National Business Travel Association Policy Statement Addresses Recent Actions in the Business Travel Marketplace
The Issue: Recent market activities threaten competition in the business travel marketplace.
NBTA believes that policymakers should pay close attention to unreasonable and anticompetitive market activity that threatens to unfairly increase costs on the business travel buyer.
Viewed separately, these issues may seem unrelated. But when viewed wholly, they have consequences that could greatly curtail travel buyers’ ability to manage travel effectively, severely impact the future cost of business travel, and inhibit healthy competition and innovation in the marketplace.
NBTA has four primary concerns:
1. “Direct Connects” – Airline mandated “direct connects” to bypass the existing global distribution systems will result in a significant increase in capital expenditure that purchasers of business travel will ultimately bear. Companies that rely on information to negotiate for and maintain airline discount programs will have a difficult time continuing to track activity and enforce travel policy.
Bottom Line: The current system for business travel procurement isn’t perfect – but it is marked by transparency, access and competition. Any changes to this system must continue to provide business travel purchasers with the information they need to make informed travel investment decisions. NBTA calls on all airlines with an interest in the business travel market to ensure their fares are widely available to buyers through all commonly-used online purchasing channels.
2. Interchange Fees and Supplier Payments – Travel buyers understand the need to pay a reasonable and proportional cost for use of payment cards. However, some suppliers are attempting to reallocate credit card costs they should be responsible for paying themselves to intermediaries – specifically, travel management firms and travel agencies. This harms all market participants and creates an additional financial burden for business travel buyers.
Bottom Line: Suppliers that are passing through credit card fees weigh down business travel buyers with higher costs in exchange for no added value – putting unnecessary stress on the recovery of the business travel industry.
3. Access to Real-Time Airfare Information –The proposed Google-ITA transaction should create cause for government regulator concern. This transaction could endanger travel buyer access to consistent, real-time airfare information wherever airline inventory is sold.
Bottom Line: Federal regulators must safeguard consumer welfare by ensuring markets remain competitive if this transaction is to be allowed. Otherwise, business buyers could experience an artificial increase in costs.
4. Customer Privacy – Data privacy is of the utmost concern of business travelers and employers that have worked diligently to protect employees’ online identities. However the proposed Google-ITA transaction may lead to unforeseen uses of traveler data.
Bottom Line: When considering any future mergers or business practices in travel, government regulators must seriously weigh the potential of search companies’ access to customer data and the possible use of that information, without customer and employer permission, in the pursuit of profit.
Commenting on these concerns, NBTA Executive Director and COO Michael W. McCormick said, “As the global voice of the business travel buyer, NBTA strongly supports market forces that drive innovation and increase competition. We are focused on ensuring that business travel buyers and the organizations they represent do not ultimately foot the bill for proposals that block transparent pricing, limit competition and unfairly raise costs.”
