Expedia Corporate Travel recently revealed
plans to bring some of its call center functions back to the U.S.
from Manila, Philippines, where they had been handled by
PeopleSoft. That decision closely followed a move by US Airways
Group to hire about 400 reservations agents for positions in North
Carolina, Arizona and Nevada to perform work that had been
outsourced to call centers in Mexico, Central America and the
developments seem to reverse the recent trend toward outsourcing
call centers in the travel industry, Peter Ryan, who heads
outsourcing and off-shoring for industry research company
Datamonitor, said talk of retrenchment is premature. Though he
admits there have been problems with outsourced call centers --
both politically and in terms of quality control -- Ryan said, For
every agent position pulled back, you dont hear about the two or
three still going over.
Datamonitor estimates that 4% to 5% of the outsourced call center
positions in India and 6% in the rest of Asia are for travel and
tourism. That figure climbs to an estimated 11% in Latin America,
thanks to a high demand for bilingual agents to accommodate
Spanish-speaking U.S. customers, he said.
To deal with
service concerns, some companies have outsourced to locations where
they believe the centers will be staffed with multilingual,
educated and travel-savvy workers who can relate to customers, Ryan
U.S. airlines are
demonstrating an ambivalent attitude toward off-shore
example, outsourced some of its call center work to India early
last year, after already having funneled a small amount to Nova
Scotia in March 2004. The outsourced call centers handle general
reservations calls and some customer-service inquiries, said United
spokesman Jeff Green.
But there are some
signs, even at United, that airlines are discovering limits to the
usefulness of outsourcing.
Though United has
closed five U.S. call centers with 800 employees since 2003, it
still uses about 2,500 of its own employees at call centers in five
U.S. cities for general sales, high-level frequent flyers and other
US Airways is
bringing many of its calls back in-house because it found that the
outsourced centers often couldnt handle calls that didnt follow a
script, said Scott Kirby, the airlines
executive vice president for sales and marketing. A customer, for
example, might ask for alternative destinations if fares for the
one they first asked about are too high. Or they might ask about
nuances in airline policy.
industry, Kirby said, tends to go off script.
That is why,
contrary to Ryans view of outsourcing across all industries, the US
Airways shift may reflect a growing reassessment of the outsourcing
trend in the travel sector.
With its new hires,
US Airways will increase the percentage of calls handled in-house
from 35% to 55%. Kirby said the airline is prepared to dump its
other outsourced call centers if they dont prove they can do the
Consulting study based on interviews with 25 of the largest
organizations across eight industry sectors, including at least one
airline, found that 70% had a negative experience with outsourcing
projects for all functions and were now exercising greater
One in four brought
functions back in-house after realizing they could be addressed
more successfully, perhaps even at a lower cost, if done
Deloittes partner in charge of hospitality and leisure, said he had
not seen a major outsourcing pullback in the travel industry, but
he had noticed that the rush to outsource work seems to have cooled
off, with companies now focusing more on developing their online
One call center
outsourcing alternative that is growing in popularity is
home-sourcing, under which a company saves money by relying on
home-based reservation agents in the U.S.
A new study by IDC,
a technology research firm, forecasts that the number of home-based
customer service agents hired or outsourced by U.S. companies will
nearly triple by 2010 to more than 300,000.
airlines, that concept had until last year been confined to
JetBlue, which has about 400 res agents in its Salt Lake City
office but has used home-based reservations staff since its
inception. It now employs about 1,200 of them in the Salt Lake City
The concept may be
picking up steam. American, which tested and rejected the concept
about six years ago, decided that new, more efficient and
cost-effective technology such as DSL connections made the idea
more feasible; it started hiring home-based reservations staff in
The first hires
began taking calls in August, and American is now well on its way
to hiring 300 of them. All will be located within 50 miles of
Americans call centers in Fort Worth and Tucson, so they can go to
those offices for periodic training and equipment
keeps its home-based agents close to Salt Lake so they can come
into the office for a monthly meeting with supervisors and gather
periodically for team-building events such as quarterly
Several other U.S.
and foreign airlines are considering home-based customer service
agents and recently contacted American for advice, said Jackie
Cutlip, Americans managing director of reservations.
outsource its call centers, and, facing increasing call volume, it
didnt want to pay to open any more facilities. The home-based
solution saves not only on facility costs but on labor costs,
because the at-home workers get less generous health plans, and
their pay scale tops out at less than that of the airlines
home-basing to outsourcing because it offers the airline more
control and helps avoid start-up problems, Cutlip said. As long as
we can do this with competitive costs, that really is our desire,
Cruise lines also
have gotten into the home-based res agent business. Norwegian
Cruise Line employs home-based agents in Broward County, Fla., near
its Miami headquarters, and in the Phoenix area.
It gives us a
productive work force, and were not leasing any office space, CEO
Colin Veitch said last year.
director of Purdue Universitys Center for Consumer Driven Quality,
which studies call centers, said the airline industry is at the
forefront of another alternative: a technology called natural
speech, which enables callers to tell a computer, I want to make a
reservation. The computer responds with a human voice.
airlines are increasingly using the technology for their low-level,
easy contacts, such as booking or confirming a flight. Its a great
alternative, he said, because the technology can handle a million
people as easily as 10 people and is easily adaptable to other
languages. He cited research indicating that about 70% of all
customer issues can be handled by a computer.
companies using any kind of computer-driven call center system
should let consumers know early in the procedure how to opt out of
the technology and get a person on the phone. In addition to simply
being more honest, Purdues research has shown that consumers are
less likely to opt out when they are told early, he
The issue of
training -- and the proximity of outsourced res agents -- was a
factor in Expedia Corporate Travels decision to phase out its use
of PeopleSoft in Manila.
Mitch Robinson, an
ECT spokesman, said the PeopleSoft facility handled 24-hour support
and some overflow for U.S. operations, and ECTs use of it will end
later this year.
will be handled in the U.S., he said, although ECT has not yet
decided if they will be conducted by staff or
Customers have not
been pounding on the table [for the change], but we think it will
benefit our customers, Robinson said.
The decision does
not affect ECT Europe, which largely has call centers in local
markets there, Robinson said.
Whether or not the
workers are ECT employees, the agents in question handle ECT
accounts only, Robinson said. He noted that it is harder to train
call center agents when they work thousands of miles away, and this
was one reason for the change.
In addition to the
Manila operation, ECT uses a mix of employee-run and outsourced
operations to support U.S.-based accounts.
ECT has a call
center at Expedia headquarters in Bellevue, Wash., which handles
top accounts and international rate desks. And ECT also has agents
that share a facility with Hotels.com agents in Arlington,
Still other call
center functions are outsourced to TRX, which operates facilities
in Parkersburg, W. Va., and Milton, Fla.
Last month, TRX
entered into an alliance with E2E SerWiz Solutions (SWS), a unit of
the India-headquartered Tata Group, to transfer those call centers
Ricardo Layun, TRXs
vice president of customer care operations, said right-shoring is
the trend he sees in companies call center decisions: Companies
want the flexibility to use domestic facilities for high touch
clients who may even want to visit the call centers, supplemented
by off-shore contracts for a large client base that requires less
of a touch point.
Sabre went to an
off-shore solution for travel agency and airline customer support
in 2004, but the call center in Montevideo, Uruguay, is staffed by
Sabres own employees.
Janet Herman, vice
president of corporate operations for The Travel Team in Buffalo,
N.Y., accepted a Sabre invitation and visited the Montevideo
facility last fall.
Sabres call center there as state-of-the-art and said Travel Team
associates were satisfied with the service they received when
contacting the center for support, usually over technical
acknowledged that the conversations sometimes can be tricky because
they involve Buffalo twang and English from non-native
Maybe there are
some language difficulties in the beginning, but the people are
extremely nice, [and we were told] to be patient, Herman
Sabre officials say
they are happy with the call center. The company consolidated
several others it was running and plans to increase staffing from
540 to between 700 and 800.
Kathryn Hayden, a
Sabre spokeswoman, said that when the Uruguay facility was ramping
up in late 2004, some callers had to wait several minutes to speak
to a representative because the company had been reducing staff
elsewhere to trim costs.
Since moving these
operations to Montevideo, the response rate has significantly
improved to almost all calls being answered by a representative in
40 seconds or less, Hayden said.
Fluency -- the
center handles calls in 14 languages -- and industry knowledge
language/accent issues through courses, and the agents watch U.S.
TV or French TV, for instance, to improve their linguistic
abilities, she said.
Also, about 60
agents have signed up for a voluntary CTA/CTC program to further
their travel industry knowledge.
decided late last year on an off-shore solution, but unlike Sabre,
Worldspan opted for outsourcing. Tech Team of Southfield, Mich.,
handles first-level help desk support for Worldspan in facilities
in Belgium and Romania.
travel agent, who did not want to be identified, said she has
called Worldspans international facilities for support and found
that rudimentary questions were handled with ease, but she was less
satisfied with answers to complex questions.
operators keep it in-house
The complexity of a
product or service can make it less than ideal for the overseas
outsourcing of customer service -- a fact that has kept tour
operator call centers close to home.
Most operators run
their own call centers, which are designed to handle questions from
and sell complex products to travel professionals. Operators
contacted by Travel Weekly expressed little interest in
Our call center,
with 150 people, is not a very large one, Ron Letterman, chairman
of Expedia Inc.s Classic Vacations said of its San Jose, Calif.,
facility. Its not really a call center. Its more of a specialty
Our people are highly trained travel planners. Its different from
the kind of call center that can more easily export business. We
have not considered outsourcing, and I dont envision us ever doing
Cyndi Zesk, vice
president of marketing for Collette Vacations, was emphatic that
Collette would not outsource its call center operations, currently
handled at a facility in Providence, R.I.
We have no
intention of outsourcing our call center, Zesk said. We place a
high value on the people who take reservations for the travel agent
community. We want them to be as educated and as well-trained as
possible, not only on travel but on Collette products
instituted an aggressive familiarization program for all
Because it sells
directly to consumers, Grand Circle Travels Boston call center is
designed to take calls from the public, not from travel
it from most tour operators. But Grand Circle, too, avoids
a spokeswoman for Grand Circle, said, We believe its important to
have our call center associates close to information that is timely
and accurate, and having our 167 call center associates based in
our headquarters gives them that opportunity.
If theres an issue
that needs to be resolved, associates can head downstairs and check
in, face to face, with an air associate or someone who works in
product development or marketing, OReilly said. Additionally, we
have a values-based culture that we want all of our associates to
be part of -- including our call center associates.
To contact the
reporters who wrote this article, send e-mail to Andrew Compart at
[email protected] or Dennis Schaal at [email protected].
contributed to this report.
details on this article, see 1-800-Flowers helps Choice solve a thorny