2001: Seeds of Change in Struggling Economy

It’s hard to talk about the devastation of September 11,
2001. It was my second full year working as a writer and reporter in New York. Coincidentally,
it was the first year I ever worked on a project for Business Travel News—the Business
Travel Buyers’ Handbook. 

I remember ashes. I remember people running up Broadway,
away from what I only found out later were two collapsed skyscrapers. I did see
the fires; I knew they were hit by planes; I assumed at that point it was
terrorism. But the buildings were standing when I descended into the subway.

I remember sitting next to radios in our offices on Astor
Place, trying to put the tragedy into perspective. Trying to offer hope to
colleagues with loved ones working in or around the World Trade Center. I
remember stories of people walking all day long—uptown or across the Brooklyn
Bridge—trying to connect without cell phone service. Trying not to hope too
much. 

I also remember people helping. Everyone reaching out to friends,
but also to people in the street. Total strangers. There is a saying or a quote
that goes something like this: A man in a crisis falls back on what he knows
best; a murderer to murder, a thief to theft.  

I learned about New Yorkers that day—and about so many
people—that most of us fall back on good, we fall back on loving one another
when it really comes down to it. So we should hold onto that. And maybe try to
remember that even when we aren’t in crisis. 

________________ 

But the travel industry in 2001 looked to be falling into
crisis even prior to the terrorist attacks on 9-11. The bust of the dot-com
bubble was in full destruction phase, after peaking in March 2000. It began to
really hit the travel industry in March 2001, with airlines and hotels putting
up wretched quarterly earnings and falling performance metrics that only got
worse as the year progressed.

Companies, once high on internet fueled product innovation
(maybe without a solid business plan), were shutting down products and
divisions and laying off employees. This happened at a lot of companies, but to
anchor your perspective in the bedrock of the startup fever, the Silicon Valley
Business Journal estimated that 2 million people were laid off in the local
tech sector in 2001 as a result of the dot-com bust, the terrorist attacks and,
to a lesser degree, the Enron scandal.

They layoffs and belt tightening hit business travel hard. Corporates
pressed travel buyers to minimize travel spend. The C-suite restricted travel
more than ever, and industry innovators concentrated on capabilities like
automated pre-trip approvals in order to subject every trip to increased scrutiny.

Some companies mandated online booking as an attempt to realize
some efficiencies in travel management company fees. The industry, at the time,
didn’t have a fully baked business model to actually deliver this type of
savings via online bookings. Last week’s lookback article explored the
development of low-cost online reservation fulfillment centers and the rise of
TRX as a tech provider that could facilitate this new model. We see more of
that developing in 2001, and larger TMCs starting to deliver economies of
scale, but the margins were still really tight.

The power of data started to come into its own in 2001, but
with that came questions about data privacy—for individuals and corporations.
That IATA concept of giving every corporation an identification number in order
to positively track all their travel volume and patterns for reporting purposes
finally petered out given the (very justified, IMO) resistance from travel
managers. 

What is most remarkable about 2001, in terms of travel
management trends and reporting, at least to me, was how eerily similar the industry
dialogues and concerns are to the dialogues and concerns that are hitting home
in the managed travel industry today. 

What I have chosen to include below is not the reporting of
the 9-11 terrorist attacks, about which so much could be highlighted. Instead,
I’ve chosen an article (again, a long one, sorry!) about airlines developing
direct booking websites for corporate travel. 

There were several motivations: 1) side-stepping rising
distribution fees, 2) the potential to eliminate credit card fees, 3) the
difficulty experienced in servicing direct connect bookings through third-party
booking tools as they got lost in the limbo between agency and airline, without
a GDS record (PNR) to make it workable. 

These are some of the same motivations we see today with New
Distribution Capability, with the addition, however, of more sophisticated online
retailing that uses personal data collection on the individual doing the booking.

It’s technical, for sure. But, honestly, you need only
change some of the names of the players to make this a conversation you might
hear at a business travel conference today. 

As an added note, BTN began reporting on mobile device-based
travel technologies in earnest in 2001, with a series of three articles about “what
could be.” 

Thanks to BTN 2001 executive editor Jay Campbell and 2001 airline
editor David Jonas for the collaboration on the article below. 

________________________________________________________________________

Passing on the Bypass

By Jay Campbell & David Jonas

Continental and Northwest airlines are launching new business travel booking
sites, joining Alaska, Delta and Southwest in efforts to cut distribution costs
by working directly with businesses via the Web.

Not only do the airlines see their sites as a way to cut out the agency
middleman, but increasingly the carriers are focusing on their sites as the
prime mechanism for enabling business travelers to book without the use and
cost of a global distribution system—partly at the expense of efforts to do so
through third-party online corporate travel tools.

That third-party GDS bypassing now is taking a back seat to the airlines’ own
sites is reflective of the difficulties in supporting reservations made without
a GDS. Airlines have arrived at that conclusion following what amounts to, in
some cases, years of third-party development.

“Going truly direct has servicing issues and working with other third
parties hasn’t progressed too much with us because I just don’t think they are
there yet,” said Elizabeth O’Hara, director of distribution planning at
United Airlines.

“We’ve encountered back-office issues for all air direct links that
prevent us from rolling it out in production,” said E-Travel senior
director of marketing Rob Wald. “We are still pushing forward with air
direct links, but work needs to be done on both sides of the link—E-Travel and
the airlines—to make it happen. This work may or may not be a high priority for
airlines, but we are continuing to push forward with our other direct links,
and we expect a beta for an Amtrak link and a National Car Rental direct link
within the next 60 days.”

At GetThere, “Direct connects are not a panacea, but rather complementary
to the GDS distribution channel,” said COO Jeff Palmer. “It will be a
hybrid solution, as far as we can see.” GetThere for now is focused on
increasing adoption of its corporate booking tool. Despite recently signing its
first definitive agreement to develop directs, with American Airlines, a
GetThere spokesman said such links are a ways off.

Continental Airlines, the earliest airline pioneer of third-party GDS bypass,
said it has put its development with E-Travel “in neutral, and we’re
coasting for a while,” said director of distribution strategy Jim Young.
“We’ve got the E-Travel link and we can make bookings, but we’re waiting
for Carrier Sales Phase II, a second generation of ARC coding that allows
exchanges and refunds to be made by the agency, not the airline,” Young
said. He set a realistic date for that implementation for October, though
“we would like it sooner,” he said.

Delta agreed that Carrier Sales Phase II is what will allow such third parties
as GetThere to facilitate GDS bypass on an itinerary that includes air, car and
hotel; GetThere confirmed it is working with the Airlines Reporting Corp.

“Carrier Sales Phase II is up and running, but implementation has been
slow thus far,” said ARC’s Barry Lemley, director of accreditation and
database management. “There needs to be more understanding about direct
connects. Some want to bypass the GDS and some want to bypass the corporate
card with electronic funds transfer.”

The key service issue is that although a booking can be made directly in an
airline reservation system by a third-party booking tool, it does not allow a
travel agency or a traveler to make changes to the airline reservation en
route. Further, the way the passenger name record is structured, a
“passive” airline segment is stored in the GDS along with any
traditionally booked pieces to provide the agent or booking system a full
itinerary.

“The idea is to use the GDS to shop and then the online booking system to
book direct, but the GDSs freak out about this,” said Steve Reynolds,
chief technology officer at Dallas-based TRX Inc. “Maybe their pricing
will change where they charge for shopping, so you have to play hide the
booking. The GDSs have value, and to replicate that is difficult.”

“The heart of the direct connect question is, ‘Where does the PNR live?’
” said Delta director of e-business, business to consumer Steve Scheper.
“Do we accept passive segments as an appropriate way to support the PNR in
that scenario? The answer is no, because the GDSs charge for that. That is not
an option as we emphasize a super PNR concept to accomplish the bypass.”

Aiming to solve this direct disconnect, TRX is partnering with WorldTravel BTI
to kick-start development on a prototype software now known as Trinity that
will bridge the gap between supplier-direct and traditional bookings.

Meanwhile, Dublin-based Datalex, which sells Internet booking services to
suppliers and soon will offer them a corporate booking tool, also is working on
facilitating GDS bypass by creating a “virtual PNR” that resides in
an external database and is synchronized with other systems.

Both Datalex and TRX work with the Orbitz Web site in development by the major
airlines. Management at Orbitz has not committed to making it a corporate
product, but many observers believe Orbitz to be an obvious mechanism for
airlines and corporations to conduct transactions without a GDS. Insiders
working with Orbitz told BTN that a corporate product is, in fact, in the
company’s long-term plans.

In the meantime, concerns about financial arrangements, the user interface and
other question marks have Alaska, Delta and Southwest airlines seeking GDS
bypass for business travelers through their own Web sites. Continental and
Northwest Airlines separately are about ready to unveil their own Web-based
business bookings. These carriers especially are concerned about
ever-escalating GDS costs, partly because, aside from Northwest, none of their
internal reservation systems are hosted by a GDS, as is the case with American,
United and US Airways.

Continental is about to join Delta in setting up a Web site specifically for
companies with which it does not have a discount program. Continental is on the
verge of announcing that it will use Worldspan’s Trip Manager booking engine
“and a hybrid of Continental and TRX for fulfillment” on the site, to
be called RewardOne Online.

“We’re primary preferred, but customers will be able to assign other
preferred carriers as well, and also load hotel and car deals,” Young
said. The new site coincides with Continental’s efforts to bring its whole Web
site in-house, saving license fees paid to Expedia, GDS fees paid to Worldspan
and fulfillment fees paid to TRX. “We’ve insourced TRX’s work to our
reservation center and are developing an electronic support desk for those
loyal customers that use our site,” he said.

Meanwhile, Southwest enhanced its SWABIZ direct corporate booking product to
include a corporation’s negotiated rates for both hotel and car rental. The
site now offers enough functionality to complete full itineraries. By entering
their corporation’s code, a traveler connects directly from SWABIZ into
internal systems at Alamo, Budget and Hertz to access contracted rates. That
enhancement came online in December and other car rental partners soon could be
added.

The GDS comes into play for hotel bookings, which became available in March.
Southwest partnered with Galileo to enable SWABIZ users to book preferred rates
with any hotels loading those rates into the system, though it does not pass on
any transaction or processing costs. For travel managers, SWABIZ now offers
improved tracking capabilities, including full origin and destination
reporting. Tracking of car rental and hotel transactions is not yet available,
but Brad Newcomb, Southwest director of marketing automation, said it would be
a natural progression.

“The features and functionalities we have added have been direct requests
from travel managers from larger companies,” Newcomb said. “They want
to track what is purchased through the Internet and offer something as
user-friendly as possible for their travelers.” Another enhancement in the
works is to allow travelers to indicate an internal billing or cost center code
to further facilitate tracking a corporation’s spend.

Delta has progressed furthest in developing a portfolio of alternate
distribution channels. Delta.com for corporations, which enables large buyers
to access negotiated rates or Web specials directly from the Web site and
capture the data, now is being used by 16 accounts with a few dozen more in the
pipeline. “It is a direct connect into our own Web site and the Deltamatic
reservation system, and is not involved with other third parties,” said
Lee Macenczak, Delta senior vice president of sales and distribution. He added
that Delta “has pulled back a little bit” on GDS bypass facilitated
by third parties. “We have some issues to work through from a
technological basis before we can move forward with that product.”

However, Delta is working with E-Travel on new direct models and also uses that
company’s booking engine to back the Mind Your Own Business Travel site
designed for more modest travel programs. While that site is not a GDS bypass—Delta
pays segment fees to Worldspan, which it conveniently owns a piece of—it is set
up as a traditional travel agency, allowing companies to book other airlines
while earning commissions for Delta. Unlike the large corporate booking
product, which is serviced internally by a specially trained group within the
reservation department, MYOBTravel uses TRX for customer support. A third Delta
module is its Online Agency Service Center. Last week, the carrier announced
that agencies now can directly book special Web fares from the site,
representing yet another step in Delta’s efforts to wean its customers away
from traditional GDS bookings. Net fares also are available to agencies through
that channel.

Along those lines, Continental plans to make available to large travel
management companies a booking link to its internal Shares reservation system,
provided by Electronic Data Systems. “Adding Shares to the GDS for a
travel agency will give us the scale to create a true alternative to the
GDS,” Young said. “Of course, that would cut into the agency’s GDS
incentives, but we’ll work with the agency to understand their GDS incentive
program and to make them whole–it might be a fraction of our savings. We’ll
also share the savings with corporate clients.”

“We envision a world where a corporation could have a travel agency of
record along with an online self-booking tool, as well as direct relationships
with suppliers,” said Delta’s Scheper. “There is a question as to
whether or not the industry could administer all three and right now we are in
a period of discovery, but we feel sophisticated travel managers could manage
all three.”

American Airlines is the largest dissenter in the airline group, stating its
preference for third-party facilitation over truly direct connections.

“The vast majority of customers we have talked to are not requesting
direct booking capability from us. If they have a relationship with a carrier
and that relationship were to change over time, they don’t want to switch out a
booking tool and put in another,” said John Samuel, AA vice president of
e-business. “Instead, we are working with third parties to create booking
capability via their engines.”

In fact, American recently became the first airline to sign a definitive
agreement—not a letter of intent—with GetThere to begin developing direct
access for the GetThere Marketplace to American’s reservation system, hosted by
GetThere parent Sabre. AA also has signed a letter of intent with E-Travel.

_______________________________________________________________________

_______________________________________________________________________ 

Troubling signs of an economic downturn notwithstanding,
hotel sales executives last week reported that the recently concluded negotiations
for 2001 rates were marked by continued strong demand for coverage in key
cities–to the point where availability often took precedence over rates. It
won’t last long.

American
Airlines’ bid for Trans World Airlines and parts of US Airways complicates
matters for buyers wary of a negotiating environment with fewer major players.

Hertz
and Avis are taken private again. Ford Motor Co. buys the remaining shares
of Hertz. Cendant buys back the 74.4 percent of Avis shares it sold when it
went public in 1997.

American joins Continental in raising change fees from $75
to $100; Continental reverses previous move to increase to $25 the agency
compensation for processing such changes, trimming it back to $15.

IBM Expense Reporting Solution integrates with GetThere to
pre-populate expense reports; Xerox
adopts the tech to go paperless with pre-trip approval as part of $1
billion cost-cutting initiative focused largely on supply chain and labor
expenses.

Delta
Air Lines is the first major network carrier to offer direct online access
to negotiated rates for all contracted corporate accounts. The Delta Web site enables
both negotiated fares as well as special Web fares and applies the latter to
corporate marketshare agreements.

Continental
Airlines’ Corporate Insight system, which aggregates client data, comes under
privacy scrutiny and raises antitrust concerns. The National Business Travel
Association asks the U.S. Department of Justice to Investigate. The airline,
nevertheless, rolls out the reporting tool in April at the ACTE conference.

In wake of low adoption among travelers for online booking, Sabre’s
Get There unit launches a consulting organization dedicated to pushing adoption
of the tool. It also offers a low-cost fulfillment option to customers through
American Express Interactive Services and goes out to RFP to extend fulfillment
partners to ensure lower costs for clients to drive adoption.

Major car rental companies push aggressively for price
increases even after years of passing back costs like airport concession fees over
the last several years.

Corporates look to cut air costs as a softening economy continues
to impact revenues, particularly for tech and manufacturing companies. Midsize
travel agency Total Travel Management begins managing “non-travel” as mediated
by web- and video-conferencing.

Tense airline labor negotiations push the Bush
Administration to accept a recommendation by the National Mediation Board
to intervene if it becomes necessary. The president in March steps in to avert
a Northwest Airlines Strike.

IATA withdraws its request for approval of a Corporate
Identification Service, which it originally requested in December 1999, and
which had drawn staunch criticism from the travel management community.

Frontier Airlines offers direct corporate booking.

John Dashburg resigns from CEO post at Northwest Airlines,
leaving an unfinished labor negotiation to Richard Anderson who assumed the CEO
role.

Get
There signs with TQ3 Maritz Travel Solutions and Kansas City-based Itravel
to offer clients low-cost alternatives for fulfillment of online bookings. The
companies are the first two of an expected half dozen fulfillment partners
expected to sign on with Get There to provide such services. The move shapes up
a tricky relationship between the online booking provider and travel management
companies—one that looks like it will ultimately push clients to prefer agency
relationships with those that have fulfillment centers.

At the same time, E-Travel deepens its relationship
with Rosenbluth International in a move that looks like Rosenbluth might
acquire the company. But insiders deny that outcome, speculating that
Rosenbluth will beef up support for E-Travel implementations. Read into July to
find out what happens.

Mega TMCs introduce templates to create and help clients to
deploy corporate intranet sites for travel and hone their ability to capture
data via customer relationship management technologies.

Escalating economic
ills spur business travel cutbacks; travel managers bear increasing
pressure to tamp down costs. Corporate travel innovators like Hewlett Packard, 3Com
and Cisco Systems apply restrictions.

Southwest announces that Jim Parker will take the helm
of the airline as CEO as founder and current CEO Herb Kelleher; Colleen Bennet
is named COO—the first female COO of a major U.S. carrier.

Following the lead of airlines, hotels
implement energy charges. Marriott and Starwood Hotels & Resorts tacked on nightly charges in states that were most impacted by
energy crisis. Other hotel companies forge relationships with energy providers
for more cost-efficient sources but also for strategies to conserve.

PricewaterhouseCoopers merges travel and meetings,
realizing “millions” in hotel and air savings, according to the company.

British Airways eliminates commissions to U.K.-based
travel agencies.

Data from Smith Travel Research shows softening hotel
rates and occupancy dip for hotels, while corporate travel managers report
hotels open contract renegotiations to lower rates for clients who will drive
greater share. Industry observers cite “failure of so many dot-com companies”
cooling once-hot markets.

Microsoft, the collaborator on American Express’s AXI
booking product, surprises the industry with a switch to new entrant
Highwire and mandates it; Amex intends to bury the AXI product in favor of
GetThere-developed CTO. Microsoft likely looked past industry leading GetThere
due to the competition between Sabre’s Travelocity and Microsoft’s Expedia
product.  

BTN-operated Corporate Travel World is defined by
dialogue around sliding economy and data privacy. “Who owns the data, how
should it be formatted and how should it be protected?” asked attendees and
speakers.

AA’sTWA asset acquisition moves forward, as
DOJ lingers over United-U.S. Airways tie up.

AA plans to surcharge paper tickets as airlines move
to push more rapid adoption of e-tickets.

In shaky economy, travel buyers get aggressive seeking fixed
fare airline contracts in response to the previous year’s repeated rises in business
fares.

Profile synchronization flummoxes travel buyers as travel pros
debate the proper place to store traveler information in standardized way that
can be updated and distributed to all nodes of the ecosystem that require it.

Delta launches website and incentives for small
business clients, Mind Your Own Business, offering Delta bookings and
reservations for other travel suppliers, including other airlines.

Following Delta and Alaska airlines, Continental and
Northwest launch business travel booking sites in an effort to bypass GDS
distribution costs, but going
direct proves to have servicing issues at the TMC for all airlines.

Hotel
rate loading remains riddled with errors. Travel managers begin conducting
rate audits and look for technologies to assist. TRX plans to roll out
automated rate auditing; in the meantime, some corporates are resorting to
year-round auditing by travel management interns.  

Sources confirm that Oracle is looking to sell E-Travel,
as a result of tech company trends of slicing off “non-core” businesses.
Sources say any sale would be predicated on keeping Oracle as a customer.

An interview
with Starwood Hotels & Resorts CEO Barry Sternlicht confirms that
corporate travel buyers are “trading down” with mutli-brand hotel companies in
the worsening economy.

Energy fees explode beyond West Coast-located hotels; Marriott raises energy fee from $2.50 to $5 per night; Hilton extended the fees
to 12 additional states. Hyatt joins the group in implementing energy
fees.

IBM and PwC push consortium purchasing,
partnering with Carlson Wagonlit Travel for fulfillment. It’s a bold
move, considering EDS closed down similar e-purchasing initiatives the year
prior.

Worldspan tops Galileo in market share in the
U.S.; Galileo suffered from lack of early positioning in internet-powered
products and from the severing of its sales function from those of part owner United
Airlines.

Navigantacquires
government travel specialist SatoTravel for $45 million; it’s a change
in acquisition strategy, which previously saw Navigant pursue midsize agencies.
Upon closure, Navigant could vie for second largest TMC in the U.S. going head
to head with Carlson Wagonlit Travel.

Visaenters
hotel e-folio fray, aiming to deliver full hotel data electronically,
challenging the IBM mechanism which reportedly now has more than 1,000 hotels
in the U.S. on board.

Sabre’s BTS adds fees to push clients to adopt GetThere,
as the company looks to sunset its original online booking tool.

Avis parent company Cendantannounces
it will acquireGalileo global distribution system; it is rumored the
company will lay claim to Worldspan as well. That won’t happen for several
years; in the meantime, Cendant forms Travelport from Galileo and another
travel acquisition CheapTickets.

Danish Travel Pool consortium aims to automate the entire
travel booking to expense process via KDS Wave for booking, Captura for expense
and SAP enterprise resource planning. The consortium is receiving electronic
invoices and settling them automatically.

TQ3 Maritz rolls out web-based benchmarking tool with
industry average comparison data provided by American Express Consulting
Benchmarking Group.

Automated pre-trip authorization capability becomes a
selling point for online booking tools. E-Travel reports winning clients
largely based on the functionality; Gelco Information Network and SatoTravel
announce a partnership to develop the capability mainly for government
accounts.

Hotels fish for corporate business, luring buyers with renegotiated
rates. BTN reported that hotel occupancy rates and average nights rates had
fallen each month since February.

I:FAO acquires intellectual property rights and
operations center of Xtra Online’s PowerTrip Booking System.

Carlson Wagonlit Travel, Rosenbluth International and TQ3
Maritz each introduce or expand tools to better understand clients requirements,
going beyond their transaction volumes. They site a need to understand
companies more deeply in order to serve them effectively.

American Express reports lower earnings, cuts agent
workforce by 5,000; this is in addition to 1,600 jobs the company cut earlier
in the year. The company for the second quarter reported a 76 percent drop in net
income from the year-prior period.

Visa announces its first e-folio partnerships with
member bank J.P. Morgan Chase and its first hotel company Prime Hospitality;
meanwhile, Hyatt teams up with IBM to provide e-folio to corporate clients.

AirTran, Frontier, JetBlue and Southwest airlines see
increased interest from corporate travel segment as cost-cutting drives buyers
to low-fare options.

After a series of articles profiling companies that are
driving online booking adoption to levels above 65 percent, executive editor
Jay Campbell drops a truth bomb that for most companies that have implemented
online booking tools, adoption remain between 5 percent and 18 percent.

Amadeus and Galileo acquire booking tools E-Travel and Highwire, respectively.

TRX enables buyers to run audits to reconcile flown
data from their preferred airlines with their own ticketed data. The TRX
service immediately delivers savings to programs like Lockheed Martin and Vivendi Universal by ensuring the corporates are getting credit for
their spending on their preferred carriers.

Administrators of ARC-accredited corporate travel
departments say they are discovering “hidden” revenues paid by suppliers to
travel management companies, which become visible by moving to a CTD. Among
these are “marketing” and “network access” fees that TMCs receive based on
volume bookings with airlines and other suppliers. Airlines say these payments
total millions of dollars annually.

TRX retires its Meetings Assist tool and will
no longer produce or develop any products specifically for the meetings industry.
However, TRX’s former parent WorldTravel Partners will distribute a new
Meetings Assist to its clients.

Hewlett Packard’sKevin Iwamoto is named
president of the National Business Travel Association.

American Airlines further caps agency commissions—the
first time an airline chose to do so in a flagging economic environment. Major
carriers, save Alaska and Southwest, followed suit.

Sabre’s GetThere subsidiary proves to have taken the
lead in online booking, claiming 57 of the 83 companies in BTN’s Corporate
Travel 100 that were known to have either partnered with or developed their own
tools.

Corporate
buyers rebuff energy fees in their ongoing negotiations with hotels; the
market has steadily flipped to favor the buyer as the economy continues its slide
into recession.

On September 11, 2001, al-Qaeda terrorists hijacked four
jets belonging to U.S. carriers and took them on a suicide mission. Two were
flown into the North and South towers of New York’s World Trade Center. One,
into the Pentagon in Washington, DC. The fourth crashed in a field in western
Pennsylvania. Nearly 3,000 people perished in the attacks. Eleven people who
worked at an American Express onsite at World Trade-located Marsh & McClennan
were among the missing and were presumed deceased.

In response, U.S. companies grounded business travel
temporarily. U.S. airlines attempted to salvage devastated operations. Agencies
aided in tracking and returning travelers to home cities. Government began a process
to investigate and transform airport security.

GDSs relax contractual terms for the month of September as
business travel around the globe, but especially in the U.S., plummeted.

Industry analysts warn of increased agency fees based on business
travel downturns in the wake of a stumbling economy and the Sept. 11 terror
attacks on the United States. They also cite the recent commissions cap as a
culprit in rising TMC fees. Within weeks, agencies begin to send out letters advising
of rising prices or the need to renegotiate.

Companies examined their security and travel risk management
protocols in the wake of the hijackings. Even buyers of tight programs reported
trouble in locating some travelers. For many, despite the slow adoption of
online travel tools, pushing travelers to use such tools and capture the
associated data was part of the answer.  

Congress and the White House dispute which
provisions to include in an airline/airport security bull, particularly whether
to federalize passenger and baggage screeners and how to pay them. Ultimately,
passenger screeners become part of what is known as the Transportation Security
Administration; baggage handlers do not.

New security requirements undermine the value of e-ticketing,
which has increased convenience and efficiencies at the airport, particularly
for travelers who do not check baggage. Lack of standardization across receipts
or itineraries associated with e-tickets snarl airport processes as security
measures are introduced. Queues begin forming at kiosks and ticket counters to get
printed boarding passes.  

Companies
prepare to return to the air; air volumes returned to between 30 percent
and 80 percent of pre-attack volumes, depending on type of business and
location.

The Association of Corporate Travel Executives canceled its
global conference in Munich.

15 CEOs of travel companies met with Commerce Secretary Donald
Evans to contemplate federal assistance for a decimated travel industry,
including assistance for individuals who lost their jobs in the aftermath of
the 9-11 terror attacks. In the struggling economy, they also looked at travel
stimulus as part of an overall economic stimulus package that might be rolled
out to the larger market. But bailouts are likely to lead to more regulation
for airlines.

Hotels, already losing occupancy and average daily rate, struggle
with cratering performance and revenues in the aftermath of 9-11. Sales teams
shudder as they move into negotiations for 2002.

Foreign carriers add “war
surcharge” as beefed up security and reduced load factors put pressure on
revenues.

Early adopters of CWT Symphonie strategy—the agency’s
attempt to fully integrate travel management operations—report improved service
and cost efficiencies. Symphonie uses a robotic workflow engine to synchronize
air, hotel and car rental data from both online and agent-assisted bookings.

Car rental companies rebound to 80 percent of pre-attack
volumes within 5 weeks of airline hijackings. 

Hoteliers
go begging for corporate business; they lower their bids they already had
offered to prospective corporate clients in order to capture market share. Andersen
Consulting, Tokyo Electric and other companies report their partners are in “survival
mode.”

Airlines reconfigure corporate discounting policies,
extending discounts on certain fares, but restricting them, especially on
already-discounted leisure fares. Northwest began the trend; it was unclear which
carrier would follow next, but the prediction was United would be next. By December,
the question remained unanswered, but the managed travel industry was
pressuring airlines to cut business fares.

United Airlines names John
Creighton as new CEO, replacing embattled James Goodwin. Once the nation’s
largest carrier, United had fallen into survival mode over the previous 18
months.

Rosenbluth launches consultancy division Eclipse Advisors.
It includes a contract optimization service Dacoda, targeting companies that were
not currently clients of the agency.

Alaska, American, America West, Continental, Delta, Jet
Blue, Northwest, Southwest and US Airways install
reinforcement bars on cockpit doors, as part of an FAA mandate after the
9-11 attacks.

The Bush Administration establishes the Transportation
Security Administration.

12
European countries swap currencies for the Euro: Austria, Belgium, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain and the Netherlands.
The Euro starts week against the dollar, making it cheaper for U.S. travelers
to access business destinations in these countries.

GDSs lend vendors a hand by keeping price hikes down.

Buyers report that desperate hotel chains are offering the
opportunity to renegotiate rates midyear as part of preferred partnerships.

ARC introduces Compass
a data warehouse-powered information tool that allows agencies and corporate
travel departments to retrieve ticket records. It is offered free to ARC-accredited
entities. 

Bankrupt ANC, parent company to Alamo Rent-a-Car and
National Car Rental, files
for Chapter 11 bankruptcy, but continues to operate.

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Elizabeth West is the editorial director of the
BTN Group. She has reported on the business travel and meetings industries for
24 years. Beth was editor-in-chief of Meeting News from 2006 to 2008 and
director of content solutions for ProMedia Travel from 2008 to 2011, when
ProMedia was acquired by Northstar Travel Media and merged with BTN. She became
editor-in-chief of BTN in 2015 and editorial director of the BTN Group in
2019.

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