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Lions, Tigers, and Fares: Taming the Fares Beast

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Lions, Tigers, and Fares: Taming the Fares Beast

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    1. Lions, Tigers, and Fares: Taming the Fares Beast Participants Moderator: J. Grant Caplan, Consulting Strategies Panelist: Mark Orttung, GetThere Panelist: Steve Reynolds, TRX Panelist: Marian Shapiro, Ingersoll Rand Panelist: Trey Urbahn, FareChase

    4. Perspective Web fare issue is now less an access issue, and more a supplier management and travel policy issue Online booking technology has proven that logic can be built that takes advantage of these fares without damaging supplier contracts There is now a different access issue Different GDSs and travel agencies now have access to different Web fares How can corporations access multiple GDSs, multiple agencies, along with different Web sites and still maintain control?

    5. What’s the best source? Suppliers are proactively pricing differentially by channel Underlying price disparities between channels are substantially compounded by exogenous factors Result: Though prices vary considerably between channels, no single source consistently delivers the best price

    7. Probability of finding a better price is directly related to breadth of consideration set

    8. Controversy Are non-GDS fares a large issue in the large corp. market Negotiated rates consistently beat web fares Recent Topaz study shows better fares in GDS 90% of the time TMC negotiated hotel rates consistently beat web rates Web fares becoming similar to alternate route fares provided by TMC’s for years Alternate carriers and connections offered but seldom taken Travel managers reluctant to mandate due to inconvenience Proven savings potential of 30% or more over direct fares Usually loaded as a comparison fare for analysis and to validate agency fare search

    9. Case Study: Ingersoll Rand Ingersoll Rand Company A global diversified manufacturing company (Bobcat, Club Car, Schlage, Thermo King, Hussman, IR) $9 billion in Sales 2002, 103 plants worldwide U.S. originating air volume: $31 million Decentralized, non-mandate culture Global Travel Redesign in progress

    10. Case Study: Ingersoll Rand Our Challenge How can we ensure the lowest fares are captured ? We’ve Experienced Lots of NOISE? From the top, down Facts and Numbers Not Convincing Road Warriors Conducted third party airfare audit, and Webfare comparison study Our Response Agency: GDS access to major airline Webfares, and simultaneous website search OBT: Access to non-GDS fares (popular websites)

    11. Case Study: Ingersoll Rand Are We There Yet ? Capturing data Communicating through every channel, again and again Shop ‘Til You Drop ! The lure of the internet is powerful Popular Website functionality robust Light at the End of the Tunnel~Yes and No… New robust OBT functionality mirrors popular Websites GDS ruling January ’04 = More chaos = game change?

    12. Strategy Start paying more attention to what the different GDSs and agencies are doing and where special content is available Make sure online technology you use accesses all sources so you can pick and choose your content If deregulation goes through, this will be even more important Make sure you are getting credit from your suppliers Ask for discounts or something else if Web fares aren’t applied to your contracts Show suppliers how you can shut off Web fares for certain markets in exchange for more favorable contract terms

    13. Thank you! Contact Us! J. Grant Caplan -grant@consultingstrategies.com Mark Orttung – morttung@getthere.com Steve Reynolds – steve.reynolds@trx.com Marian Shapiro – marian_shapiro@irco.com Trey Urbahn – trey@farechase.com

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