Is It Rocket Science?
20 years ago, the corporate travel industry found itself in a difficult position and was forced to ask an incredibly challenging question: How can we aggregate and utilize disparate booking sources for air, car, and hotel reservations?
The question came as a result of burgeoning online booking sources, content fragmentation, and GDS deals gone awry. Solving this problem and the motivation to do so was critical for the corporate travel supply chain to compete and stay relevant. Travel Management Companies (TMC) needed to solve the problem to ensure they could provide any type and source of supplier content. Air, car, and hotel providers needed to solve the problem to optimize their distribution costs and foster brand loyalty. Clients needed to solve the problem to ensure access to relevant content, leverage supplier discounts, provide duty of care to its travelers, and to better automate its procure-to-pay method.
In the early 2000’s, all of the major Travel Management Companies sought ways to develop technology to solve the problem. The “Super PNR” (Passenger Name Record – essentially, a traveler’s itinerary) would marry travel reservations booked through various channels, providing the traveler a single itinerary view and the TMC the ability to modify, monitor, and otherwise service the reservation. While the complexity of developing a solution was not lost on many very smart technologists, millions of dollars and two decades later, no one came up with a good answer. No one could figure it out.
It Isn’t Rocket Science, But It’s Really Difficult
In fairness, the technology we use today to solve this problem wasn’t available when this question was first posed. But, even with advancements in technology that have enabled CapTrav to solve the “Super PNR” problem, its complexity cannot be overstated (coincidental perhaps that CapTrav co-founder and CIO, Nick Romano, is a nuclear engineer) and in retrospect probably not fully understood.
There are literally thousands of suppliers. Quality data aggregation must take into account every airline, car rental, hotel, ride-share, train, and non-traditional housing option such as Airbnb and VRBO. And all of these supplier types can be booked through a TMC, the suppliers’ own website, and aggregator sites such as Expedia. Each supplier provides a different set of reservation information and varies by booking source. For example, the information that an airline provides to a TMC for reporting purposes can be different than the information that same airline provides to its customer through its website and different from the information it provides if booked through an aggregator website. Even the products and services available for sale differ by booking source – in some cases, you can pre-pay for certain services or products through the supplier website, for example. For all, there are 25 plus fields of pertinent data to capture, marry, and normalize. The complexity only grows. Travelers make changes to reservations. Reservations get cancelled, modified, refunded, credited, applied, discounted, moved, and appended. And lastly, our options as consumers seem to grow daily.
The challenge to the solve the problem was far greater than we imagined and its clear why so many failed. It’s really difficult stuff. But the result may be transformational.
Why Does This Matter?
If we didn’t solve this “problem” 20 years ago, who cares if we have it solved today? TMC’s, suppliers, and corporate clients have figured out a decent way to manage the process without solving the Super PNR problem, right?
Let’s consider that less than 10% of global corporate travel is traditionally managed by a TMC. Let’s also consider that corporate travel represents one of the largest discretionary indirect spend categories for most organizations. These statistics don’t represent a model of best practice by any measure and I can’t think of a good explanation other than the value proposition offered isn’t too compelling.
Does the Super-PNR Have an Impact?
TMC’s Think So
Super PNR capabilities provide a TMC an overwhelming competitive advantage in the short term. In most respects, a TMC acts as a technology aggregator for third party tools that provide no real competitive distinction. The ability to marry disparate content sources and utilize data otherwise unavailable creates a value proposition for that TMC that would be unmatched as the barriers for entry are high. In addition, any TMC with Super PNR capabilities can fill the gap for its clients’ duty of care programs by providing off-channel booking data to its risk management partners.
Capturing off-channel booking data also provides long term benefit even if the competitive advantage becomes mitigated by a ubiquitous solution. The vast majority of TMC clients suffer between 30-50% leakage and by having this booking data, TMC’s can charge clients a fee for this information and leverage these bookings into their pay for performance deals with air, car, and hotel suppliers. In other words, TMC’s can monetize bookings that come as a result of Super PNR capabilities.
Air, Car, and Hotel Suppliers Think So
Suppliers understand that travelers need a comprehensive itinerary view to include all trip details. In the corporate travel environment, TMC’s are very good at not only providing this view in a traditional PNR but also managing reservations which mitigates the supplier’s engagement with the traveler. However, in an ideal world the supplier would limit their distribution costs and more heavily promote direct website bookings. The latter being a huge focus to create brand loyalty among Millennials that extends beyond just business trips. The notion that a business traveler can book on supplier.com or mobile app, enables the TMC to report on and service that reservation, and build brand loyalty which makes the Super PNR a panacea for travel suppliers.
Automated Procurement and Expense Suppliers Think So
Actually, SAP Concur doesn’t think so – they know. Bundling online booking with TripLink and TripIt is their version of the Super PNR solution and while not perfect, they have created what amounts to a monopoly in the corporate travel industry for its end to end solution. Competitors are moving in a similar direction with varying strategies but most recognize the challenge faced based on Concur’s booking engine relationship with the TMC community. Super PNR technology has the potential to permanently disrupt the notion that high adoption of a corporate online booking tool is mandatory to best practices.
Corporate Clients Think So
Even the best managed corporate travel programs suffer from some degree of program leakage. And while there are many reasons for this despite corporate policy disallowing such practices, ultimately personal choice plays the biggest factor. Today, we have more choices and more ways to exercise those choices than ever before. As a result, providing that choice to travelers while optimizing spend practices and providing duty of care is the compelling product to sell to companies today. The Super PNR is that product.
Some Final Perspective
I have played the role of corporate travel consultant now for nearly 20 years. Across companies of all sizes and industries, optimization opportunities have always been reliant on compliance. Want a better airline deal? Hotel rate isn’t quite on par? Risk is worried about the company’s duty of care practices? Better corporate travel compliance to the TMC was the only real answer. For me, the theme became repetitive, predictable, and frustrating. How can we solve this problem? I’ve thought about this stuff for two decades.
My business partner and Board member, Danny Hood, has been thinking about this stuff much longer than me (and carries far more credibility!). As President of BCD Travel Americas and forerunner on many cutting-edge technologies and technology companies, the Super PNR problem was one that he too tried to tackle 20 years ago. It was also the main reason he agreed to join CapTrav. The problem posed one of the biggest industry technology challenges ever faced and the sting of not solving it never diminished. After all of this time, a real solution represents an overwhelming value to the industry and to corporate clients. The opportunity is too exciting to pass up.
Can we change the industry? Hmm. Let’s see how deep the rabbit hole goes.