New Models for Business Travel Management

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• New Models for Business Travel Management
• Chicago, IL
• February 4, 2004

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• Greeley Koch
• President-elect
• ACTE

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• Peter Fellinger
• Regional Sales Manager,
• US Midwest
• Lufthansa

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Jeff Katz Chairman, President CEO

• The New Vertical Model versus
• Legacy Solutions
• ACTE Regional Forum - Chicago
• February 4, 2004

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Whats Happening In The Marketplace

• Business travelers continue to revolt against
  high prices
• Suppliers press for even lower distribution costs
• Travel budgets further scrutinized as suppliers
  diminish corporate discounts
• Sourcing increasingly directs procurement process
• Online bookings are soaring- 35 increase 2003
  vs. 2002 (Comcast)

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What Corporate Travel Buyers Are Telling Us

• Business travelers routinely check Internet
  agencies to find the best prices
• Corporate fares/rates often not the lowest
• Internet out of program purchases are
  increasing
• Rogue travelers challenging overall credibility
  of corporate travel programs

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Where Companies Are Today

• Corporate leadership demanding simplified
  low-cost solutions
• Companies aware of cost savings associated with
  Internet solutions
• Confusion between benefits of legacy booking
  tools versus Internet agency solutions

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Mega Agency Configuration

• On-site agents or call center
• Separate fulfillment center for interactive
  transactions
• Separate center for after-hour services
• Agent and self bookings tools are GDS-based
• Issues with PNR and Profile Synchronization
• Different service contact for different reasons
• Cost plus with commissions returned

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Adoption Challenges With Legacy Online Tools

• Unfamiliar tools impede use
• Large company adoption lingers below 20
• Difficult for senior leadership to implement
  acceptable non-reimbursement policies
• Company budgets blown by artificially inflated
  fees for telephone bookings
• Cutting off telephones to force use of legacy
  tools often results in employee lash-backs

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Mega Agency Transactions Rarely Touchless

• Legacy online booking tools are cumbersome
• Travelers cant find the lowest prices in
  GDS-based system
• Counselor intervention still necessary to fulfill
  certain requests

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Difficult to Find Savings

• Legacy Tools require training
• Bookings take more time than phoning an agent
• Complex servicing arrangements
• Complicated fee structure with menu-based pricing

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Business Travelers Want to Book Online

• Top three travel sites among 10 largest U.S.
  travel agencies
• Consumers save 20 on ticket price when they book
  online (PhoCusWright)
• Even more for hotels
• Traditional travel agents do not find the lowest
  price 49 of the time (Consumer Reports)

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What The New Vertical Offers

• One low price for online transactions
• One low price for counselor-assisted transactions
• Known brands accelerate adoption
• Restores credibility with rogue travelers
• Seamless vendor management
• Widespread corporate acceptance

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Why Internet Service is Better

• Better agent training and tools
• Customer Care
• Orbitz pioneered the Care program, covering 1.5
  million travelers a month
• More than any other airline or travel agent

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Orbitz Was Created To Be The Low Cost Producer

• Orbitz business model differs from mega-agency
  model
• Allows Orbitz to provide services to corporations
  at lowest possible cost
• Technology innovation - Linux over Microsoft and
  PCs over mainframes
• Lower distribution costs allow suppliers to sell
  cheapest inventory on Orbitz

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Orbitz Supplier Link Technology Drives Down
Process Costs
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Orbitz is First Online Agency to Launch a
Corporate Program

• Technology is same as embraced by leisure
  travelers
• Fare transparency
• Superior search technology
• Lowest total program cost
• Track Internet purchases

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Low Cost Does Not Mean Low Capability

• Orbitz Meeting Services partners with David Green
  Interactive
• Most advanced data reporting powered by Prism
• Complete set of policy tools
• Ability to book small group travel (up to 9
  passengers)

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What You Get for a Few Bucks with Orbitz for
Business

• Up to 75 lower transaction costs
• Around-the-clock convenience
• No program implementation fee
• Integration of all fares/rates for air, car and
  hotel bookings
• Three times more valid itineraries, 20 more
  airline choices

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But Wait, theres more

• Executive desks and VIP traveler support
• Travel Arranger functionality
• Exception codes ensure lowest fare/rate booked or
  explained
• Preferred supplier filtering
• Daily data feeds to corporate travel managers
• The most powerful low-fare search

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Is the New Vertical Right For Your Company?

• Eager Adopters
• Change their business
• Take risks
• Get maximum value
• Happy compromisers
• Know nothing is perfect
• Save the easy money
• Cynical Majority
• Wait for the global solution thats just right

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Todays Choice is Simple

• A brand known for online travel
• Or,
• A brand known for offline travel

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More and More Companies Realizing Benefits

• Approximately 4 billion in unmanaged corporate
  already spent online
• Companies with 10 to 10,000 employees, spending
  between 50K and 50M annually
• Mega-sized accounts cutting over at rapid pace
• Thousands of companies have moved and are moving

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More Reasons to Accelerate Your Decision

• GDS deregulation means not all suppliers full
  content will be in all systems
• Agencies and clients have relied on GDS
  incentives to offset costs price increases on
  the horizon?
• More fees and complexity to an already archaic
  system

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What Are You Waiting For?

• A Happy Compromise means
• You are saving money for your company
• Your travelers are getting what they want faster,
  with better service than before
• Better a Happy Compromise.....than a broken
  system with unhappy travelers and managers.