Desribes two frameworks for managing corporate travel. Trip Friction is tClara's way of measuring traveler wear and tear, such that a travel manager or HR leader can pre-empt travel-related burnout risks. Open Booking shifts much more responsibility to the traveler and the travel budget owner, while requiring travelers to book in ways that provide their booking data to their employers quickly.

1. Trip Friction and Managed Travel 2.0
Scott Gillespie
30.10.2013 Helsinki

2. Scott Gillespie
• Co-founder of tClara, a travel data analytics
firm focusing on Trip Friction
• Founder and former CEO of Travel
Analytics, a pioneer in airline sourcing
• Author of a U.S. Patent on airline contract
analysis
• Speaker and writer on innovation and best
practices in managed travel
14.3.2014 2
Managing Partner, tClara
Author, Gillespie’s Guide to Travel+Procurement
Pushes the corporate travel industry to think
new thoughts and create more value

3. Little change in
100 years
3/14/2014 3Gillespie’s Guide to Travel+Procurement

4. Where we’re headed
Discuss and Debate
Traveler Friction
Open Booking
We Need New Frontiers
Managed Travel (MT) 1.0 has Peaked

5. • 1994: Delta Air Lines caps commissions,
triggers TMC transaction fees and cost center
mentality
• Late 90’s: Strategic sourcing, corporate online
booking tools and Prism put travel management
in spotlight
• 2007: UK’s Corporate Manslaughter Act makes
duty of care a high priority
Key Drivers of Managed Travel 1.0

6.  Consolidate TMCs
 Consolidate T&E card programs
 Consolidate travel data and reporting
 Comply with duty of care
 Use KPIs and benchmarking
 80+ % online adoption
 90+ % travel policy compliance
 Optimize air, hotel and car programs
After 20 years, best practices for
Managed Travel 1.0 are well known

7. Managed Travel 1.0 has reached
diminishing returns
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Gillespie’s Guide to Travel+Procurement
1995 2015
High
>
Incremental
Value
Low
The
castles
have been
built

8. Solid, safe, enduring –
a valuable base
Immobile,
inflexible

9. value
3/14/2014 9
Gillespie’s Guide to Travel+Procurement
it’s time
new sources
to find
of

10. 3/14/2014 10
not
Castles
Ships
We need

11. Where are the new frontiers?
3/14/2014 11
Gillespie’s Guide to Travel+Procurement
Open Booking
Traveler Friction

12. Open Booking’s Four Principles
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Gillespie’s Guide to Travel+Procurement
1. Shop anywhere –
period.
2. Book anywhere –
so long as data is captured
quickly
3. Book anybody –
so long as suppliers are safe
4. Book anything –
so long as it is in budget

13. • “I have had open booking for several years. It can and does work but it was
a lonely trail until recently. Conversations with TMCs, airlines, expense
tools, hotel chains and other partners have exploded in the last 12
months though.
• There is a realisation amongst all of these groups that they need to get a
handle on the drift away from traditional policies in many corporates and
find new value propositions - ones that focus more on the traveller than
the travel manager in many respects.
• There is a need for TMCs and travel managers to move from enforcement
to empowerment... you can only fight a tide for so long and the question "I
can get it cheaper on XYZ.com" still remains unanswered by most
companies and travel 2.0 is searching for a way forward pulling the
customer and the data into a virtuous environment.”
Mike Tangney at Google says:
(emphasis added)
Published on “Managed Travel 2.0” discussion group, LinkedIn, 12 Jul ‘13

14. Evidence supports Open Booking
GBTA’s “Global Business Traveler 2012” study of
840 U.S. managed and unmanaged travelers:
1. Unmanaged travelers were happier with their
trips
1. For traveler comfort and convenience
2. For interesting and enjoyable trips
3. For getting the best prices
2. Unmanaged trips cost 3% less than managed
trips

15. Open Booking is NOT Unmanaged
Brand.com
or OTA
Corporate
Traveler
Corporate
Booking
Data
Traveler’s
Expense
Report
Net of
Discounts
Duty of Care
Provider
3/14/2014 15Gillespie’s Guide to Travel+Procurement

16. Edit Rights will be essential
3/14/2014 16
Gillespie’s Guide to Travel+Procurement
Corporate
TMC
Trip
Changes
Right to edit or
cancel the
booking
Everybody is
happy!
Corporate
Booking
Data
Corporate
Traveler
Brand.com
or OTAs
Net of
Discounts

17. The data channel trumps the booking channel
Data
Channels
over
Booking
Channels

18. Payment Providers
become
essential
data
suppliers

19. morph into
Traveler
Subscription fees
TMC Booking
fees
Security and
Service

20. Where are the new frontiers?
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Gillespie’s Guide to Travel+Procurement
Open Booking
Traveler Friction

21. How do we optimize
a travel program?

22. Travel Program KPIs
Spend
Savings
Prices
Variances
Finance,
Procurement
Policy
Compliance
Traveler
Satisfaction.
TravelersOperations
Agent
Productivity
Call Service
Quality

23. Travel Policy
None Harsh
High
Costs
Supplier Cost
Travel Supplier Costs Are
Controlled by Travel Policy and
Procurement
Source: Scott Gillespie

24. Travel Policy
None Harsh
High
Costs
Supplier Cost
Traveler Friction Is The Hidden
Cost of Travel. It’s an HR Issue
Source: Scott Gillespie
Human Cost, or
Traveler Friction
• Lost productivity
• Reluctance to travel
• Negative impacts on
recruiting & retention
•Traveler health issues

25. Travel Policy
None Harsh
High
Costs
Supplier Cost
The Total Trip Cost Is What Matters
Source: Scott Gillespie
• Lost productivity
• Reluctance to travel
• Negative impacts on
recruiting & retention
•Traveler health issues
Total Trip
Cost
Supplier Cost + Human Cost = Total Trip Cost
Human Cost, or
Traveler Friction

26. Travel Policy
None Harsh
High
Costs
Supplier Cost
So We Must Measure Human Costs To Find
The Lowest Total Cost and Optimal Policy
Source: Scott Gillespie
• Essential
• Not well understood
Total Trip
Cost
Human Cost, or
Traveler Friction

27. Listening
for
Traveler Friction
Is this the best we can do?
Traveler Complaints
Business
Leaders’ Complaints

28. Travel Policy
None Harsh
High
Costs
Supplier Cost
If Human Costs are high, then the
optimal travel policy is lighter
Source: Scott Gillespie
Total
Trip
Cost
Human Cost, or
Traveler Friction

29. Travel Policy
None Harsh
High
Costs
Supplier Cost
If Human Costs are low, then the
optimal policy is harsher
Source: Scott Gillespie
Total Trip
Cost
Human Cost, or
Traveler Friction

30. Companies
spend about
the same on
travel as
they do on
turnover:
1-3%
of revenues
Source: “Retention of Key Talent and the Role of Rewards”, Scott, Hay Group, June 2012. tClara analysis

31. Human Resource KPIs
Turnover Rate
Cost per Hire
Sick Days
Healthcare Costs
Productivity Metrics
Engagement Scores
Performance Ratings
Employee Potential Ratings

32. Measuring
human costs
travel-related
is a
New
Frontier

33. Trip Friction™ - a measure of
the traveler’s experience
6-hour non-stop in
Business Class,
arriving home on
Friday afternoon,
after 2 nights away
Trip A
6-hour red-eye flight,
with a 4-hour layover,
connecting on a
regional jet,
both legs in Coach,
arriving home on
Saturday afternoon,
after 5 nights away
Trip B
300
Trip
Friction
Points
900
Points

34. 10 Firms in tClara’s 2013 Trip Friction
Benchmark Study
By Industry
High Tech 5 firms
Consulting 3 firms
Financial 1 firm
Manufacture 1 firm
By Annual Air Spend (USD)
$1<10MM 2 firms
$10<25MM 5 firms
$25<50MM 1 firms
$50+MM 2 firms
Avg. Annual Air Spend,
USA POS $36MM

35. 35
44%
27%
10%
19%
Work Time 8a-
6p, M-F
Home Time 6p-
10p, 6a-8a M-F
Sleep Time
10p-6a, M-F
Weekend Time
Sa-Su
When Do Travelers Fly?
Share of Total Flight Hours
56% on Personal Time
Source: tClara’s 2013 Trip Friction Benchmark study

36. Distribution of Trip Scores
42% are Harder Trips
27%
31%
20%
11%
4% 3% 2% 3%
Easy Moderate Fairly
Hard
Hard Very Hard Fairly
Extreme
Extreme Very
Extreme
Source: tClara’s 2013 Trip Friction Benchmark study

37. Next Step: Calculate scores for each
traveler, and benchmark entire programs

38. A high score indicates a higher travel-
related retention risk, and perhaps the
need for a softer travel policy.
Our Firm’s
Trip
Friction
score is in
the 87th
percentile.
That’s not
great.

39. Should you treat high-friction
travelers differently?
Illustrative

40. Should traveler friction be a
basis for tiered travel policies?
14.3.2014 40
Rank by Trip
Friction
Points
Traveler
Traveler's
Trip
Friction
Points for
2013
Traveler's
Percentile
Among All
Firms in
2013
1 Veera 22,560 96%
2 Riku 21,730 95%
3 Johanna 21,690 95%
4 Juho 20,370 95%
5 Lida 18,650 92%
6 Sami 18,120 92%
7 Jenni 17,600 88%
8 Teemu 17,360 88%
9 Sonja 16,920 84%
10 Oskar 16,840 84%
“18,000 points,
or the 85th
percentile”
Use industry-wide
percentiles

41. Should managers understand
each traveler’s recent travel
workload and trends?
41
High
Very High
Extreme

42. Can firms avoid losing their most
valued travelers?
Trip Friction Level
Very High
High – Med. High
Medium or Low
Circles represent employees High Value
Talent
at Risk?

43. Travel Policy
None Harsh
High
Costs
Supplier Cost
Goal: Predictable Impact of
Travel Management
Source: Scott Gillespie
Traveler Friction
Retention Rates
Health, Safety Costs
Productivity Levels
Engagement Scores
Ticket Prices
Room Rates
Travel Spend

44. Summary, then Debate
• Managed Travel 1.0 has peaked
• We need ships, not castles
• Open Booking and Traveler Friction
are new frontiers
• Open Booking’s first challenges are
about technology
– Will change the role of TMCs
• Traveler Friction’s first challenges are
about HR costs
– Will change the role of Travel Managers
44

45. Kiitos / Thank you
Scott Gillespie
Scott@tclara.com
Glad to connect on LinkedIn

46. Traditional travel metrics don’t work
6 trips between
San Francisco
and Seattle
6 trips between
Phoenix and
Frankfurt
$24,000 buys 12
round trips between
L.A. and San
Francisco in coach
$24,000 buys one
first class ticket,
NYC to Sydney
6,000 miles flown
between D.C. and
NYC in a quarter
(30 one-way trips)
6,000 miles flown
between D.C. and
Seattle, a one-week
trip
Trips?
Spend?
Miles?
Higher Trip Friction
or
or
or