Johnny Thorsen is Serko's VP of strategic business development. He also advises start up technologists in the managed travel space and beyond.
It has been almost two months since the long awaited
“public secret” was announced by SAP and Amex GBT on Oct. 3, and during that time the two partners have been busy communicating
details of their new strategic partnership to the wider travel industry, while
no doubt also spending some serious time and energy on explaining the
commercial rationale and service benefits to their respective customer bases
around the world.
As stated in my LinkedIn post just a few days after the
announcement, I truly respect the decision made by the two travel giants, and I
wish them the best of luck with the future product development and eventual
delivery. Hopefully they will set a new standard in terms of how things can be
done.
There are already clear signs of some dramatic fallout
from the announcement, however, as both TMCs and corporate buyers around the
world have stated (some formally, others in confidence) that rather than going
down the road outlined by these giants, they’ll opt for change that this
announcement will trigger. That leads to an interesting debate about what type
of business or program you prefer:
- Would
you rather walk into a “walled garden” where you can have anything you want,
assuming it exists inside the walls?
- Or
would you prefer the “open ecosystem” approach where you have complete freedom
of choice and can select any given solution and service regardless of the
origin?
There are pros and cons with both approaches, so rather
than saying one is better than the other, I will outline what characteristics
you can look for in order to decide which model is right for you (by the way,
this is relevant for travel buyers and TMCs alike, even though these groups
obviously are looking for very different values when they make a decision).
The “walled garden” option is typically designed around
a limited or restricted choice model where the supplier decides what services
they will promote, and under which commercial terms they are made available.
Consider your mobile phone – it comes with a number of mobile apps preloaded
based on decisions made by your network provider, and you can then add mobile
apps subject to your phone manufacturer and the network provider allowing this
to happen.
In the travel industry the best example is content—the walled
garden model will limit your choices of how you get content as well as under
which commercial terms the content will be available, while the open ecosystem
model will allow you to select any combination of content and secure your own
commercial terms accordingly.
While the open ecosystem might sound like the better
choice, it does come with the burden of more work. You have to put in the
effort to make the right decisions and establish the associated commercial
agreements and technical solutions, which is one of the main reasons many
customers prefer the “walled garden” model: It requires less effort to get
something in place which is “good enough” to move forward.
With the arrival of Agentic AI and the massive
expectations of rapid innovation in the travel industry, it might make sense to
ask yourself a few key questions to determine which model is right for you:
- Do you want to experiment with multiple
products and solutions?
- Do
you want access to all content options without having to ask for permission
- Do you want access to new leading-edge
innovations as soon as they are launched?
If you answered “yes” to two or three of the above
questions, then you are probably better suited to an open ecosystem model, and
you should consider creating a framework where you can try new things without
relying on your TMC to make this possible. If you answered “no” to two or three
of the above questions, then you are most likely better served by a “walled
garden” model and should stay in that environment.
Before you jump to conclusions, however, consider this:
After 20 years of relatively slow innovation, the corporate travel tech stack
is ripe for disruption, and it is very likely we will see completely new
AI-native products emerge over the next 12 months which quite simply don’t fit
into the legacy model when it comes to servicing and settlement. These new
products will no doubt be extremely traveler focused and, as such, will create
a new demand from your travelers to get access to these smart services. This
will more than likely only be possible in the open ecosystem model, so even if
you personally prefer the walled garden approach, the pressure from travelers
might force you to change your position.
2026 is truly shaping up to be an exciting year in terms
of innovation in the corporate travel segment, and it will happen at a speed
which is hard to imagine after 20 years of snail-paced transformation. Get
ready for an exciting journey!