The global financial crisis has put business travel into an embarrassing situation with expenditure cuts or reduction by many companies as a way to save costs. In this situation, it is necessary for travel service providers to consider how to re-plan and adjust their operations to meet increasing demand in the future.
There is no denying that today's business travel is still run in a traditional way. It is neither friendly to, nor aloof from, the Internet, and e-commerce has not been completely integrated into modern business travel operations. Many professionals believe that the marketing of business travel has nothing to do with the Internet and it is safe to maintain the original way of operation.
At present, the operational procedure for business travel goes like this: the company client raises a request, the supplier offers a price quotation, the two sign a contract, meeting or incentive travel, service-payment.
Travel agencies have long adopted this pattern for business travel. At the start of a service, a client needs to sign a long term agreement with a travel agency, commissioning the travel agency to provide them incentive travel services or organize events for them. The agency will arrange the itinerary for the client and get paid by the client on a monthly, quarterly, or six monthly basis. For business clients, the advantage of choosing a travel agency is that they can make use of the travel agency's resources to get discounted air tickets, hotel rooms and scenic spot entrance tickets to help control their budget. For travel agencies, a business traveler usually spends three times more than an ordinary tourist and this can bring them higher profits. However, not all travel agencies are qualified to offer business travel or incentive travel service. Only those with strong fund and talent resources can do this.
Since MICE clients are usually experienced travelers, they have higher expectations on service. When their expectations are not met, there will be disputes and the four weak points of the traditional operation pattern will be exposed.
1. Passive selling. The traditional operation pattern means that a client will first send their request to a travel agency: sometimes they will specify a destination for the latter to issue an itinerary and price quotation for them. This seemingly normal work procedure actually indicates passive selling and this kind of selling shows a lack of agression in the ever-competitive market.
2. There is no prototype of the travel product for the first-time client. Under the traditional sales pattern, there is no way to provide a complete, multi-angle and three-dimensional image of a travel product for clients to have a basic understanding of the product, hence there are likely to be more unexpected problems in the later stages of providing the service.
3. Slow to offering price quotations. Travel agencies usually won't have a precise idea of how they will provide an incentive travel product at the beginning of the negotiation with the client. They need to take time to consider their profit before issuing a price list to the clients. Under the current economic situation, companies need to control their costs. So it is very likely that some companies will cancel their incentive travel plans after failing to reach an agreement with a travel agency after the latter takes time and makes repeated alterations of the itinerary and adjustments to the cost. This will waste time for the travel agencies and lower the work efficiency of both sides.
4. Possible disputes on final payment. Clients with whom travel agencies have established long term relations do not usually pay travel agencies case by case. Instead, they often pay the travel agency periodically. Unlike other services, travel is a product that combines many tangible elements with intangible elements. After using the product, the client may be discontented with some charges, which is usually not for one cases, so the two sides may have disputes on the final settlement of the payment.
The problems listed above are caused by the traditional pattern of business travel. To solve these problems, the pattern needs to be improved by adding more new elements and regulating the service procedures, for example, producing a formal and automated model.
With the existing levels of e-commerce service it is difficult to realize automatic quotations for MICE services. The reason is that all the travel products are client based and the profit relies on the capability and skills of the coordinator. Air tickets and hotel room are fixed products, so their profit can be predicted, but there are a number of other factors affecting the profit of travel products, which mean that a varied and flexible operation is needed.
Any high-end business activity can be regarded as an innovation of the coordinator or a play directed by the main operators, which brings a different feeling to the clients, reaching or even exceeding their expectations. Because of its non-repeatability and innovation, it is quite hard to implement automatic quotations via e-commerce.
Therefore, at this stage, we can not totally rely on e-commerce to run business travel, but we can try and use e-commerce for some aspects of business travel.
1. Transforming selling style. On an e-commerce platform, travel agencies can better show their business travel advantages. They can show their strength and successful cases in the past by the means of text, graphics, and videos. In addition, they can use e-commerce to promote and sell their products.
2. Improving travel agencies' efficiency. Travel agencies can share air ticket and hotel systems with other companies, but it should consider making a pricing system (or so called single group budget system) on its own and a searchable database on major suppliers and products by making use of the existing system. As this involves a lot of work, it is impossible that all products can be included into the system. If travel agencies have a basic tool that helps them offer price quotations to clients, calculate their internal costs and profits and arrange events, with the commonly used content and conditions being directly written into the system so there are no major omissions, then this can greatly enhance their work efficiency.
3. Settlement. E-commerce platform can help optimize settlement lists and enable business clients to have a clear understanding of their costs.
Achieving MICE Programs With IT Approach
There are indeed many unfavorable factors in the traditional operation pattern which have put suppliers into a passive selling position. But how can IT help suppliers solve the problem of inefficiency and how can IT technology bring new vigor and fashion elements to the traditional travel industry and provide an extraordinary experience to clients? China Hospitality News interviewed Bach Liu, general manager of Shanghai Higher Expo Service Company, to find answers to these questions.
The Status Quo of MICE In China
Speaking of the status quo of Chinese MICE, Liu said that, first of all the whole industry is still in a consolidation phase. All basic elements for MICE are there, but there is not a clear and complete image of the industry; besides there are few professional MICE companies. Some travel companies, meeting service providers, advertisement companies and public relations companies have set up a MICE department based on their existing business, however these MICE departments are influenced by the original business of these companies.
Second, there are still problems with the traditional MICE operations. As MICE is quite new in China and still in the early stages of development, there is not a clear work flow and operation pattern, many things still need to be done or dealt with flexibly according to the actual situation. Due to the limit in human resources, material, and capability many services can not be made available in a perfect manner. Manual operation has the problem of being backward, inaccurate and not real-time. It often involves a lot of labor but causes repeated work. There is no way to accumulate knowledge and it is difficult to improve service quality and maintain consistent services.
Third, there are limited venues for MICE. Take Shanghai for example, it is difficult to find a venue for a MICE event of more than 1,000 people, and the arrangements for events are often not well done. Perhaps after the 2010 Shanghai Expo is over, the venue serving the World Expo will be a suitable site for large scale MICE events in the city.
Fourth, with China's economic development and the internationalization of enterprises, more companies will be aware of the importance of MICE and increase their budget for this sector or integrate related budgets to form a single fund for the sector.
The Advantages of IT Solutions
Through his work and study in the MICE industry, Liu and his team have developed an IT solution for MICE, which has brought a lot of surprising results to the clients. Liu says that their MICE solution is a combination of the most advanced and mature solutions of related industries and is developed based on constant communications and research with clients from different industries as well as the understanding of their features and demands. All their software can be freely combined according to the clients' demand and form a unique solution for a particular event. Through in-depth analysis of the service of MICE companies and their work flow, the software can ensure a tailor-made a solution to them. At present, their clients are mainly agencies with high volumes in Southeast Asia and Europe. And they have planned 200 different sets of software to facilitate an enhanced solution.
Get Customized Service Online
According to Liu, unlike traditional MICE operations, they will set up a dynamic website for each MICE event with all the related information, including the event schedule, a destination overview, scenic spots, and selected restaurants around the destination: all shown on the website so clients don't have to spend time searching for this information online. Liu says that each participant of event will be given a user name and password with which they can input their demands online, including dietary requirements, flight information, hotel room, and travel. The service departments can make the corresponding preparations based on the online statistics. This helps them save time and cost, increases their work efficiency, and improves their service accuracy and quality. For each work procedure, the company has prepared a corresponding software solution. With their unique hardware facilities, these solutions can bring a brand new experience and thoughtful service to each client involved.
E-settlement Simplifies Work Procedure
Liu says his company has a set of solutions to solve the problem of slow quotation, one of the major problems faced by traditional MICE suppliers. He states that his company has set up a database of all suppliers so client can choose a price quota from the database on their own. Besides, all the databases have been integrated into an online database to provide automatic e-settlement. All the data is real-time and feedback can be made in a timely way based on the Web. Everything can be done online.
Because some activities may have not achieved the desired results, there are usually disputes on final payment between the client and MICE supplier under the traditional MICE operation. In answering how their MICE solution can help solve this problem Liu explains that, first, with the IT solution the work procedures will be confirmed via computer programs. Second, it can record on site data via RFID and clearly restore the situation to generate a variety of assessment analysis report via three-dimensional charts, quantifying on-site service, assessing the effect through clear data, eliminating any unnecessary differences to effectively reduce the difference points. This is a technology-focused solution, so it can not completely solve the disputes on settlement.
MICE Operation Tends Towards Technology
Regarding the development trend of MICE operation, Liu says that first more technology items will be involved. More mature and advanced technology achievements are to be adopted for MICE in a cool and fashionable manner. The development of science and technology will touch upon the limits of imagination. Meanwhile, more and better solutions will bring bigger space for MICE as well as more service innovations.
Second, more details will be considered in MICE. Technology can help solve the problem of repeated procedures, confirmed procedures, and confirmed treatment via software and corresponding hardware. Software and hardware system provides data analysis and assessment, so the staff can concentrate on making judgments, decision making, and taking care of things that they did not have time and energy to do in the past.
Third, there will be more changes for MICE. IT software based solutions can turn over many original operation modes. Under the traditional modes, many good ideas were not realized due to the limit of the industry or cost. With further study on IT technology, many traditional practices can be reformed.