Open booking, Travel 2.0, call it what you will, is a tectonic shift in the world of business travel, and that shift gained deep traction in 2013.
Quite simply, open booking is changing the way travel is managed, said Norm Rose, president of Travel Tech Consulting.
“The emergence of open booking as both an acceptable policy alternative and as a technology to capture rogue itinerary elements is the single most important development in business travel this year,” Rose told Travel Market Report.
It’s not that conventional travel policy died. Rather, the recognition that bookings made outside policy can be tracked began forcing travel managers and TMCs to reevaluate their priorities.
Think of the shift as moving travelers away from the edge of the business travel arena, from being the pieces who get moved around the board by travel managers and TMCs, to the center of the universe.
It’s what Joel Wartgow, senior director, the Americas, for CWT Solutions Group, called “traveler-centricity,” and it created some interesting industry dynamics in 2013.
The driving force in the shift has been mobile technology. “Clearly mobile has become mainstream in 2013 with high-level adoption among business travelers,” Rose said.
A transformative development
“Mobility has gone from being interesting to being transformative in corporate travel,” said Mike Hilton, executive vice president and general manager of the expense management firm Concur.
“For the past couple of years, mobile has been a companion solution at various points in a business trip. Now mobile is becoming the primary way people are dealing with just about every aspect of their jobs, including travel.”
Road warriors who use do-it-yourself mobile tools to book out of policy aren’t obstreperous, they’re just trying to get the job done more efficiently, more effectively and – many believe – more cheaply than travel policy allows.
Big news in 2013
In the past year, the transformation driven by mobile technology was reflected in two significant developments in the business travel arena.
• In September, the largest player in the game, American Express, announced that it was selling off 50% of its Global Business Travel division to the investor group Certares for between $700 million and $1 billion. The deal with New York-based Certares, whose CEO is also co-chair of Travel Leaders Group, is scheduled to close in the second quarter of 2014.
• Throughout 2013, continued aggressive growth by Concur, together with its open booking solution Concur TripLink, fed concerns that the company is expanding from an expense management provider to a de facto TMC, creating new competition for corporate-focused agencies.
Both American Express and Concur credit technology changes for their moves in 2013.
Problem or opportunity?
Amex cited declining profit margins resulting from the rise in self-service travel, while Concur cited the growing business opportunities resulting from the rise in self-service. (Concur invested heavily in mobile solutions throughout 2013, while hammering the industry to come along for the ride.)
Lisa Buckner, president of CTS, a mid-sized TMC in Minnetonka, Minn., commented on the significance of the developments at Concur and American Express.
“The reality is that you’ve got a major technology company buying up a mid-office company [TRX and GDSX], a risk management company [ConTgo] and all the other pieces to create an end-to-end solution. And you’ve got the biggest corporate travel agency in the world selling out to a private equity company,” said Buckner.
“Mobile technologies are pushing to compete in the TMC arena; even the tech companies will all tell you that they are enablers, not competitors,” she said.
Investing in gamification
Not all TMCs are embracing open booking. Some are focused on finding new ways to keep travelers in the program.
“We have seen a massive influx of ways to search for travel, to get travel information, to connect with others who are traveling,” said CWT’s Wartgow.
“The challenge has been to make your program traveler-centric in order to get travelers to bypass some of those new entrants and go directly to the travel program for your company.”
CWT, like many other players, is looking to gamification to boost traveler engagement. But gamification has not had a stellar track record in the past, so whether TMCs can use it successfully remains to be seen.
Ease, choice & control
The rise of mobile and the changes driven by self-service technology shouldn’t be a surprise to the business travel world. We’ve already been through a similar transition in leisure travel and other consumer segments.
Business travel has been somewhat insulated from the changes that have swept through the consumer retail world, but business travelers now are demanding the same kind of ease, choice and control they have come to expect on the leisure travel side. And they are getting it, with or without travel managers.
“The transition to travel apps is taking place,” said Richard Eastman, president of The Eastman Group.
“It’s a function of consumer expectations and a need by business travelers to get their needs met in a timely way – with hotels and other vendors responding to those needs via the common protocols used on the Internet and other IT consumerization solutions.
“The shift away from the GDSs to various online and app-derived solutions is clearly seen in the booking trends.”