TravelpoolEurope, a consortium that buys travel and manages expenses for 31 companies with a combined annual T&E spend of €45 million, has found a new way to obtain discounted pricing on airfare classes not normally discounted. The Copenhagen-based not-for-profit group, which has used proprietary technology since its inception in 1991, during the past year also expanded to 11 from four the number of countries in which it manages members' travel, and this month started implementation in another six countries.
Like many corporate buyers, TPE in recent years has seen the proportion of fares it books at a negotiated discount plummet. In 2001, the organization had 75 route deals and applied negotiated discounts to 60 percent of its total bookings. Today, it has 25 route deals and receives discounts on only 15 percent of purchased fares. The consortium's policy is to buy the lowest logical fare, but since airlines often apply discounts only to the most expensive ticket classes—notably business and fully flexible economy—lowest logical fares rarely are eligible.
"If you are getting negotiated fares from airlines, often you can't promise them any loyalty because of the lowest-fare policy," TPE managing director Søren Schødt told The Beat here at last week's Association of Corporate Travel Executives conference. "The only way we can give an airline more business is for it to give us a price below what we pay on each ticket class."
TPE therefore built a new tool that presents data to airlines showing what has been purchased. "Since we know what our prices are for each of those classes, we calculate how much business airlines will gain if they reduce their fare by a specified amount in that given class, and how much it will cost them," Schødt explained. "In fact, they don't have to change the price; they can change the eligibility rules for the class [such as how far in advance it can be booked] or open a new class for us. It gives us a discount on the fare classes we already buy, not the more expensive classes the airline wants us to take."
TPE also shows airlines how many fares the consortium is buying for each route in classes on which no discount is being offered. "It gives everyone more transparency," Schødt said.
After conducting tests with carriers last year, TPE in recent weeks started to use the tool more widely. "Airlines tell us they have never seen preparations like this before," Schødt said.
In one example, a European short-haul route from Copenhagen, TPE claimed to achieve a discount of 12 percent on a range of flexible restricted economy fares for which there previously were no discounts. Nonflexible economy fares also were reduced by 3 percent. Discounts on business class and flexible economy, for which discounts previously had been offered at 10 percent, were 20 percent and 15 percent, respectively.
An adroit manipulator of management information, TPE operates its own middleware platform to aggregate data from all its intermediaries and integrate with human resources systems of member companies. TPE's middleware handles master profiles that sync with Concur's expense management system, the IFAO Cytric online booking tool and various travel management companies. "No matter where the transaction is done, data comes and goes through that platform," said Schødt.
Using this technology, TPE manages expenses for members in 35 countries, customizing the Concur tool with 75 interfaces that feed transactions with numerous local suppliers including taxi companies, toll bridges and ferries.
As TPE sees it, the greatest benefit of having its own middleware is an ability to substitute TMCs, expense management tools or booking tools without damaging data flow. In practice, for several years across all its markets TPE has retained IFAO for the booking tool and Concur for the expense system.
But the consortium has started to expand its travel management activities beyond its core Nordic market (Denmark, Sweden, Norway and Finland). This year it added the United States, Germany, the Netherlands, Luxembourg, the United Kingdom, United Arab Emirates and Singapore. All the core Nordic countries had been fulfilled by BCD Travel, but TPE now is using seven TMCs, with more to come as part of the latest wave of expansion into Hungary, Croatia, Switzerland, France, Israel and Canada.
All TMCs are obliged to use Amadeus as their GDS. "The strength is the data is always ours," said Schødt. "The only tool we depend upon is Amadeus. That is the only one we would not like to shift."
Schødt said expansion into more countries is made possible by technology from Amadeus enabling personnel at TPE headquarters to view in real-time any booking made by any Amadeus agent. A second improvement has been integration between Amadeus and Cornerstone Information Systems' iBank data management platform following a 2011 partnership between the two companies. TPE uses iBank as a conduit between reservations made in Amadeus GDS channels and its own reporting tool.