One of the main challenges for frequent business travelers is balancing the financial needs of the company with their need for comfort while traveling for work.
They’re aware they shouldn’t ta spending frivolously on luxury hotel rooms and first-class flights. But it’s nearly impossible to know, given most online booking tools, whether they’re making a sound financial decision for their employer.
Upside, the new company from Priceline founder Jay Walker, will use gift cards from a variety of retailers to encourage business travelers to make less-expensive travel buying decisions.
Walker wants to shift how travel is booked in the $300 billion U.S. business travel market by providing incentives when business travelers voluntarily select a trip package that saves their company money.
“Everbody is walking around in the travel space knowing that the whole space is going to be reinvented in the next five to 10 years,” said Walker. “There are so many new forces and new tools coming into play. Obviously there is going to mobile, but will there be AI, virtual reality, or hybrid mechanisms nobody has ever thought of before? Business travel is up for grabs because the technology has become so powerful so quickly.”
Upside will open its beta in mid-September, making an iOS app available along with a traditional online booking interface. Interested business travelers and companies can request access now.
Upside is privately-held but does has an outside group of investors in addition to investment from Walker, according to the company.
Walker told Skift that the company’s main play is for unmanaged or lightly managed travel programs, generally smaller companies that wouldn’t ever use a travel management company to handle its travel policy. He estimates that unmanaged business travel accounts for half of the U.S. business travel market.
“We’re going straight for the unmanaged business traveler,” said Walker. “A lot of the time when I talk to small companies, [they say] they’re not even as interested in saving money, but if they could just give their employees a benefit for business travel, they love that idea.
This differs from the model of many other companies experimenting in the corporate travel incentive market, like Rocketrip which provides similar benefits to employees who make smarter travel decisions but doesn’t position itself as a booking tool.
The Upside app caters to the needs of individual travelers by tracking their favorite hotels and airlines, along with trip-specific needs. This hybrid self-booking tool books the trip using connectivity with Expedia and Priceline. Upside is also looking to negotiate deals with hotel chains and independent properties. Flights are booked using Sabre as a global distribution system.
The company will make money by buying travel at wholesale rates and selling it in a retail environment with a markup.
Companies earn five to 15 percent savings on each trip by participating, while travelers earn gift cards that can range into the thousands depending on the type of trip they’re booking. Travelers still get their normal frequent flyers miles, but do not receive hotel reward points.
The typical traveler, however, can expect to receive $100 to $200 in gift card value for using an Upside option on a normal trip.
The core of Upside’s operation is a massive big data analysis project that crunches the numbers on the smartest travel buying decisions.
“We are building a shadow every day of almost the entire air travel system,” said Walker. “Against that shadow we are putting together an entirely new big data software algorithm we call a Flexibility Engine which analyses all the flights, the connections, the tradeoffs you can make and presents them to you in really simple choices on a phone so that you can say, for $80 I would do that, for $50 I would do that.”
The company’s artificial intelligence pricing technology will create packages for travelers based on their travel needs. Upside won’t break out airfares and hotel rates individually, so it can negotiate lower rates than publicly advertised from airlines and hotel chains.
It will also offer 24/7 call center support for travel disruptions or itinerary changes.
Walker envisions business travelers making simple changes to their travel itineraries that add up to large savings for their employers over the course of time, even for those business travelers who only travel a few times a year.
“There is pretty much no business traveler who is coming home and can’t afford to make a stop if they want,” said Walker. “There’s no business traveler who can’t stay a five minute Uber ride away from the convention center if that’s what they want to do. There’s never been a reason for the business traveler to be that flexible, because the company policies and other people’s money basically give them what they’re entitled to…. on the other hand, if you were getting $1,000 to stay at a two-star hotel that was perfectly fine instead of a four-or-five star, where do you stay?”