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Travel business process outsourcing (BPO) is the transfer of responsibility for a company's travel-related operations to a third-party consultant firm. This type of BPO can encompass a range of projects that relate to travel, from the outsourcing of ticket reservation management to transportation logistics. Companies typically outsource travel processes to cut costs and to streamline in-house operations.
Outsourcing noncritical operational processes has become a popular way to cut costs and increase efficiency in the first decade of the 21st century. Advances in technology, including worldwide, always-accessible Internet connectivity, server-based collaborative work environments, and real-time audio, video, and text communications have revolutionized thinking about how companies can get work done. Technological advances have significantly opened up developing labor markets in countries where workers are educated and English-speaking but cheaper to employ than in countries with mature markets. Travel BPO is a by-product of these developments, where businesses have found ways to outsource processes that rely on travel or transportation to specialists who can employ economies of scale to keep costs down.
The functional definition of travel BPO depends upon whether the outsourcing company is in the travel or hospitality industries or using travel or transportation as an operational modality. In a company that is part of the travel industry, such as an airline or travel agency, travel BPO includes projects that deliver traditional travel services. For example, an airline might outsource its fare auditing or revenue accounting processes. A travel agency might outsource its ticket reservation process.
Another distinction within the travel industry is travel BPO that concerns front office or back office processes. Front office BPO include projects that deal directly with customers. Back office BPO includes administrative projects that do not touch the public. For example, an airline might outsource its front office phone-based customer service to an offshore firm that will handle the process through a call center. Alternatively, it might outsource a back office process, such as the company's payroll processing system.
Travel BPO that is not directly derived from the travel or hospitality industries typically concerns companies that use travel or transportation as a non-core process. For example, a sales company with a workforce that travels extensively for company purposes may have an in-house travel department or can outsource the function to a third-party BPO service provider. Companies that ship products to fulfill orders can operate an internal shipping department or can outsource to save time and money. The common thread in this type of context is a business process that is based on travel or transportation. If this type of non-travel industry business outsourced an unrelated process, it would be considered ordinary BPO rather than specialized travel BPO.