Biz Travel Outlook: Mobile Tech, Dynamic Pricing Gain New Ground
by Fred Gebhart /If you thought 2012 was a challenging year in business travel, take a deep breath, exhale slowly, and repeat. As mobile technology and dynamic pricing kick into high gear, travel managers will need to adapt to momentous change.
Here is a look at some of the major developments that industry leaders see as driving forces for business travel in the coming year.
Rose: Mobile the Main Channel
Starting in 2013, mobile technology, including tablets and smartphones, will move from being an additional channel to the main channel, said Norm Rose, president of Travel Technology Consulting.
Mobile technology, which is untethering the planning, searching and buying processes and fostering “always connectivity,” is having a huge and growing impact on travel, according to Rose.
“It means greater traction at supplier dot-com sites, merchandising, capture of information from bookings made outside the system,” he said. “We are not going to see this fully vetted in 2013, but we are going to see the strong beginning of a different model.
“The thing to be leery about if you are a corporate travel manager is whether there will be a level of bypass that you are not comfortable with as a result of supplier direct through smart phones and tablets. It is going to be the job of the travel manager to be aware of all these changes, to leverage information in negotiations with suppliers and to create policies that are flexible enough to accommodate these shifts in bookings.”
Eastman: Travel Apps Evolving
2013 will see critical mass adoption of newer and ever-evolving travel app solutions, according to distribution technology developer Richard Eastman, president of The Eastman Group.
As consumer apps evolve, demand for like apps in business travel will also evolve, he said.
“Apps, by their very nature, are highly dependent on cloud-based servers and integrated links between serving host platforms,” Eastman said. “Airline cloud systems must communicate with hotel cloud systems, which must communicate with the rental car cloud, and so on. Common protocols will enable the app user to build the travel itinerary transparently on a hand-held device.”
Senior levels of travel vendor management are just beginning to recognize this new product distribution reality, he said. “As that awareness becomes installed in vendor company cultures, ubiquitous travel information will continue to evolve.”
Brindley: Dynamic Pricing Takes Off
“The big change is the increased use of hotel chain-wide deals to increase the adoption of dynamic pricing,” said Bob Brindley, vice president of business solutions for Advito, the research and consulting arm of BCD Travel.
While hotels formerly shied away from chain-wide deals, except for their largest customers, hotel companies now view chain-wide deals as a way to reduce the number of properties where fixed rates may be negotiated, according to Brindley.
“The new deal is a percent off, instead of a fixed price, as a tactic to increase the penetration and adoption of dynamic pricing,” he explained. “It’s not a matter of buyers preferring dynamic pricing, they are just being denied access to negotiated rates. Hotels weren’t successful encouraging clients to move to dynamic pricing, so they put it out there as the only alternative.”
Hotels are taking a risk that buyers will get a better rate at another property and take their volume with them, Brindley said, adding that hotels are willing to take the risk because of the scarcity of inventory in relation to demand. “They believe they can always sell those rooms to somebody else at a higher price.”
Wartgow: Do You Have a Traveler Connectivity Strategy?
“You manage air, you manage hotel, you manage rental car. You need to manage connectivity, too,” said Joel Wartgow, senior director of Carlson Wagonlit Solutions Group, Americas. “How are your travelers staying connected and productive on the road? How are you understanding and managing these costs effectively?”
While high-speed Internet is the first thing that comes to mind, connectivity is also about the devices, the hardware, the mobile providers, infrastructure, education and direction around the best ways to connect, he said, noting that there are “a lot of layers” to keeping travelers connected.
“When you start to fold in productivity, it is also about how you manage a trip or a traveler to put them in position to be as successful as possible,” Wartgow added. “Do you always fly economy or are there times you should upgrade? This hotel or that hotel?
“It is phase two of what we saw in 2012, when it became a very traveler-centric marketplace. In 2013, it is going to be about how to successfully manage travelers and costs for maximum results.”