The travel industry needn't wait seven years to consider the
implications of a world in which business travelers take greater control of
their travel shopping and booking decisions. Already today, a growing cadre of
nascent online and mobile searching and booking tools help make such a scenario
feasible, even if no real evidence exists that today's business travelers, even
the youngest among them, are any less policy-compliant than travelers of the
past. But in 2020, technology will have advanced, the use of mobile
applications likely will be further ingrained into daily work processes and a
steady flow of new travelers weaned on online and mobile consumer booking
options will enter the workforce. The opportunities for those travelers to
explore the spot market seem likely to expand, but whether and to what extent
their employers will allow them to choose booking channels and suppliers is an
open question.
The implications for the business travel industry obviously
would be profound should such a traveler-centric approach to booking travel
take hold—be it termed "open booking," "Travel Management 2.0"
or some other such phrase. Buyers not only would have to redouble their efforts
and adopt solutions to ensure capture of such travelers' booking and
expenditure data and itineraries, they also would have a far more difficult
time guaranteeing suppliers a specific share or volume of their business.
Opinions varied among interviewees as to the feasibility and
likelihood of such a scenario in 2020, and respondents to BTN's survey generally exhibited some skepticism. About two-thirds
of those surveyed indicated they believe "travel management professionals"
will "be at least as concerned as they are now with getting travelers to
use specific travel suppliers in 2020," but nearly a quarter disagreed
with that sentiment, with the remaining 11 percent disinclined to hazard a
guess.
"I'm not a proponent of Travel Management 2.0 theory,"
said Tom Stone, managing director of travel consulting firm Sirius Management. "In
seven years, the key decision makers at banks, pharmaceutical companies and oil
companies will be people over 45 years old, not kids out of college. They will
still buy into the concept of Travel Management 1.0. I'm skeptical that even in
20 years they won't be seeing the value of managed travel. Travelers will still
be expected to follow policy and use preferred suppliers."
Stone may have cited age in his analysis of the travel
landscape seven years hence, but the as-yet unproven expectation that
Millennials are more likely to disregard corporate policy mandates might not be
the only effect in 2020 of the increasing number of that generation's business
travelers. Bjorn Hanson, divisional dean of NYU's Tisch Center for Hospitality,
Tourism and Sports Management, predicted that Millennials' preference for "experience,
convenience and being able to share experiences with peers" when making
choices over what he called Baby Boomers' embrace of "status, entitlement
and recognition" will have an effect on travel program structure.
"For many types of travel, the emerging policy will be:
there's a list of brands that are acceptable, there are hotels that can be
requested for approval and then there's a price guideline," Hanson said. "What
will come out of all of this are lower travel costs related to hotels for
corporate travel managers and higher satisfaction among employees. The old
model was: There will be savings by volume purchasing. The new model will be:
There are savings because there are travelers who sometimes prefer location
over anything else, and that might include a limited-service hotel. In other
cases, the traveler might prefer an experience, but it might end up being much
less expensive than the corporate rate model would."
Honing The Tools
Hanson's prediction of structural change is by no means an
industry consensus on the potential effect of traveler-centric booking models,
but most interviewees generally agreed on one aspect of the process: The
technology to support open-booking will have matured by 2020, making such a
structure possible, whether travel managers find it a desirable option. Already
today, technologies exist that allow travel managers to collect information on
some bookings outside preferred channels, and some executives are anticipating
the next steps.
"I expect much more of the open booking platform mostly
because of the tech that's coming about," said Management Alternatives
president Carol Ann Salcito. "From a corporate buyer's perspective, I see
a lot of decisions in the hands of the individual. There will always be
duty-of-care responsibilities, but they will have technology that will bring in
all disparate sources of purchasing travel. It's the Holy Grail, but no one's
found it yet."
Jerry Behrens, senior vice president at Travel Leaders Group
and at TLG's Tzell Travel Group division, noted that technology soon will allow
travel management companies to better collect booking data in cases when those
travelers who like to search for better deals outside approved channels succeed
in their quest. "We want to plug [that data] into the back office and get
the reporting," he said. "Will that be a huge majority of bookings?
No. There are vagaries of what is available through one source versus another
source; it's always in flux. The acceptance of open booking will grow as long
as it can be watched."
As technology to locate and manage rogue bookings develops,
so too will technology designed to keep travelers in a managed program in the
first place, noted former BCD Travel president Danny Hood.
"There will be a seven-year race to develop the super
managed-travel app that has everything the traveler needs, including corporate
policies and negotiated rates as well as managing more of the E in T&E,"
Hood said. "Whether the TMC develops this or it is outsourced, that
certainly is high up on the priorities to continue controlling negotiated rates
and policy. I think there will be a race over the next seven years between
channel-independent pricing and the super managed-travel app. Open booking
could play into channel-independent pricing. It is still a long way off."
Accenture global travel and events senior director Mary
Bastrentaz noted her company is addressing head-on the lure of outside
technology. "The corporation is going to be challenged to create their own
apps to keep people within the managed program," she said. "We
already are taking steps. We just built within our firewall The Connected
Traveler, which is very much like a TripCase or TripIt, where travelers can
share itineraries with others. That's a type of app we have developed
internally to keep people within our environment."
Happy Mediums
Many interviewees agreed that 2020 still will feature
managed travel programs usually tolerating varying levels of program leakage
while incorporating new innovation into methods of incentivizing travelers to
book preferred suppliers through approved booking channels—and capturing
associated data when they don't.
Travel managers "will have to eventually reduce their
expectations in what is reasonable to collect and manage, and give up on the
others," said Al Lenza, CEO of Lenza Group, a travel distribution
consulting firm. "Maybe it's an 80/20 rule. It's a losing battle if they
think they'll get to 100."
University of Texas at Austin director of travel for
intercollegiate athletics Kevin Maguire noted that "we need to find a
happy medium" between travelers' desires to book how they want and
corporations' desire to hold down travel costs, "and I don't know what
that happy medium is at this point."
This report
originally appeared in the Nov. 11, 2013, edition of Business Travel News.