Toward excellence in online booking

Carlson Wagonlit Travel founded the CWT Travel Management Institute in 2005. The principal aim of this institute is to conduct fact-based research into effective travel management practices for the benefit of CWT clients worldwide. To this end, the institute draws on the companys global resources and expertise in business travel management. The institutes latest research is focused on online booking and its role in todays global business travel market.

Background
In seeking to optimize their managed travel programs, companies worldwide share the same principal goals. In a nutshell, they are looking for service, savings and security. In a recently published handb ook entitled Effective Travel Management, Carlson Wagonlit Travel (CWT) highlighted eight key levers to meet these goals:
1. Drive online adoption and process optimization around the world. 2. Tackle hotel spend in a disciplined and professional manner. 3. Attack meetings and events as an additional opportunity for savings. 4. Continue to optimize air spend for example, through spot buying and advance purchasing. In this guide, the first in a series illustrating each of the eight levers, CWT highlights Lever One and presents the findings from its research project Toward Excellence in Online Booking. 5. Monitor and address program leakage. 6. Further consolidate travel programs globally. 7. Enhance high-touch services to travelers and vigilantly address security issues. 8. Develop executive-friendly, action-oriented performance measurement reports.

Toward Excellence in Online Booking

Key findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1. Significant savings and rapid return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2. Major differences in online booking performance across companies . . . . . . . . . . . . . . . . . . . . . . .10 3. Key drivers of adoption and the 4 Ps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 CWTs five-step methodology toward online adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Research methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 & 27

Toward Excellence in Online Booking: a CWT research initiative

CWT recently completed extensive global research Toward Excellence in Online Booking into 153 companies with a travel budget of more than US $5 million and with headquarters principally in North America, Europe and Australia. Half of the companies were using an online booking tool when the research was conducted.
Transport, aerospace 5% Food, personal care, retail 10% Other 13%

Unique in its geographical span and methodology, this research was conducted from July to November 2005 in two phases, starting with 10 case studies and concluding with a survey of 143 companies. The companies represented a broad crosssection of industries and nationalities.

IT, telecommunications, utilities 22%

Oil, chemicals, pharmaceuticals 16%

Banking, insurance, financial services 17% Industry 17%

Australia 3% Italy 4% Netherlands 6.5% Germany 6.5%

Scandinavia 2%

Spain 2% Other 4%

US 44%

France 12% UK 13% Canada 3%

Toward Excellence in Online Booking: a CWT research initiative

Research objectives
The principal aim of CWTs research was to explore the lessons learned by the early online booking adopters which could benefit new and potential users in todays global business travel market.
To this end, the research focused on the following objectives: 1. Evaluate return on investment (ROI) of online booking, in terms of booking fees and average ticket price (ATP), against the cost of implementation. 2. Benchmark actual performance levels in online booking achieved by those companies that have already implemented a booking tool. 3. Identify the key drivers and influencers behind successful online booking implementation, highlighting the differences between the leaders and laggards.

Key findings
CWTs research resulted in the following key findings:
1. Significant savings and rapid return on investment (ROI) By driving the adoption of online booking, companies can reduce their total travel spend by up to 10 percent. Half of the savings come from reduced airfares and the other half from lower booking costs. In more than half the companies surveyed, the payback of the investment was less than one year. 2. Major differences in online booking performance across companies Online booking performance defined in terms of level and speed of adoption varies by a factor of five between the leaders and the laggards. Geography, in terms of region and/or proximity to headquarters, is not a major factor behind the marked difference in performance levels. 3. Key drivers of adoption and the 4 Ps Online performance is first and foremost influenced by company culture and financial context. Companies that have embarked on an overall effort to reduce costs obtain better and faster results. Beyond this, companies combine the use of four key drivers to boost online adoption: Product and process, Price, Push and Pull the 4 Ps.

1- Significant savings and rapid return on investment

By driving the adoption of online booking, companies can reduce their total travel spend by up to 10 percent a result derived principally from combined savings on airfares and booking fees.

Yearly savings on booking fees and airfares (1)

Savings on airfares
Savings on airfares are first and foremost derived from a reduction in average ticket price (ATP). Based on CWTs analysis of 23 large North American, Australian and European companies, online bookings result in savings on ATP of 5 percent on average and can represent as much as 15 percent.

Savings on: Airfares Booking fees

Online booking can result in savings on ATP of 5% on average

Capital letters refer to company case studies described on Page 26. (1) As a % of airfares and booking fees. Calculations made from Q3 04 to Q2 05. Recurring fees charged by the booking tool editors are deducted from the agency fee savings. Source: CWT Travel Management Institute

Source: CWT Travel Management Institute

With online booking, two key factors help reduce ATP: The visual guilt factor: when travelers or travel arrangers can see a variety of prices directly on their screen, they tend to select the lower-priced alternative. The tendency for travelers or their travel arrangers to make more advanced bookings than when booking offline. Out of 23 large North American and European companies surveyed that were currently using an online booking tool, visual guilt was perceived as the more effective of the two factors in reducing ATP. In fact, it was perceived as the key reason in up to 70 percent of the cases; while more advanced booking was identified as the key by only 20 percent.

Online booking was perceived to be more effective in reducing ATP, particularly for those companies that, up until their implementation of a booking tool, were not strictly pushing travelers to choose the lowest fares. Although advanced bookings were perceived as a key factor for savings in only 20 percent of the cases, CWTs analysis of a group of companies based in North America nevertheless indicated a clear correlation between earlier online bookings (compared to those made offline) and lower ATP.

Strong correlation between advanced online booking and lower ATP

Difference in advanced booking days 2 3 4 5 0 1
0% Online booking's impact on -2% the ATP -4%
(1)

Visual guilt and advanced booking perceived as two factors behind savings

E C J G

-6%

A
-8% -10% -12%

Source: CWT Discovery data (Q1 '04 to Q2 '05). Calculated on top travelers and routes on the U.S. market. All fares. (1) Average number of days between online booking and departure minus average number of days between offline booking and departure. Capital letters refer to company case studies described on Page 26.

Source: CWT Travel Management Institute

1- Significant savings and rapid return on investment

Savings on booking fees

Transaction processing costs typically constitute 3 to 5 percent of total travel spend. Companies can reduce these costs by shifting from a fullservice phone transaction to an online transaction. As reflected in CWTs survey and case studies, the difference between online and offline transaction charges in North America and Europe typically reaches up to 50 percent.

Percentage of companies achieving payback within

Rapid return on investment: under one year for 60 percent

In more than half the companies surveyed, the payback of the investment was less than one year. And for 89 percent, the return was generally achieved within two years. Return on investment depends on level of adoption. Those companies with a return of more than two years, either did not have a high adoption level, or in the early phase went through a very slow ramp-up.
Source: CWT Travel Management Institute

Online booking penetration

Online booking penetration in North America is high: out of 68 North American companies surveyed, 80 percent have implemented a booking tool. Penetration is currently less significant in Europe: out of 91 European companies surveyed, only 30 percent have implemented a booking tool. It is expected, however, that online penetration in Europe should reach the same level as in North America within the next two to three years. Of the 91 surveyed companies based in Europe, 10 percent stated that they intend to implement an online booking tool in the near future. Another 40 percent indicated they intend to do so within the next two to three years. This would bring the total online booking penetration level in Europe up to 80 percent, equivalent to the current rate in North America. Online booking in Europe is expected to catch up to North America

Source: CWT Travel Management Institute

In Australia, as reflected in the case studies, although companies started online booking later than in Europe, penetration is increasing quickly. In North America and Europe, once a booking tool is deployed by a company, most travelers or their travel arrangers have access to it. Out of 52 North American companies surveyed and using online booking, 85 percent confirmed that more than 70 percent of their travelers had access to it. So too in Europe: out of 36 companies surveyed, 90 percent stated that more than 70 percent of their travelers had access.
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2- Major differences in online booking performance across companies

Based on an analysis of the companies current online booking adoption level, CWT has identified two types of performers: the leaders and the laggards. And among these two groups, there are four sub-groups of performers: fast adopters and long runners make up the leaders and newcomers and stalled pioneers make up the laggards.

Two key factors distinguished the leaders and laggards:

Speed: amount of time to reach current online adoption level (expressed in points of adoption per quarter). Time: since online booking implementation (expressed in years). Speed was the key differentiator among the leaders, as it distinguished the fast adopters from the long runners. Time was the key differentiator among the laggards, as it distinguished the stalled pioneers from the newcomers. CWTs findings indicated that on average, adoption levels and speed varied by a factor of ~5 among the four sub-groups of performers: Online adoption levels ranged from 15 percent for the newcomers to as high as 70 percent for the long runners and fast adopters. In terms of speed, the overall average rate was at five points per quarter, varying from ~2 points for the stalled pioneers to ~11 points for the fast adopters.

Adoption and speed vary by a factor of ~5

100%

High

High and quick adoption

Fast adopters

Adoption level: ~70% Time since implementation: ~2.5y Av. speed: ~1 1pts/quarter (1)

0% 1999 100% 2001 2003 2005

Adoption

Leaders
High but progressive adoption
Average adoption level of the sample ~40%

Speed is a key differentiator

E (US)

Long runners

Adoption level: ~60% Time since implementation: ~5.5y Av. speed: ~3pts/quarter (1)

0% 1999 2001 2003 2005

100%

Implemented early but stalled

Stalled pioneers

Adoption level: ~20% Time since implementation: ~3.5y Av. speed: ~2pts/quarter (1)

Adoption

Adoption

Adoption

H (US)

F (D)

Laggards

Time since implementation has to be taken into consideration

Adoption level: ~15% Time since implementation: ~1y Av. speed: ~5pts/quarter (1)

0% 1999 100% 2001 2003 2005

Late implementation

Newcomers

Low

Adoption

G (US)

0% 1999 2001 2003 2005

Source: CWT Travel Management Institute : Basis of analysis: 106 companies (1) Speed = Current adoption level / Number of quarters to reach the current level since implementation

Geographic location is not a major factor behind the marked difference in adoption levels between the leaders and laggards.
When comparing performance levels of companies in North America and Europe, the findings revealed that adoption levels varied by a factor of ~1.5 only, with the North Americans at 50 percent and the Europeans at 35 percent. But the North American companies are leading principally because they started implementation earlier. In terms of speed, on average the regions were on a par. It should be noted, however, that the

level of speed in North America was diminished by the performance of the long runners those companies with early implementation processes and tools which were not as advanced and effective as those used today. Fast adopters in both regions achieved an adoption level of 70 percent with an average speed per quarter of 11 points in North America and 14 in Europe. A similar relative pattern was observed within each sub-group, right down to the newcomers. Overall, performance levels were similar for each corresponding sub-group, whether based in North America or Europe.

Overall performance levels are similar between North America and Europe

Source: CWT Travel Management Institute

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2- Major differences in online booking performance across companies

Europe
In Europe, the proportion of newcomers is currently nearly double that in North America a reflection of the later move toward online booking in Europe. This group will inevitably diminish with time, however, transforming into either long runners or fast adopters. Some may go through a stalled phase, but eventually will move forward as they revitalize their travel programs. Beyond this transitional group of newcomers, European companies using online booking are for the most part equally split between fast adopters and stalled pioneers. Generally, the European fast adopters started online booking implementation more recently than the stalled pioneers. This trend indicates that those companies which put off adoption until more recently (within the last two years) have particularly benefited from the more advanced booking-tool technology, making speedier initial progress than those companies which started earlier (on average, as far back as four years ago) when the technology was less advanced.

North America
In North America, the pattern is different. The fast adopters represent approximately half the online-user population. But there is a significantly lower proportion of stalled pioneers in this region suggesting that over time, some have since revitalized their program and joined the long runners, swelling the numbers in this latter group to a significantly higher proportion than in Europe.

Australia
In Australia, among the case studies and companies surveyed, the proportion of newcomers was relatively high, and on average this group started even later than in Europe (within the previous year only). Beyond this transitional group of newcomers, however, the companies tended to cluster in the fast adopter sub-group. This phenomenon may be attributable to three principal factors: large international companies in this region having benefited from the implementation know-how of other regions, the recent advances in bookingtool technology and national culture.

Within each company, similar levels of speed regardless of country

Company C
Speed (Pts/quarter)
30

Company E
Speed (Pts/quarter)
30

25

25

20

20

15 Norway 10 Belgium Germany UK 0 0% 20% 40% 60% 80% 100%

15

10 Italy Australia

US

Belgium

UK

US

0 0% 20% 40% 60% 80% 100%

Adoption level

Adoption level

Company H
Speed (Pts/quarter) 30
25 US

Company J
Speed (Pts/quarter)
30

25

20 Spain 15 France UK

20 France Netherlands

15

10

10

US

5 Netherlands 0 0% 20% 40% 60% 80% 100%

0 0% 20% 40% 60% 80% 100%

Adoption level

Adoption level

Capital letters refer to company case studies described on Page 26. Source: CWT Travel Management Institute

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3. Key drivers of adoption and the 4 Ps

Online performance is first and foremost influenced by company culture and financial context, including pressure to reduce costs.

Culture
Companies with the greatest speed of adoption tended to have one or more of the following attributes: Ability to change: the company usually adapts to change very easily. Self-enabling: a strong do-it-yourself culture, where employees typically do not use administrative assistants. Process performance: the company has a widely shared methodology to improve process performance, which is systematically measured and managed. e-culture: employees are technology-driven and many administrative tasks are completed online, particularly those related to procurement. Mandatory culture: decision-making is generally a top-down process.

Financial context and pressure to reduce costs

CWTs findings indicated that a companys financial conditions, including the level of pressure from management to reduce costs, were perceived as having as significant an impact on online adoption as cultural conditions. When a companys financial conditions were characterized as just fair or less favorable, indicating high pressure to reduce costs, there was greater potential to achieve a higher adoption level. Promptness to change Pressure to reduce costs

Source: CWT Travel Management Institute

Product & process

Effective IT access Enhanced booking tool features Integration with travel processes Service configuration Improved efficiency from a travel arranger's standpoint Creation of travel arranger positions

Pull
Communications Training Appointment of champions Display of statistics Incentives

Price
Differentiated pricing between online and offline transactions

Push
Barriers to access BTCs Tracking of non-booking-tool users Effective management support / mandates

The 4 Ps

Beyond this, the survey revealed that companies tend to combine four key drivers, the 4 Ps, to drive online adoption.

The 4 Ps
Product and process: ongoing actions to ensure the booking process is user-friendly and efficient and that its functionalities are appropriate, accessible and visible on the company intranet; integration/automation of the booking process, including pre-trip and expense management workflows; and the evolution of the service configuration. Price differential: internal communications about differences in pricing between online and offline transactions.

Push from management: actions to encourage bookers to use online tools, such as tracking non-online bookers; implementation of barriers to access business travel centers (BTCs), including voice prompts directing travelers to the booking tool; reducing service level agreements (SLAs); and mandates from management. Pull through training and incentives: actions favoring change, such as ongoing training, incentives and rewards; communications; statistical comparisons between business units/ divisions/departments; and appointment of champions or ambassadors within a company to promote online adoption.
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3. Key drivers of adoption and the 4 Ps

The survey looked at the perceived effectiveness and frequency of use for a range of specific actions.

Average Average effectiveness effectiveness of of actions actions High High (>20 pts) (>20 pts)

Mandates Mandates

Product Product && process process

Pull Pull

Effective EffectiveIT IT access access

Push Push

Improved Improved efficiency efficiency perceived by perceived by the thebooker booker

Rewards Rewards

Price Price

Training Training

Medium Medium (10-20 pts) (10-20 pts)

Barriers to Barriers to access the access the BTCs BTCs

Tracking Trackingof of non-online non-online users users

Communications Communications

Display of Display of statistics statistics Creation of Creation of travel travel arranger arrangerposition position

Differentiated Differentiated pricing pricing Tool Toolfeatures features enhanced enhanced

Low Low (<10 pts) (<10 pts)

Apt. Apt.of of champions champions

Integration with Integration with travel travelprocesses processes

Low Low

Medium Medium Frequency Frequencyof ofuse use

High High
Source: CWT Travel Management Institute

Companies tend to combine a range of actions. There is no silver bullet. A holistic approach is what is needed.
Product and process Ensuring easy access to online booking tools and improving the efficiency of the booking process were perceived as highly effective against the risk of stalled low adoption, but interestingly, were not frequently used. Incorporating these relatively simple initiatives, however, could produce positive results.

CWTs findings indicated the tendency for those companies served by dedicated travel consultants to fall below average speed of adoption. For those who shared BTCs with other companies, their speed was higher than average and in North America, was nearly doubled. The relationship between travel arrangers and their dedicated consultants was clearly a more difficult habit to break and therefore, slowed down online adoption.

On average, integration of an online booking process with pre-trip approval and expense management workflows was not perceived as key to successful adoption. Nor was the creation of travel arranger positions considered effective.

Push actions Mandatory actions were perceived as the most effective, but were not widely used perhaps because of their negative implications and incompatibility with company culture. By contrast, tracking non-users was rated as quite effective and often used, offering an effective compromise for those companies seeking to rapidly enforce online booking. Pull actions Training and communications were the most popular solutions to prepare bookers for online adoption and were perceived as critical to successful change management. Incentives were perceived as equally effective, but were not frequently used, perhaps because they were incompatible with company practice and involved additional cost. Display of statistics and appointment of champions were perceived as favorable for change, but low in effectiveness.

In North America, speed of adoption is almost twice as great when companies are served by shared BTCs.

Source: CWT Travel Management Institute

Price differentials Although differentiated pricing was perceived as low in effectiveness, it was, nevertheless, commonly used. The key, as reflected in the case studies, lies in making travelers accountable for their travel expenditures.

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3. Key drivers of adoption and the 4 Ps

The power of the 4 Ps combined: three case studies

When combined and incorporated on an ongoing basis to strategically support online booking implementation, the 4 Ps can lead to successful adoption. As reflected in CWTs analysis, the following case studies of three North American companies A, B and E, illustrate the kind of holistic, well thought-out approach that the leaders tend to employ with success. Company A, a large North American consulting firm, achieved an 80%+ adoption level within three years. The company first implemented online booking in the first quarter of 1999. Training and communication campaigns were introduced in the third quarter of that year.

With these pull drivers in place, the adoption level increased by 25 points in less than six months. Differentiated pricing was introduced in early 2001 and travelers were made accountable for their travel costs through the introduction of individual corporate cards and the reallocation of travel costs for each consulting project. For this same period, a combination of three different drivers product and process, pull and push were introduced and used on an ongoing basis. Initiatives included regular surveys and focus groups for online booking improvement, quarterly metrics reviews on online usage and management support. As a result of these actions, an 80-percent adoption level was achieved by the second quarter of 2005.

Company A
Adoption level 100%
Price

Differentiated pricing 80%

Pull

60% Training and communication campaigns Ongoing 40% Regular surveys and focus groups for online booking 20%
Push Product & process Pull

Quarterly metrics reviews on online usage

Management support

1999

2000

2001

2002

2003

2004

2005

Source: CWT Travel Management Institute

Company B, a North American leader in the pharmaceutical industry, took several steps between the fourth quarter of 1999 and the second quarter of 2005 to reinforce its online booking implementation, beginning with incentives and training both pull drivers. The company subsequently combined push and pull drivers, including mandates for simple round-trips and communications, underscoring the importance of adoption to relevant departments. Company B achieved a 65-percent adoption level for online bookings by the end of the period. It is particularly interesting to note the speed of online adoption in the period following the companys implementation of incentives and training.

Training and incentives were introduced by the third quarter of 2000. Adoption picked up 20 points within the subsequent quarter and stayed at this level into the following year. In the fourth quarter of 2001, the company introduced its combination of push and pull drivers. Again, the adoption level picked up dramatically, increasing by 35 points from the fourth quarter of 2001 to the second quarter of 2002, a giant leap within a very short time frame of only three quarters. The results here suggest that the combination of drivers has a major impact on speed and level of adoption.

Company B
Adoption level 100%

Pull

80%

Mandates for simple round-trips Communication on adoption between business units/depts

Push

60%

Pull

+~35 pts

40% Incentives Trainings

+~20 pts 20%

1999

2000

2001

2002

2003

2004

2005

21
Source: CWT Travel Management Institute

3. Key drivers of adoption and the 4 Ps

Company E, a large North American diversified leader, combined several actions, each representing one of the 4 Ps, from the first quarter of 1999, when it initially implemented online booking, to the third quarter of 2004. Its actions included the following: Partnership with its booking-tool provider to improve the tool (Product & process). Re-design and re-structuring of its intranet (Product & process). Reduced service level agreements with BTCs (Push). Prompts from travel consultants to use online booking for point-to-point trips and e-mails to non-online users as alerts of noncompliance (Push). Training and comparative adoption levels featured on intranet (Pull). By the third quarter of 2004, Company E had achieved a 60-percent adoption level, progressing steadily from ~5 to ~10 points between the third quarter of 2000 and the first quarter of 2001, increasing by another ~5 points in 2001, and by the third quarter of 2002, leaping by an additional ~20 points. In relation to this last leap, the company used two push tactics: prompts from travel consultants and e-mails to non-online users.

Company E
Adoption level 100%
Pull

Push

80%

Product & process

60%

Push

SLAs with BTCs downgraded 40% Partnership with the tool provider to improve the tool Restructuring of the intranet 20%

Prompts from travel consultants to use booking tool for point-to-point trips, e-mails sent to non-tool users mentioning non-compliance

Training Business units' adoption featured on intranet

+ 5-10 pts

+~20 pts

+~5 pts + 5-10 pts

1999

2000

2001

2002

2003

2004

2005

CEO support for e-programs

Source: CWT Travel Management Institute

The time is right for companies in Europe to adopt online booking

Online booking tools first appeared in the mid1990s as a relatively basic tool with little flexibility, designed simply to facilitate the booking of flights available in the global distribution systems (GDS). North American companies had a head-start over their European counterparts in the initial move to online booking for the following reasons: The elimination of commissions in North America in 1995 created the need to reduce travel booking costs and provided an incentive to book online; whereas in Europe, the phasing out of commissions was a slower process that only began in the late 1990s. The original online booking tools did not have rail functionalities, which hindered implementation in Europe, where rail travel is far more prevalent than in North America. Europes pre-trip approval requirement a step not required in North America was not addressed in the early online booking tools. The early booking tools lacked a profile synchronization functionality to meet the multiGDS environment in Europe. Greater content diversity across Europe (in terms of international currencies, rail systems, languages, etc.) was not accomodated for. Recent advances in online booking tools mean that now these factors have been largely addressed. The most significant advances in online booking technology have resulted in the ability to handle multinational itineraries, including: international currencies, filtering and selecting hotels within program policy, off-site car rental, low-cost carrier and rail bookings to name a few. With regard to online rail bookings for example, functionalities are now integrated for most European countries into at least one or two of the major booking tools, including the recent integration of Frances SNCF and Eurostar into all the major booking tools. This was not the case a few years ago, when the only way of booking rail travel online was to go through the train suppliers web site. These new technological developments have influenced recent decisions to invest in online booking tools in Europe, particularly for those large international companies with offices in two or more countries, where the tendency is to use the same online booking tool provider everywhere.

significant advances in online booking technology have resulted in the ability to handle multinational itineraries, including: international currencies, filtering and selecting hotels within program policy, offsite car rental, low-cost carrier and rail bookings

3. Key drivers of adoption and the 4 Ps

Current functionalities of the major online booking tools in Europe

Multi-GDS profile synchronization Pre-trip approval Hotel filtering Low-cost carriers

Rail

UK

DE

FR

1-way

2-way

e-Travel

GetThere

KDS

Fully functional

Non functional

CWTs five-step methodology toward online adoption

Investment in an online booking tool may or may not be the right strategy for a company. Or it simply may not be the right time. To help companies decide whether to invest and ultimately, to maximize their online booking strategy, CWT has developed a five-step methodology which capitalizes on its experience in North America and deep-seated knowledge of the European business travel market. The methodology takes companies through each step of online implementation from initial definition of strategy to roll-out and program management for rapid adoption. For more information about CWTs five-step methodology and details on how CWTs online experts can help your company, please contact your account manager or e-mail: onlineconsulting@carlsonwagonlit.com

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Research Methodology
Case studies
The first phase of CWTs research, from July to September 2005, entailed 10 case studies of large North American, European and Australian companies representing a variety of industries, all using online booking in one region or more and identified as A to J below: Company A B C D E F G H I J Large North American consulting firm North American leader in the pharmaceutical industry Large European company in the oil and gas industry Large North American company in the oil and gas industry Large North American diversified leader Large European company in the household and personal care industry Major North American investment bank Worldwide leader in the IT industry North American conglomerate in the media industry Large European company in the household and personal care industry

Survey
The second phase of CWTs research, the survey, was launched in early October and completed by November 2005. Its geographical scope encompassed North America, Australia and key countries in Europe France, Germany, Italy, the Netherlands, Spain and the United Kingdom. Of the North American, Australian and European companies surveyed, approximately 50 percent were online users in one region or more. CWTs priority was to obtain results based on a common methodology, ensuring consistency and uniformity in the responses. To this end, prior to launching the survey, the company briefed an international team of CWT account managers to administer the survey globally to the North American, Australian and European travel managers within each company. The survey was made up of 100 questions aimed at gathering both qualitative and quantitative information. For the online-user companies, questions focused on the following: countries wherein a booking tool is currently implemented; adoption rate; actions carried out to drive adoption up; impact on savings; and company context, in terms of culture, size, sector, financial conditions and pressure to reduce costs. For the non-online-user companies, questions focused on the following: their reasons for not implementing to date; whether they intended to do so; if yes, when and where; and if not, why not?

Calculating savings
1. Impact on booking fees For the case studies, CWT calculated savings on booking fees by comparing what the online-user companies actually paid, to what they would have paid for booking fees if all transactions had been completed offline. For the survey, savings on agency fees were calculated jointly by the travel managers and CWT account managers using the same methodology. 2. Impact on ATP Calculation of the impact of online booking on ATP is a complex and problematic area, subject to oversimplification and exaggeration. For this reason, CWTs findings were drawn from a restricted set of criteria. For the case studies, calculations were based on data accumulated over a period spanning 12 to 18 months. CWT calculated, for top routes only, the difference between bookings performed online and bookings performed offline by the same traveler and then made a weighted average of the differences observed.

CWT considered this methodology more reliable than simply comparing online to offline ATP on a route-by-route basis. With this latter methodology, calculations risk distortion, as some travelers or their travel arrangers buying online may be more restricted by company travel policy than those booking offline. According to CWTs case-study findings, this can lead to overestimates in real savings by a factor of up to ~3. For the survey, travel managers were asked to estimate the impact of online booking on ATP only if a specific assessment of the question had been conducted prior to the survey. Consequently, less than 10 percent of the online users submitted an estimate which they considered reflected real savings on ATP. CWTs findings were, therefore, drawn from the case studies and survey on this restricted basis to ensure objectivity.

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For more information about how CWT's online experts can help your company, please contact your account manager or e-mail:

onlineconsulting@carlsonwagonlit.com
or connect on

www.carlsonwagonlit.com

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 Copyright 2006. Carlson Wagonlit B.V., All Rights Reserved.