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back to index backGLOBALtalk December,  2014


Latin American Travel Management Challenged By Data Deficiencies

While Latin America is united by two common languages, Spanish and Portuguese, HRG Brazil's business development director Eduardo Murad during an online education session hosted in September by the Association of Corporate Travel Executives emphasized that it remains a vast region with some daunting challenges, ranging from cultural diversity to data collection.   

According to Murad, there are a number of reasons why travel managers in Latin America find it difficult to obtain quality data. For one, content from many low-cost carriers and some mainline carriers is not available in the global distribution systems typically used by travel agencies.

"When [Brazilian low-cost carrier] Gol came into the market, it came in running on its own website so travel agents had to book outside the GDS for Gol," Murad explained.

"After [that], Tam started to run the same way. We have about 85 percent of the national and domestic content out of the GDS, as Tam and Gol are the major players."

Murad said that the situation is "worse" for lodging, as the majority of hotels in the region are not associated with global or regional chains. Many smaller independent hotels in the region also don't have the funds to invest in technology needed to add their content to the GDSs, he added. The situation forces travel managers to rely on agencies to capture all hotel and card data. "This presents one of the biggest issues regarding data collection and data analysis," he concluded.

"Our biggest challenge is to get quality data and integrated data," echoed Carla Blotto, who handles travel and meetings in Brazil for global agricultural company Bunge.

Unlike regions with more technologically advanced infrastructure,—like the United States or Europe, which have more sophisticated travel management practices and rely on credit card data as a primary data source—Latin America has low usage of credit cards and automated expense management tools. For this reason, Murad explained that Latin American countries primarily tend to rely on TMC data.

While international and local issuers like American Express, Brazil's Bradesco Bank and other major banks have local payment solutions, ghost cards are the payment of choice in Latin America when it comes to air transactions, with about 95 percent of them paid using ghost cards, according to Murad.

For lodging and car, invoicing continues to be the primary form of payment. While Murad said there are "some" ghost-card solutions for hotels, travel managers still are challenged by data consolidation.

Although international car rental companies operate in the region, they're not always willing to do business in the more remote places where many manufacturers or chemical companies have locations, according to Murad.   

"It seems hotel and car are always an issue," he said. "We're a bit late on the technology and procedures in the region."

Due to a lack of automated expense tool adoption in the region, keeping track of other travel and entertainment costs (like meals and taxis) also is challenging. The common practice is to issue cash advances or reimburse travelers, according to Murad. "There's a black market in some places where a taxi gives you a blank receipt so [the traveler] puts whatever amount [he or she] wants and makes money on that," he explained.

As travel management in the region still is evolving, the role and function of a travel manager is not always clearly defined. "The same person that deals with supplier relations or is the buyer for furniture is sometimes also purchasing travel," Murad said. "Because they're not controlling the right spend or don't know the details of that, they're not doing the best negotiations."

Innovation

The lack of quality data and content available in GDSs has sparked some innovation in Latin America. Local companies, including some airlines for example, develop their own multi-content search tools. Murad admits, however, there still is some leakage.

"Those tools started as front-office tools for travel agencies and are now good online booking tools in the market," he said.

Brazil in 2013 had the most smartphone users in Latin America, 30.3 million, and had a 36 percent smartphone user growth rate, second to Mexico's 48.2 percent growth, according to an eMarketer study released in January 2014. With more travelers also using mobile travel apps, Murad said corporations have to allow their travelers to decide which apps to use and now are worried about IT security issues.

Accounting For Culture

Because travel management technology still is evolving, Murad suggested picking good travel partners based on a corporation's particular travel type and destinations. He said travel management professionals should stay aware of the local suppliers, as some global partners will not be as effective in certain markets.

Meanwhile, Murad emphasized that doing business effectively in Latin America means understanding the importance of interpersonal relationships. Face-to-face communication generally is preferred, and necessary to forming long-term business relationships.

"You can present the best business case," Murad said, "but if you can't convince the person that they can trust you on first impression, that makes a difference."

Source: BusinessTravelNews.com - GAI




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