Monthly Archives: May 2017

New Private Luxury Terminal At LAX Offers Corporate Memberships, But Are There Takers?

Who will pay thousands of dollars to use a private terminal before boarding a commercial flight? Rich folks, of course, but also maybe those who employ rich folks. At LAX, where celebrities move through and paparazzi pursue, entertainment companies and talent agencies may take a look at The Private Suite, a facility that opened this month. They may not be the only types interested in corporate memberships.

By all accounts, the people who put together The Private Suite thought of everything, at least when it came to designing the actual product. It’s operated by Gavin de Becker Associates, a firm specializing in protecting public figures.

The gated facility is on the opposite side of the airport from the rabble of the main passenger terminals. Members avoid the nasty road traffic getting into LAX. At the private building, they get their own TSA screener (for outbound) or customs official (for international inbound). There are lounges for individuals and for groups. Users get rides in BMWs across the tarmac to their commercial airline’s lounge or direct to the plane. The glitz includes pre-flight massages, manicures and haircuts. A team of eight escorts travelers, handles the bags and attends to special service requests.

It’s a private jet experience without the private jet. All for a mere $2,700 per group (up to four people) for a domestic flight. For international flights it’s $3,000 per group. That’s if you have an annual membership, which runs $7,500. Non-members can pay higher “trial” rates.

Corporate memberships apparently come with similar pricing. A spokesperson said the company still is working to set up corporate accounts and wouldn’t answer questions.

LAX Private Suite

Image: Blackbow17 via Wikimedia Commons

Multiple Los Angeles-based sources who looked at the service thought it would appeal to some despite the cost. They asked not to be quoted because they were not authorized to speak to the media.

New York-based CBS Corporation vice president of travel services Hal Rudy called the concept “interesting.” He questioned the pricing but said he would consider the service for talent travel if more attractive rates could be had.

“It may be cost-prohibitive for us as when our talent does fly commercially, we use a paid greeter service for considerably less money,” he said. “I would imagine if the talent is traveling on their own dime they would use this service when flying commercially.”

Altour provides travel management services to entertainment and other VIP clients. SVP of West Coast operations David Sefton said he could see top talent demand The Private Suite in contracts with entertainment companies. But he also pointed to that industry’s existing private meet-and-greet services. Sefton suggested private equity firms may be the more likely corporate users.

He said Altour is interested in securing volume-based discounts on membership fees for some clients.

United Airlines at LAX receives VIP travelers from and hands them off to The Private Suite “every day,” said Anthony Toth, the carrier’s Western Division managing director. Passengers are taken to the airplane or an elevator from the ramp directly into United’s lounge. “We have our own car for moving Global Services members and stars,” he said, “and could even do a car connection.” United’s Global Services is the ultra-elite level of its loyalty program.

Toth said United is considering how to jointly market to corporate accounts. “There may be ways to partner together for more than just celebrities,” he said. “I see huge applicability: ambassadors, government dignitaries and CEOs who just want that level of service.”

Toth agreed that the proposition “sounds expensive,” but suggested membership may be worth the time saved by avoiding crowded customs lanes after inbound international flights.

It also could appeal to those with excessively long layovers at LAX who want to spend the time resting or squeezing in a meeting.

The Private Suite apparently had to negotiate access to each individual airline’s ramp space but still had a few to secure by the time it opened, according to sources. Not with United. “We took care of that,” Toth said.

A spokesperson for the facility did not answer questions about ramp access or the next steps in corporate sales. Some travel management pros who serve the entertainment industry last week said their calls hadn’t been returned.

Sources wondered if the next private terminal for commercial passengers in the United States would be in New York. There’s already one at London Heathrow, offering many of the same perks as the one in Los Angeles. Called Heathrow VIP and also known as Windsor Suite, it’s been open for about five years to those premium-class passengers who can afford to plunk down another £2,750 per visit. According to a Heathrow Airport spokesperson, the facility does not arrange for corporate memberships.

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Another Travel Startup Leans On TMC Support

Disadvantaged relative to bigger companies that negotiate their own airfare discounts, small businesses mostly pay retail. TravelBank co-founder and CEO Duke Chung is out to change that. In a market full of business travel startups, one of his company’s angles is rebates for users.

TravelBank introduced its first products in November. They are an expense app and budgeting tool, offered for free. This month it added flight bookings. In an interview last week, Chung described the company as a “corporate online travel agency.”

TravelBank has an ARC number. It is using what Chung called a “Midwest” travel management company for after-hours support by phone and chat support between 7:00 a.m. and 7:00 p.m. Central time. He passed on naming the company.

A call to TravelBank’s support line went to Tower Travel Management, based in the Chicago area. Tower CEO John Smith declined to comment.

“We looked at 100” travel agencies, said Chung. “Culture is really important. We share in the success.”

TravelBank earns commissions from aggregated business with airlines. The greater the volume, Chung said, the larger the commissions. Corporate users earn a 1 percent rebate on their spending. Customer service calls incur no user fees.

Chung noted that TravelBank has “direct deals” with more than 10 airlines. A spokesperson listed as partners China Southern Airlines, Copa Airlines, Icelandair, JetBlue, Saudi Arabian Airlines, Singapore Airlines and Virgin Atlantic.

Image: Thinkstock

TravelBank’s app is available for Android and iOS devices. Users input their destinations and travel dates. Applying algorithms and some artificial intelligence, the system delivers results based on various criteria including flight duration, amenities like power outlets and Wifi, price value, upgrade potential and airplane type.

A lot of corporate travelers, Chung said, want to fly on larger airplanes because there’s a higher likelihood of an upgrade. He said TravelBank is working to incorporate loyalty program status into such considerations.

Companies can earn points in airline small business programs when they book through TravelBank, according to a spokesperson. Most small businesses don’t have their own negotiated airline deals, but if they do, TravelBank will incorporate those too.

The system learns traveler preferences and adjusts search results accordingly. Inventory comes from global distribution systems. Chung said TravelBank uses all three primary GDSs for different purposes. “Social seating” lets users see which flights and seats co-workers have booked, if they’ve opted in for that feature.

Hotel and car rental reservations could come later. For the time being, Chung said, TravelBank is focused on getting better at airline bookings. He acknowledged it’s “no easy feat.”

TravelBank claims 3,000 expense system users from 700 mostly small companies.

Receipts from TravelBank flight reservations flow into the user’s expense reports. The system can sync data with corporate credit cards and certain general ledger platforms.

Asked what makes TravelBank’s different from the scores of other expense tools in the market, Chung had three answers.

The first is a predictive budgeting tool travelers can use before booking. They pick the date, destination and cost components they’d like to consider — air, car, hotel, meals and ground transportation. The system calculates a budget based on real-time GDS data and GSA per diem rates.

Users can submit the expected budget to their bosses for approval. Machine learning helps improve predictive capabilities.

Beating calculated budgets earns points for travelers. Those points are redeemable as credits with Airbnb, Lyft, RedAwning, Uber and others. Chung said the concept is similar to Google’s corporate travel program and Rocketrip’s trip budgeting tool.

The second differentiator, Chung said, is the mobile-first approach (it also has a desktop browser interface for adding expenses, but not yet for bookings). The “camera-first” design lets users quickly snap pictures of their receipts. Scanning technology determines expense types, and learns as it goes. TravelBank touts “24-hour direct deposit reimbursements.”

The third is the price: free. Chung said that while most expense system providers charge subscription service fees per user, “that’s not how we intend to make money.” Expense was the entry; supplier revenue from bookings is the moneymaker.

New Entrants New Markets

Other new entrants partnering with TMCs include 30SecondsToFly (now backed by Christopherson Business Travel), NexTravel (Adelman, Atlas Travel & Technology Group, W Travel) and TripActions (S.R. Travel). Upside enlisted a bunch as advisors.

Fulfillment and consulting services are a growing business for Atlas, according to president Lea Cahill. The company has four other such customers in addition to NexTravel. “While one may think these are competitors,” Cahill added, “we feel there is room in the market place for various types of engagements that evolve within the travel industry and leverage the expertise of travel management companies that have industry and technical experience.”

Christopherson has a similar view. “We facilitate the vendor negotiations, travel fulfillment, travel risk management and the servicing of the travelers,” according to CEO Mike Cameron. “We’re always looking for new markets and I view travel tech start-ups as simply that, a new market.”

Cameron acknowledged that 30SecondsToFly is a competitor, “but so is every other travel tech start-up that is working to innovate and create the next travel disruption. We would rather be part of the next big thing than be disrupted.”

“Most of the travel tech start-ups we’re talking to don’t seem to have ambitions in obtaining an ARC/IATA license,” he added. “They want to focus their investment on their technology and outsource the fulfillment to us.”

Additional info: TravelBank parent Travelator Inc. is registered in California and headquartered in San Francisco. New Enterprise Associates and Acel Partners backed the company with $10 million in Series A funding. Chung started his career by building what became customer service software company Parature out of the dorms at Cornell University. In 2014, Microsoft bought it for $100 million.

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Flight Centre Buys Into Sam App’s Co-Developer

You’re making a pitch in an unfamiliar city. The flight home is in a couple of hours, but you’re making headway with the client. Your phone dings: “If you don’t leave in the next 30 minutes, you’ll miss the flight. Would you like to rebook?” Tap yes and get back to the meeting.

Too good to be true? Yes, but it may not be for long. Proactive rebooking is in the cards for FCM’s Sam app, which already sends the alerts. For now, travelers still need to text with or call an agent to make alternative plans.

“The first thing Sam does is to ask to locate the user,” said FCM Travel Solutions France and Switzerland managing director Jordy Staelen during a Friday interview. “It’s a basic calculation between where you are at that specific moment and the place where you are supposed to be at that given time. Then we look into Google to get a traffic estimation — boarding time minus the amount of time you need to get there.”

For situations where the traveler isn’t going to make his or her flight, FCM is building the capability to “proactively rebook to secure a seat on the next plane.” The app would use the global distribution system and mid-office software to request availability using “company rules, policy, preferred suppliers and specific fare agreements,” according to Staelen.

Staelen in 2006 co-founded 3Mundi, whose Barcelona-based innovation lab has been building technology for the FCM Sam app, released last year. FCM last week announced it bought a 25 percent stake in the company, which also runs TMCs in France and Switzerland that became FCM affiliates in 2015.

Jordy Staelen, managing director of FCM Travel Solutions France and Switzerland

Staelen said 3Mundi’s algorithm works in the same way when flights are disrupted. “If everyone is delayed or cancelled, the faster you get in, the faster you get on the next plane,” he said.

Sam just graduated to version 2.0 on iOS. Now also on Android, the app is newly available through Flight Centre brands Campus Travel and small-business specialist Corporate Traveler.

The new version added city maps and mini-guides, bag carousel info and an updated design.

FC USA corporate brands chief strategy officer John Morhous said Sam’s biggest challenges since launch last summer have been more practical than technical. “Believe it or not, actually demonstrating it has been one of the bigger challenges,” he said.

The company built into the app an internal demo triggered by a cheat code so representatives can easily show it. Training those reps also has taken some work, he said.

“Probably the biggest thing we’re still wrestling with is how to most effectively market the tool to travelers,” said Morhous. “It’s a classic challenge in FCM. We have relationships with travel managers, who are the gateway to travelers.”

Nevertheless, he said, usage is doubling each month.

“Overall customer feedback has been extremely positive, but it takes a while to get people using the app,” Morhous continued. “Some customers have high adoption, others are still trying to get more users on the system.”

Hotel bookings powered by nuTravel have yet to roll out, but will soon, he said.

Staelen said the lab in Barcelona works exclusively for FCM in the TMC field but develops technology for other segments in travel. It also builds data reporting technology, portal and profile solutions and enterprise software integration.

Additional info: 3Mundi claimed about 115 staff in Barcelona, Geneva and Paris. Clients include Fives Group, the French National Centre for Scientific Research and PricewaterhouseCoopers. FCM also holds ownership stakes in partners in Denmark, Finland, Germany, Ireland, the Netherlands, Norway, Sweden and the United Kingdom.

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Mezi Adds Thorsen, Joins Lola And So Many Other Business Travel Startups

Conversational commerce startup Mezi hired former SAP Concur exec and risk management entrepreneur Johnny Thorsen as VP of travel strategy and partnerships. He offers contacts and expertise as the company narrows its focus to business travel from various kinds of shopping. The app maker is one of more than a dozen startups targeting business travel, now also including Kayak co-founder Paul English’s Lola.

These players join 30SecondsToFly, Compl.ai, ETA Inc., NexTravel, Pana and several others in going after what Upside founder Jay Walker called the $165 billion market for “unmanaged” small and medium business travel.

Thorsen said he would look into whether Mezi can help managed programs as much as unmanaged ones. “A number of buyers are realizing they don’t have just one type of traveler,” he said during a Monday interview. “They have many, based on a combination of behavior, preferences and status. So we’re looking at how to provide a technology that makes it possible to move to a more multi-dimensional profile world.”

At the moment, all of Mezi’s clients are individuals. Mezi aims to help business travelers with more than reservations — offering event tickets, activities and dining help, too. Its agents will even check you in to your flight, though the company plans to automate that.

Mezi VP of travel strategy and partnerships Johnny Thorsen

“We are looking at this as more like a travel concierge,” said CEO and co-founder Swapnil Shinde. “Personalized and high-touch, it understands the traveler like a human agent would. We believe this might be the start of a new era in the travel domain.”

The app uses the Expedia Affiliate Network for fulfillment. It has a partnership with American Express Company and investment from American Express Ventures. Shinde declined to detail what he called testing with Amex.

“We’re looking at a broad range of partnership opportunities,” said Thorsen. “It can both be in the buying end of town — the service providers, TMCs — or the suppliers. Suppliers also are challenged with getting new staff into the production house. There will be a growing need for intelligent, automated servicing technology.”

Existing booking systems, they said, suffer from inflexibility and limited predictive capabilities using history and preferences.

Mezi uses Sabre and also sources some content from Priceline. It makes money on commissions, but is testing booking fees.

The company has about 60 employees, 35 of whom are travel agents using a proprietary interface on top of Sabre. However, Shinde said, many of the requirement-gathering, research and booking processes are completely automated.

Mezi decided in November to focus on travel after seeing it grow ten times as quickly as other verticals, and with more repeat customers. At least for now, though, the app will still sell you an air conditioner.

Lola Zigs

Lola declined to make an executive available for an interview about its change in direction. The company started about a year ago as an app-based travel agency. Execs anticipate relaunching its services at the end of the summer with a new focus on business travel, according to a spokesperson.

Skift reported that CEO and co-founder Paul English recently told attendees to a PhoCusWright conference in Europe that Lola has 11 corporate clients in the Boston area. He was quoted as saying the company employs about a dozen travel agents, after initially expecting to hire 100.

“The people who really love Lola are the ones who travel a lot —  they are on the road every week, or every couple of weeks,” English wrote in a Friday blog post. “They really need human support for all kinds of different things … We believe there is a huge opportunity in the marketplace to bring simplicity to the complexity of business travel and maybe even a little bit of joy along the way. We’re refocusing Lola to serve the busy, frequent business travelers who really need us.”

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CWT Using Points, New Rate System To Capture More Hotel Bookings

Many travel management companies and tech firms are working to process more of their clients’ hotel bookings. Continuing its push, Carlson Wagonlit Travel is rolling out a simplified rate aggregation system and using loyalty points as incentives.

During a Wednesday interview, CWT president of hotels Scott Brennan said some clients in Europe that use the KDS and Traveldoo corporate booking tools now are testing the initiative.

Brennan described it as less a database and more “a hotel engine that racks and stacks all the rates and categorizes them.” It pushes out to points of sale content from CWT’s private rates, global distribution systems and Booking.com. The aim is to connect all online corporate booking tools globally. Brennan sees three in five CWT hotel bookings being processed this way by year-end.

Like other providers, CWT is using data on past behavior to surface the most relevant, policy-compliant choices while also letting users view more. It’s organizing rates into four general buckets: “value-added” prices that include amenities, upgrades or extra points; budget rates; GDS and loyalty program rates; and negotiated corporate deals.

Carlson Wagonlit Travel president for hotels Scott Brennan

“It shouldn’t matter whether you’re originating from China, Australia or San Diego,” Brennan said. “If you’re looking for a hotel in Cartagena, we should be putting the same hotels in front of you — assuming you have the same preferences — in CWT To Go, online booking tools like Concur, GetThere or Serko, or through the offline phone service center. If you’re meeting a colleague who lives somewhere else, they should see the same hotels.”

In a future release, Brennan said, CWT expects to attach to the rate displays guest feedback from its Hotel Intel program.

One intriguing element of CWT’s plan is “Loyalty Boost,” in which it buys points from big chains or even airlines to dole out as rewards for in-policy, in-channel bookings. If a booking is with a boutique property that has no loyalty program or a less-than-popular one, CWT may offer airline points instead.

“We have no interest in creating a CWT loyalty program,” said Brennan. “We have run three or four betas with Hilton and we’re in the midst of a test with IHG right now. About four months ago, we ran a test using Amazon gift cards.”

Cleanup Job

Tempting as they are for marketers, claims about breadth of hotel content using total numbers of properties generally are derided as meaningless. “The number doesn’t matter,” said HRS CEO Tobias Ragge, even as his company was tweeting its number during an Association of Corporate Travel Executives conference last month. “Just piping in content APIs is worth nothing.”

What does matter, he said, are relevant and bookable rates payable using preferred processes.

Managed travel providers must ensure rates exposed to business travelers are business-travel friendly. Road warriors (typically) don’t need the “Romance Package.” Most aren’t interested in pre-paid or otherwise restricted rates.

So when the likes of CWT or a booking tool provider hooks up to a Booking.com or Expedia, there’s filtering and/or messaging to be done.

“We screen out more than we put forward,” said Brennan. With some of the Booking.com rates, he said, “we call out that it doesn’t come with points, etc., so the traveler is aware that’s the case.”

A Deem spokesperson said the company’s travel tool, which connects to GDSs as well as Booking.com, “excludes pre-paid properties and properties that have restrictive cancel rules.” Short’s Travel Management in March announced it would offer Booking.com rates through its proprietary booking tool. An official said the TMC can “restrict pre-paid and non-refundable rooms.”

Brennan acknowledged other technical issues to watch out for when sourcing hotel content outside traditional channels. One is determining which confirmation number to display to travelers. In some cases, the aggregator attaches a confirmation number to the booking but at check-in, the hotel wants to see its own. Also, some intermediaries don’t allow for online changes in certain cases, resulting in phone calls and possibly associated fees.

HRS North America director of sales and account management Eric Hofer said the confirmation number issue can cause confusion, though rarely. At worst, he said, front desk personnel should be able to find the reservation by looking up the guest’s name — which is usually what they first ask for anyway. Are there cases where changes or cancellations require phone calls? “It depends on the timing of the booking,” said Hofer. “If you have reached a point where you’re past the cancel date, then you have a situation where you need to pick up the phone and call the TMC or HRS to make that cancellation. But in most cases, the traveler can go online and make a change like they would any hotel booking.”

Despite any such hurdles, corporate travel distributors from Concur (with Booking.com) and Sabre (with Expedia) through to TMCs have been adding hotel content sources at a speedy clip. Citing Euromonitor research, HRS indicated there are about half a million hotels but just 23 percent are available in GDSs.

Altour this month announced a global content deal with HRS to complement its own negotiated rates, GDS rates and the Radius global hotel program. Content including specially negotiated HRS business travel rates will be available in all supported OBTs, according to Altour EVP and COO Barry Noskeau. Agents in some cases will toggle to the HRS agent portal from their usual GDS interface. Noskeau said he has observed no confusion about confirmation numbers.

Perception Campaign

TMCs want to not only add hotel content, but also change perceptions. Travelers have the impression “that to get the lowest rate, sometimes you have to go outside the program,” said BCD Travel CEO John Snyder during an April interview. “We want to bring them back into the system.”

BCD claimed it has the leading hotel platform in the market, though it declined to disclose its sources of content beyond GDSs because that information is considered competitively sensitive. “We have broadened the type of rates we offer our customers and provide fully flexible, restrictive, pre-paid, package and wholesale rates,” according to a company official.

BCD last year acquired GetGoing to boost its capabilities. GetGoing’s products now are exclusive to BCD Travel.

CWT’s Brennan recommended that travel managers focus on why travelers book outside managed programs. Is it “old-fashioned loyalty program greed” or that the rates are simply not in the preferred systems?

In promoting its new middle market initiative, American Express Global Business Travel claimed that it “beats the leading online travel agencies 90 percent of the time in price and availability.” The figure came from a study by RateGain Technologies that compared GDS rates with OTA rates. Collected in November for travel Nov. 9, 2016 to Dec. 7, 2016, the sampling of pricing for one-night stays in standard single rooms excluded pre-paid and non-refundable rates.

Such studies may be helpful in addressing misperceptions. Regulatory oversight can help, too. The European Commission last month announced that about two-thirds of the 352 travel shopping sites it checked provided misleading information about prices. In about one in three cases, prices listed on comparison pages were not the same as prices ultimately displayed. Thirty percent of the sites failed to display the total price including taxes.

Additional info: The CWT gift card and points programs are not related to its partnership with Rocketrip, which also offers rewards for compliant booking behavior.

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Talking Approvals And Expenses With Unit4’s Digital Assistant

Unit4 provides enterprise resource planning systems to governments, not-for-profits, higher education and professional service firms. Based in Utrecht, the Netherlands, it’s known in corporate travel for powering Sabre’s Central Command travel agency back-office software. It also offers an expense management product and, as of this spring, a digital assistant. Named Wanda, the chatbot stems from Unit4’s focus on “self-driving applications.”

The idea is to let human users easily interact with the company’s enterprise software components. Wanda is accessible via popular messenger apps and talks to other digital assistants. Formally announced this month, it is starting with five features. In addition to purchasing, task and time management, one of them is a travel assistant.

It doesn’t make travel reservations. Rather, users tell Wanda (by typing or speaking) about a business trip they’re planning and Wanda asks the user’s manager for approval.

It’s conversational. During a demo for The Company Dime last week, Unit4 global head of presales and product strategist Thomas Staven told Wanda that he needed to travel to Stockholm on the coming Wednesday. Wanda asked for the trip purpose and cost estimate. Users can input an estimate or let Wanda come up with one based on similar, past trips.

Wanda reports back with approval or rejection. If approved, the user goes off to book travel in some other channel.

In a future version, Wanda might search for the best flights and hotel rates — perhaps based on previous trips — and handle the booking via the client’s travel management company. Staven said the company is closing in on embedding travel policies and letting Wanda answer related questions.

A next step is integration with Microsoft Office 365. In that way Wanda would be proactive. When finding calendar entries related to an upcoming business trip, it would ask if the user wants to send a travel request.

Unit4's Thomas Staven

Unit4 global head of presales and product strategist Thomas Staven

The digital assistant also helps with expense reporting. Users can upload a receipt image or manually enter the expense item’s type, amount, currency and date. Wanda guesses to which expense report that item belongs, allowing the user to adjust. Depending on configuration it also may ask the project with which the expense should be associated. It might also press the user on policy compliance. In the demo, after Staven uploaded a taxi receipt image, Wanda asked why he didn’t use public transportation.

Wanda’s roadmap includes location services, more policy features, importing receipts embedded in emails and integration with new payment mechanisms.

It’s built on the Microsoft Azure cloud platform and uses natural language processing, machine learning and artificial intelligence.

Wanda doesn’t have its own voice. “We decided to leverage apps already in use,” Staven said.

It’s accessible through such popular chat apps as Slack, Skype and Facebook Messenger, with more such connections to come. Unit4 introduced Wanda to Amazon’s Alexa.

“This ability to bring natural language controls to any app is a massive game changer for enterprise computing,” according to a January 2017 blog post by Unit4 chief architect Claus Jepsen. He added that it is “great that we can use this for booking travel or claiming expenses for example, but more crucially the ability to ask questions and follow-up in the way you’d have a normal conversation is incredibly powerful. For the first time, speech recognition available through applications like Alexa gives us the ability to build conversational applications that business customers can and want to use every day.”

The company also wants Wanda to befriend Microsoft’s Cortana, Google Home and other digital assistants.

Wanda users must work for companies that have installed Unit4’s expense management software. It comes in two flavors. Business World Expenses is part of the larger Unit4 Business World ERP offering. The company calls this the “standard solution.” Travel & Expenses is the “premium” standalone system designed “for the most advanced requirements.”

Like a lot of systems, Travel & Expenses features receipt capture.

“The innovation is what happens afterwards,” said Unit4 global product manager for time and expense Oistein Nordhagen.

By that he means the system predicting the type of expense and determining if the account has a preferred relationship with the supplier. With machine learning, it gets better at it. Because it’s “public cloud learning,” Staven added, the system learns across all system users, not just among those in the same company.

The newest module now in testing includes “travel management connectors.” Nordhagen said “open APIs” could show expenses that are in and out of policy or whether the user booked directly or with the TMC. Depending on how client companies configure the system, end users might have to explain out-of-policy items before being able to submit.

In North America, Unit4 resells Travel & Expenses via ServeVita, a software integration consultancy.

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Cornerstone Wins Federal Data Account As Concur Sunsets TravelTrax

Concur is phasing out the TravelTrax data solution and its biggest user, the U.S. federal government, is switching to Cornerstone Information Systems.

A Concur representative confirmed the company would be sunsetting TravelTrax by next year. “We are committed to the travel analytics space and will continue to invest and innovate in this area,” according to the spokesperson. “We are working with our customers to ensure they have the best technology to meet their needs.”

Concur offers the basic Analysis product as well as a premium Intelligence option.

TravelTrax is based on technology built by Hi-Mark Software, acquired by TRX in 2006. Concur bought TRX in 2013. (It subsequently retired the separate TRX mid-office product.)

Concur declined to comment on the migration from TravelTrax by the U.S. General Services Administration, which conducts procurement on behalf of federal agencies. GSA had contracted for TravelTrax since before Concur bought TRX. It selected the system again in January 2015 after a full solicitation process for data needs covering what it described as roughly $14 billion in annual travel spending. If all options were exercised, that contract would have run until 2020.

data reporting

Image: Thinkstock

Then GSA on Feb. 23, 2017 awarded a 33-month data contract to Cornerstone as part of a “blanket purchase agreement” related to its travel agency services framework.

BPAs are leaner purchasing mechanisms that allow GSA to “eliminate such contracting and open market costs as the search for sources, the need to prepare solicitations and the requirement to synopsize the acquisition.”

What changed? A GSA spokesperson did not offer answers by press time.

The BPA award documentation indicates there was a “full and open competition” that resulted in two bids. The contract appears to be focused mainly on GSA’s airline City Pair Program. The earlier full solicitation had numerous additional components related to hotel data and emissions tracking, among other areas.

According to Cornerstone Information Systems CEO Mat Orrego, following a “comprehensive bid process” federal agencies will use the company’s iBank and next-generation TravelOptix products for data acquisition, consolidation and normalization services.

The platforms will provide “an extensive data warehouse and data lake for GSA to access all their data in real-time,” Orrego wrote in emailed statements. “TravelOptix is designed to create a single analytical and visualization lens for data from multiple sources – from booking and reservation data to expense and risk management information.”

Implementation is underway. Cornerstone aims to have the government running on TravelOptix by July, according to Orrego.

Additional info: Two independent organizations in 2015 recommended improvements in government travel data.

The Governmentwide Travel Advisory Committee, comprised of public and private sector professionals, in March 2015 recommended that federal agencies “should compile and maintain enterprise-level travel data.” The committee said this would support business decisions and improve purchasing leverage. GSA replied that it would “lead a formal working group” to create “a long-term strategy map for government-wide travel data … for travel policy, procurement, and programs, all driving toward more efficient travel by federal employees.”

A few months later, the Government Accountability Office issued a report criticizing the inability of the six federal agencies that spent the most on travel to quantify savings from their cost-reduction efforts. These six departments (Agriculture, Defense, Homeland Security, Justice, State and Veterans Affairs) accounted for about 84 percent of the total governmentwide travel budget in fiscal year 2015, GAO wrote. “Without standardized reporting practices, the federal government lacks common metrics for identifying, comparing and evaluating travel spending across federal agencies,” GAO noted.

The reports neither mentioned nor specifically blamed the government’s travel management vendors for the deficiencies.

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Amex Combines Virtual Account Numbers And Centralized Business Travel Accounts

Amid a steady flow of announcements about virtual payment in corporate travel, American Express is putting on a different spin. It has created a model that combines the single-use concept of virtual account numbers with the centralized Business Travel Account setup. Amex’s “enhanced BTA” now is available in Australia and the United Kingdom, with additional markets under consideration, according to a company spokesperson.

The official declined to comment on whether the new offering would be available in the United States, but Amex’s U.S. website proclaims the introduction of “virtual accounts for the reality of travel.” [UPDATE: Subsequent to initial publication of this article, the linked page was revised and no longer mentions virtual accounts.]

Business Travel Accounts, or BTAs, also are known as Central Travel Accounts, lodge cards or ghost cards. They traditionally have a single account number. Employees of companies that have gone this route use that one number mostly to book airfares via their travel management companies. The employer gets one bill and makes one monthly payment to cover all the charges.

According to a Global Business Travel Association/U.S. Bank 2015 study, BTAs are “best utilized for airline transactions, such as allowing the company to purchase blocks of lower-cost tickets and to improve the management of tickets purchased in advance. They also help when reconciling the ticket data, including the passenger name, with the transaction.” The study noted that these payment accounts also protect against fraud and provide travel management reports.

A 2015 BCD Travel report laid out some of the downsides. Of course, BTAs can’t be used for taxis or other en-route purchases. They’re incompatible with low-cost carrier airfares, according to the report, “because they don’t come with the security code that these companies require.” Though BTAs are “less exposed” to fraud than individual corporate cards, their limits “tend to be very high,” BCD noted, and therefore one successful instance of fraud “could have devastating consequences.”

According to information posted to Amex’s Australia website, the company’s “enhanced” BTA would fix some of those problems.

It’s still a centrally billed account that provides spending visibility. The addition of virtual account numbers, though, further minimizes risk and improves policy compliance. That’s because unique 15-digit VANs are generated for each specific booking (air, car and hotel) via the client’s TMC and sent to merchants. As with other virtual payment programs, client managers can set spending limits, valid vendors and effective dates.

“VANs let you customize your BTA using defined data fields,” according to Amex. “The data from the TMC (booking) and the travel providers (billing) is sent to the BTA and is consolidated in a single eData File for reconciliation.”

In written comments, the spokesperson indicated that Amex BTAs heretofore covered “expenses for air and travel management company-invoiced transactions.” Clients expressed interest in expanding central-bill capabilities to more types of travel expenses.

“Enhanced BTA now offers central billing for hotel charges in the U.K. and Australia, as well as low-cost carrier air transactions in the U.K.,” the official wrote. “The centralized account also enables client companies to pay travel expenses for large groups, employees who do not have corporate cards and travelers who are not employees, such as job applicants and consultants.”

Payments company Conferma automatically generates VANs for TMC bookings. The Amex spokesperson explained that single-use VANs roll up to the master BTA account.

virtual-BTA

Image: Thinkstock

Some Acquis Consulting Group clients already are using the Amex BTA with virtual account numbers “in select markets,” according to principal Debra Moss. “The driver seems to be the TMC. In some markets, the TMC provides significantly better terms for using the virtual BTA due to the controls inherent in using a BTA and the security inherent in the VANs. If travel management companies begin to include the use of VANs as a driver for more favorable contract terms, there is no reason to think we won’t see an increase in the use of BTAs with virtual account numbers.”

TCG Consulting senior director Jim Coufal said the problem with traditional BTAs is less about fraud than it is the risk of excessive or unauthorized use. Amex’s enhanced BTA would help prevent that.

And it would help with reconciliation. Coufal noted that by combining its pre-existing virtual payment product with the BTA approach, Amex is creating a single reconciliation process through its online Corporate Account Reconciliation tool. He said that would make life easier for Amex clients and for the TMCs that support them.

MW Travel Consultancy principal Martin Warner said another big benefit would be additional use cases. “For example, virtual cards could now be used for the TMC transaction fee on a per transaction basis and therefore easily allocated to the individual transaction to which it is associated and to individual cost centers,” he explained. “Previously transaction fees were billed in batches on a monthly basis due to the fact that if attributed/charged to the BTA account, they were notoriously difficult to reconcile due to many (hundreds) of ‘same small amount’ transactions without a unique identifier to allocate to the right air transaction.”

Warner said he expected other payment companies to follow with similar products combining CTAs/BTAs with virtual account numbers.

An AirPlus official said the company has been doing it for years. “In all markets where we offer our AIDA virtual payment solution, it can be linked to our AirPlus Company Account,” according to the spokesperson. “This allows us to consolidate all expenses onto one invoice for a customer.”

Coufal said he has observed a general trend away from BTAs due in part to administrative costs. He pointed to fragmented data collection. It’s helpful when data from BTAs feed expense systems, he said, but most customers reconcile outside those systems and “are not getting data in one place.” Instead, some TCG clients opt for individual corporate card programs in a central bill/central pay configuration. That obviates the need to manage credit limits for employees while providing some of the same back-end benefits as BTAs.

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Blockchain Startups Target Travel Distribution

Blockchain digital ledger technology could be used for loyalty programs, corporate contracts, payment, expense management, airport processing, traveler identity and maybe even travel policy and compliance. Innovators also are betting on distribution disruption.

With tests beginning in about three weeks, Blockskye aims to shift the power in distribution “back to hotels and airlines” by enabling them to design and privately offer rates to specified customer groups. Its inventory system works with “our online partners to publish your rate to their private groups,” according to the company’s site. Existing partners segment the market into such groups as corporate employees traveling for leisure, small and medium enterprises, or conference-goers.

Blockskye is aiming to begin distributing this year through partners including private hotel booking site OutofOffice.travel. It’s starting with air and hotel transactions in an internal database that mirrors what’s in a global distribution system.

The company’s “open source passenger name record” allows authorized entities to add data before and after travel in keeping with the key benefit of blockchain — an immutable, auditable, secure, accessible record of truth.

Blockskye CEO and co-founder Brook Armstrong said during a Monday interview that the company’s initial focus will be on “extremely granular market segmenting.” As an example, he mentioned the “last-minute purchaser” who frequents Hotel Tonight. “Hotels need 10 times more of this capability than they have,” he said.

Although segmentation by corporate account is not in the initial plans, there’s no reason to think Blockskye or another entity would not build that in.

“Blockchain eliminates unnecessary middlemen, but some middlemen are necessary,” according to an Armstrong blog post. “Corporate travel records require pre- and post-transaction processes to allow for policy compliance, security rules and increasingly sophisticated post-transaction reporting demands.”

Also in pre-launch mode, Winding Tree echoes the “cut out the middleman” language in its materials. It’s talking about Google and meta-search sites. It’s hoping to create a minimum viable product — an alternative form of travel distribution — by year-end.

Blockchain

Image: Thinkstock

The two companies’ financial models differ. Blockskye would charge suppliers a per-transaction fee at a fraction of the typical cost.

Winding Tree isn’t interested in transaction fees. It expects to sell reporting and optional extensions, charge for technical support and consulting, and levy fees on sales of its cryptocurrency.

Education and awareness are big challenges, but that’s not all. These initiatives require infrastructure. Without massive scaling, a blockchain-based distribution system would be too slow. This requires adoption. It’s a chicken-and-egg problem.

Greg Abbott, senior vice president of travel and hospitality at tech consultancy DataArt, was skeptical that startups can tackle such challenges on their own. “Blockchain is a sea change for our industry,” Abbott said. “We’re at the very early days. It’s a shrewd move for an entrepreneur, but I believe it will require large-scale companies that offer blockchain as a service.”

Asked by email about this point, Armstrong wrote that Abbott “is 100 percent correct.” That’s why Blockskye is “partnering with both Microsoft Azure and a leading Etherum development group, in a partnership to be formally announced in the coming weeks.”

Like Microsoft, IBM offers blockchain-as-a-service. Other big firms including American Express are getting involved.

Winding Tree co-founder Maksim Izmaylov also recognized the hurdles. “The hardest problem by far, because of the nature of it, is to bring critical mass together,” he said. Izmaylov runs a startup called Roomstorm that helps airlines find hotel rooms after cancellations or other disruptions. Last year, he founded the Travel Tech Con conference.

“We need users and adopters on both sides of the marketplace,” he said. “The core project is open source. The goal is to be the internet for the travel industry but we don’t want to build everything. We want other people to build identity solutions, property management systems, travel agency interfaces.”

According to a Winding Tree white paper, “Easy access to the platform would mean that many more individuals and organizations will be building these interfaces, competing on features and price, which will lead to vast improvements in quality of these interfaces and adjacent products and services, including back office.”

Some of Winding Tree’s ideas for reaching scale are obscure for the typical businessperson. For example, Winding Tree is interested in crowdsourcing computing power. It may raise funds through a token sale. It’s planning to use a state channel to enhance scalability.

If you’re hoping you don’t need to know more details, you’re right. These blockchain inventory and pricing systems do not necessarily require travelers or agents to interact with different software.

“The users of the platform, like travel agents or front desk managers, do not have to know that what powers the system in the background is the líf token,” notes the paper. Líf is Winding Tree’s cryptocurrency. There are hundreds of these, Bitcoin being the most famous. Ether is the currency of Ethereum.

Blockskye also is starting a non-profit industry group called the Global Travel Blockchain Alliance. GTBA would be “a global, multi-stakeholder governance organization with the jurisdiction to adjudicate disputes and address failures in the GTBA travel-inventory blockchain.”

Blockskye is owned by Armstrong and longtime corporate travel executive Michael Share. Other investors are “coming on board,” said Armstrong.

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Providers: Audit To Improve Hotel Sourcing Results

Companies that do not audit hotel rates and availability are leaving piles of cash on front desks, according to BCD Travel analysis of client data.

Without standard rate audits, a firm spending about $20 million annually on hotels overpays them by $490,000, the travel management company found. The same client would save about $900,000 per year using both rate and availability audits.

Extrapolating the findings, BCD Travel estimated that if its top 50 clients did not correct for hotel rate errors, they would pay up to $30 million more than if they implemented a “standard GDS rate audit” to do so. If those companies “globally performed a rate availability audit in addition to a standard audit, they would save a combined $55 million,” the TMC found.

“Rate audits, rate availability audits and hotel price assurance should become standard in every program,” according to BCD Travel SVP for supplier relations and global hotel strategy Dave Mitchell. “There’s a return on investment for every one of those services.”

Nearly two-thirds of 200 travel managers polled as of March by hotel content and sourcing provider HRS and the Global Business Travel Association said they audit rates either once a year or only after rates are loaded into booking systems. The poll found that 2 percent of buyers audit rates weekly and 7 percent do so monthly. Among buyers who perform audits, one-third find discrepancies more than 20 percent of the time.

hotel rate audit“Hotels can put into place dynamic room management and pull rooms out of inventory,” Mitchell said during an Association of Corporate Travel Executives meeting in New York last week. “It limits the opportunity to use corporate negotiated rates. That can push average daily rate up.”

Hotel Solutions president Robert Langsfeld has observed many of the same problems. “A number of properties yield their preferred rates,” he said during a phone interview. “You’ll find a rate is loaded but there’s no inventory associated with it. More and more of the companies that are looking find they’re not necessarily getting the benefits of the negotiated rate, such as breakfast or parking. Hotels have learned very well how to manage this stuff. It’s a significant and increasing issue with yield management.”

Langsfeld said he has found rate errors in upwards of one in four bookings. There are various reasons they may be missing or wrong. He warned against relying on TMCs for auditing, though, since they have their own interests.

Although 2018 rate negotiations won’t heat up until later this year, hotel sourcing strategy is top of mind for many buyers as the Marriott-Starwood merger for the first time is set to impact corporate negotiations.

“Hotel contracts and RFPs continue to get more complex,” said Mitchell. Many buyers, hoteliers and their partners agree that the traditional approach to hotel sourcing doesn’t work very well; the trouble is coming up with another way.

Attendees to an ACTE panel discussion heard a few perspectives. TripBam’s Steve Reynolds noted his desire to “kill” the RFP process. He realizes it won’t happen all at once. Advocating less drastic changes were speakers from BCD Travel and HRS. Both said they were beefing up their sourcing services this year.

ABC Global Services, also, is chasing more clients this year after sourcing for 32 of them in 2016.

Mitchell said BCD Travel favors a diversified approach using traditional negotiated rates and market pricing. Rather than killing the RFP process, he told Reynolds, clients should “take some steps” toward that:

“You can put in with preferred partners both fixed and dynamic negotiations. A little like the 80/20 rule. You can layer in chain programs to cover secondary markets and sold-out situations. Also, use tools for spot purchasing, a little like a lowest-fare program. Lastly you should bring in a rate assurance tool to monitor rates and offer lower rates to a traveler even after they have purchased. It can be at the same hotel. All this should give you the ability to manage dynamically in that environment and message travelers to let them know rates are peaking. Maybe they can change their meeting, or move a little outside the city.”

In its analysis, BCD found that price assurance programs realize a net savings of $110,000 for every 50,000 hotel bookings. Also speaking at ACTE, HRS CEO Tobias Ragge said these solutions can offer 2 percent to 3 percent savings.

HRS last year opened a sourcing service in the United States, marketing it at no charge. The company said it would make money on client use of HRS’ commissionable properties. That has mostly worked, but Ragge told The Company Dime that HRS has informed some clients it’s over: “At some point, we have to say we’re not just a free ride. So we’re changing it for those who couldn’t commit. There are ongoing discussions.”

The HRS sourcing service includes free auditing, officials said. “All sourcing clients allow HRS to view rates impacting their respective hotel programs from all sources,” according to a spokesperson. “We do audit the GDS rates given to the GDS from the hotel since we have the same view on the source as the client. Of course, we also audit rates loaded in the HRS portal as well.”

Ragge said the United States was HRS’ second-largest market for sourcing last year. He expects it to be the biggest this year. He said the company has added 20 percent more sourcing staff since last year. “We have the biggest team,” he claimed. “We’re playing a completely different sport.”

ABC Global Services CEO Eric Altschul sees it as a sport with different divisions. The large TMCs “are very targeted on very large customers and it’s a very expensive proposition,” said Altschul in a phone interview this week. “We think there’s a big gap in the market. There are many programs with less than 800 hotels that are not being well-served. The TMC account managers are not sourcing experts.”

ABC isn’t giving anything away, but Altschul is convinced its pricing is competitive. The service is offered in three tiers, depending on how much consulting or ongoing management the client needs. ABC offers it through TMC partners.

Asked about the idea of throwing out the annual process, Altschul said it’s not in the client’s best interest.

“I have not met a travel manager out there who doesn’t want a sense of control and an idea of what their cost will be,” he said. “Travel managers want a relationship with their suppliers. I don’t think it’s part of their culture to say, ‘Whatever everyone does is fine, we’ll just report on it in the end.’ I don’t think technology will change that.”

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Daimler Rides Trip Packages In Efficiency Effort Powered By Amadeus, BCD Travel

Trip packages are uncommon in business travel, but the concept isn’t new. Daimler may become the first major corporate account to go all-in. In partnership with AirPlus, Amadeus and BCD Travel, the car maker is testing a program of intentionally limited choice.

After employees select travel dates and trip components, the Amadeus Cyrtic online booking system returns just a few relevant packages based on “historical behavior, corporate policy, corporate supplier strategy and preferences,” according to a press release BCD Travel issued last week.

Amadeus uses these criteria to offer content through a modified Cytric user interface.

AirPlus assists with virtual payment. “Automated invoice reconciliation throughout the trip and via mobile further simplifies the trip for travelers and reduces the time needed to process travel expenses to almost zero,” according to the press statement.

Kathy Jackson, BCD Travel

BCD Travel executive vice president of global client management Kathy Jackson

The goal is to simplify processes that cost Daimler the “equivalent” of 25 million euro “in productive working time each year,” according to comments attributed to Daimler head of global travel management Bernd Burkhardt. “With this simple three-click process, business travelers are able to focus on the jobs they’re paid to do rather than on trip administration. All Daimler travelers will use this process as a global standard rooted in digitalization, mobility and user friendliness.”

The pilot at Daimler began last month. The company expects to begin “rolling out the model globally region-by-region in 2017.” It called the program its “FiveStar Model.”

Burkhardt could not be reached for an interview, but officials at Amadeus and BCD Travel provided some details. Their announcement suggested the new model could become an “industry solution.”

BCD Travel executive vice president of global client management Kathy Jackson said Daimler first brought the vision to its suppliers a few years ago but it was delayed because of mergers and other activity. Burkhardt’s three clicks are request, confirm and submit expenses (post-trip). The first two are in place.

Amadeus global head of corporate travel sales and marketing Arlene Coyle said the “smart trip” functionality developed within Cytric serves up three packages. If they want more detailed options, travelers may click beyond those choices.

For BCD Travel, Jackson said, the model removes so much complexity that in-country servicing becomes obsolete. “It can be done in one central location,” she said. Jackson said Daimler has a lot of “point-to-point” travel activity, which helps enable this level of simplification.

“We may expect renewed interest in the packaging concept in managed travel,” said Coyle. Amadeus is working on improved calendar integration and other related features in Cytric.

ETA, MicrosoftUpside Travel and WhereFor are among those pursuing these concepts. Others in the past tried and failed.

What has held back the concept before?

“Traveler confidence,” said Jackson. “They think they can get it cheaper.”

She said that ideally a different pricing model would come about, as well, but that’s to be determined.

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NDC’s Upshot: Altered TMCs, Evolved Air Deals

[UPDATE, May 26, 2017: IAG informed industry partners that British Airways and Iberia would add a $10 fee as of Nov. 1, essentially for each one-way trip, on tickets purchased in global distribution systems. The fee will be displayed as a “Q charge” in fare constructions, and included in itinerary fare quotes. Refunds will align with the rules of the fare. The fee will not apply to fully flexible fares, and there are some other exceptions. It will, however, apply to tickets purchased for travel on codeshare partners. More details here.]

[UPDATE, May 26, 2017: HRG said it would connect to British Airways using NDC.]

[UPDATE, May 26, 2017: Concur said it would connect to British Airways and Lufthansa using NDC. Concur also has TripLink plans with both carriers. “All these products will be live” later this year, Concur announced.]

British Airways expects later this month to share more details about its distribution strategy. Possibly in conjunction with a surcharge on GDS bookings, BA will discuss use of IATA’s New Distribution Capability. Lufthansa made its big splash along these lines nearly two years ago. Last week the Germany-based airline group hyped NDC-enabled direct connections with a pair of U.K. travel management companies. While NDC’s potential impact on distribution chain economics remains fuzzy, corporate travel benefits are starting to come into focus.

Generally, those benefits fall into two buckets. One is accessing in the indirect channel (TMCs and self-booking tools) all the products and services sold through the direct channel (airline.com websites). Airlines say it’s important to differentiate themselves versus competitors in all sales channels. This should help travel program managers, too, by keeping travelers within designated systems. Working with the KDS self-booking tool, PwC secured such an arrangement with U.K. carrier Flybe.

The second is securing personalized products and services.

Airlines won’t be limited to the 26 letters of the alphabet when constructing fare types, said Festive Road managing partner Caroline Strachan. “In a future contract,” she explained during The Company Dime’s April Teleconference, “you might have 10 different types of an economy fare and 10 for business class, and you can personalize based on the kind of traveler.”

This would transform corporate airline relationships.

“Up until now we have been negotiating purely on costs — discounts, rebates, fixed fares and so forth,” said Ingersoll Rand global travel, fleet and meeting services director Pascal Struyve, also during the April Teleconference. “We’ll start talking way more about experience.”

Each organization would pick the product attributes that are important to them. Maybe last-seat availability comes into play, if an account is willing to pay a premium for it. A member of IATA’s travel manager advisory group in Europe, Struyve said he would evaluate the idea for certain routes. In other cases, it may not be worth it, just as last-room availability in the lodging world appeals to corporate buyers in some but not all situations.

Dave Weaver

Bechtel Corporation manager of travel procurement Dave Weaver

Bechtel Corporation manager of travel procurement Dave Weaver told Teleconference listeners that airlines today block off seats for preferred travelers, “but we don’t have the visibility into that today in all the systems we use.” He, too, pointed to hotel LRA to describe the considerations: “If you have LRA on your preferred rate, you are relying on the faith of the vendor to provide that and be transparent with the information. It is not really measurable and controllable.” If last-seat availability proves otherwise for airline contracts, “great, it’s on the table.”

What’s measurable also colors Struyve’s thinking. The more quantifiable, he said, the better the airline relationship. If airlines want to use NDC to personalize “the right offer,” the client should know how often the airline actually is delivering. “In today’s world, we are held accountable for marketshare or volume targets,” he said, but in the future it would work in both directions. That could mean new service-level agreements or key performance indicators embedded in corporate deals.

TMCs And ‘Service Intelligence’

One concern among travel buyers is the potential flood of product and service information going directly to travelers. Won’t program managers lose control? IATA NDC program director Yanik Hoyles addressed the concern during a Business Travel IQ webinar last week. “Whatever environment we are in tomorrow, the buyer still will be able to control what comes through that pipe with their travel policy,” he said. “It’s just that there will be more stuff to control and more opportunities to allow things to come through if they want to let them through.”

This is where TMCs can continue earning their stripes.

“Corporations still want to manage spend,” said Weaver, a member of IATA’s North American travel manager advisory group. “We still need to control the buy, so how do we do that in NDC? That’s going to put a lot more pressure and a lot more accountability and responsibility on the intermediaries going through this content to deliver the right corporate policy-driven price.”

This is part of what Weaver called “service intelligence.” For TMCs, that also includes understanding the value of client travelers’ time and moving away from strict transaction-oriented mindsets.

Struyve agreed, using the familiar refrain that TMCs must become “travel consultants in the true sense of the word.” Since his program spans the globe, requires consolidated reporting and considers duty of care, he saw no path forward that excludes the TMC as an essential element.

Though it’s not using NDC, Siemens is booking simple transactions on Lufthansa without a GDS. Officials there also talked about the need for the TMC to up its game on what’s left.

U.K.-based TMC Portman Clarity said it is testing with one client the Lufthansa direct connect using NDC. A Farelogix application programming interface connects Lufthansa’s res system with Portman Clarity’s point-of-sale systems. Those are white-labeled versions of booking technology developed by Atriis Technologies and other partners, according to Portman Clarity CEO Patrick McDonagh. GDS and non-GDS content is commingled in one spot for agents and for travelers using the self-service components.

McDonagh hoped GDSs and NDC-enabled channels would work together. Maybe when the dust settles, in some cases, functions including booking, ticket management and schedule changes stay in GDSs while rich content and additional products and services come in through an NDC channel. Portman Clarity embraced the Lufthansa direct connect to “influence change” rather than being left behind, McDonagh said.

He acknowledged that “lots of work” is needed for NDC to replicate everything GDSs do. The parties are in “discovery phase” on sorting out how much manual effort will be required to handle post-ticketing tasks like exchanges and refunds, he said.

McDonagh also said part of the challenge is the loss of GDS incentives and reduced profitability on bookings through the direct connect. “It depends on what we agree with the airline,” he said. “As an early adopter, we are in position to make sure commercially we are made whole.”

Click Travel is another U.K. TMC publicizing participation in the Lufthansa/Farelogix program. Executive chairman Simon McLean indicated in emailed statements that client fees are no different for Lufthansa direct connect bookings. He also discussed losing GDS incentives on relevant Lufthansa transactions and the impact on margins:

“We have anticipated losing such incentives anyway. The world of direct connects is going to change how TMCs work commercially. It’s time to get on board rather than burying one’s head in the sand. The revenue model of travel agencies/TMCs has to change, and the days of being paid to simply make bookings are numbered because travel suppliers don’t see that as adding value to their business anymore. We need to find new ways of providing value to travel suppliers.”

Lufthansa connects into Click Travel’s travel.cloud platform, used by agents and customers. For Lufthansa bookings, McLean said Click Travel also needs the Farelogix Sprk desktop system for “some processes” that are not yet available via the API, “but once they are this will change.”

BA On Tap

Several other carriers are pushing ahead on NDC initiatives. British Airways is among the more active. Asked about BA, McDonagh said Portman Clarity is “working actively on their next stage.” McLean wouldn’t confirm Click Travel’s involvement, saying only that the TMC has “a number of other direct connects under development.”

“BA seems to be focusing on expanding the capabilities offered by their NDC interface, with a (comparatively, at least) wide array of offer and order management features, including cancellations and changes of itineraries as well as the more commonplace ancillary merchandising support,” according to a January 2017 report from airline IT research firm T2RL. “With BA now being connected to various aggregators, agencies and both Skyscanner and Kayak, we feel British Airways has the broadest and most mature NDC rollout to date in the market.”

According to BA documentation, the airline’s NDC program will offer seat and bag purchases, improved product feature information, a lowest-fare finder, reduced debit memos and continued payment by “credit and debit card or IATA BSP (where available).” British Airways declined to make officials available for an interview.

A recent ARC presentation positioned British Airways at one end of a spectrum of airline approaches to NDC. Focused on a “direct distribution strategy with the agency channel … BA would issue the ticket/EMD and bill the credit card. All post-ticketing changes would go through the NDC process,” according to ARC.

On the other end of this spectrum were American and United, whose plans ARC summarized as implementing “one or more of the NDC standards” and making “little to no changes to their distribution strategy with the agency channel.” For those carriers, NDC-compliant distribution comes into play via GDS partners.

Additional info: IATA will discuss NDC at a business travel summit on May 30-31 in Geneva. It reported that more than 100 TMCs participated in its 2016 summit. After partner BA similarly hosted constituents last fall, AA has scheduled an NDC Summit for June 22-23 in Dallas.

Related:

Direct Airline Booking Isn’t Legit For Lufthansa’s Clients That Manage Travel

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Shelved US Airways Direct Connect Evokes Airline Distribution Aspirations

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