Skift Take

Beyond limiting company spending, there are financial reasons why business travelers feel so constrained by corporate travel-booking policies. It's time for everyone to be honest about them.

The Global Business Travel Association Convention 2017 kicked off this weekend in Boston, with thousands of business travel professionals descending upon the Seaport District ready to schmooze and talk the future of corporate travel.

Last year’s edition wasn’t a thrilling affair, but a few issues did emerge that show how divided the ecosystem is when it comes to giving travelers more control over a business trip. One onstage argument between a car service provider and Lyft deftly illustrated the tension that remains in corporate travel.

The theme this year is “convergence,” whatever that means. Despite all the talk from travel management companies about using digital tools to empower travelers, the core structure of the corporate travel ecosystem remains virtually the same as ever.

Technology can now track travelers in dangerous areas, automate expenses, and instantly rebook disrupted flights. It can simplify the booking process for travelers, allowing them to feel more in control of their trip through booking tools that pay attention to traveler preferences. These are all powerful advances.

Follow the Money

But these new technology-focused innovations don’t do much to fix the reality that the choices travelers are allowed to make are generally constrained by economic considerations, particularly that travel management companies stand to make money from particular outcomes.

I think back to an interview I conducted last year when I was looking to learn more about how the corporate travel ecosystem really works behind the scenes.

“It’s not a conspiracy, but if half of your revenue comes from a source, you’re going to defend that source of revenue,” said one top corporate travel executive. “It’s impossible to be able to say, ‘I’m going to act in the best interest of the client and traveler,’ if the revenue is coming from someone else.

“In terms of leakage for corporate travelers, travelers are putting up their feet and saying, ‘this is bullshit.’ Most of the industry operates under the false premise that the corporate traveler is a captive audience and I can kind of abuse them with content that isn’t competitive, or biased content.”

This won’t be news to many at the GBTA convention this week, but it does deserve more discussion.

Entrenched Interests Versus Business Traveler Preferences

Travel management companies have incentive to sell products that make them money, in other words, even thought it might contradict what travelers actually want.

It’s a bit of an open secret in corporate travel that travel management companies often make money off both sides of a transaction. While taking in fees or a percentage of spend from their clients for bookings and services, they receive commissions and/or volume-based payouts from the hotels and airlines whose products they sell.

Travel management companies also receive money from the global distribution systems for routing transactions through their systems because the travel providers themselves pay a fee on each transaction placed.

Based on the volume they sell, travel management companies receive discounted rates for clients. This revenue and discounting pushes down what they need to charge their clients for service, making the value proposition of using a travel management company even stronger for clients while travel management companies continue to grow their total volume.

The structure of individual agreements vary between client and travel management company, the travel management companies and travel provider, or global distribution system, but this is basically how it works.

Not Aligned

Everyone wins, except for the traveler.

For all the talk of easing traveler pain points and making it easier for travel managers to do their job, at what point will it be acceptable to discuss the plain fact that the needs of the traveler and the needs of their travel management company aren’t truly aligned?

This is why we’re seeing the growth of services like Rocketrip and others that incentivize travelers to make certain choices. If travelers feels good about their trip because of a “free” Macy’s gift card, then they’re likely to stay in policy and book whatever their company or travel management company wants them to.

This is also why we see the buzzword “traveler-centricity” used so often; personalization can make it seem like a traveler is getting what she wants even if she isn’t staying in the hotel of her dreams.

Here at Skift, we cover the travel industry but we are fanatically focused on travelers themselves. The reality is business travelers can’t always get what, but the reasons why don’t often add up.

A recent survey from Egencia found that half of the business travelers it polled don’t want to interact with another human when traveling for business, except when they encounter a problem.

The reason for this isn’t that business travelers particularly loathe their fellow man; it’s because they’ve been trained by the online travel agencies they book through when taking a vacation. They want the same seamless digital experience when traveling for work, with all their trip information in one place and the ability to easily make changes online, as they do in their personal life.

Yet, this will never happen — unless the traveler bucks company policy — because they are only permitted to stay at certain hotels and fly on specific airlines.

As the corporate travel industry looks toward the future, and more nimble digital tools emerge surrounding business travel booking, one has to seriously wonder: Will business travelers ever be able to get what they want instead of what they need?


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Tags: business travel, gbta

Photo credit: Business travelers have digital tools but are hampered by corporate financial interests that often won't bend to the preferences of road warriors. Getty Images

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