Business Travel Show Europe Kick Off, 23 February,
Global Travel Risk Summit Europe, April 2023,
3rd Annual Sustainable Business Travel Summit
In the last 40-plus years a lot has changed in our industry, but the overall business model is fundamentally the same. Real revolutionary change has rarely occurred. Suppliers are embracing new ways of thinking, but corporates and travel management companies (TMCs) are not – yet.
We are perfecting travel programmes to achieve incremental savings, fine-tuning policies to control travellers and drive compliance, reacting to world events by hastily putting in new layers of control, and increasing administrative hurdles to cover more aspects of spend. We are doing everything we can to ‘control’, but what about delivering business value?
Travel management has gone through a long evolution – something that is defined as “a process of continuous change from a lower...to a higher, more complex, or better state”. An orderly process – but a very slow one. The earth is 4.6 billion years old; and modern humans have taken 2.5 million years to evolve. Modern travel management has only taken 45 years to reach the point it’s at now, which sounds like a relatively short timeframe, but in today’s business environment and a world of immediate gratification, it can be seen as an eternity.
On the other hand, revolution is defined as “a sudden, radical, or complete change. It is a fundamental change in the way of thinking or visualising something, a changeover in use or preference.” Revolution is sudden, extreme, a complete change in the way people live and work. This process is disruptive, chaotic, hard to predict, disorganised and not always progressive. Our suppliers are making these changes and new entrants have redefined what we can do today. What is needed now is a revolution for the corporate- and TMC-side, not only to catch up but to leapfrog ahead.
What is wrong with the current business model – why change? Broadly speaking, our business is all about data – collecting it, analysing it, making decisions with it. Over decades this has meant booked data from TMCs and (hopefully) matching data from suppliers. But suppliers have embarked on a revolutionary path whereby these traditional sources of data become much less reliable or even obsolete. Data is becoming more global, random and decentralised.
Suppliers are streamlining the booking process to reduce their cost, provide personalised offers, and know more about your spend and your traveller than you do. This trend means the market now deals with a variety of booking options, service offerings and data sources. Travel management is having a hard time adjusting to these changes and is often actively fighting this trend. TMCs are seeing their core-business being seriously complicated by these developments and, while their data has always been the ‘source of truth’, these new trends are making it difficult, if not impossible, for them to fulfil their role.
Needs and wants
So let’s start with a clean sheet of paper and write down what we need, and what we want from this new environment. We want to get preferred deals with suppliers; be aware of every movement of our travellers; know their exact spend; and process expenses automatically. We want to be able to predict traveller behaviour and adjust programmes before changes occur; know what travellers think and demand at all stages of their trip; and have all this data available in real-time, 24/7.
In this new environment, the traveller can book however they want – through TMC, on websites or direct – and be able to get the lowest logical fare with corporate discount, wherever they book. Corporates have full visibility of bookings and changes regardless of channel used – with all data consolidated regardless of source. Expenses are visible in real-time. Traveller tracking is proactive but not intrusive. A feedback system allows for immediate service recovery if required. Traveller behaviour and predictive analysis is used to adjust the travel programme.
Evolution is a way of looking from the inside out: what are others doing and how do we get there? Whereas revolution is an outside-in view: where do we want to be and how do we get there? We need to redefine our way of providing value to the company, and not focus on just savings realised. Once we have set our goals we then need to develop a roadmap to get us there. Our mission should be to challenge and improve the status quo.
Revolution is disruptive, so not everything will be orderly. But if we do nothing, the cost of catching up will be much higher. Let’s forget what we know today, start with a blank sheet of paper and unlock new opportunities.
Don’t survive – thrive.
Andreas Wellauer is the CEO of Galiant Consulting, a Germany-based company providing global training and consulting services. His previous employers have included the United Nations in New York, the Asian Development Bank in Manila, UBS in Hong Kong and Woolworths in Australia.