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For this week’s episode, The Business of Travel once again revisits GBTA’s 50th Convention that just took place earlier this month in San Diego. Last week you heard our Monday Center Stage sessions and for today’s episode, we bring to you Tuesday’s industry sessions.
First, up you’ll hear from Kurt Ekert, CEO of Carlson Wagonlit Travel, who led a panel of experienced travel buyers in a shift from typical GBTA Convention Center Stage sessions, which often put a supplier on the hot seat. Their discussion centered around the growing responsibilities for travel buyers and technology’s increasing role in travel management as buyers work to ensure duty of care responsibilities and cost-savings measures are in place, while also balancing individual traveler preferences and convenience.
Next up you’ll hear our final Center Stage panel which saw Guy Langford return as a moderator to GBTA Convention – he is Deloitte’s Vice Chairman of U.S. Transportation, Hospitality, & Services Leader and asked a panel of executives covering various sectors of the business travel industry if bigger really is better in the travel sector, prompting a discussion of advantages and disadvantages of industry consolidation.
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After a brief hiatus, the Week in Review is back. Head to the GBTA Blog every Friday for a weekly recap of the latest business travel news.
As category three Hurricane Lane bears down on Hawaii, major U.S. airlines are cancelling flights and offering travel waivers to impacted passengers, Business Insider reports.
Marriott International has completed the integration of its three loyalty programs, Buying Business Travel notes. Marriott Rewards, Ritz-Carlton Rewards and Starwood Preferred Guest will now “operate under one set of unified benefits and one currency”.
Hyundai is investing $14.3 million USD in Indian car rental startup Revv, TechCrunch writes. Revv provides consumers with on-demand car rentals and uses a model similar to Zipcar.
According to Travel Market Report, major airlines are rolling out new benefits for corporate customers aimed to please road warriors and travel professionals alike.
A potential pilot shortage could have repercussions on the way we fly in the near future, Condé Nast Traveler reports.
4Hoteliers shares findings from an IATA survey that suggests significant growth in aviation jobs is expected. However, the survey does not address the forecast shortages of pilots and maintenance technicians.
GBTA Convention 2018 wrapped up just over a week ago in the beautiful and sunny San Diego. As we celebrated our 50th anniversary of Convention, innovation and the future of business travel were the predominant themes throughout the event.
According to USA TODAY, Lufthansa tops the ranking of Europe’s 30 biggest airlines (by available seat miles).
Delta’s newest jets will have fewer middle seats than typical jets, Skift reports. The airline plans to deploy the jets on key business routes and in markets where its most lucrative passengers fly.
Changi Airport Group has launched a “Changi Stopovers in Singapore” program in order to attract passengers traveling through the airport, Business Traveller notes.
For this week’s episode, The Business of Travel takes you back to last week’s GBTA Convention. Hear all of Monday’s Center Stage sessions. First, up you’ll hear from Marriott International President and CEO Arne Sorenson in a one-on-one interview with GBTA Executive Director and COO Mike McCormick as he shares his outlook on the business travel industry, the shakeup over group commissions and the company’s home-sharing strategy.
Next up is a panel featuring Successful Women Leading in Business Travel, moderated by GBTA’s Allied Member of the Year honoree and the SVP and Chief Marketing Officer of Best Western Hotels & Resorts, Dorothy Dowling. The panel of top female business travel executives share their insights on the unique challenges they faced as women arriving in leadership positions within their companies.
Wrapping up today’s episode, you’ll hear our final Monday Center Stage session where TSA Administrator David Pekoske and U.S. Customs and Border Protection Commissioner Kevin McAleenan took the stage together for the first-time in an interview with McCormick. The two highlighted technology’s potential to dramatically increase security and passenger facilitation.
As we wrap up another successful GBTA Convention, we take a behind-the-scenes-look into what goes into planning such a massive event with Liz Huh, GBTA SVP of Global Operations. Next up, Heather Haley, GBTA VP of Sales Operations in Supplier Strategies, shares Convention highlights.
You can download and listen to The Business of Travel in iTunes, Stitcher, Google Play and your other favorite podcast directories. Be sure to subscribe to the show so you don't miss out!
Being bigger can help companies learn, negotiate better, and innovate, according to the representatives of three big travel brands who participated in a panel discussion from Center Stage at GBTA Convention 2018. On the other hand, integrating people from different cultures challenges even the largest corporations.
With 4,200 locations worldwide, Best Western CEO David Kong said being bigger provides greater brand awareness and cost savings. With greater scale, companies such as Best Western are in a better position to negotiate with suppliers. “If you think about industry today, one of the biggest challenges that we have is the ever-rising distribution cost. And when you are bigger you have better leverage in negotiating more favorable commercial terms.”
This, in turn, allows Best Western and other similarly-sized companies to boost investments in marketing and new technology to meet consumers’ evolving expectations. “What used to be amazing is now ordinary, obsolete. That expectation keeps rising so we have to respond to that,” said Kong.
Enterprise COO Christine Taylor agreed, even though her grandfather (who founded Enterprise over 60 years ago) often said, “It's not about being the biggest, but it's about being the best.” But being large provides unique opportunities, according to Taylor, which are critical to innovation. Her company’s “diverse, global network…push[es] us to innovate every single day. And we’ve got to do that.”
With the resources needed to develop and apply new technologies, big companies can take more calculated risks and become more innovative. For example, Best Western has invested in artificial intelligence and augmented reality for training their customer service staff. Now, said Kong, the company is partnering with IBM Watson to help consumers plan vacations.
Taylor explained that Enterprise is also using technology to meet consumer needs—the company wants to provide a rental car to a consumer when and where it is needed instead of only by walking into the rental car office.
Size also helps companies use scale and technology to reduce costs, which in turn can be passed along to consumers, said the panelists.
Technology, the panelists said, can help today’s big businesses operate more efficiently and nimbly, allowing them to give consumers experiences anywhere in the world. “Scale has brought us the ability on the demand side to create options for consumers that literally would have been impossible for them to find a generation ago,” said Rob Greyber, CEO of Egencia, a business travel platform within the Expedia Group.
Greyber said that, most importantly, Expedia sees size as an opportunity to learn from the vast amounts of data they collect as consumers use their platform. The Expedia platform is “almost a central nervous system” that helps the company understand travelers’ needs. “Each element, each addition, each optimization to the platform helps our customer service consultants to be more effective, it helps our customers to be more effective,” he explained.
With 11 brands under the Best Western umbrella, its size gives consumers more choices, said Kong. “We bring more solutions to the table,” he explained. Being big enables companies to offer a more attractive loyalty program too. “It makes the loyalty program more powerful, because you're offering more earnings and redemption options.”
Being large creates disadvantages too.
Creating a global company brings tremendous competitive advantages, but if you grow through acquisition, you must assimilate and integrate cultures and systems.
“Culture eats strategy for breakfast,” said Greyber, who said that you can set forth corporate principles “on posters, you can talk about them in the town halls,” but “all of that will be undone in an instant” if leaders don’t model these principles. “Culture is not something you say; it's something that you do every day--it's the set of expectations that people can have and can rely on about how we will work together to solve problems.”
A travel buyer’s job is to ensure that corporate employees safely travel where they’re needed at a reasonable cost. But it’s much more than that. Importantly, these travel buyers are looking to balance corporate security and budgets with the individual traveler’s preferences and convenience.
A panel of experienced travel buyers told GBTA attendees from Center Stage that successful corporate travel buyers must work hand-in-hand with human resources to help increase employee retention and recruitment. In these days of low unemployment, they recognize their role in helping keep employees happy.
“How do we make travel an attractive part of getting people on board, keeping them there and having them do what they’re supposed to do?” said Stephen Gheerow, travel buyer with the Ford Foundation.
Isabelle Donovan senior manager of global travel at The Boeing Co. revealed that they are also working to improve the experience for their 80,000 travelers. She’d like to “deploy all the fun stuff with AI, machine learning, and chatbots” as well as increase self-service.
“We want to make the travelers really efficient on the road and self-serviced and…have the more expensive agent interaction kept for when something really blows up,” Donovan said.
New York Life Insurance Co. Corp. V.P., CSD Ray Greeve credited technology with helping to integrate various data streams to better forecast costs and identify waste and improper expense reporting. “You can see who’s renting a car and who is submitting taxi receipts at the same time,” he said.
Technology, while increasing traveler convenience and providing data for better cost controls, can be the source of headaches too.
The panelists agreed that the sheer volume of new technologies is a challenge. Each technology investment “must provide a value add,” Donovan explained.
Corporations must also ensure a new app or other technology is secure before they adopt it. These types of security reviews are sometimes “long and drawn out,” said Greeve.
Keeping travelers—particularly technology-adept Millenials—happy while managing security risks and travel costs aren’t easy. Often these priorities clash.
“Our next generation of our travelers…grew up with tablets, phones in their hands,” said Denise Truso, travel services manager with Abbott. “They want to use the apps they love in their personal lives for business, which proves problematic for travel managers” who are concerned about security and safety.
Gheerow agreed, explaining that Ford Foundation wants to give employees access to a Ford app store so they can use some of their favorite apps in a secure way.
New facial recognition and CAT scan technologies are key to stopping terrorists, according to two of the nation’s highest security officials who spoke Monday on Center Stage at GBTA Convention 2018.
Transportation Security Administrator (TSA) David Pekoske calls for “better security faster” at Monday’s Q&A session with U.S. Customs and Border Protection (CBP) Commissioner Kevin McAleenan, led by GBTA Executive Director and COO Michael W. McCormick. Pekoske said that we must get the technology in place faster than our adversaries, and faster than government has typically acted.
“There’s nothing I’m more excited about in our mission set than the capability of biometrics, and specifically facial recognition or comparison technology, to enhance our facilitation and security efforts,” McAleelan explained. Through pilot programs at multiple airports with a number of domestic and foreign carriers, he reported that the agency has been able to screen 700,000 travelers with biometrics and achieve a 98 percent match rate.
In addition to biometrics, new CAT scan technology will be able to do a much better job detecting threats such as those in luggage. Pekoske shared that his agency plans to replace 2,000 checkpoint x-ray machines with CAT scan technology. In addition to significantly enhanced screening capabilities, he predicted that in three to five years, passengers will not need to remove any items—including food, liquids, or electronics—from their carry-on bags.
In addition to enhanced security, he highlighted traveler benefits such as expedited boarding and arrivals, adding that his agency has been able hold or reduce wait times for five consecutive years using new technologies. Responding to security concerns, he stated the importance of technology remaining cyber secure, not retaining information on U.S. citizens, and maintaining transparency with the public, privacy groups, the media and legislators.
On the horizon, the two agencies will better integrate the PreCheck and Global Entry programs.
Commissioner McAleenan cited tracking ISIS operatives’ widely scattered movements throughout the world, and the 70 percent growth of e-commerce shipments as his top two concerns.
From his agency’s perspective, Administrator Pekoske reiterated the Commissioner’s terrorism concerns, adding that undetected operatives, “lone actors,” pose a real challenge to intelligence operations and those on the front lines. “Security is a shared responsibility,” he added, GBTA members, airlines, airports and passengers included.
Each with over 60,000 employees around the globe, keeping their teams prepared in uncertain times is an ongoing challenge. “I spend the majority of my time on the front line,” said Administrator Pekoske, which he explained includes not only security checkpoints, but also vetting processes, air marshals, and international staff at last-point-of-departure airports around the world to ensure they have the resources, technology and procedures in place to best do their jobs. Commissioner McAleenan underscored the challenge, noting that the travel industry’s ninth straight year of over four-percent growth in international air arrivals. He said he is focused on three imperatives: executing operationally, providing his staff with the tools they need to facilitate travel and improve the customer experience, and building partnerships with the aviation industry, international partners and other federal agencies, like CBP.
Both TSA and CBP garner an unprecedented level of coverage in the news cycle. When asked how his agency responds when, for example, an internal pilot like Quiet Skies program leaks into the public domain, Administrator Pekoske explained that he operates knowing that any new procedure or program can become public at any time. “Our job, both Kevin [McAleenan] and my job, is to manage and mitigate risk,” he continued, emphasizing that Quiet Skies looks at patterns of travel to help identify flights which may require an Air Marshal. “We have a very, very robust process inside TSA—which I think is absolutely necessary and something that I 100 percent endorse—of oversight from the Department of Homeland Security on all of our processes that assess risk by individuals.” Commissioner McAleenan agreed, adding that his agency faces “a tremendous amount of attention on all aspects of our mission, being responsible for anything that comes in or out of the country.”
Women who want to move ahead in their careers must take risks, thrive through failure and talk the talk, according to three female business leaders on Monday at GBTA Convention 2018.
The business travel executives—Jodi Allen, Executive Vice President and Chief Marketing Officer at Hertz; Melissa Maher, SVP Marketing and Innovation at Expedia; and Traci Mercer, SVP of Lodging, Ground, and Sea at Sabre—participated in a Q&A session led by Dorothy Dowling, Senior Vice President and Chief Marketing Officer for Best Western Hotels and Resorts.
Each shared their insights on the unique challenges they faced as women arriving in leadership positions within their companies. Although their personal leadership journeys differ, their advice for women in the business travel industry coalesces around a few core themes:
All three women agree that taking risks early in their careers proved critically important to their successes. “The biggest challenge that women face is [not] being put into crucible roles where they’re learning new skills and pushing past their limits,” said Jodi. For leaders and companies, she advises working with women to draw them out of their comfort zones. “We strongly believe that diversity is a business builder,” she said.
Rising leaders must take risks, part of which, explained Melissa, is seeking out new opportunities. “Ask for what you want,” she advised, echoing the same advice her mother bestowed upon her in high school. “Rarely will leaders say no when you’re wanting to take on more responsibility,” she argued.
Thriving Through Failure
An essential side effect of risk—failure—is key to advancing personally and professionally, the panel agreed. “When you are someone who rises within a company, your mistakes are on display for everyone,” said Dorothy, underscoring why women often avoid taking risks. “It’s not okay to fail—it’s imperative that you fail,” added Traci. “If you don’t fail and don’t fail early, you’re going to be so scared of failure as you go later in your career,” she continued. “It’s going to paralyze you from taking risks,” which “will limit your ability to go forward,” she explained. “I’m a big believer that you learn the most from failures.” “You need to be able to pick yourself up quickly and move forward,” echoed Jodi. Melissa suggested finding sponsors who support you if a risk leads to failure.
Talking the Talk
While it may sound cliché, these female leaders agreed that talking about diversity—and setting the example with women as leaders and board members—is key. For women looking to grow in their careers, they stress the importance of seeking out partners, mentors, and sponsors for support and guidance. Developing a different perspective and stepping out of comfort zones helps too, they said. “Every opportunity you get, meet more people, go more places, read more things,” said Jodi. “Using partners is a wonderful way to do that.”
For executives and companies, Traci advises using metrics to lead difficult discussions around diversity and inclusion. “Numbers can neutralize,” she said. “Measure it and talk about it.” She also encouraged companies to engage female employees, citing a women’s engagement group her company initiated. Discuss why diversity is important to your company and include men on that conversation, as difficult as that may be, advised Melissa.
As only the third person in 90 years to head the largest hotel company in the world, Marriott CEO Arne Sorenson shared his outlook on the business travel industry, the shakeup over group commissions and the company’s home-sharing strategy on Center Stage at GBTA Convention 2018.
Sorenson said he is “thrilled to be in an industry that’s growing,” during a one-on-one interview kicking off Center Stage with GBTA Executive Director and COO Michael W. McCormick. Marriott’s success, like much of the rest of the travel industry, is thanks to solid economic progress and the global growth of the middle class, he said.
Consumers are spending more of their dollars on experiences, also contributing to the recent growth many in the travel industry are enjoying.
Perhaps the best news is that Sorenson doesn’t think the prosperity will end anytime soon. “I don’t think we’re in a plateau or peak. We are in a complicated world today, and that complicated world exists in the United States and it exists abroad.” Those complexities are hard to predict, but the bigger trends will last for decades, Sorenson predicted.
McCormick and Sorenson discussed some contentious issues, including Marriott’s market concentration, pricing and group commissions. With a portfolio of 30 brands and an enormous presence in some larger cities, McCormick relayed GBTA members’ concerns over rates and the ability to negotiate in those markets.
“We don’t have much pricing power,” Sorenson explained. “As big as we are--roughly 15 percent the of U.S. hotel business--we only price about half of those rooms.” The other half, he explained, is priced by franchisees. Further, Sorenson said, there is “total transparency, enormous competition…[and] the potential for a rate premium is extraordinarily modest.”
In addressing the company’s decision to reduce group intermediary commissions, Sorenson highlighted the significant rise in group business over the past decade. He would like ultimately to transition to a commission system where group intermediaries are rewarded based on the value they deliver to their customers.
“Some were delivering amazing value, some weren’t at all,” he said, “and they were all charging 10 percent. Ten percent in the context of many of our hotels in bigger cities in the U.S. is a very healthy percentage of the total profitability of that hotel.” He proposed finding a position where “the economics are fair and we are as aligned as we can be.”
Sorenson discussed the home sharing’s effect on the hotel business and the company’s future plans to participate in that space; however, the company’s pilot program—200 whole-home units in England connected to the loyalty program--competes for leisure travelers, not business travelers. Home sharing, he said, competes “broadly in the hospitality space,” but skews overwhelmingly to leisure and budget travel. As for the future, Sorensen said, “I think it’s fair to say this business exists, and we’re unlikely to be able to wake up tomorrow and suddenly see that it’s [the home services industry] gone.”
The GBTA Broadcast Studio will stream live for the final day on Wednesday, August 15. Our last day of interviews will feature back-to-back interviews with our exhibitors on Innovation Row in addition to industry executives as they share their insights into business travel trends, opportunities and challenges.
Here is Wednesday’s schedule: