The Perils & Promise of Open Booking

This is Part Two in a series on open booking.

Open booking has clear advantages.

Proponents of open booking, aka Travel 2.0, point out that allowing travelers to book through non-program channels, then capturing that booking information, is an improvement over current practice.

Rogue travelers who book on their own are invisible in a traditional managed program. Programs that support open booking provide an opportunity to capture travel and traveler data that employers never had before.

Compliance still an issue
“An open booking tool solves the problem of where are your travelers,” said Lea Cahill, chief operating officer of Atlas Travel, which is in the final stages of developing its own open booking solution. “It allows travelers to go out of program and uses technology to collect the data you need.”

But, she added, “it does not solve the problem of policy compliance.”

There are other issues too, among them the fact that data capture and consolidation are not automatic with current open booking products.

One prominent open booking solution, Concur Connect, requires proactive buy-in from both suppliers and corporate clients.

Suppliers must have the capability to recognize corporate travelers and load negotiated rates.

Corporate clients, for their part, must turn the product on within the managed travel system and convince travelers to use it.

Work in progress
Here’s how Concur Connect should work. A road warrior books direct at a participating supplier, say Marriott.com. Marriott recognizes the corporate affiliation and automatically loads negotiated rates. And because the traveler’s company has signed on, Concur automatically collects and forwards complete trip data to the travel manager. That way there’s no need to create a work-around like signing up for TripIt and adding the travel manager as a contact.

But if that same traveler books direct at a chain that does not participate in Connect or fails to recognize the corporate identification, the system fails. The travel manager gets no data and the booking remains rogue. From that perspective, open booking is a work in progress.

“This is an evolution, not a revolution, – and it is going to happen,” said Norm Rose, president of Travel Tech Consulting.

“The shift will put Concur or some other technology provider in the position of being a technology link between supplier and client.”

Corporate culture is key
Whether the emergence of open booking solutions is good news or bad news for TMCs and corporate agencies depends to some degree on your clients.

The decision to use open booking, and to allow travelers to use it, is more a matter of corporate culture – including how a company wants to control spending – than of technology.

There are two basic methods of controlling travel spend, explained Cahill. Some companies prefer to manage by travel policy, which imposes pre-spending restrictions. Other companies prefer to manage by budget, which imposes post-spending restrictions.

Control or trust?
Organizations with a strong command and control culture tend to manage by travel policy.

They prefer to control spending before a trip is even authorized, much less booked and purchased, as it gives them more control over both travel and travel spending. So do procurement departments that are accustomed to setting hard spending limits and authorizing spending in advance.

Managing by budget, comparing the actual spend and spending trends against budget goals, requires a degree of trust – trust that in the absence of prior authorization travelers will spend appropriately. That is a bigger leap of faith than some traditional companies – or travel managers – are willing to make.

Generational issues
Generational changes are at play as well. Younger travelers simply won’t accept the kind of travel policy restrictions that Baby Boomers accepted as a matter of course.

There is no reason to expect their no-strings attitude to change as younger generations of business travelers advance into management positions. As Boomer managers are replaced by Millennials, there will be less insistence on strict travel policy limitations and enforcement.

In the not-too-distant future, what is now considered rogue travel will become the norm. Travel policy might remain as a guideline, but most travelers will make their own travel decisions and their own bookings.

No turning back?
In today’s world, Concur and other open booking providers are banking on the fact that traditional travel management programs are unlikely to re-capture the growing number of rogue bookings.

“We don’t think these rogue transactions will come back into the ecosystem in the old way,” said Mike Hilton, Concur co-founder and executive vice president of product management and strategy, global marketing.

“We are not going to go back to 100% of travelers booking 100% of travel on the system. That’s a seriously challenged idea. In order for agencies to continue to add value, they are going to have to evolve.”

Part One – Concur: Technology Partner or Competitive Threat?

Next time: How to compete in an open booking world.