Air leakage: A thing of the past or back with a vengeance?

Most of us assume that air leakage (or off-program/ off-channel bookings) are a thing of the past, right? We have new technologies and innovations that have solved the issue. Well, in this episode, Chad and Miriam connect with Olivier Benoit, Senior VP with BCD's consulting arm Advito and what Olivier shares might surprise you. Listen in as the trio talks about why air leakage is becoming an issue again and what programs can (and should) do to course correct. 

Learn more by visiting https://www.bcdtravel.com or https://www.linkedin.com/company/bcd-travel/

Transcript

Copy Transcript Copied

Intro:

Welcome to Connections with BCD Travel, an ongoing conversation about the modern-day travel program, the impact of technology, and how travel buyers can take control and drive change. What are we waiting for? Let's start connecting.

Chad Lemon:

Hey everyone, welcome back to the show. I'm Chad Lemon.

Miriam Moscovici:

And I'm Miriam Moscovici. Before we jump into today's episode, just a quick reminder to leave us a comment on whatever platform you're using to tune in. We love hearing from you.

Chad Lemon:

All right, Miriam, what do you have for me in today's Quick 60 in Business Travel?

Miriam Moscovici:

Well, I thought we'd talk about turbulence.

Chad Lemon:

Oh, okay.

Miriam Moscovici:

It feels like we see a lot more on the news folks experiencing turbulence. And so in the research team, we decided to put some time towards writing some interesting content we think will help people understand what's going on in turbulence. But I will say that when a study looked at about 10 years worth of air travel, about a third of the injuries or incidents related to air travel were involving turbulence. So it is an issue that affects people and thought we'd take a look at it.

One of the first things we discovered was that when looking at turbulence, a majority of it is from weather patterns. And those are things that meteorology departments and pilots at the airlines can help navigate around so it's not as uncomfortable for passengers. But that clear air turbulence is what causes that unexpected turbulence that sometimes affects the cabin violently.

But the airlines are doing a few things to help alleviate the effects of this clear air turbulence. They've created what's called the Turbulence Aware program, and many airlines are members of that program. And what that means is that their teams are reporting in various incidents of turbulence around the world so pilots can stay aware and flight planners can help pilots avoid those situations for travelers.

We also took a look at the fact that turbulence, this clear air turbulence is often unexpected. And so looking at about 10 years worth of incidents where travelers were injured, the only time somebody wasn't injured is when they had their seatbelt on. So that is the number one factor to keep yourself safe in case of this unexpected turbulence, keep that seatbelt on. And over half of the injuries to passengers experiencing turbulence happened when they were on their way to, from, or in the lavatory. So make it quick.

Chad Lemon:

Love that. Good advice. To learn more about the research we put out, head to bcdtravel.com.

Okay, today's topic is quite timely. As business travel continues to grow, so does the problem of leakage or off-program bookings.

Miriam Moscovici:

It's an age-old problem or is it? That's what we're going to discuss today with Olivier Benoit, senior vice president with BCD's consulting arm, Advito.

Chad Lemon:

I've had the pleasure of interviewing Olivier a few times for BCD TV, so I'm looking forward to this conversation.

Hello, my friend. I'm excited we got to have you on the podcast. I think it's fair to say that many thought air leakage was a problem of the past, but am I correct that it's back and it's kind of back with a vengeance? And if so, what are the existing or emerging challenges around leakage with travel programs?

Olivier Benoit:

Well, it's a nice title, The Revenge of Air Leakage.

Chad Lemon:

Yeah.

Miriam Moscovici:

Oh, no.

Olivier Benoit:

So in short, it's about losing ability to support travelers, to steer behavior, and to control spend from a travel buyer or travel manager perspective. So you asked me about the typical challenges. So I can see three typical challenges and two emerging challenges.

So the typical challenges: number one, duty of care, where are my travelers? Then number two, it's visibility on spend. And when I negotiate with suppliers, I want to negotiate based on my entire spend. The third one, it's visibility on behavior. What are they doing on the dotcoms, the travelers, are they compliant with my travel policy? So that's the most typical challenges.

Now we have two emerging challenges. One is about sustainability because I may have assessed suppliers that will support my decarbonization of business travel program. So are the travelers steered toward the suppliers, I lose control. And last but not least, it's potentially a data privacy challenge because I'm not completely sure that what the dotcom site will collect from my travelers personal information.

Miriam Moscovici:

I have to be honest, Olivier, I hate the term leakage. In the past we've used terms like leakage and rogue bookings. Can we say today something like off-channel bookings? Is that accurate? How do you feel about that?

Olivier Benoit:

Well, I think we say leakage because there is something negative about leakage, that is a kind of risk. I mean, we don't want leakage. I don't want leakage in my house, my roof, my bathroom, in my car.

Chad Lemon:

Exactly. Exactly.

Miriam Moscovici:

That's right. Yeah.

Olivier Benoit:

Yeah. So that's negative. No, yes, I mean, off-channel booking is a more accurate, relevant definition. Corporations are actually building ecosystems to manage business travel. So it comes with a travel agency, online booking tools, duty of care, expense systems, and that's the preferred channel. So if you don't use it, you're off. So yes, off-channel booking is a good way to define it.

Chad Lemon:

Well, let's take a second to understand some of the probable causes of these off-channel bookings. Is it NDC implementation or are there underlying factors? I guess what I'm trying to ask here is what are the key opportunities?

Olivier Benoit:

Well, off-channel bookings are happening, maybe first because travel policy is allowing it. Some corporations, very few of them, are allowing off channel. They don't have a preferred channel. But the standard is that there is a mandated preferred channel. So then why being off? I mean, there are variety of reasons that, let's say good reasons or good faith reasons and really bad reasons.

Let's start with the bad reason. The bad reason is more kind of rogue behavior. I know I should be on, but I'm off because maybe I want to use a dotcom with a supplier that is not part of my company supplier program. I may find some amenities because there is no sorting and filtering on this site, so that would bring me some personal benefits. But I mean, this is not the common case.

But most of the travelers are willing to do the right thing. So there might be reasons that are in a good faith. One of them could be to save time. I'm used to my dotcom site, I'm familiar with it. I will save time if I book through that beautiful, very responsive user interface. Another one would be to save money to my company because I heard many times that it's cheaper online with the supplier site. So I would go there instead of using my corporate online booking tool to try to find a better deal and save money to my company. So it comes in good faith, but eventually I end up being off channel and that will create the challenges we discussed earlier.

And this willingness to find cheaper deals is actually driven today by NDC because the new air retailing model that is currently implemented by the airlines comes with the end of what we call the GDS full content. So it means that in my preferred channel, I may not access to the cheapest available fair because airlines are not loading these fares into the GDS anymore. They are offering these deals into their direct dotcom channels. So yes, NDC and the new air retailing model is driving leakage.

Miriam Moscovici:

Olivier, is this just another NDC panic conversation or are there real challenges here?

Olivier Benoit:

Well, no, it's not another panic. I would see it as more another NDC implementation, collateral damage for the business travel segment. It's not here to stay. We need to manage the transition. I mean, we, the industry, all the stakeholders need to manage the transition. Eventually, the full content will be back, but it's a long journey. This transition is taking time. So this is something that needs to be addressed today and for the next couple of years.

Miriam Moscovici:

Well, content fragmentation isn't new. 10 years ago we were talking about hotel leakage where a very small portion of your hotel bookings were going through your approved channels. And I remember back then the content, the hotel content available in traditional content sources like GDSs wasn't as robust as it is today. We had a whole legion of HBAs in the scene, hotel booking agencies to compensate for that lack of supply, or that lack of content and traditional channels. So why should we get on top of this now? Hasn't technology pretty much solved this problem?

Olivier Benoit:

Not yet. It's a work in progress. There is a tremendous amount of funding, investment, time, effort from the industry, TMCs, OBTs, GDSs working together to integrate this new content type, this NDC technology with this old content type, GDS, EDIFACT technology into the preferred channel. So there is absolutely no reason to go off.

Miriam Moscovici:

Okay. So let's look ahead here. How can travel buyers address this leakage in their program? What does the feature look like?

Olivier Benoit:

Well, there is, as we said, a link between the NDC implementation and this leakage. So keep track on the air retailing model implementation with all the stakeholders, with the suppliers, with the agency, with the OBT providers. It's a collaborative effort. So that's the first thing to do. And then there is, of course, a need to communicate, to educate, to engage travelers.

The future looks good. The content source will become irrelevant to travelers. They should not care "about is it a NDC, is it a GDS fare?" It's going to be irrelevant. And eventually this new air retailing model benefits will be there for the travelers in term of rich content, better user experience with the tool, potentially bundles, and eventually the benefits from the air retailing model will be there.

Chad Lemon:

Okay. So knowing all of this, can you give us a checklist of sorts around what are some key steps that our listeners, travel managers, should be taking right now to assess their own travel programs?

Olivier Benoit:

Well, they may consider not to do it alone. I mean, there is plenty of resource and expertise to support. You can use your BCD program manager for data consolidation to track the KPIs around air leakage. Advito is providing total trip insights. When it comes to communication, our Engage team is expert in digital marketing communication. So addressing the right audience through all available channel in the company to deliver the messages and steer behavior.

Miriam Moscovici:

And another thing around communication, there are, like you said, some good reasons or proper reasons for leakage of all kinds. And sometimes I just remember in my past we'd find a pocket of leakage and oftentimes the remedy was just calling up the leader and finding out why is this leakage happening? Could it be we don't have the right contract in place or we acquired a unit that they just didn't know that there was a program or a policy in place. So is that kind of what you mean around communication is even sort of the tactical things around finding those pockets of leakage and addressing them one-on-one?

Olivier Benoit:

So yes, it's really about targeted communication to address it. And so this pocket, makes a lot of sense because depending on the pocket you are addressing, that could be to talk to a leader. That could be to talk to a supplier. That could be different types of actions. It could be a company-wide communication. It could be something much more targeted to a specific group or a specific area in the company.

Miriam Moscovici:

Okay. Last question, Olivier. In a few words, what do our listeners need to consider when thinking about their programs and off-channel bookings?

Olivier Benoit:

Well, full content is gone, so air leakage is back. So I would say that the best way to address it is to bring travelers back home. It's good for their safety, for their well-being, for their satisfaction. Eventually it matters. Could be good for the planet if you think about the sustainability goals. And it's for sure good for the company bottom line.

Chad Lemon:

Miriam, are you so happy that we changed our terminology from air leakage to off-program booking?

Miriam Moscovici:

I think the jury is still out. I think we're going to hear the words leakage for decades to come.

Chad Lemon:

Oh, no. Oh, man. All right, well, hopefully we can change a few people with this podcast episode. But that's all for this episode. Thanks for tuning in everyone, and please be sure to subscribe and download the Connections podcast wherever you're listening.

Outro:

Thank you for connecting with us. BCD Travel helps companies travel smart and achieve more. We drive program adoption, cost savings, and talent retention through digital experiences that simplify business travel. Learn more about the topics you heard on this episode by visiting bcdtravel.com/podcast.