Amex GBT & Lola Will Partner Exclusively for Five Years

Lola is going for it. Chief technology officer and founder Paul English hinted in July about a "partnership with a company that has thousands of agents," and now we know: Lola and mega travel management company American Express Global Business Travel have signed a five-year exclusive contract. That means Lola will not work with another TMC and Amex GBT won't work with a Lola competitor in the unmanaged/lightly managed travel space.

Who Lola's competitors are, though, is unclear. Asked to name Lola's competition, English cited Concur. "We're not competing with them directly right now, but we're very aware of them." Though it's not the reason Lola is partnering with GBT, Lola benefits indirectly from GBT's large share of mutual clients with Concur. "One of the things, frankly, I really like about this partnership is: We're learning a little bit more about Concur, and that's been good because Concur does some things that we don't do that we want to do at some point," English said.

While Lola isn't targeting larger customers now, it is learning from GBT what it takes to serve bigger clients, namely travel manager-friendly software—from controlling the traveler list to implementing rules-based policy, such as higher fare classes for executive travelers. English was referring to something a bit beyond the Lola Works dashboard that launched in March. "We're designing a software right now that will allow us to do that at some point," English said. He added: "Technology usually starts with consumers and small businesses and then makes its way into larger enterprises, and so we really see this as the beginning of a new wave of technology starting to permeate the entire industry."

GBT VP of marketing and product strategy Evan Konwiser noted: "That's a departure from how TMCs have traditionally approached technology, TMCs a lot of times have oriented their technology to the most complex need … and then tried to distill it and simplify it for simpler-need clients. Ultimately, that can create a less superior solution." Now, Amex GBT is "joining Lola on this mission of starting at [a] maniacally traveler-focused" solution and then collaborating to add features that could appeal to more clients.

What's Really Happening Here?

Lola appears to be throwing in with corporate travel tech platforms that are challenging traditional booking tools and TMCs that have consumer-friendly technology. TripActions CEO Ariel Cohen has stated his company will beat out the mega TMCs. TravelPerk chief commercial officer Jean-Christophe Taunay-Bucalo told the BTN Group's The Beat that he anticipates a "revolution" in the short term in which digital booking platforms take over for TMCs. Tools that enable open booking could cut into the need for booking tools: Shep can apply light policy to internet travel shopping via a browser extension and pop-ups and can capture those bookings for travel management and reporting, and TMC AmTrav has reinvented itself as an end-to-end integrated travel management platform and has hooked up with Traxo to bring in off-channel bookings. AmTrav, though, like TripActions still is a TMC, and that means real, live travel agents.

Lola and GBT, too, seem to be embracing the best-of-both-worlds model with Lola's end-to-end tech, GBT's travel agents and GBT's negotiated content. Lola offers light travel policy capabilities, based simply on prices and threshold. Lola has 20 agents who carry out Lola's brand of proactive travel management. They're based in Lola's headquarters city of Boston. The partnership with GBT helps Lola, though, scale up its customer support—globally, even—without a massive internal investment. GBT's thousands of agents will train on Lola's system over time.

Additionally, Lola will offer the rates and amenities GBT negotiates with suppliers on behalf of its midmarket clients, which GBT calls its Preferred Extras. Those rates will be available within the Lola platform to those who buy the Lola/GBT product and to Lola's other clients, the latter under undisclosed contract terms. "There's revenue sharing in both directions," said Lola CEO Mike Volpe. "[GBT is] very much vested in our overall success, not just our success" on the joint product.

Expense capability caps off the end-to-end effort. Lola "is looking very carefully at" launching its own expense tool, English said. That, however, is in the future. For now, it integrates with Expensify and has more third-party expense integrations coming. "We know expense is important," he said. A proprietary expense system is another weapon in a potential faceoff with the likes of Concur. The move mirrors some new players that have come from the opposite direction: tech platforms that started in the expense world and are expanding into more full-fledged travel tech platforms—namely TravelBank and Certify. Bob Neveu, CEO of Certify, was among BTN's 2017 Most Influential for challenging Concur, even if from a distance. In the one-stop-shop arena, AmTrav, too, has an internal expense tool, though it's still fine-tuning the functionality and has not made a large-scale announcement.

Another big benefit for Lola: GBT's large sales force can attack the small and midsize enterprise market, English noted. But there's something else. "The other thing I like personally about this—I'm an engineer by training, but I've always been obsessed with brands—Amex is the best brand in business travel, for sure," he said. Lola can learn from GBT how to adjust its brand slightly to be more business oriented, he said. Branding for the joint product remains to be determined, but the Lola name will be involved. "We want to be part of reinforcing the Lola brand," said Konwiser. "We're not putting a separate brand on it."

Lola's geographic plans are to market first to companies headquartered in the U.S., which can include companies with crossborder travelers. English-speaking countries like Canada, Australia and the U.K. will be next, and a full global rollout will follow. Konwiser said GBT's efforts for the joint Lola/GBT product will be in the U.S.

Lola subscriptions start at $99 per month and go up to $900 per month, Volpe said, noting that clients appreciate a predictable cost for which they can budget. Konwiser said GBT will offer a deal for those who sign up by the end of the year and then will follow "a similar but slightly different pricing regime."

A venture capital-backed startup with a "really important partner," English said, would healthily derive about 25 percent of its business from that partner. As GBT's sales efforts scale up over the next 12 months, GBT likely will produce a higher percentage. "Over time, we need to grow our own direct business, and we're doing that," English said. Volpe added that the partnership indirectly will help Lola scale up its direct business, as well.

What GBT Gets Out of It

While the partnership will help Lola scale, GBT has found in Lola an entry point to lightly managed travel programs. Though not a typical TMC target, it's a segment GBT has been eyeing for years. There are "hundreds of thousands of them out there in the U.S. market alone and they're spending billions on travel, and we think that's really darn attractive," Konwiser said. "We are attracting a lot of clients that are looking at travel management that ultimately may not sign with us because, both by association and solution set, we are more designed around more complex and bespoke needs." The Lola partnership gives GBT a product to offer to such prospects.

Konwiser said this segment required a different approach than TMCs' usual offerings. "There is something unique about what happens when you can combine the complementary assets of an agile tech focus startup in this space with one of the larger travel agencies with a travel agency DNA." The solution, Konwiser said, "has to come from a more nimble, more agile, more flexible, more tech savvy, more maniacally focused team than we could ever put together." He proposed that Lola, too, needed something a little beyond its core strength: "Through this arrangement, I think there's a tacit acknowledgement from the Lola side that they had to approach this a little bit differently … to really achieve the commercial greatness. … The cocktail is a first-to-market from a solution standpoint, from an asset standpoint and certainly from a startup-plus-big company collaboration standpoint."

What's to Come After the Five-Year Contract Ends?

English and Volpe maintained that Lola will not be sold, as Volpe proclaimed, "We're going to go public and build a really big, successful company. This industry is gigantic."

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Correction, Nov. 13, 2018: This article previously referred to a Lola integration with Concur. Lola is not integrated with Concur. BTN regrets the error.