16.01 MICE Talk – Corporate Duty of Care & BT MICE in India

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1.What is Duty of Care?

Duty of Care is defined as the corporate obligation that an employer has to secure the welfare of their employees , when the employees travel on official work .

In many part of the world - like USA / Canada & Europe / Australia , this is a legal statutory obligation of the Directors & management of the company & there have been many instances where the Board of Directors / Chief executive and other officers of the company are legally & financially liable for negligence, if proven.

The concept of Duty of Care emerged and become a major component of business travel polices worldwide post the incidents to 9/11

This is not yet a legal obligation in India which is why there is limited or nil CXO visibility or focus amongst most Indian companies.

This is however a very well established business practice with Multinational and large Indian transnational firms .

2.How is Duty of Care different from Travel Risk Management?

Travel Risk Management is a function of Duty of Care .

Duty of care includes multiple aspects

Basic

  • Active advisory on potential travel risks and security related news
  • Creation of robust policies & continuing training & sensitisation of employees
  • Active intervention & approval by multiple levels of officers of the company incase an employee is travelling to a high risk destination.
  • Subscription to bulletins / 24 x 7 news and alerts that update corporate travel administrators & travellers on security instances / general travel risk & security issues
  • Active tracking of all corporate travel bookings made through the designated TMC including individual PNR tracking
  • Subscribing to the services of global travel risk & security / medical services like iJET /ISOS / Anvil
  • Ensuring that all reservations and hotel bookings made are done through approved official travel management service providers so all information is centrally updated and tracked through solutions like iJet / ISOS / Anvil etc .
  • Insuring travellers when they travel abroad is also a mandate that most companies es implement

Advanced

  • Active counselling of the traveller in regards to the attendant risks and advise of how best to protect ones self
  • Detailing security / GPS & mobile tracking / Regular check in’s to a defined helpline number or email id

3.Where does Duty of Care fit into travel management?

Duty of Care is a central & very integral part of any global travel management program. However in the Indian context , this is not understood and nor is is it implemented with seriousness with the exception of MNC’s & Large Indian companies ( to some extent )

In many of the recent instances of terrorism & attacks across the world , like the Boston bombings. Paris attacks in 2016/7 & the Nepal earthquake in 2015 , most corporate entities in India were totally unprepared from such a situation

  • many had no idea which of their employees were onsite at the location
  • incase of the Nepal earthquake , a Fortune 500 consulting firm in India took more than a week to determine the well being of their employees in Kathmandu ,given that phone and mobile systems failed 


4.What is the role of a travel management company?

The role of a TMC is integral to the program success of the Duty of Care initiatives the company . This would require-

  • All reservations for flights and hotels to be made using the official corporate travel agency
  • The official TMC would then be mandated to deliver an in-house traveller tracking and security suite or integrate their PNR records with global travel risk and security provider system
  •  subscription to a 24x7 news alert system that tracks travel risk & security instances across the world and share this in realtime with the client company and its employees

5. What are the key elements of a successful Duty of Care programme?

answered above

6. What according to you are the challenges that hinder travel risk management?

7. Please share some insights into the India market regarding Duty of Care programmes

I will answer both questions simultaneously , with specific reference to India .

My comments relate to the broad general community of corporate travel buyers & companies & does not include Global MNC’s who may have a globally consolidated travel program in India & some Indian transnationals who have evolved their travel program to actively include traveller risk & duty of care . A prime example of an Indian company who has a very effective Duty of Care & Travel Risk Management Program is the Aditya Birla Group .

  1. Most companies in India execute their corporate travel programs with “Travel Agencies “ and not “Travel Management Companies (TMC’s”). “Travel Agencies’ - are generally non specialists in the business travel domain & generally win business on price / service attributes but don’t deliver the full range of business travel support
    services .
  2.  Much of the Indian business travel purchasers appoint travel agencies / TMC’s based on the lowest transaction fee pricing or the highest levels of discount . Many of our travel managers & procurement professionals place a far higher value on pricing and financial benefits rather than the qualitative aspects of their vendors technology capabilities, account management , risk management & management reporting capabilities
  3. Many Indian companies including some of our largest corporations follow a travel purchasing strategy that places the highest premium on the lowest fare . This is particularly seen in IT companies that follow a unique system where they put each travel request out to “bid” amongst multiple travel agencies / TMC. In this situation the lowest bidder wins the ticket and fulfils it . This places in question , how these clients ensure data consolidation of all tickets booked and tracking of their employee
  4. Another very unique situation seen with Indian companies is that they dont consolidate their hotel reservations with their TMC .Bookings for hotels especially international hotels are done through rate consolidators , directly with the hotel concerned / through secretaries & at times on reaching the destination from the airport by the traveller . tracking and consolidation of hotels booked and where the employee is tyyaing is hence missing .
  5. Further many Indian IT firms especially give their employees a “per diem” - the employee is expected to arrange their stay in their destination country using this per diem . Generally the employer will not ask for any receipt for the stay from the employee - IT companies actually regard such a practice as being “employee friendly “ and regard this as giving an incentive to the employee , since the employee could technically stay with friends and relatives and retain the per diem. However the fact that the employer has little or no information on where the employee is staying / the quality of the accommodation / the health & safety standards of the place of stay are totally ignored
  6. With very few exceptions there is very little CXO oversight to managed travel programs in India . Again there are some sterling exceptions but in general , CXO’s regards travel as more an act of fulfilment rather than one that requires due diligence to corporate liability , employee security and a structured strategy & policy definition.

Further , probably to some extent , CXO’s themselves drive their travel managers and procurement executives to squeeze every last rupee that the TMC / Travel agency could give them in the contracting process without delivering any of the basic hygiene services of technology / risk management & overall service delivery .

As the old saying goes “ if you pay peanuts , you get monkeys !!”

8. How important is travel insurance for business travellers? (Please share details for the following: percentage of corporate travellers who take travel insurance; type of insurance like annual or trip on trip; what is covered under travel insurance and if there are any particular details especially relevant to corporate travellers)

Travel insurance is a fundamental function of a travel program especially if your employees travel overseas given the extremely high costs of medical services especially hospitalisation.

Many companies have subscription to travel insurance for their employees - there is no real statistic available with ProKonsul to substantiate the % of travellers who use travel insurance .

Most companies buy an annual cover that stipulates the number of insured days that their employees are likely to travel as a whole. This reduces the cost of the cover as the retail cover is atleast 500-1000 higher than such corporate programs.

While insurance is taken at a corporate level , ProKonsul believes that there is inadequate employee briefing on how the insurance could be used, should a situation arise. Many companies don’t as yet provide wallet cards & other utilities to employees when they travel . Hence the overall approach with some exceptions in largely reactive - “let something happen , then the travel team will firefight the issue”

Also, please share some facts and figures/ infographics that provide an insight into the Indian MICE market and its future growth

As per some public statistics shared online , it is believed that Indian outbound MICE & leisure will generate 6.5M travellers by 2020 . However there is not validated statistics to indicate the quantum of these travellers who travel for business travel MICE ( BT MICE ) versus VFR / Leisure and other purposes. regarding MICE as a homogenous segment is erroneous as this have very specialized sub-segments

In general , BT MICE - MICE business related to the business travel portfolio of a company like conferences / events & incentives for employees is a large and growing segment .

However Indian companies tend to manage their BT MICE is a largely reactive manner very few companies plan annually in advance ; they rarely work with hotel groups / National Tourism offices & airlines directly ; dont consolidate their BT MICE programs across regions / globally and across user tiers - luxury / budget etc & almost never
conduct post event CSAT / VIC in a structured manner.

The general tried and tested approach of incentive buyers is India is to generally put together an event with a gala evening / indian food and some entertainment .

The focus on technology to optimize events , evaluating user experiences through a CSAT / VOC initiatives is missing as is the desire to provide travellers with unique and different experience . This is where a lot could be done to improve BT MICE in India .

Further most tour operators / travel agencies operate in a largely opaque manner where their negotiate prices with vendors & place an undisclosed markup when they invoice the client . Further in trying to secure the lowest price , Indian incentive managers don’t focus on specific areas areas like cancellation penalties where they eventually lose
significantly .

Today the globally accepted best practice is that tour operators operate on a fixed transaction fees and transfer all negotiated benefit to the client , who pays the hotels and airlines directly .

This allows corporations to recover GLOBAL VAT , on their groups to Western Europe , Canada & Asia - This alone can allow corporations to recover upto 20% of their land arrangement costs , which they currently pay as local GST in the country they are visiting