For industry observers and participants, neither crystal balls nor bottles of wine are in short supply these days. Projecting how and when corporate travel will start back up and what the new norm may look like has many of us turning to both.
I am intrigued by new industry tidbits that seem to come daily. Lufthansa’s announcement to part ways with Sabre strikes me in light of NDC and the general move of suppliers to push website direct bookings. SAP Concur’s announcement that it plans to rebuild its booking engine strikes me in light of the mounting legacy competition and start-ups. Will more airlines exit the GDS? Can SAP Concur leapfrog the competition yet again? Who will be the winners and losers?
What does the future look like for corporate travel?
This is difficult to answer with any certainty but part of the reason I got into this business was because I have trouble sitting still and this is an industry that will fast leave you behind even in normal times if you don’t keep up. And while these are not good times by any stretch, I do find it exciting to think about the future of the industry – an unpretentious glass of red wine helps me through.
The corporate travel supply chain is as weak as I can remember. When I started my corporate travel consulting business 18 years ago, the notion of “managed” travel without a TMC was a non-starter. Couldn’t be done. At the time, we were striving for 30% online adoption with first generation booking engines. We went through a few rounds of GDS/airline distribution battles and many of millions of dollars spent and lost in search of the super PNR. But ultimately, best in class was strictly defined by an agency of record, optimized supplier discounts, and strong travel policy – ancillary tools and technology were in the works to support these basic facets of the business.
Today, while the basic principle is the same, the supply chain is fragile. SAP Concur has enjoyed “co-opetition” with most of the major regional and mega-TMC’s and have remained a whisker away from not only becoming a full-blown competitor but also changing the game entirely. You don’t really need a crystal ball for this one – SAP Concur has just about all it needs including a best in class booking engine, mid-office quality control, expense, risk, and tools in TripIt and TripLink that enable data capture of off-channel bookings and expense reimbursement. When you think about it, infrastructure in the form of travel counselors is all they are missing to provide an end to end corporate travel program.
New market entrants promise a one-stop-shop leveraging slick technology aimed at the small to mid-market, no doubt with sights set to move upstream as their client base grows.
Airline suppliers have seemingly succeeded with NDC, providing greater flexibility for the traditional supply chain but really positioning themselves to better own the client relationship as corporate demographics shift to brand loyal millennials.
At CapTrav, we capture all bookings no matter the booking source, enhancing duty of care, leveraging supplier distribution strategy, and providing “labor-less” transaction volume to TMC’s and as we continue to develop, the ability to automatically populate any expense management tool.
And if we gaze just a bit deeper into our imaginary crystal ball…
As NDC continues its path and as suppliers continue to enhance their product offering that makes traditional GDS distribution even more uncertain, what happens to travel distribution? Do corporates even need a traditional booking engine? If suppliers can optimize their businesses by mitigating GDS distribution fees, commission and override payments, wouldn’t they continue to do so? We’re seeing this in action today with CapTrav, TripLink, and others. And if you consider the under-served small to mid-market which makes up the majority of corporate travel spend and the investments being made in new technology to service this market segment, is it hard to imagine that we may fundamentally change the way we define the traditional corporate travel supply chain?
I understand why SAP Concur is re-building their booking engine but is it that difficult to imagine an optimized program that doesn’t use a booking engine at all? If we have all of the travel data, can provide duty of care, leverage supplier deals, and streamline expense reimbursement, why not? The booking engine plays a role but the vision is leveraging TripIt and TripLink to provide a holistic picture of transactions – book your trip anywhere, we don’t care, and captured expense will be automatically reimbursed to you. That’s the essence of the vision and it seems smart to me. It seems inevitable.
I don’t pretend to know what the future holds any more than any of my industry colleagues or competitors. Even prognostication comes from a place of experience and my crystal ball thinking is a direct result of conversations I’m having every day with clients across virtually every industry and of every size as well as industry suppliers. Based on what I’m seeing and hearing, both start-ups and legacy technology is preparing for massive change and it’s happening right now, before our eyes.
We see it happening at CapTrav. We developed our technology based on collective decades of hands-on experience, both with clients who embraced the traditional corporate travel supply chain and those who sought to reject the norm. We believe our model satisfies both.
In the meantime, I’m looking forward to putting the crystal ball on a shelf, forgetting my Zoom password for at least a while and having a glass of wine with industry colleagues and friends. In person.