Several Expedia-owned brands, from its namesake online
travel agency to Hotwire and Trivago, target leisure-oriented and unmanaged
business bookers. Meanwhile, its Egencia travel management company goes
squarely after the managed business travel category. Sensing an opportunity in
the middle, Expedia in May launched Expedia+, a loyalty and travel
management-lite program for small U.S. businesses.
The online travel giant is not alone in its attempt to seize
an opportunity in the small, lightly managed or unmanaged travel sectors.
Priceline’s Booking.com this spring launched a small business hotel loyalty
scheme called Booking.com for Business, while corporate TMC HRG in February
came out with Fraedom for what it calls the “unmanaged” corporate sector. There
also is an upstart in the bunch. This year, NexTravel launched with an
out-of-the-box, turnkey travel-booking tool for the lower end of the market.
While each of these entities has a different approach, they
all provide free (at least in their basic forms), Web-based tools for small
businesses, travel administrators, startups and others looking to streamline,
centralize and save on travel without all the trappings of a full-blown managed
They are going after a market that is vast but varied. On
the whole, it’s lucrative, even if no individual account is a big moneymaker.
“The total U.S. online travel market is a $145 billion
business, and unmanaged business travel makes up roughly 25 percent of that,”
according to Expedia chief marketing and strategy officer David Doctorow,
citing PhoCusWright research. As such, he called the unmanaged business segment
“a $36 billion opportunity.”
Suppliers and intermediaries have grasped at that
opportunity for years, often in the form of small business programs that
require no upfront cost, are easy to administer and are simple to use. Just
about every travel supplier, from airlines and hotel companies to rental car
operators and payment systems, have some sort of small business offering.
Expedia and Priceline have molded their approaches on
similar small business loyalty schemes, but theirs seek loyalty to the
intermediary, not the individual supplier.
Expedia’s U.S. small business loyalty program offers no-fee
access to a dedicated travel site where travelers can book and administrators
can manage—at least lightly. The play is for the lowest end of the market, as
Expedia prompts users that spend more than $100,000 per year on travel to use
The savings aspect lies in hotel bookings. Enrolled
companies invite employee travelers to join. The company can earn a $100 hotel
coupon for every 10 prepaid hotel room nights booked for more than $50. The
rebate “can be used by the company immediately, saved for future travel or
given as a gift to an employee for personal leisure travel,” according to
Employee travelers get their own perks like personal Expedia
points, access to priority customer service and, for some hotels,
rate-inclusive hotel amenities. They also still can earn loyalty points from
the suppliers they book.
While business rewards apply to hotel spend only, “all
enrolled employee travel booked on Expedia.com automatically appears in your
company’s Expedia+ business account,” according to Expedia.
With that, administrators have at their fingertips simple
reporting tools to view employee travel plans, track travel spending and manage
Booking.com For Business
Released this spring just before Expedia+, Booking.com for
Business follows similar contours. It provides at no fee the ability for
administrators to set budget filters and view and manage employee-booked hotel reservations
worldwide. Canned reports also review business hotel spending booked via the
“Our tools let you link travelers to the company account or
book on their behalf, without ever losing oversight,” according to the service’s
website. The program offers more than 600,000 properties in 212 countries at
savings opportunities of 10 percent off “select properties.”
While Booking.com for Business and Expedia+ have parentage
in OTAs and take their cues from supplier loyalty programs, Hogg Robinson
Group’s Fraedom grew out of the corporate travel management sector and
positions itself as an end-to-end travel and expense management solution. In
short, it is a more complete management tool. The offering bolts together its
HRG TMC booking technology with tech from expense management division
Fraedom Travel & Expense, available only in the United
Kingdom but planned to expand, enables users to book travel online and flow
transaction data into an integrated expense management system. While free to
users in its most elemental form, there are fees to load and book negotiated rates
or to use agent assistance.
Like Expedia, HRG is targeting a customer set separate and
distinct from its TMC business. HRG CEO David Radcliffe called it the
“unmanaged” sector, even if, he acknowledged, providing travelers with an
integrated booking and expense tool denotes some level of management.
“There are about 1,000 large corporations in the world, of
which we manage 200,” HRG marketing director John Harvey told The Beat
earlier this year. “There are companies in the rest of that 1,000 we don’t want
because they are heavily commoditized. The 1,000 are relatively static, but we
are a publicly quoted company and we don’t want to stay static. If you move
down from there, there are tens of thousands of companies. There is a large
opportunity if we can build an attractive offering.”
Also seeing the opportunity, Web-based booking tool
NexTravel incorporates spend tracking, reporting and policy controls and houses
traveler preferences and profiles. The firm fleshes out its core booking
technology by tapping into partners, including TMC Atlas Travel for travel
fulfillment or agent services as needed. Basic bookings are free, but agent
assistance, higher-volume users, expense system integration and other premium
features would incur costs.
“We are a technology company,” NexTravel CEO Wen-Wen Lam
told The Beat earlier this year, “but because the market that we have is
smaller, we position it as an online travel agency for the ease of marketing.
Also, if you look at the size of our [target market], they have no idea what a
Where NexTravel, HRG, Expedia and Priceline see an unmet
market opportunity, others aren’t quite sure how—or even if—they should angle
services to the lowest end of the corporate travel spectrum.
American Express Global Business Travel, for example, has a
small and midsize offering for companies spending at least a couple hundred
thousand dollars a year on travel. But does it have any plans to think even
“We are still looking at this domain, and I don’t know what
we’ll do,” said chief commercial and technology officer Philippe Chérèque. “I
think the number-one concern of these guys is cost. Do we want to be a cost
competitor to the OTAs? I don’t think so.”
This report originally appeared in the June 1, 2015, issue of Business Travel News.