The term "game changer" gets bandied about so frequently these days that it's frankly lost much of its meaning. But the corporate travel initiative led by ZS Associates travel operations manager Suzanne Boyan, BTN's 2019 Travel Manager of the Year, embodies that description in the truest sense. Boyan's project is fundamentally transforming travel for ZS, a consulting and professional services firm with nearly 7,000 employees and global operations. But it also could serve as a proof of concept for an entirely new managed travel model, one in which corporate travel managers can leverage direct supplier connections and innovative service providers to tailor travel programs to their organizations' unique needs.
Straight to the Source
"We just didn't find value in the GDS model of booking travel," said Boyan, explaining the rationale to shift the travel management company out of the center of her program. In a typical travel program, the TMC serves as a link to content offered through global distribution systems. Plus, it has access to service and reporting on those bookings.
In late 2017, Boyan began reimagining ZS's managed travel program from the ground up, looking for an approach that would improve the travel process for employees, while maintaining data visibility and other essential controls for its travel department. Instead of going the GDS/TMC route, Boyan reasoned, ZS's travelers could get access to an equivalent level of content by going directly to the suppliers themselves, with the added benefits of greater freedom of choice; a consumer-like booking experience; and the ability to leverage loyalty programs, which are challenging to factor into corporate travel policies, despite the significant savings they can offer.
After a small pilot in 2018, ZS has rolled out the program in stages this year. The ultimate goal is to shift 50 percent of air and hotel booking volume to direct channels rather than through a TMC. Boyan has deployed the initiative throughout ZS's 10 U.S. offices. Around 300 employees signed up from among the company's 700 road warriors. Participants aren't required to book direct and can still use the company's TMC, but the program already is driving 10 percent to 15 percent of ZS's bookings through direct channels each month, according to Boyan, who has a clear set of plans to grow that footprint further.
How It Works
The program employs a direct connection with United, undergirded by the airline's integration with data aggregator Traxo, which funnels back to ZS all bookings ZS travelers make directly with United. Travelers book via their United MileagePlus accounts and indicate that the trip is for business, and thus the data flows back to ZS whether a corporate or personal email is tied to the account. Travelers are free to book other airlines but must go through the traditional TMC channel to do so. Meanwhile, ZS's hotel guidelines offer travelers similar freedom. Aside from one or two preferred properties near some ZS offices with which the company has direct billing relationships, travelers may book directly at any property they choose, and the company captures those bookings via email confirmations using Traxo Filter. In this case, only bookings made via corporate email address are captured.
Direct booking fulfills a major tenet of the program's goal, offering a superior experience for travelers compared to booking through a TMC, according to Boyan. "The traveler gets a booking experience that's more like what they're used to and [what they] enjoy from the consumer side, specifically on an app," she noted. "No one is going to invest as much money into a mobile app than the suppliers because they have the most to gain from it. TMC apps are not that great in comparison and don't have all the functionality and ancillaries that travelers want."
Meanwhile, enabling travelers to leverage loyalty programs via direct booking not only makes for happier travelers but also may lead to savings in the form of perks like free Wi-Fi or breakfast, Boyan noted. "If a traveler is Platinum Elite at Marriott, they'll get much better benefits than I can negotiate, probably, from another brand." Direct booking also reduces ZS's TMC service fees and has given the company greater leverage in negotiating rates with United. The airline gains margin on direct bookings because there are no GDS fees.
While United is the only airline on board at the moment, ZS is talking with other carriers. Boyan said she'd be eager to expand the direct connect strategy to hotels, as well. She noted a direct hotel integration with Traxo would be a "differentiator" and "high on the list" of ZS's considerations when the company goes out to bid for hotel suppliers again next year.
Microservice Model
TMCs, of course, do more than just manage booking on behalf of their corporate clients. They provide an array of additional travel and support services. To fulfill those necessary functions without involving a TMC, ZS contracted a lineup of tightly focused "microservice" providers, including Freebird for flight disruption management and rebooking, Tripbam for hotel rate reshopping and International SOS for duty of care. Integration service Traxo Marketplace transmits travel data directly to those providers, and it's all tied together by ZS's in-house travel dashboard, which serves as a control center for tracking data.
Many see that open marketplace approach, as opposed to a one-stop-shop TMC for the full gamut of such services, as the future of the corporate travel industry, especially for small and midsize enterprises, which don't necessarily require the heavy-duty support a large corporation might need but still can benefit from the advanced technology and tools that have become available off the shelf.
Boyan said she "absolutely could not" conceive of launching such a program even three years ago. "I feel really fortunate to be in the position I am today, with the current technology landscape." Her program could be a test case for that open model. It could help redefine how corporations buy travel—and push TMCs to adapt. "There's always been this assumption that when you get to a certain [size], you have to have a TMC and you have to have a booking tool and you have to have all these kinds of big, heavy infrastructure components," said Traxo chief commercial officer Cara Whitehill. "Those are very expensive, both from a direct cost standpoint and also from an indirect cost standpoint, when you consider the teams that are required to manage, configure and maintain."
For many travel programs, the status quo of a TMC as the centerpiece doesn't make as much sense as it did before the rise of targeted microservices, Whitehill added. "TMCs do some things really well. They're really good at service and support or handling a complex itinerary, so there's still a place for them," Whitehill noted. "But why do you need to pay a TMC the $10 or $20 for somebody to book a simple round-trip flight and a night or two in a hotel? That's overkill. So that's where Suzanne has been coming at it from an interesting perspective."
GoldSpring Consulting partner Will Tate, who advised ZS during the conception of the program, illustrated the difference between Boyan's decentralized approach and the "platform" model: In a platform model, TMCs play a role similar to Walmart or Netflix, acting as hubs to connect customers to a slate of offerings. That convenience, though, comes with a limited selection. "The whole value proposition comes down to … if I decide to source everything independently, what's the gain versus the resource requirements and the cost," observed Tate. "That's what's so innovative about ZS's program. … A lot of companies would like to do it," he said, especially given the services available these days to capture data and apply controls into direct booking channels with no TMC involvement.
It takes significant time and manpower to fine-tune the mix of microservice providers, and each provider then becomes a relationship that must be managed, Tate noted. ZS, an information-focused SME with the ability to build its own data management system, was particularly well-positioned to benefit from this type of approach.
Nonetheless, Tate thinks other SMEs "absolutely" could leverage the concept, if they're willing to take a chance on transformation and accept some of risks, such as lack of a single, TMC-managed traveler profile and the potential for leakage. To wit, if travelers don't book with their corporate email addresses, they slip through Traxo's email filtering system.
A Risk Worth Taking
As direct booking and microservices reach further into TMCs' turf, TMCs will be forced to reconceive their value proposition, which ultimately will benefit travel buyers, noted Susan Lichtenstein, former Cisco global travel manager and now co-founder of DigiTravel, a consultancy concentrating on digitizing and simplifying the managed travel ecosystem.
The future for travel programs, Lichtenstein said, is an omnichannel approach that maximizes choice, with direct connections and TMCs side by side. "The tools are there [for a ZS-type model], but it shouldn't be an either/or," she said. "If a traveler wants to use a corporate booking tool, great, but they should be able to do direct booking, too, if they want to." She predicted: "There are going to be more and more Suzannes out there who are looking at their program and asking, ‘Why do we do it this way?' TMCs will have to decide how to add value and how they're going to make money because buyers will pay for what they want."
ZS recently completed an RFP for TMC services, selecting Luxe Travel Management for its U.S. operations. Boyan said the companies are working together to "better understand how the TMC can help service" ZS travel booked through direct channels, if needed. She added that Luxe "has already had great discussions with United" about doing so.
While Boyan is confident her bold experiment is measurably improving ZS's travel, she aims to advance the entire corporate travel ecosystem, which she described as "stuck" in the past. "At the end of the day," Boyan said, "the biggest benefit is that if we can move the travel industry forward … we're going to have access to even more technology, and that alone could be well worth the risk."