The Titans of Tech

“We’re experiencing a simultaneous clashing and blending of technologies,” says meetings tech expert Rodman Marymor, in reference to the online travel agencies’ foray into group business.

As more corporations reap the benefits of booking travel online, many are looking to the next frontier of automation. For some, that logical next step is to extend their web-based tools to meetings.
    “Companies right now are trying to get their arms around how much is actually being spent on meetings, because it’s so fragmented and decentralized,” says Susan Steinbrink, travel analyst for Stamford, Conn.-based PhoCusWright, a travel/hospitality research and consulting firm.
    “As corporate online booking tools and online travel agencies make headway into corporate travel, you’re going to see greater penetration of those services in meetings,” Steinbrink adds.
    According to the PhoCusWright/National Business Travel Association Technology Survey (released in July 2003), 73 percent of the 206 travel managers who responded planned to be using online meeting tools by 2005.
    “One of our priorities this year is to integrate booking technology into our meetings program,” says Tracey Wilt, supplier manager of travel, meetings and incentives at Rochester, N.Y.-based Xerox Corp. Wilt also is co-chair of NBTA’s Groups and Meetings Committee.
    This past spring, the committee released a white paper titled, “Framework for Success: Building a Strategic Meetings Management Program,” which specifically looks at harnessing meetings spend for possible inclusion in the corporate travel program. “We believe technology is an essential part of the process,” says Wilt.

While these trends indicate a definite opportunity for the Internet travel management companies (ITMCs) Expedia Corporate Travel, Orbitz for Business and Travelocity Business to move into meetings, their market share of corporate travel is still just a few percentage points. Procurement- or travel-led initiatives to integrate group travel into corporate online booking procedures very likely involve the use of other booking tools. Products such as Southlake, Texas-based GetThere’s DirectMeetings and Alexandria, Va.-based Outtask’s Cliqbook already are offering solutions that ease the integration of group and transient travel booking.
    “I think the driving technology is a combination of a lot of good products that are out there, as well as products that are evolving to be even better,” says Steinbrink. “It’s not just online travel agencies that are forcing that hand.”
    The meeting planner’s need to curb attrition also will be a factor in the convergence of booking technologies, according to Alan Zingale, Philadelphia-based hospitality and leisure consultant for PricewaterhouseCoopers. “Providing coordinated online event registration and room-booking capabilities is one method of reducing off-block attendance,” observes Zingale. “If attendees or exhibitors cannot book all their travel needs easily from one source, it’s not hard to understand why it makes sense for meeting consumers to shop around.”
    Whether the online agencies get into the group housing market, Zingale says, remains to be seen. “But you can be sure they’re looking for future opportunities.”
    In fact, suppliers on the meetings side already are seeing demand from the marketplace. For example, clients are asking StarCite, the Philadelphia-based meetings management technology and service provider, about integrating with their online booking tools, according to Mark Phillips, vice president of strategy for the company. “They’re also asking the online agencies or online tools to integrate with us as well,” he says.
    “Over the course of the next few months you should see announcements that agreements have been reached with various companies,” adds Phillips. “We are working through the issues of integration with a number of clients. That does include discussions with the online agencies as well.”

“We do meetings for Fortune 500 customers,” says Mitch Robinson, product manager for Bellevue, Wash.-based Expedia Corporate Travel. However, he emphasizes, “We are not in the business of independently going out and looking for meetings at this time. It’s a service that we provide, as a full-service corporate travel agency, to our customers.”
    Expedia, Orbitz and Travelocity all have launched corporate travel divisions within the past two years. Featuring the same robust search engines used by the leisure sites, the corporate products also track travel spend and may include negotiated fares. Each ITMC also has specifically touted its offspring as a full-service corporate travel agency, supplementing its technology with more customized services according to customer need. The foray into meetings is, at this point, simply a supplement to the agencies’ overall service offerings.
    " Expedia inherited meetings and group expertise upon purchasing Metropolitan Travel in 2002. Expedia Corporate Travel, the corporate program launched later that year, has therefore been able to offer meeting planning services since its inception. To augment that service with automation, Expedia Corporate Travel developed a relationship with Santa Clara, Calif.-based seeUthere Technologies, an online meetings management company, in 2003. As a result, both Expedia Corporate Travel planners and their clients now have access to seeUthere’s products.
    " Orbitz launched its corporate program, Orbitz for Business, in mid-2002 and announced Orbitz Meeting Services the following year. Like Expedia, Orbitz for Business turned elsewhere for meetings expertise and automation specifically to the David Green Organization, a Chicago-based meetings management company that specializes in site selection. Through a partnership with the division known as David Green Interactive, Orbitz for Business customers can submit requests for proposal to check site pricing and availability and work with David Green to obtain additional meeting planning services if needed.
    “We expect to see the tools to support meetings and group travel become more sophisticated over the coming years,” adds David Cerino, general manager of Orbitz for Business, who anticipates that many of his clients will focus on cost reduction through consolidating group travel spend.
    At present, Orbitz Meeting Services is used to varying degrees, according to  Lephate Cunningham Jr., executive vice president of David Green Organization. “Take McDonald’s, for example,” he says, referring to Orbitz for Business’ most famous client to date. “They’ve got a lot of departments or divisions that execute meetings but have nothing to do with their meetings division. We helped out with a meeting for a franchisee in Southern Illinois who had to get together with 20 other owners. That owner saw there was a meeting services button on the site and discovered a solution there. That’s how the meetings occur today it’s clearly a supplement to Orbitz for Business. The meetings services component is not standing center stage.”
    " Travelocity Business, launched in 2003, is concerned primarily with tracking figures for precisely these types of ad-hoc meetings for its customers. Travelocity Business hasn’t looked outside the company for meetings management expertise, as parent company Sabre already offers the DirectMeetings product to its larger customers who use its GetThere booking engine.
    “We agree there’s going to be great growth in using technology to solve meeting problems,” says Pete Stevens, vice president of marketing for Travelocity Business. “But to be honest, we’re getting spotty demand for meetings management in the smaller space.”
     Many Travelocity Business clients, says Stevens, have just gotten a grasp on putting their transient booking online. Meetings won’t follow for at least another year, he predicts. Travelocity Business and GetThere DirectMeetings both will be focused primarily on obtaining ad-hoc meeting data for groups of as few as four or five people.
     “Right now, we’re pretty much drawing the line when we talk about true meeting planning services,” Stevens says. “We think there already are a lot of meetings management companies that do that well, and many companies that do it internally,” he adds. “We don’t think we add as much value there. In terms of processing the ad-hoc groups and the air, car and hotel associated with larger meetings and servicing those transactions, that’s where we think we can add a lot of value.”  Though currently focusing more on maintaining, expanding and internationalizing their core corporate travel offerings, the ITMCs aren’t ruling out more involvement in meetings in the future, as the market demands further consolidation of transient and group spend. And just putting their toes into the meeting planning waters already has raised the antennae of current meetings technology providers, whose products would compete with any meetings tools built by the ITMCs.
    “They’ve still got a lot of work to do on the transient side of the market,” says Ed Tromczynski, president and COO of Twinsburg, Ohio-based PlanSoft, which provides the technology for David Green Interactive. “But inside 18 months, I think you’ll see a series of business development relationships focused on group travel providers and online agencies offering technology products for consolidation, housing and registration, and so forth, to their best customers.”
    In fact, many sources suspect the ITMCs of more intense plotting than they’ll publicly admit. “We believe they’re like ducks,” Tromczynski observes. “All calm on the surface but paddling like crazy underneath.”
    “When I realized those guys were headed this way, my first reaction was, ‘Oh man, they’re gonna screw up everything,’” admits meetings technology innovator Rodman Marymor, CEO and founder of Berkeley, Calif.-based Cardinal Communications, creators of the RegWeb online registration tools now available from Philadelphia-based StarCite. Marymor even gave the agencies a nickname “Exorbicity” to make it easier when constantly invoking their names in disgust.
    “I talked to lots of people about it,” he says. “What can we do to ward them off? Because we’re this nice meetings industry and we have a way of doing things, and they’re going to come in and force us to do it their way. And they can, because they’re big and they’re powerful and they’ve got a ton of money.”
    But Marymor has since softened his stance. He now sees room for everyone to have a hand in the evolution of meetings management. “We’re experiencing a simultaneous clashing and blending of technologies,” he says. “Initially, I thought it looked like a head-on collision, but I think what we’ll end up seeing is much more of a blend.”
    What the ITMCs don’t know about meetings, says Marymor, they’ll learn from the people who do be it through acquisitions, partnerships or simply hiring people with meetings expertise. “Fighting it isn’t the answer,” he says. “I mean, they didn’t say they were going to kill us they just said they were interested in our market. Let’s make something good out of it.”
Consultant Corbin Ball, based in Bellingham, Wash., says it’s natural for the online agencies to try to move into this space. “Meetings are the ‘black hole’ of travel spend,” he says, “and there are big bucks for those who succeed in shedding light on that abyss.”
    But while the major online providers “are 800-pound gorillas with deep pockets,” says Ball, “their Achilles heel is they do not know or understand meetings. It makes sense for them to sign partnership deals; this buys some expertise.”

ITMCs have achieved great success in the leisure space as distribution channels for discounted hotel inventory, using what’s known as the merchant model. In other words, hotels unload inventory they don’t expect to sell, at very steep discounts, through these online channels. The ITMCs typically sell the inventory at an 18 to 30 percent markup over the hotel discount. Even with the markup, the room rate can be significantly cheaper than a hotel’s published rates.
    At present, the inventory distributed in this fashion is intended for transient use. “Room blocks and things like that don’t come out of the same inventory  Expedia Corporate Travel uses,” clarifies Expedia’s Robinson. “But will we integrate with our travel inventory? It’s something we’re certainly looking at.”
    Yet, none of the ITMCs has proposed a model for that integration. The tools themselves aren’t designed for booking blocks of rooms from the current merchant model inventory (a travel arranger currently can only reserve rooms to which specific travelers are assigned). Moreover, the hotels and hotel chains would need to be convinced there was some benefit to them in distributing meetings inventory in that fashion.
    “If Expedia decided to get into the group business, they would work with us like any other meeting planner,” says Joan Lowell, vice president of electronic distribution at Hyatt. “They would contract with the hotel and block whatever number of rooms they needed. I guess it’s possible that Expedia would let the fulfillment of those rooms be done on a website. But from our point of view, it would be hard to understand what value they bring to the table. Their whole focus has been on the individual traveler.”
    Hotels have benefited from the merchant model to the extent that they have been able to sell inventory in a difficult market. “There’s nothing more perishable than an unused hotel room,” says Ball. “It’s better to get 50 cents on the dollar than nothing for it. But it’s going to become a seller’s market, and things will change.” 
 

While there are obvious entry points for integrating attendee booking into the corporate travel tool, the other side of meetings automation booking meeting space and room blocks is a more complex matter. But the value of automation here, too, is key.
    “Once we agree on [request for proposal] standards and get these into the system in the next two or three years, we can digitize that process and many others in very substantial ways,” says consultant Ball. “We’re largely still ‘analog,’ but we’re making great strides.”
    Standardization of RFP forms and online submission capabilities have, at least in some cases, begun to speed up the booking process. Accessing available group inventory online appears to be the next step and is already a reality, albeit in limited instances.
    Hyatt’s E-mmediate Meetings, linked to Hyatt’s national sales database and live since early 2003, is still at the forefront of hotel-sponsored group booking technology. Planners can check availability and basic rates for small meetings through the E-mmediate Meetings site, and even put a hold on space before negotiating contract specifics with Hyatt salespeople. Similar technology is being developed by Fairmont Hotels and Resorts and should be available within 18 months, according to Heather McCrory, the chain’s vice president of sales.
    StarCite has developed products that take advantage of Hyatt’s E-mmediate Response technology. The StarCite Online Marketplace database and procurement tool can gain immediate access to Hyatt’s inventory when submitting an RFP for any size meeting. Within 30 seconds, planners receive group availability and quote information.
    “There’s a lot of activity in the space around online booking or making available inventory open and accessible to the buyer,” says PlanSoft’s Tromczynski. Each month, more than 10 percent of the hotel searches of PlanSoft’s database of 38,000 meetings properties are for distressed inventory discounted, available room blocks. Of course, there are definite limits to how far either hotels or planners would be willing or able to automate the booking process for the room block or meeting space itself.
    “You would never just pop online to book a meeting and say, ‘Yeah, I think I’ll go ahead and take it,’” Tromczynski points out. “You have to see it, you have to feel it, you have to smell it, you want to look at the contract extensively, and you want your lawyers to look at the contract. We’re still a little ways off from large conventions being able to roll up all on the web.”
    Not surprisingly, hotel reps agree. “Meeting space is such a valuable commodity, and the decision-making about what to book and what space to give is very subjective,” says Jamie Walters, senior vice president of sales for Dallas-based Wyndham International.
    “I think online booking will become more streamlined and will get more sophisticated and more popular with small events,” adds Walters. “But any time there is a significant amount of function space, there is going to be a problem. Hotels like to get certain fees, but it’s all negotiable.”
    For some planners, however, the increased automation doesn’t hold much allure. “What we usually need is so specific, we don’t use online RFPs or anything like that,” explains Sheryl Kolb, events planning manager at Irving, Texas-based VHA Inc., a network of health-care systems. “We have our own RFP that we e-mail as a Word document. It’s easier on our end to do it that way, without trying to adapt to somebody else’s preformatted forms.”
    Corbin Ball acknowledges the changes in automation won’t happen industrywide overnight, citing Meetingbroker.com as an example. The subscription-based service, offered by Newmarket International (developers of the Delphi hotel sales management programs), was developed to translate online RFPs directly into the sales property management systems. “That [concept] is a lot faster, a lot easier for the hotels to handle,” says Ball. “But planners have been reluctant to use it because it’s outside the way they do things. People are resistant to change it’s just human nature. But if I can get a response back a day faster by sending an RFP in the industry standard way, that’s a good thing for everybody.”
    Eventually, says Ball, planners will embrace automation that saves significant time. “The more you can digitize the process, the better,” he says, and the ITMCs are just one part of making that happen. “Everybody is interested in automation,” Ball notes. “They just want their piece of the pie.”