To See the Future of Biz Travel, Look to Leisure Sector
by Fred Gebhart

Want to know how technology is about to transform business travel distribution? Just look at what is already happening in the worlds of leisure travel and online retail shopping.

There are more similarities between the business and leisure sectors than there are differences, said Lorraine Sileo, vice president for research at PhoCusWright, during a recent webinar on the future of travel distribution. “The needs of travelers, suppliers, distributors and intermediaries are the same. And so are the solutions.”

Open booking
Take open booking. Shop, book and buy anywhere has long been the norm on the leisure side.

Today, leisure travel agencies that learned to use better technology, better personalization and better communication are thriving, despite massive growth in supplier-direct sales and cutthroat pricing by mega and online agencies.

But when Concur introduced its open booking tool, much of the business travel world reacted in horror.

“Concur’s open booking initiative opens a whole new world with business travelers being able to book directly with their supplier of choice,” said Bob Offutt, senior technology analyst for PhoCusWright. “But you have policy controls in place and aggregation of data for more effective travel management.

“You are giving travelers more choice than the typical managed travel program, herding them into policy compliance without complaints and automatically aggregating data.

“It’s a win-win-win for everybody except the GDSs, who aren’t part of the new picture,” Offutt said.

Making shopping easy
Advances in technology made open booking a reality, Offutt noted, just as advances in technology have shaped distribution in other areas.

For consumers, Amazon.com transformed the shopping experience, using technology to move online shopping from an iffy adventure to an everyday activity. Today repeat customers can buy on Amazon with just two clicks.

No travel seller has introduced that kind of shopping ease. But it’s coming.

Two-click travel purchases
Google and Priceline are developing a two-click travel engine that could debut within the year, Offutt said.

Easy point and click buying will have the same kind of impact on leisure and business travel buying as Amazon’s easy point and click technology had on consumer retail buying habits.

Travel engines that don’t make shopping and buying just as easy will wither.

Biz travel must adapt
Because most business travelers learn their travel shopping habits and expectations on the leisure side, business travel engines that don’t adapt will wither almost as quickly as many of their leisure counterparts did.

“Two-click buying on Priceline will make a huge difference. As a differentiator between travel sellers, two-click buying will be priceless,” Offutt said.

“Travel has to catch up with the retail world,” Offutt said.

“It is time to reinvent the role and the function of the travel intermediary. This includes TMCs and business travel agencies, as much as it does OTAs and traditional travel agencies. If they are going to survive, TMCs need to develop new forms of business value and customer loyalty.”

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