Redfern Travel: the big interview part II

Public Sector Travel | Jan 25, 2012 | Comments 0

In this second part of our exclusive interview with Redfern Travel, the winning bidder of Lot 2 (domestic) in the recent central government travel management tender, we see how the Yorkshire-based travel management company will use its well-regarded online booking tool suite to deliver low-cost, high-value services as well as how it will manage relationships with our travel suppliers.

At Public Sector Travel, we are privileged to have been granted access to Redfern Travel managing director Ian Wotton to find out what the company has planned. We have asked Wotton a number of incisive questions about its success in winning the tender and its strategy.

You can still read the first part of this interview, which looks at the company’s background, its success in the tender and its plans for growth.

PST: Much has been made of the excellence of your online product. Can you tell us where and how offline requests will be managed?

Bradford of course!

I’d love to share the information in the tender with you, but it is of course confidential. What I can say however is that these government customers have made massive commitment to moving their transactional processes to online booking. Some do already conduct a lot of transactions online, particularly rail, but more impressive is their stated intention to achieve online adoption rates well over 90% across the board.

I guess it is all about proper, prior preparation. Our track record with these customers consistently shows that the effort we put into implementation with massive commitment to user training quickly pays off with high online adoptions from day one. As always, we will be totally focussed on ensuring that, as each new customer goes live, they are immediately over 90% online for rail and over 80% for hotel and air.

Historically, online adoption for hotel bookings seems to have been hard for some of these customers and feedback tells us that this has been because of technical issues such as single sign-on to booking tools, poor presentation of available Government and/or preferred supplier rates and content issues such as limited availability of Premier Inn, Travelodge and LateRooms. Our technological solutions do not have these limitations.

From your recent articles, you appear to have a thorough grasp of the scale of the transactions and their face value. If you work the numbers through, you will see that the scale of the offline transactions is nowhere near as large as people have been guessing and the majority are around hotels.

PST: By all accounts your online product tRIPS is excellent. Can you describe to our readers how it differs from other self-booking tools on the market?

That’s a difficult one and I don’t want to upset anyone!

We obviously continually review all systems in the market and the system behind tRIPS is not unique to Redfern, it is commercially available to all from Micros. Of course, we have invested in the development of the system in response to the key functionality that customers told us is of vital importance including:
• Single sign on.
• Simple password management and resetting.
• Content – not limited to GDS, but able to incorporate any API or XML feed from any aggregator or supplier. Hence there are direct feeds to LateRooms, Premier Inn, aggregators like Conferma, multi-GDS, web airlines and so on. Technically there is no limit to what content can be delivered to the system’s supplier gateway and the customer experience is not compromised – what they see on the screen could be from any channel.
• Shopping basket.
• A logic engine which delivers:
o simultaneous multi-modal searches,
o holistic cost of travel (including man-hour, emission offset costs etc)
o intelligent packaging (eg bundling of rail and hotel to offer alternative off-peak combinations),
o splitting return rail and air tickets into one-way combinations,
o breaking return rail tickets to take advantage of off-peak rates en-route.
• Extensive profile management at many levels, eg Corporation, Administrator, Travel Manager, Booker and Traveller.
• Seamless integration to mid-office, back-office and MI.
• Online help and live support.

PST: Can you share how supplier content to be loaded onto your tool will be chosen? Will you be creating a new Government Hotel Programme and/or Government Air Programme for all central government departments or will stakeholders be able to nominate their preferred suppliers?

As previously mentioned, the Supplier Gateway within tRIPS can accept content from any supplier. All that the supplier needs is to either participate with a GDS or have a decent API or XML. Either way, their content can be incorporated so tRIPS will scan their inventory during any booking process. It is so flexible, we have even had it popping up restaurant availability at destination cities.

You are well informed – in a previous article, you have already correctly reported that as part of the contract, we have to create and manage an hotel programme for central government which is across Lot 1 and Lot 2. The winners of Lot 1 – HRG – have to reciprocate with an air programme.

Of course there is already a functioning Government Hotel Programme (GHP) and many of our customers have their own preferred suppliers alongside this. Naturally all of these rates are available and managed via tRIPS. It is interesting to note that over 85% of bookings made through tRIPS are at rates lower than GHP. Of further interest is that nearly 50% of our customers’ bookings are at chains like Premier Inn and Travelodge (who pay no commission) or via LateRooms inventory which do tend to be at the top in tRIPS when availability is displayed in ascending price order.

We have been managing preferred supplier programmes for our customers for many years and we have some innovative ideas and processes around a new Hotel Programme which will bring instant rate reductions for Central Government Customers and much better yield management for hoteliers. We are already putting in place new arrangements with hoteliers for this contract.

PST: This contract will have a high proportion of hotel and rail transactions, both of which still pay commission. Will these commissions be shared centrally or on a department-by-department basis?

Don’t forget the airline sales and marketing agreements, hotel over-ride commissions and GDS sector payments as well!

Seriously though, Redfern is not interested in supplier commissions – we believe they compromise our position as acting on behalf of the customer in the supplier-GDS-TMC-customer chain. Therefore, we pass them all back to our customers and have done so for many years. In fact we wish they would all go to net rates, thereby reducing ticket prices and hotel rates to all of our customers – there is a lot of money spent and wasted on administering commission schemes.

Wherever possible, we refund commissions at the point of sale. In the case of retrospective commissions, these are refunded when we receive them from the suppliers.

We can refund centrally, or customer by customer and indeed to individual cost centres within a customer if that is required.

PST: What arrangements are you making for meeting your new customers and training their bookers in the use of your tool?

I have already mentioned that the process of customer migration has already started. Our largest on-boarding to date involved the migration of a customer who was 100% offline to full online booking on day one. That project involved setting up 12,000 traveller profiles, over 500 corporate cost centres and business streams and training just under 800 “super-users” on how to use our systems. It took us a month and included floor-walking as each of the customer’s main sites went live.

We’re really looking forward to getting involved with our new customers and helping them to really make best use of the online booking process to improve their efficiencies, buy cheaper and drive down their process costs. Our MI will help them accurately quantify cost reductions and we are looking forward to sharing the results in due course.

PST: Can you describe what you will be doing to enhance the traveller experience? For example, will there be a traveller tracking programme or mobile alerts?

From the conversations we have been having with the new customers, tRIPS brings many improvements to the booking experience and some of these have been mentioned earlier – single sign-on, simultaneous multi-modal bookings and intelligent packaging always seem to be a “breath of fresh air” for new customers whilst the holistic cost of travel at point of sale makes the booking experience far more educated than previously and yes, traveller tracking has been an inclusive part of our offering for many years.

PST: There has been some very public criticism of this award not on the basis of your quality but on the size of your company’s turnover in relation to the value of the contract. How would you reply to this criticism?

Of course we have read the comments and observations which have been published and had a little chuckle to ourselves to be honest.

In assessing our ability to perform and do the job, people need to decide what is the important measurement here. The exact numbers projected for this lot are of course confidential and will be influenced by travel policy and departmental needs, but the headline numbers in the press seem to be £110m to £120m of annual turnover across about 1.5m transactions.

The reality is that the £110-£120m is the “wash through” value of the travel arrangements – what you often refer to as the total cost of travel – and includes fees, taxes, any commission refunds, any GDS sector refunds, ticketing surcharges as well as ticket price and room price paid. Redfern already has a considerable percentage of this business because we already have supply contracts with a number of the customers included in Lot 2 and it is the wash through value of the NEW business which is relevant if this is the chosen measure. But even so, yes, these numbers look large in comparison to our audited turnover figures which you have kindly published recently.

However, it’s not the accurate story – the ticket price and room rate paid makes up the vast majority of these large numbers and has no value for a company like Redfern where there is no dependence on commission – the money just washes through us from customer to supplier.

The key number in assessing our ability to perform is of course the number of NEW transactions being administered, these are where Redfern adds value and earns its fees. This is the volume of work being processed – and this number will represent about 50% to 55% of our business once it is all “on board”. A ratio that will continue to decrease as it is diluted by our burgeoning wider public sector and private sector customers.

PST: Can you describe the degree of management information that tRIPS will be providing?

Phew – not enough space! Basically everything shown to a customer in tRIPS (and we use also the system internally) is captured and can be included in the MI. We have a clever bit of technology which meshes bookings and invoiced data to ensure our customers’ MI reconciles exactly to what they are invoiced.

PST: British taxpayers are understandably keen to get good value from Government suppliers. Will you be delivering that?

Absolutely. Price and achieving value for money was a key part of our submission and will be at the focus of the delivery of our services. There will be instant savings on fees in comparison to what was previously paid and customers will find their average costs per mile travelled will fall as tRIPS delivers more intelligent ticketing and packaging options to them at point of sale. We also look forward to a steady reduction in average hotel rates per city as customers enjoy transparent net rates and benefit from dynamic pricing.

You can still see the first half of this interview by clicking here.