The Rise of Online Travel Management: A Threat to Corporate Travel Managers?

Strategic Insights -

As corporate America increasingly shifts towards online travel booking, traditional travel agencies and travel managers are facing a challenge to their livelihood. With the growing market share of online travel management companies, such as Expedia Corporate Travel, Orbitz for Business, and Travelocity Business, the role of travel managers is becoming increasingly obsolete. According to projections by the research firm PhoCusWright, about one-third of all corporate trips will be purchased online this year, with the online travel agencies claiming a bit less than a 10 percent market share, expected to grow to 15 percent by 2008.

Key Takeaways:

  • Online travel management companies, such as Expedia Corporate Travel, Orbitz for Business, and Travelocity Business, are saving companies money by introducing more automation to the travel booking and reporting process.
  • Companies like Aetna, McDonald's, Harvard, and Starbucks have already shifted to online travel management, reducing costs and airfare expenses.
  • Travel managers at midsize and smaller organizations are the most vulnerable to replacement by technology, with some experts predicting that the traditional travel manager job title may become extinct.
  • Traditional agencies argue that online travel management companies are not equipped to handle the complexities of managed corporate travel programs.
  • The National Business Travel Association plays down the threat, insisting that where there is a managed travel program, there will always be a need for a travel manager.
  • A survey by the American Society for Travel Agents found that 30 percent of its members' business came from corporate travel last year, down more than five percentage points from 2000.
  • Online travel management companies claim they are not trying to put anyone out of business, but rather offering technology to make travel managers' jobs easier.

Statistics:

  • About one-third of all corporate trips will be purchased online this year, according to PhoCusWright.
  • Online travel agencies claim a bit less than a 10 percent market share, expected to grow to 15 percent by 2008.
  • The National Business Travel Association has 1,615 members, an increase of 237 from 2001.
  • A survey by the American Society for Travel Agents found that 30 percent of its members' business came from corporate travel last year, down more than five percentage points from 2000.
  • Companies like Aetna, McDonald's, Harvard, and Starbucks have already shifted to online travel management, resulting in cost savings and reduced airfare expenses.

Sources:

  • PhoCusWright
  • American Society for Travel Agents
  • National Business Travel Association
  • Expedia Corporate Travel
  • Orbitz for Business
  • Travelocity Business