Corporate travel agents - the best deals for business travellers?

Corporate travel agents still claim to be able to find the best deals for business travellers, but the number of entrepreneurs still using them appears to be dwindling. Stuart Anderson reports.

Five years ago, a salesman colleague and I had to attend an exhibition in downtown Atlanta. My former employers, in their infinite wisdom, engaged a corporate travel agent to make the arrangements for us.

We were assured by them that the only room left in the entire city was a twin at the midtown Swisshotel, a 20 minute taxi-ride from the convention centre and a snip at about £200 a night. In a fit of pique (and horror at having to share a room with a salesman) I went online and immediately found a perfectly acceptable room for myself at less than half the price and just ten minutes' walk from the exhibition.

It was just as well that I had because, when we arrived, it transpired that the Swisshotel Room (which my less scrupulous colleague took) was a double, not a twin. The relationship between sales and editorial could have got rather too close for comfort....

Since then I have always booked everything involved in business trips directly, either online or over the phone. And I'm not the only one.

According to the Barclaycard Business Travel Survey, medium-sized businesses are most likely to abandon their travel agent in favour of the net. While 30 per cent of respondents from companies with a turnover of less than £250,000 said they booked the majority of their travel via an external agent, this figure drops to 20 per cent in the £250,000 to £1 million bracket, rising gradually to 40 per cent among £100 million-plus enterprises.

Unsurprisingly, travel management firms in the region claim this is often a false economy. When it comes to air travel, for instance, while low-cost carriers advertise all their fares on the web, the best deals on scheduled flights are not advertised even by discount travel websites, according to Gary McLeod, director of Leeds agency Traveleads.

Airlines pay the four global travel distribution systems (Amadeus, Galileo, Sabre and Worldspan) to host their fares, access to which is then sold on to agents and other distributions. Discount travel websites use automated trackers to source fare information from these GDSs.

However, according to McLeod, if airlines decide at the last minute to cut their prices to fill a particular flight, they will often bypass the GDSs, which they have to pay to make alterations, just listing the new fares on their own websites and with industry consolidators. Agents have access to these, but automated web crawlers do not. "Wholesale fares don't go onto the GDSs either," he continues. "It's quite a messy distribution chain."

He also points out that, if plans change, as long as the agent has not yet issued the tickets it will not cost the client anything - but if booked directly through a website a fee would be payable. And, once the client has set off, a good agent can easily earn their fee (typically between five and seven per cent), he continues.

"We work for a certain tennis coach who recently had to stay on longer than expected because the player he works for got through to the next round unexpectedly [not a certain surly young Scot by any chance? - ed]. He called the airline, Delta, direct and they said he would need to be issued with a whole new ticket at a cost of $554. He then called us and we found out that his existing ticket could actually be changed to a later flight for an alteration fee of just $50."

When it comes to hotel rooms McLeod, whose business concentrates on SME clients with annual travel budgets ranging from £10,000 to £2.5 million, acknowledges that, from an agent's point of view, it is harder to compete with the likes of Laterooms.com and hotels' own websites. However, he continues, an agent is able to haggle with hotels in a way that you can't when booking directly over the internet.

According to Tony Stone, managing director of travel management firm Business Travel Plus, along with the 24-hour support an agent can provide, another key advantage for the business traveller of using services such as his is the ability to put together complex trips involving multiple flights and hotel stays with minimum fuss and the provision of management information.

"If you have 20 staff all booking their own travel with their own credit cards, that can be hard to keep track of, while an agent can reconcile all your billing into one invoice. We can also tell you where all of your staff are at any one time - something that can be an issue for companies who have a lot of people in the field."

On the whole, and it doesn't sound as if his teeth are gritted too tightly, Stone says that the rise of the internet has been a good thing for the travel industry, having brought prices down and enabled agents (as well as internet-only distributors), to offer services like online check-ins and the ability to view and amend itineraries remotely.

He admits, though, that a number of services now offered by agents, such as management information reporting and the "duty of care" to provide 24-hour support for clients, probably only came about as a result of changes to the competitive landscape in the travel industry brought about by the rise of internet distributors. For all the agents' protestations, however, their message doesn't seem to have got through to many of the region's businesses.

Helen Lawson is export manager at Ritchey-ID, a manufacturer of electronic identification tags based in Masham, near Ripon. She does most of the company's gadding about, making on average one trip a month (except during the quiet summer period) to a variety of European destinations.

"I book it all myself, mostly through websites," she says. "Most of the places I visit are quite easily reached by cheap flights. Jet2 are by far the best: you're allocated a seat and they just seem a little bit nicer than the other budget airlines."

What of the lack of flexibility over itineraries when booking direct of which travel agents warn? "With cheap flights I suppose you just lose it if you have to cancel - but I've never had to do that yet." Others in the company, she continues, are left to make their own arrangements when travelling, for instance, to exhibitions on the continent. The company does have a preferred travel agent which, she says, some of these staff would be likely to use.

Lawson is, though, a little sceptical about the flexibility offered by agents: "Once our MD had to cancel a flight and what we actually got was a token from the travel agent. I don't know if it ever got used." She does, though, concede that if she was ever to book a long-haul business trip she would probably use an agent.

When it comes to hotels, meanwhile, Lawson again likes to book her own "good three star" accommodation. Because she travels alone, she says she likes to use the same hotels, or chains, in any given country in order to make sure she has both the facilities and security she wants. In Spain, for instance, she always uses NS Group Hotels and in France she tries to use Ibis whenever possible. Again, though, she admits that agents can occasionally have their uses: "What is really painful is if you are going to a particular area when there is a big event on and all the hotels are booked up - then an agent might be able to help."

Someone who never bothers with agents, even for complex long-distance trips, is Tony Caldeira. He runs the eponymous £9 million cushion business with operations in the UK and Hangzhou, China - and a New York office planned for 2007. Caldeira endures around 50 flights per year himself, while his 15-strong management team take another 100-or-so between them. All of these are booked on the internet by his PA Karen Donnelly.

"She's become a bit of a specialist and is registered with all the loyalty schemes," Caldeira explains. "I think it's better if you can have one person to make travel arrangements for everyone in the company. Then there is consistency across the team and you don't have one person going off and booking first class tickets - we try to always fly economy. Plus it gets done more quickly because she knows all the sites."

Caldeira has been in business for 15 years but it has only involved significant amounts of travel for the past five - coincidentally beginning at the same time as internet distribution really burst onto the scene. He admits that the lack of flexibility resulting from booking online rather than through an agent can sometimes be a pain when his plans change at the last minute. However, for his staff it is a different matter: "It's good because it means they have to manage their time better."

Logistik, the international events company founded by Dirk Mischendahl, takes another approach to booking hotel rooms. It has, for the past couple of years, had its own ABTA registration. "We negotiate deals with hotels ourselves," says general manager Lisa Prudhoe. "We do everything internally including venues for clients. We have also negotiated with GNER - less successfully," she admits ruefully.

Over the last year Prudhoe estimates the company has spent between £100,000 and £150,000 on travel. Is the internal ABTA registration, with deals negotiated either by Prudhoe, the events manager or the office manager, the most efficient way of spending this? "There are different ways that it may or may not be cost-effective," she concedes. "It certainly is for our clients, who don't have to go through a travel booker." Going forward, Logisitik plans to employ a dedicated individual to manage the travel operation, she continues.

When it comes to buying flights, the business hopes in future to cut its own deals with airlines but for now it either employs a local agent to make block bookings or, "if it's just the odd flight", makes its own arrangements over the internet. In a manner of speaking Logistik's plans to become its own full-service travel agency could be seen as a vote of confidence in agents over the internet - but it's one that is highly unlikely to be welcomed on the high street.

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