Essay on Online Booking

Submitted By nickmalhotra91
Words: 4262
Pages: 18

1. Online booking tools bring proven benefits when implementation is tailored to each company’s specific context.
To reap the full benefits of online booking, companies require a tailored strategy and thorough implementation plan. Online booking tools (OBTs) are used increasingly by companies wishing to minimize costs while providing convenient booking features for travelers. Many factors influence online adoption, from the macro-economic context to organizational culture, but high adoption rates are possible, particularly when a comprehensive implementation strategy is implemented. Companies also need to carefully consider the trade-offs involved in using a single OBT or best-in-market OBTs regionally or locally, as well as whether to source directly or use reseller agreements.

Benefits of online booking
When implemented in the right way, corporate online booking tools enable companies to generate significant savings while offering travelers convenient service features. This CWT research confirms a number of benefits:

Lower transaction costs. Transaction costs typically represent 3-5 percent of total travel spend. Within this budget, simple, touchless online transactions generally cost half as much to process as manual offline bookings, while the cost of assisted bookings comes about halfway between online and offline

Figure 5: Transaction costs are significantly lower for online bookings

High case Low case

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Source: CWT Travel Management Institute Based on CWT client transactions for North America


transactions. In some cases where assistance is required more than once, however, the cost may be higher than for offline bookings if per-touch charges are applied, given that companies must also pay an OBT fee.

Travel managers rank booking cost optimization top of the list of factors driving online adoption, followed by service features that enhance the traveler experience (24/7 availability and ease of booking), as shown in Figure 6.

Figure 6: Travel managers say optimized booking costs are the main driver of online usage

Factors driving online usage in order of importance
Booking cost optimization 24/7 availability Ease of booking Increased compliance with travel policy Speed of booking Standardization of travel management across regions 0 1 8 7 10 14 47 20 21 15 15 22 30 11 17 25 21 19 12 13 7 10 12 36 25 17 16 14 80 16 16 16 6 39 23 12 14 5 8

Average ranking 2.5 3.0 3.4 3.5 4.0 4.6 100

40 60 Respondents (%)

Least important 6
Source: CWT Travel Management Institute Based on a survey of travel managers (103 responses)

Most important 4 3




Lower average ticket price (ATP). Previous in-depth CWT research4 indicates that the ticket price is on average 5 percent lower when travelers use online booking tools instead of contacting a travel counselor, and savings can sometimes reach 15 percent from combined savings on airfares and booking fees. In the current survey, travel managers say the average air ticket price paid through online booking tools is

7 percent lower on average, while close to a third of respondents (or 45 percent when excluding “don’t know” responses) believe it is more than 8 percent lower. An analysis of transaction data for a global company’s top 15 city pairs used by its global headquarters in Paris shows a reduction of 6 percent in ATP. (See Figures 7-8.)

Figure 7: Travel managers say online booking reduces the average air ticket price by 7 percent on average
Estimated savings on airfares through online booking Average: 6.7%

Travel managers (%) 40





0 No savings


Don't know

Source: CWT Travel Management Institute. Based on a survey of travel managers (112 responses)


Toward Excellence in Online Booking, CWT Travel Management Institute (2006)


Figure 8: The average air ticket