Face-to-Face: Andi Budd
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This week we chat with Andi Budd, Vice President & General Manager of American Express Global Business Travel, ASEAN, about the rising issue of ancillary sales and services in the corporate travel sector…
Q) As a TMC, how do you manage the increasing range of ancillary products and services offered by airlines, in terms of your clients’ bookings?
The situation with ancillary fees is a complex one to manage because there is no standard on what ancillary fees suppliers – like airlines – make available in the GDS and therefore which ancillaries are made visible to TMCs.
Because of this, there is no standard way of paying for and managing ancillary fees. Where possible, we do, of course, manage the booking and charging of ancillary fees on behalf of our customers. However, there are certainly a number of ancillary fees which will be purchased directly by the traveller during a trip (for example, if a traveller turns up at the airport and finds that they need to pay for check-in luggage) which means that as the TMC, it is difficult to capture the information.
To overcome this issue, we work very closely with our customers to help better manage ancillary fees from both a sourcing and business travel policy perspective. For example, our Global Business Consulting team provides strategic sourcing services, allowing us to negotiate better ancillary rates with suppliers on behalf of our customers. We also work closely with customers to help determine how ancillary fees, from baggage charges to upgrades for air, hotel or car rental for example, should be treated within the company’s travel policy.
It is also interesting to note that standard ancillary fees differ considerably between low-cost carriers (LCCs) and full-service airlines, with meals, entertainment, and baggage being common ancillary options for LCCs, while bulkheads, advanced seating, and Wi-Fi, are typical full-service add-ons. Similarly with drinks and snacks, these come as standard parts of a full-service flight experience while being seen as ancillary extras across LCCs. While full-service airlines are largely still the preferred choice for the majority of business travellers throughout APAC, LCC business travel and associated ancillaries will likely become a larger consideration in the near future.
Q) What can TMCs or their clients do to mitigate the extra travel spend incurred by ancillaries?
It can be challenging for travel managers to enforce policy and to track the total cost of a trip, which may or may not include ancillary fees, largely due to lack of transparency and lack of accessibility to ancillaries. Travel managers should seek insight from travel and corporate card data together, in order to get a clearer picture of expenditure on ancillary fees.
It is important to have a comprehensive travel policy in place, which addresses ancillary fees such as additional baggage. Company policies need to have some level of leniency to accommodate unforeseen expenses.
It is also very important to educate travellers and travel bookers on when and how ancillary fees are incurred. For example, when travelling on code-share flights where a traveller is using multiple carriers in a single trip, the traveller needs to be aware if the individual airlines have different baggage allowance policies.
We can also provide our customers with tools to help them monitor bookings, and ensure they adhere to policy. Our Pre-trip Auditor tool, for example, allows customers to exert the level of control they deem appropriate for individual traveller groups or the company as a whole. The tool accommodates any online booking tool and can be configured to audit transactions based upon a variety of policy criteria, including but not limited to air (included in this is booking class), hotel, total trip cost, form of payment, preferred vendor, and security risk. Companies have seen the benefits of replacing cumbersome, manual processes with automation, and enforcing corporate travel policies.
Q) Is the availability of services like in-flight Wi-Fi becoming a factor in a traveller’s choice of flight or airline?
We’re not seeing Wi-Fi as a major factor in the choice of airlines within Asia-Pacific at this stage, but in other markets such as the US, Wi-Fi is growing in popularity. From what I have observed locally, business travellers enjoy being without Wi-Fi, as it’s an opportunity to disconnect for a brief period. I would expect that in the near future other travellers in economy and first-class will wish to use Wi-Fi for the leisure purposes or even to call people.
Travellers need to be aware of pricing when using airline Wi-Fi, as the service can include data over-usage charges which can become prohibitive. When we consider ancillary fees for hotels, Wi-Fi deals are far more influential in the decision-making process and this is a very common area of hotel negotiations.
Q) How is the impact of airline ancillaries different from extra charges in, say, the hotel sector?
Unlike with flights, ancillary fees in relation to hotel accommodation are often negotiable, and while hotel occupancy in Singapore remains high, this will be a key area where companies will look to make savings. Negotiating on benefits such as access to free parking, internet or meals is something that we always look to include in contracts on behalf of our clients.
Q) What ancillary services do you believe will become increasingly important to business travellers in future?
The most valuable in-flight ancillary services for business travellers tend to be additional baggage, meals and seat assignment. In certain industries where heavy equipment is required, such as media, marine or even medical repatriation, additional baggage is very important. In the future, in-flight Wi-Fi may become more popular if costs are reasonable.
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