Travel News

The Unbundling Trend

By September 13, 2010 No Comments

This past week I had the opportunity to attend the EdCon Conference for SGTP (Society of Government Travel Professionals) in Washington DC. The focus was “Trends Affecting the Government Travel Landscape: A Probable Future?” Here is a piece of what I took away:

Trends are predictions about the future based on our knowledge of the past and present. The interaction between the trends is as important as each individual trend. There are many trends with in travel: higher fares; TSA requirements; and more noticeably, the unbundling of services by airlines.

So what does the trend of unbundling airline costs tell us about the future? Unfortunately that they are here to stay! This unbundling trend presents several challenges.

The first is the limited time between the notification and effective date or the lack of notifications by the airline to the consumer/travel management company (TMC). It’s frustrating to get to the airport and unexpectedly need to pay for an additional service. Once the airlines have found all the possible services that they can charge for, I believe the notifications will stop. Hopefully there won’t be any more surprises to the consumer or the agency.

The second is the inability of the TMC to assist the consumer by directly charging for unbundled services. To correct that, ARC (Airline Reporting Corporation) has recently come out with a document that will allow agencies to charge for these services. This will result in corporate travel cards or UATP cards being able to be directly charged.

This document also solves the third challenge: travel reconciliation for the corporate customer. Once the services can be charged directly through the TMC, clients will no longer have the hassle of tracking down traveler receipts for reconciliation. Currently the traveler is presenting a receipt (if they have one) for these additional services. When TMCs can charge for these services, they will be present in reporting as well as on credit card statements. It will also clear up confusion on whether an unbundled service is reimbursable or not. When the client has determined which services are reimbursable, they can be noted in the company travel profile for company-wide implementation.

The process isn’t complete, but once the airlines have “all their ducks in a row,” the TMCs will be able to ensure accuracy and customer satisfaction when reconciling and managing unbundled fees.

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