Lloyd Hates Dealing with Ancillary Fees

March 9, 2010 at 11:04 am 3 comments

by Tony

As native New Yorkers, Mike and I are often mistaken for Johnny Drama and Turtle. I’ll let you figure out who is who. Awe, c’mon Mikey, let’s “hug it out!” When does Entourage’s next season start? I love that show. HBO’s tagline refers to its original programming as thought provoking and entertaining, just like our webinars.

Have you heard the one about the TMC exec, the corporate travel buyer, and the travel technology expert who walk into a bar? Neither have I, but I’m sure more madness ensued than with the priest, rabbi and minister.

Hear what the experts have to say

It wasn’t as rowdy as a bar, but we recently gathered Steven Mandelbaum (a 2009 BTN Best Practitioner and Managing Director of Information Systems, The Advisory Board Company), George Gadebusch (CIO, World Travel, Inc.), and Norm Rose (President, Travel Technology Consulting, Inc.) in our Webinar lounge for a discussion we cosponsored with ACTE – Expand Your Travel Program and Gain Visibility within Your Organization. Yours truly was the virtual barkeep who led them through a thought provoking discussion that covered

  • Ancillary Fees – what does the future hold, plus the challenges of and methods for tracking the data
  • Total Trip Cost  – reasons for looking beyond ancillary fees and managing other areas of spend
  • Practical Recommendations  – how to leverage technology and other tools to cut costs and boost your employees’ productivity

This one is better than a bowl of bar nuts. It’s free and you can enjoy it from the comfort of your home. So, sit back, crack open an ice cold one (or pour yourself a nice glass of vino) and see what these experienced professionals had to say. Click here to view the recording.

Don’t be shy. Jump into the mix and let us know what you think. Our last posting on ancillary fees had some strong comments, so we expect there to be a good discussion here. Plus, let us know who should be our Vinny Chase and “E”. We are looking to round out the entourage.

Entry filed under: Ancillary Fees, Business Travel, Tony's thoughts. Tags: , , , , , , , , , , , .

NBC Got Away with It… You Can’t Golfing in the rain. Priceless.

3 Comments Add your own

  • 1. Michael Griffin  |  March 10, 2010 at 1:06 pm

    Read the recent Beat Article on how TRX has provided a solution for companies.

    Analyzing more than 8 million tickets covering $3.8 billion in air spend, TRX determined that “ancillary airline fees account for between 0.75 percent and 1.5 percent of the total air spend, with the average being less than 1 percent.” The company increased its focus on running such numbers to meet client demand after more airlines in the past few months began detailing optional purchases on card charges, according to TRX executive vice president for product architecture Kevin Austin.

    “The interesting metric is that while the ancillary air fees for business travelers seem negligible (less than 1 percent), the amount spent on other charges is significant,” according to Austin. He said meals, fuel, taxis, cash advances and other miscellaneous items represented about one-third of travel budgets–roughly equivalent to both overall air spending and combined car rental and lodging expenses.

    Nevertheless, Austin said TRX is attempting to help customers get a handle on ancillary airline fees to help with policy creation and supplier contracting. Many expect airlines to levy fees on additional items going forward. “Most of our clients are interested and almost all of them have asked whether we can do this, which really moved it to the forefront over the past quarter for us,” said Austin. Considering the increase in types of add-on fees, customers are focusing on average total trip cost, Austin said.

    A handful of airlines during the past few months began annotating data sent to card companies to indicate optional purchases by travelers, he said. TRX matches that card data with booking data from travel management companies and reimbursement data from expense reports.

    “We can break out things like inflight Internet, inflight meals and beverages, baggage fees, upgrades, premium fees and lounge fees,” said Austin. “I view this whole issue with the ancillary fees on the airline side and the unbundling as more about participation than standardization. It’s kind of like hotel folio data: the more hotels that participate and provide data, the better it gets. We are able to identify each type of charge on American, British Airways, Delta, Lufthansa, United and US Airways. United does a really nice job. They identify the first baggage charge, the second baggage charge, overweight baggage fees, premium economy upgrade fees [and] inflight meals. On the card side, we get merchant information so we can tie in where an employee might charge something on GoGo [inflight Internet], so it comes through as a fee from an airline, but we know that is inflight Internet and we can tie it back to the same time period.

    “Our rules engine is able to pick out where these carriers are placing this information and where the card vendors are placing it in different places, and pull it all together,” Austin added. “Almost every carrier differs in how they are representing it and where they are representing it. It varies by carrier and by card vendor.”

    Reply
  • 2. Tony D'Astolfo  |  March 11, 2010 at 2:16 pm

    Mike, some interesting thoughts here. We actually heard from others at TRX that the survey was heavily skewed towards larger companies. Let’s not forget that many frequent travelers from these enterprise companies have “elite” status. Elite status or other corporate negotiated deals with the airlines result in many of these fees being waived. It’s good to hear there is some progress being made regarding identifying and capturing these fees, and let’s hope the progress continues. If anyone has data on a wider spectrum of the corporate travel market, please chime in.

    Reply
  • 3. Bruce Miller  |  March 12, 2010 at 8:11 am

    OK… so…what’s the REAL issue? Is it that airlines are charging for items that we’re accustom to having for “free” or is it the lack of consistency with how the “services” are being billed and tracked by airlines and card companies? While I’m not happy there are additional fees related to air travel, I am happy that we have the opportunity to negotiate them. Or maybe the problem is that services can’t be purchased at time of booking making it harder to negotiate (can’t negotiate what you can’t breakout)? Yet still, maybe part of the problem is that these are not really ancillary fees…at least not all of them, because some are essential. (the business definition of ancillary is: “of or relating to something that is available but not essential”). I wouldn’t put blankets and luggage in the same category.

    OK…so…let’s ask, hope, pray and arm-twist as best we can for consistency…item / service, category, fee (can we do this one legally?), how it comes over to the card companies…line, etc.. Then we can report, influence, and negotiate appropriately. Remember, in the middle of a difficulty lies an opportunity; and if you’re looking for a big opportunity, seek out a big problem. Here’s one!

    Reply

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