Travel companies are exploiting regulatory liberalization, cheaper communications and a general shrinkage of the globe to maintain or improve service and cut costs. For travel management companies, opportunities include the shipment of contact center jobs to such locations as Costa Rica, India and the Philippines, as well as the creation of regional centers using multiple languages to service multinational corporations.

One component of a recent deal to consolidate nearly all of Armonk, N.Y.-based IBM's global card and travel needs with American Express involves handling IBM travelers from a pan-European Amex center in Nice. Other recent developments include American Express' movement of standard 24-hour operations to the Philippines, TQ3 Travel Solutions' establishment of a four-language, six-nation call center near Brussels, the expansion in India and Panama of operations by Rosenbluth International subsidiary Upstream and the impending opening of a regional Carlson Wagonlit Travel center in Poland.

Travel management companies clearly are trying to slash labor expenses, presumably without reducing service quality. American Express' Travel Related Services division cut 15 percent of its workforce—or more than 11,000 jobs—between the beginning of 2001 and 2003.

"At TRS, the most significant reductions occurred within our Corporate Travel business," American Express chairman and CEO Ken Chenault said in remarks prepared for a financial presentation last week. CFO Gary Crittenden said Amex, during the fourth quarter, "geared up for the movement of additional jobs to a service site in India" as part of an effort "to optimize the cost of our infrastructure around the world by moving jobs to low-cost wage environments. Those actually don't eliminate people, so the headcount stays the same, even though the cost to produce actually goes down." The TRS division earned record profits for the company both in the fourth quarter and for the year 2002.

An Amex spokesperson said she was aware of only one corporate travel service that is moving offshore in this fashion, Amex's basic Emergency Travel Service, which is in the midst of a six-month transition to the Philippines from Houston. "We have operations still in the Detroit area that do the bulk of our ETS support, including the gold-level service," she said.

Through a Mumbai, India-based joint venture in which it holds a 50 percent stake, Rosenbluth's Upstream is drawing a college-educated workforce that costs it "anywhere from 30 percent to 50 percent less," depending on many variables, said vice president of sales, marketing and client services Joe Terrion.

The center, which Terrion said will expand from 100 to more than 500 seats, began with support from Upstream client Orbitz. Reflecting the large degree of caution with which the industry is approaching offshore customer support, however, Orbitz for now is servicing only e-mail contacts from India.

Carlson Wagonlit Travel had curtailed aggressive call center plans laid out by a prior management (BTN, May 1, 2000), but the company said by the end of this quarter it will open a pan-European center in Poland. A CWT office in Belgium also serves the Netherlands and Luxembourg.

"We have become more flexible in general," said Tyler Lyman, CWT vice president of operations in North America. "There have not been a lot of successes with pan-European centers, but the evolution of self-service reservations and some recent changes in reporting procedures are making it easier for GDSs to issue cross-border tickets." Lyman said a little more than 50 percent of Carlson Wagonlit Travel's volume is handled through onsite offices.

Sources said Amex is gathering client feedback on the idea of moving additional corporate services offshore. According to Terrion, Rosenbluth is "looking to begin testing the use of an offshore solution for corporate travel." A spokesperson for WorldTravel BTI, however, said, "At this time we are not comfortable with moving our customer-service centers offshore, though Canada is one possible low-cost option that we are exploring. We feel that some of the foreign call centers are not as far along as we would want them to be to be able to service our clients. We continue to investigate other countries as they become more capable of handling our customer service needs."

Proponents agree that the export of customer service functions requires careful consideration. "I think offshore solutions are an important part of the future and I suspect it only makes sense for corporate travel to go in that direction, but we feel that has to be a very controlled environment where you have ownership, and operational oversight, connected to systems in the United States," Terrion said.

One issue is that business travelers expect telephone or e-mail support agents to be knowledgeable about national and even local geography.

"Say you're on the phone and you live in Durango, Colo., you want to get to New York and you have a choice of United over Denver, American over DFW or Northwest over Minneapolis," posited Scott Guerrero, vice president of consulting with TQ3 Maritz Travel Solutions in Fenton, Mo. "That consultant in Mumbai needs to understand the geography, the fare structures, etc. It's just a complicated sale."

"I would think the challenges are less cultural or language-related, but more about the knowledge," said Sam Andraos, president of Aim International Management in Toronto. "In Canada, we are doing very well in terms of having U.S. travelers handled by a team in Montreal or Winnipeg, but I remember when that trend started six or seven years ago, U.S. travelers were saying, 'The girl doesn't even know Boulder is 30 minutes from Denver.' "

Terrion said Upstream is addressing that challenge by creating "similar or the same training in India as in the United States, and it's not unusual for us to bring agents here from India and train them on an account for six to eight weeks and then they head back to train others," he said, speaking from Philadelphia. "If people are not trained, it's a disaster."

With training, however, agents in places like India can be more helpful than those in the Western world where, one multinational buyer noted, "Serving people is not the prestigious job it used to be, and so we don't have people coming into the industry. We are interested because the foreign agents are so helpful."

Upstream's Indian agents also participate in an "accent-neutralization program" to make their English more palatable to American ears.

"The goal is to take out the accent," Terrion said. "After that, travelers are more likely to notice a Southern accent than an Indian one."

Terrion said he had seen no research indicating that North American travelers are put off by an ethnic accent.

"Ethnicity and race I think are all to do with it," asserted Colin Brain, chairman and CEO of Management Solutions Ltd. in London. "Let's face it, people around the world are so prejudiced."

"The world is getting global, whether we like it or not," said Andraos. "And it's been that way for years. If we haven't learned the culture of other countries by now, then I guess we haven't learned our lesson."

According to Guerrero, a customer using the multinational center TQ3 opened in Belgium last month said, "A Dane answering the phone in English from Belgium was slightly surreal, but that just made it more interesting."

Guerrero said agents hired for the center near Brussels must speak both English and a second European language. In less developed areas of the world, he said, "I think the non-verbal support will move offshore before the verbal. Still, the accent is a minor issue. People can be coached for the accent and some companies have done that. It's mainly the knowledge."

It's also the systems, he said. One driver behind the growth in pan-European servicing is the regionalization—if not globalization—of corporate travel policies and practices.

"As long as policies are set up accurately and all negotiated fares for air, hotel and car are accurate, it doesn't matter where the location is," said Carol Salcito, president of Norwalk, Conn.-based Management Alternatives. "You need those basics and also intelligent people to read the basics."

"The wave of the future for awhile has been pan-European," said Judy Bauer, director of global travel management at Pharmacia Corp. in Peapack, N.J. "It's all about supporting technology, but the problem is service levels within the same agency differ from country to country."

Guerrero said the objective for the Belgian operation, a first of its kind for TQ3, is "not so much about labor costs, although you can get some economies. The primary motive is to deliver consistent implementation of travel policy and preferred suppliers." TQ3 also is setting up a regional center in Costa Rica to serve several Central American countries. The regional contact center concept continues to grow since at least 1998, when one of the early pioneers, Rosenbluth, set up what is now a six-language center in Killarney, Ireland.

While globalization and automation each have unique characteristics that influence customer service, including labor cost pressures, they also can work in tandem. Sources agreed that automation, including the freedom of electronic ticketing, is a major enabler.

"The whole idea of offshore servicing exists in various iterations as a natural outgrowth of our travel operations," said the Amex spokesperson. "Our Miami center, for example, is handling e-fulfillment for online booking customers in the United Kingdom."

"The walls are finally coming down," concluded Salcito. "People are finding you can manage travel all over the world."