Corporate travel moves slowly compared to most other sectors of travel due to deeply entrenched players angling to advance their interests in a manner that often holds back improvements to the business traveler experience for employees.
At the Global Business Travel Association convention this week in San Diego, the battle for the future of corporate travel was on full display. Yet, rival segments of the industry are starting to team up to fix some of the longstanding problems that have plagued the sector.
The biggest news in advance of the event involved long-awaited partnerships between a variety of travel management companies, global distribution systems, and airlines. Industry giants American Express Global Business Travel and Carlson Wagonlit Travel, for instance, will partner with Sabre and Amadeus on various initiatives to bring stronger merchandizing and richer content to their customers.
We are skeptical of partnerships, particularly when it comes to travel technology, but even these represent an important step forward for a sector that has traditionally seen taken a siloed approach to these issues. IATA’s New Distribution Capability was first announced in 2012 and wasn’t designed to cater to travel management companies in any concrete ways; it was pushed out by the airlines with their interests in mind, namely wrenching power away from the global distribution systems.
Fast forward six years, and everyone is starting to play nice.
“There is no technology standard today,” said Kurt Ekert, CEO of Carlson Wagonlit Travel. “There’s a thesis that says airlines want to sell in the same way they sell dynamically in the consumer public. What we see happening this year for the first year is trilateral conversations and obviously, the travel buyers are a key component as well. This is finally beginning to get some legs.”
The complicated issue right now has to do with who holds the passenger name record for a booking under this standard: the travel management company or the airline? And what happens when a change is made? This all has to be sorted out, and who knows when it will be.
“You need real-time synchronization, that’s important because the GDS will hold other airline segment information or hotel or rail,” said Ekert. “Solving that problem in a holistic manner is important to enable us to get this right to avoid the degradation of service or efficiency. I’m becoming more and more optimistic that this will become real, not as a technology standard but as a dynamic way to improve user experience and the experience of everyone in the value chain.”
The magically vanishing partnership, or announcement merely for public relations purposes, is still a reality in the sector, according to David Reimer, American Express Global Business Travel’s senior vice president and general manager of the Americas. The corporate travel giant’s tie-up with Amadeus and Sabre, though, is less about optics and more about creating a better purchasing environment for buyers and travelers themselves.
It could be a way to deploy rich content at scale across all its booking tools, or simply targeted to particular customers who want it. American Express Global Business Travel and others are figuring it out for now, and it’s likely similar partnerships will be announced going forward.
Travel management as a platform is finally starting to emerge under these conditions. Booking and service are converging thanks to mobile apps and better online booking tools, while the race is on to automate the repeatable parts of servicing a customer. Where do phone service and the hefty service fees that come with contacting an agent head from here, though?
Furthermore, the stated objective of nearly every travel management company to provide a more personalized experience may not transpire in the ways envisioned in prior years. Even if the major travel management companies crack the airline merchandizing problem in a comprehensive way, there are still a variety of privacy issues that will limit how granular prediction can be, according to Ekert. And that could be just fine, he added, if the business travel experience is improved by what they can pull off.
Dealing with the glut of data produced by business travelers and travel providers is the biggest challenge for legacy players, said Egencia president Rob Greyber. Most are transitioning from service-based businesses to technology solution providers, which has led to an explosion in the number of digital tools, interfaces, and dashboards available for travel managers. Egencia is running nearly a million different versions of its platform at time, using learnings to further refine its offerings.
New technology can actually complicate matters for companies looking for stronger control of their travel program; it’s up to the industry’s biggest players to figure out more intuitive ways to parse the data and empower their customers with automation, or risk clients leaving for other travel management companies.
The consumer-like experience for travelers, touted by these companies as their inevitable goal, will be incomplete if the unsexy legacy technologies behind it doesn’t catch up.
Hotels Get Creative for Business Travelers
Hotels, too, are trying to put a new spin on the business travel experience as the market represents an increasingly large part of their business. Marriott International’s technology integration with Starwood Hotels & Resorts continues apace, with the switch-over slated for next month.
“Digital is everything,” said Marriott International’s global officer of digital, distribution, revenue management, and global sales Brian King. With booking, loyalty, and everything else handled on one platform, the company can start to innovate when it comes to the digital experience for travelers. King declined to elaborate on his vision, but it’s clear a comprehensive digital offering for business travelers and loyalty members will come sooner rather than later.
AccorHotels, likewise, has been making an acquisition a month on average for the last two years in order to better provide a range of choices to travelers looking for something outside their core business travel brands.
Markus Keller, AccorHotels’ senior vice president of global sales, said even exotic new additions like 21C Museum Hotels or Mövenpick Hotels & Resorts have a place for specific segments of business travelers. As the line between leisure and business blur, variety in terms of experience has become a vital differentiator for hotel chains.
One interesting trend has been hotel chains themselves creating programs for small- and medium-sized businesses. Hyatt Leverage, which launched in May, has seen strong growth, according to Hyatt’s vice president of global sales Gus Vonderheide. InterContinental Hotels Group introduces a similar program this month, as well.
Though progress is slow in corporate travel, the scene at GBTA this year shows how seriously the sector’s largest companies are taking the digital transformation they’ve embarked upon. If history has taught us anything, though, real innovation will happen slowly, with a small set of more nimble companies leading the way.