed travel policies within their organizations. Brewer says one local company requires its employees to book travel reservations online; many of its employees, busy with the work of their job or not wanting to deal with computerized booking, call Carlson Wagonlit to make their reservations, paying the agency's service fee out of their own pockets.

Bobbi Landreth, vice president of MSABTA and senior director of Carlson Hotels, says most companies with sizable travel budgets maintain an affiliation with a travel agency: "Travel companies have set up Internet sites with tools to comply with their (respective) travel policies."

Caleb Tiller, senior public relations manager for the 2,500-member National Business Travelers Association, says companies desiring to establish travel policies have a virtually unlimited choice of options they can include or exclude from their programs.

"They can package them any way, it's a la carte," he says.
Marek pointed out that few companies maintain their own corporate travel departments, but many will contract with agencies that sometimes establish a manned office at the company's location. She says that an agency takes the potential for abuse out of the hands of employees who might otherwise be making their own travel arrangements.