The concept of book-your-own apps and tools are seen as a threat by many travel managers but some sense the opportunities.
“It’s a given today that travellers want to manage business bookings in the same way they do their leisure trips. The challenge for organisations is to combine control of their travel programme with the choices end-users expect.”
These words, from UBS’s regional head of travel and Institute of Travel & Meetings board member Mark Cuschieri, neatly sum up the debate over what has become known as ‘open booking’. This is where a company has a very loose travel policy in place, and travellers may book however they wish – within constraints, such as a cap on spend.
Open booking is not widely favoured among travel managers. Research by Carlson Wagonlit Travel’s (CWT) Travel Management Institute revealed that only 9 per cent of travel managers are in favour of an open booking approach. Stanislas Berteloot, a board member for GBTA France and marketing director of technology firm KDS, says the trend known as BYOD – ‘bring your own device’ – is behind the rise of open booking. BYOD is the concept where organisations allow employees to use their own laptops and smartphones instead of standard-issue company ones.
A 2013 survey for Cisco found that employees using their own devices gained 37 minutes of productive time per week, and generated US$350 of value for the company. Already, 70 per cent of corporate IT decision-makers in France and 77 per cent in the UK are positive about the trend, according to the research.
IT bosses like BYOD because it reduces their capital costs. There may be higher costs for supporting a wide range of different devices, but no initial outlay for the equipment.And when people bring in their own devices, they bring in their own apps – and travel apps in particular.
This leads to business travellers expecting the same sort of experience on a business travel booking tool as they do on leisure sites and apps. “End users are increasingly dictating what corporates do when it comes to travel procurement and IT policy,” says Berteloot. “The reason they are using consumer apps is because they look good and work well. The answer is to provide the end user with the app they want to use.”
Concur senior vice-president Isabel Montesdeoca believes business travellers are jumping outside corporate programmes, not because they are trying to be difficult, but because they are trying to be more productive. She says: “It is natural that travellers want to use these great new tools that are popping up.”
Loss of overview when travellers use these apps is one of the big worries among travel managers – both in terms of management information and of traveller-tracking, where employers must increasingly show their duty-of-care.
Concur sells a service called Trip Link, which allows travel managers to gather information on spend outside the managed programme – though it says it’s not so much an advocate of open booking, but an enabler of it.
MISCONCEIVED THREAT
UBS’s Cuschieri says there is a place for open booking, and the perceived threat to managed programmes is misconceived. “While open booking channels may provide certain benefits, it’s important to appreciate that each company is unique, with its own culture, traveller needs, internal processes and supplier leverage. Each of these characteristics needs to be considered when determining if open booking can add value.”
He says there is a big difference between managed open booking and unmanaged travel. “Under a managed open booking programme, travellers have guidelines to abide by. The question is how much room to ‘roam’ do you give your travellers? This will be dependent on the organisation’s culture.”
Cuschieri says UBS carries out regular rate parity checks with a number of online booking websites. “We believe the current booking medium – online booking tool and agency – works. However, I’m a firm believer that enabling wider content and choice is a good thing, which could work across secondary or infrequent destinations, with the proviso that we can create a link to our corporate online booking tool.”
He says that, in essence, the minimum requirement for a travel buyer or manager is the ability to capture data and the ability to track travellers.
Open hotel booking
Open booking of hotels is where it might all begin for some companies. Research by CWT’s Travel Management Institute found anywhere between 40 per cent and 70 per cent of business hotel room nights are typically booked outside the travel management company (TMC)/online booking tool channel.
A rapid growth in web and mobile booking channels for hotels is also playing a role. Many of the new start-up ventures are in the area of hotel bookings, and the table on p80 shows just some of those that have launched in the past two years.
Hotel Tonight, which lets you last-minute book hotel rooms on the same day only, says that business travellers account for half of all their users. Its app – it is a mobile-only platform – has now been downloaded 8 million times.
The company’s managing director for Europe, Heather Leisman, says: “These are typically interrupted business travellers, people whose plans have changed, and they are booking a hotel for that night.
“Most of our business travellers are from small businesses and are unmanaged, but this trend away from: ‘You must book through here’, excites us. We see a huge opportunity for business travel.”
Hotel Tonight operates as a marketplace, with hoteliers setting prices themselves, guided by market makers employed by Hotel Tonight, who make suggestions if a price seems out of kilter. “What we typically see is hotels loading discounts of between 20-25 per cent on the price available on their own channels,” says Leisman. The company believes that its mobile-only, limited-availability business model means hotels are willing to offer discounts above what is available through their own websites and the global distribution systems.
SITE LIMITATIONS
Secret Escapes is probably best known for its TV advertising campaign featuring a pretty young woman whispering seductively to the viewer about the amazing deals the site offers. The site now has a huge number of members and can virtually guarantee to sell large numbers of room nights for hotels that sign up.
The site does not actively target business travellers. Co-founder Troy Collins says: “To be honest, our model is such that I would be surprised if anyone can efficiently book business travel. Our sales only last for seven days and we don’t give any indication of what is coming up so that people can plan their business trip around it.”
That said, the site virtually always has good central London hotels available. “But even in places like Paris and New York, we do not always have hotels available,” says Collins.
Spare-room booking portal Airbnb is the granddaddy of this new sector. It was founded in 2008 and has grown to the point where it handled 3 million guests in 2012 and has booked over 10 million room nights. Around one-fifth of people using Airbnb say they are travelling on business, and the portal has recently introduced facilities that allow you to add a business name to a reservation and also to generate a VAT invoice. The VAT issue is an interesting one. Many of the hotel booking sites will only allow you to reclaim VAT on their commission or service fee, rather than the full value of the booking, since they are acting as agents.
SHARING CONTENT
The glue that could make open booking and these new start-ups stick in business travel is the API (application programming interface) – the standardised data pipes that booking sites can use to share their content with others, including online booking tools. Room 77, for instance, allows others to plug into their hotel content via an API, believing that it brings mutual benefits.
KDS’s Berteloot believes these new entrants will open up their APIs. “Take the example of Easyjet,” he says. “The airline said it was not interested in business travellers. Now it is increasingly distributed through traditional channels and have services just for the business travel industry.
“The internet has made it easier for more and more suppliers to distribute, and most start-ups are now starting from scratch with a pretty standard API.”
Troy Collins at Secret Escapes says providing booking through an API would be a logical evolution. “Once a hotel’s deal is live, they just want to sell as many rooms as they possibly can.” It already sells its hotels through white label sites with partners such as The Guardian and Skyscanner.
APIs are not the only way of getting access to open booking transactions. The trick, says Concur’s Montesdeoca, is getting your arms around the spend data generated by these sites by whatever means necessary – not surprisingly, she cites Concur’s Tripit tool. “You find a place to stay that is five minutes from your meeting on one of these sites and send the email generated by the site to Tripit, and it gets absorbed into your itinerary. Using it doesn’t require Airbnb or any of these new sites to open up their APIs yet. It can be done off email,” she says. “Without significant effort, you can have all these bookings in the Concur system, giving visibility to the finance team where that spend is happening.”
Triplink is Concur’s other service that allows companies to embrace open booking. Travellers book on a supplier website, obtain corporate-negotiated rates and Triplink does the work behind the scenes to bring the travel and transaction data back into its system.
It is going further, too. This year, it will add a feature called Price to Beat, which will offer average benchmark prices for point-to-point travel, whether booked through the main Concur online booking tool or brought in through Triplink.
Concur says this will open the playing field for open booking because a company can take action on controlling spend by means of data gathering rather than simply enforcing online booking rules.
Final words on the subject go to UBS’s Mark Cuschieri.
He sees a bright future for open booking, but as part of a hybrid approach, “as and when corporate technology enables vast access to such rich content – which will ultimately deliver greater choice, increased compliance and duty-of-care, all within a clear and confined travel booking framework”.