eTravel: Towards Industry Standards and Certification
What is the eTravel Vision?
A unified, simplified service that delivers a cost effective
travel experience, supports excellent management, and results in superior
What are the eTravel Goals?
- A government-wide web based end-to-end Travel Management Service
that integrates: a self-service reservation system, a self-service
Travel Authorization and Voucher System, and Agency financial,
travel card and human resource systems.
- A cost model that reduces or eliminates capital investment
and minimizes total cost per transaction for the Government.
- Policy environment based on the use of the best travel management
What are the Federal Government eTravel Objectives?
To provide Federal Civilian Agencies with a common customer-centric
web based Travel Management Service by December 2003. eTravel will
consolidate travel at the federal agency level and simplify end-to-end
travel for federal employees.
Supplied by General Services Administration September 2002.
The following "White Paper" is in response to the eTravel Vision of the
GSA, opening the dialogue on Industry Standards and Criteria for Certification.
An SGTP panel, chaired by Ted Lawson, National Travel, Charleston, WV was
formed to study and respond to the above GSA vision, at the suggestion
of Mr. Tim Burke of the eTravel Initiative.
SGTP eTravel Perspective
eTravel, in its reservations process, has been evolving with market speed. Market
speed is the ability to change and adapt. It is our contention the
efficiency of the marketplace is already operating at market speed in the
government sector and is running parallel to the private sector in the
reservation and travel service area. In fact, the government already has
eTravel in the entire travel reservation area. TMCs have been the driving
force in this efficiency in serving the government.
Achieving maximum cost efficiency is already being realized by those federal
agencies whose travel is managed by a TMC providing both cost-effective
and superior customer service, regardless of TMC size. The benchmarking
of this efficiency can be measured by comparing the transaction fees paid
by the government agencies to the TMCs and the fees paid for by the private
sector (US) on the open market. Our research suggests the transaction fees
are as much as 40% below what corporations pay in transaction fees for
travel services. These statistics/information are based on the Runzheimer
Report and Business Travel News, compared to information on GSATask Order
Client satisfaction of service has dramatically improved with the GSA's
Master Contract and defaults of TMCs have become a rarity compared to the
early days of Government Travel Management.
In reviewing the GSA fact sheet we could not determine how the new eTravel
Initiative was going to reduce capital expenses. Government needs to identify
which capital expenditures its initiative would actually reduce, over consecutive
periods of newer technology, and what systems the Government would exclude
from purchase as a result of this eTravel initiative. There should be no
capital expenses for contracting with the TMCs since the equipment of the
reservation process is essentially free and requires no capital investment.
Even the online booking tools are usually provided by the TMCs. Current
TMC capabilities also provide efficient and low/no cost solutions to later
steps in the "end-to-end" process.
The On-site Travel Management that some government agencies have
required is an expensive requirement that would be hard to justify with
today's technology and cost advantages of centralized travel centers. But,
this has little to do with eTravel and could be reduced by counseling various
government agencies that feel they need this enhanced service.
The eTravel goals of 'creating a policy based environment on the use
of the best travel management practices' again can be accomplished
without a single source online booking and GDS system, which we believe
creates a set of problems that can be avoided by setting specific standards
The eTravel Initiative by the federal government does have the ability
to improve travel efficiency while reducing costs. The end-to-end solution
certainly has benefits for the government in that the integration of the
authorization, reservation and reimbursement process reduces redundancy
and improves data collection. This is a worthy pursuit for the Federal
Government and it does appear the professionals within GSA are utilizing
the best efforts in this attainment. However, there is cause for concern
in seeking a single source provider for the reservation process.
There is evidence in the public market place that the pursuit of a pure
electronic travel solution has failed to meet the needs of the travelers,
as electronic travel providers have moved to offer more traditional travel
management services and the traditional "brick and mortar" agencies have
developed and offer a full range of electronic solutions. This middle of
the eTravel Spectrum does include online booking with full service centers,
as opposed to fulfillment centers, that meet the needs of the financial
considerations and the service to their travelers.
The extrapolation of the eTravel initiative to a single source end-to-end
product with the coupling of the expense reporting, travel approval, and
reservation process would not fulfill the stated objectives outlined by
GSA in their fact sheet. We believe there is evidence that an end-to-end
product has advantages; however, the extrapolation to a single source for
the government, rather than a connective interfacing product, could prove
expensive for the various government agencies as well as create an environment
that has a negative impact on travel businesses. In addition, this end
of the spectrum perspective will cause a deterioration of travel service
by increasing, not decreasing, cost to the participating government
The following outline reveals the impact of a single source travel system.
We believe this is a design system element that does not need to be part
of the eTravel initiative and in fact could flaw an otherwise excellent
approach of the government.
Evolving of Electronic Travel
The evolution of electronic travel in the private sector offers empirical
evidence of the need for a multi-dimensional approach to develop a comprehensive,
cost effective travel system.
The leaders of on-line travel services, Expedia and Travelocity,
provide valuable insight to the evolution of Internet booking and subsequent
related travel product and services. Both of these travel companies started
out at the end of the online travel spectrum, while the "brick and mortar" travel
agencies were at the other end of the business spectrum. Several years
of operation and severe economic losses to both Internet companies precipitated
the addition of personal travel services to their travel system and the
deletion of their original fulfillment center concept. Both companies
have evolved from a fulfillment center concept to their delivery
of full service travel and in fact Expedia purchased a large traditional
travel company in order to enter into the private sector business travel
It is more than interesting that in the private sector, a large, tech-savvy
company such as Microsoft does not utilize its own travel site(Expedia)
for their corporate travel solution, but has contracted with a traditional
Travel Management Company (TMC) for a blend of both online and personal
The fact sheet of the GSA advocates a single source system and does, in
our opinion, reduce the TMC(s) role to little more than fulfillment centers.
This must be GSA's conclusion since the TMC is deprived of its own technology
which it supplies in customized and evolving technology to its clients.
The scenario that one size fits all and that a single source will deliver,
will not meet the needs of various government agencies who have specific
travel needs necessary to accomplish their overall mission.
The GSA would attempt to realize a new revenue source from the GDS company.
These booking fees are currently being captured by the TMCs. However, the
retention of this money by GSA would simply be a reallocation of
costs since the TMCs transaction fees would increase once the revenue from
the GDS system was lost. Therefore, the client federal Government agencies
utilizing the system would incur increased costs.
The economics of depriving the TMCs of their own or procured booking engine
and their own GDS contract will have a direct monetary impact on the Government.
The booking fees currently are part of the pricing models used by virtually
all TMCs. In other words it is part of their income budget. This TMC revenue
area would have to be made up with additional transaction and or management
fees. If these fees, for example, amount to an additional $10.00 per reservation,
a typical government agency with gross airline sales of $10,000,000 or
transactions of 30,000 would incur $300,000 in additional fees. This projection
is based on the current transaction fees and the revenue needed to make
up for the loss in fees from the GDS, which the government would retain.
It is our projection that fees for on-line bookings could average approximately
$25.00 versus today's average cost of $15.00.
For each billion dollars of air travel purchased, which would amount to
3 million transactions, the additional fees to the government agencies
would be $30,000,000. While this reallocation of expense to the client
agencies would be dramatic, it is not necessarily the most dramatic effect.
The appropriate type of service would be most dramatically affected. As
stated previously, the variety of federal agency mission objectives
requires a variety of services for its business travel.
However there is evidence that a combination of online booking with full
service travel companies does offer the efficiency and high quality travel
services that are needed. TMC(s) are deploying technology to increase the
efficiency of their personnel. Most travel companies are offering clients
their own customized client software that includes on line booking tools
and provides their clients the capability to retrieve data necessary for
their travel management and expense reporting.
Presently the market forces are already operating at maximum efficiency
and it is our contention there is no waste because of the competitive
environment. This efficiency can be evaluated by comparing the bidding
process for new accounts; the number of participating bidders; and, the
leading edge technology being deployed by travel management companies in
order to attract new accounts.
The single source element of the eTravel initiative itself is a paradox
in that there are only four GDS systems and the bidding process of one
versus four, without fee, the retention would be virtually identical. However
a single source leaves the government with both security issues as well
as a non-evolving competitive technology environment. It is the TMCs or
travel management centers that are driving technology. If the government's
focus is solely on fulfillment centers, these innovative businesses will
disappear from the government market and by default the government
will be left with fulfillment centers whose employees don't offer the service
levels currently enjoyed by the government clients.
All business - small, medium and large, would be dramatically impacted
by any single source technology contracted directly by the government.
The result would be consolidation for efficiency to fulfillment centers,
with specially trained personnel. Traditional-type travel companies simply
could not and in some cases would not want to compete in this narrowly-focused
business environment, which emphasizes volume production of airline tickets.
Companies of all sizes have proven, in this technology evolution, that
technology itself is the great leveling component in competing for business,
but they must have this access to technology access so that they can compete
The government would suffer from a homogenous type of online booking sites
that would not necessarily meet the mission of its individual federal agencies.
This could be readily assessed from reviewing the current differing
objectives and requirements put forth in GSA task orders from government
agencies. The transference of the labor would not provide the efficiency
unless the well-qualified TMCs are still offering their services and the
The last concern with a single source is the area of security. Does
the government really want a single source for their travel planning and
execution? In today's environment, this should cause great concern. The
potential vulnerability of a single government travel system is dramatically
amplified in a single technology source, especially when one views DoD
The Federal Government should continue to pursue an end-to-end travel
management solution for federal agencies, recognizing that these federal
agencies currently have access to electronic travel reservation system
in place with the technology being provided by their TMCs, who drive the
evolution of technology.
In the spirit of fair play, and free and open competition, DoD has leveled
the travel management playing field for all size travel agencies and other
suppliers. Certification with basic standards allow all size travel suppliers/agencies
to compete in DTS. The recommendation would be that GSA adopt a standards
approach similar to the solution proposed by the Department of Defense.
These standards would include:
- Security issues
- Government fare access, inclusive of all government contract airlines
- Reponse time and reality factors
- Communication standards
- Profile integration
- Other value added features
- Interfacing expense system
The TMCs should play an integral role, like they do in the private sector,
by providing technology to the government travel programs administrated
by GSA, to maintain what has developed into an efficient and effective
travel management system for the government, and for its travelers.