Concur is finding out that changing business travel is very difficult
Through its corporate venture capital arm, the Concur Fund, and Open Booking initiative, Concur is a leader in changing the travel industry for the better, but the company is finding out that this is tough work.
Concur Open Booking is going to take an awfully long time to transition from concept to reality.
That means it will still take at least a couple of years before business travelers — who may be locked into using their less-than-fluid corporate booking tool — would have the freedom to surf and book their business trips much as a typical leisure traveler would.
The idea behind Open Booking is that corporations would allow their business travelers to book their hotel stays and car rentals on InterContinental Hotels or Avis websites, for example. And, business travelers would still be able to take advantage of the company’s negotiated rates from these suppliers, and their employers would be able to keep track of, and account for, their employees’ bookings through Concur’s tools.
This supplement to stodgier corporate booking tools sounds wonderful, but Concur CEO Steve Singh said yesterday that Open Booking won’t provide any meaningful revenue contribution to Concur until sometime in fiscal 2015.
In other words, it’s going to be very slow going, and that’s making a big assumption that Concur can be successful in pushing this initiative.
During Concur’s analyst day April 16, Singh reminded a questioner that “innovations take time time to really take root and to grow at the kind of scale that we want.”
“But I think what’s really important to take away from this, is that this solves a problem that is fundamental and that the behavior that this problem is addressing has been in the market for at least 20 years,” Singh said. “So it really tries to solve a behavior process that exist today and exist today because customers, in this case business travelers, want this. And so we feel like even though it will take time, we think it’s inevitable that it will reach a critical mass.”
Concur announced last summer that nine companies had expressed a willingness to participate in Concur Open Booking. These companies are: Avis Car Rental, Best Western International, Choice Hotels International, Inc., Hertz, InterContinental Hotels Group (IHG), La Quinta Inns & Suites, Marriott International and Starwood Hotels & Resorts Worldwide.
However, to date only InterContinental has formally signed on, and it is expected to take an extended period before the hotel chain goes live in Concur Open Booking.
Concur has spent the intervening months conducting discussions with these potential partners about what their technology and commercial requirements would be to get the thing off the ground.
It remains to be seen whether Concur Open Booking becomes a forgotten footnote or something transformative in business travel.
There are lots of established forces in business travel, including major travel management companies and corporations, that vote for the status quo instead.
Singh thinks Open Booking will be a complement to the status quo, and he defended Concur’s deliberate approach, saying:
“The thing that I think has been a challenge, if you look at the history of the travel industry for the last 20 or 30 years, is that people try to optimize the revenue — or the revenue per customer opportunity way too quickly, instead of actually trying to make sure that are you delivering a set of value that people love and that they will use on an enduring basis.”
In other developments, Concur revealed it launched an app center to market apps that work off Concur’s travel and expense solutions. Apps currently in the company’s app store include TripIt, which Concur owns, as well as CIBT Visas and a Cegedim for customer relationship management.
Lots of companies want to get some mileage over “app store” buzz, but it remains to be seen whether Concur’s app center, which has parallels to one launched by Sabre, can attract enough developers to make it interesting.