Author Archives: Jay Campbell

About Jay Campbell

Jay Campbell in 2004 created travel business newsletter The Beat, in 2006 co-founded Travel Procurement magazine and in 2010 integrated them into Northstar Travel Media's BTN Group. He served as editorial director there until 2013. Jay made his travel industry media debut in 1993 at the Air Travel Journal of Boston. More on LinkedIn.

Concur, Frosch, HRG Sign Up For New AA NDC Program Offering $2 Per Segment, Other Benefits

American Airlines will pay participating travel agencies $2 per net segment booked and ticketed using certified NDC connections at all points of sale on AA-marketed flights. The program requires agencies to cover distribution costs, but comes with a near-term content parity commitment. It also enables new possibilities for corporate bundles, waiver-and-favor management and risk management data.

They’re not up and running yet but the first agency participants are Frosch and HRG, according to American. The airline this week is hosting an NDC meeting near its Dallas headquarters with industry constituents.

Approved “Level 3-certified” New Distribution Capability connections include AA’s application programming interface and Sprk web application. Both are furnished by Farelogix. Some online travel agencies already use both. The airline said Concur would connect to its NDC API. The compensation program is the same whether agencies go direct or use aggregators including, perhaps ultimately, global distribution systems.

The program supports traditional settlement through ARC and International Air Transport Association BSPs. The NDC connection supports the same post-ticket servicing and change capabilities as GDSs offer, according to AA. Corporate clients can configure the content to include negotiated rates or block basic economy. A translation layer makes existing travel agency scripts compatible.

Among the possible NDC carrots are intriguing new features, largely subject to corporate client buy-in:

Fare bundles: Packages of services and amenities customized at the corporate level but also at the sub-corporate level — for example, just for the C-suite.

Flex funds/waivers and favors: Allows travel agents, or travelers using corporate booking tools, to access and apply waivers.

Enhanced duty of care: New types of data returned to clients about day-of-travel flight changes, whether booked travelers actually boarded and overwater flight position.

The optional program could spark the biggest changes to relationships between airlines and distributors since standard travel agency commissions disappeared. It follows the airline’s legal win over Sabre, which is under appeal.

“We’re not announcing any changes in how we work with GDSs,” said AA vice president of sales and distribution strategy Cory Garner. “NDC is too important to let it get confused with a GDS distribution strategy.”

Cory Garner

Cory Garner, American Airlines vice president of sales and distribution strategy

It’s clear the airline wants out of the “full content” provisions in its participating carrier agreements with GDSs. How the economics of GDS bookings look after it comes to terms with them is anyone’s guess.

AA has been using NDC and its predecessor XML protocol since 2008 “and will be doing it for decades more,” Garner said. “Last year, we did 4 million transactions, or about 10 percent of U.S. point of sale travel agency volume, through NDC. That doesn’t account for NDC work we have done [for paid seats] with GDSs. Taking all that into account, about 50 percent of U.S. point of sale agency bookings are being effected by NDC in some form. We now have NDC in over 30 countries. We’re certified to expand to over 150 more.”

AA’s NDC program started with online travel agencies and until recently did not address corporate travel providers. The program, Garner said, unlocks great potential for TMCs to enhance their value to clients:

“We see agencies playing a bigger role in all aspects of the journey, including on day of departure. We’re moving in a direction that uses NDC not just to sell more, but also to provide a level of high-touch and seamless service that no airline has provided before through a travel agency.

“NDC in all honesty has always had a cost savings component to it. But AA’s NDC strategy is so mature at this point that we believe the costs we set out to save have already been saved. That frees us to focus on other high-priority things like how the NDC strategy combines with our overall commercial strategy. NDC from this point forward is a competitive strategy, a way for AA to differentiate itself from its competitors, to offer more compelling products and offer provide a high-level, seamless service that we don’t think other carriers will be able to match anytime soon.

“What we’re interested in is the trajectory. As long as we’re making progress towards a fully realized, end-to-end NDC model, AA will be more competitive than the rest of the airlines out there and that’s the prize we’re after.”

There are no volume commitments and no deadlines for agencies to decide on participation. To be published as part of AA’s ARC contracts with agencies, the incentive and content agreements are subject to change. Any partners who join the program and issue a ticket through it by the end of next year would be guaranteed those benefits through 2020.

AA is using the wholesale distribution model for the new program. That means it is choosing to pay only for “its own costs associated with operating the NDC connection and for any internal development undertaken by American to facilitate integration.” Assuming GDSs offer an NDC connection, this puts TMCs in the position of negotiating with GDSs the fees they would pay rather than receive from them (offset more or less, by the new $2 per segment incentive.)

If they decide to book off-GDS, said Garner, the “financial consequence” will be “top of mind” for TMCs.

Shifting their AA transactions could threaten agencies’ contractual volume commitments to GDSs. “The GDS-agency agreement is between that agency and its GDS, and American cannot become involved in that discussion,” according to AA documentation.

The Stick

The new AA program adds to recently heightened activity in airline distribution. The industry already was grappling with IAG’s program to surcharge British Airways and Iberia bookings through GDSs — itself following the Lufthansa program begun in 2015.

After IAG in May announced its program, which takes effect Nov. 1, AA was quick to point out that bookings with its code on BA and Iberia flights would not be subject to the surcharge. In revealing the new program today, AA made a few points to distinguish it from its partners:

• “Why don’t American and BA use the same NDC solution? Each airline has its own priorities for NDC and determines whether to ‘build in-house or buy from the market’ according to its own analysis. American chose to ‘buy’ its NDC solution by using a third party technology company called Farelogix. Since NDC is a technology standard, regardless of whether an airlines builds or buys its NDC solution, each airline’s NDC will be comparable so that travel agencies need not worry about connecting to airlines with wide variations in NDC technology.”

• “Why is American’s approach to NDC different from its Atlantic Joint Business partners? American and its AJB partners have their own distribution needs and considerations. Like American, British Airways and Iberia’s NDC solutions are built upon IATA industry technology standards.”

Some New Distribution Capability advocates thought it lamentable that British Airways and Iberia tied their surcharge announcement to the NDC program. IATA for years had been trying to say the connectivity standards were not part and parcel of airline cost reduction programs or GDS negotiations.

“For airlines, this isn’t just a transaction fee,” said ARC CEO Mike Premo. “It’s about aggregate revenue, customer loyalty and brand value.”

NDC is a messaging standard. Airline-GDS talks are a commercial issue. But all these dynamics are intertwined. Costs shifts to intermediaries and clients seem inevitable.

American Express Global Business Travel last year introduced a fee program to address similar situations. Carlson Wagonlit Travel today issued an updated statement on the topic: “Distribution dynamics or decisions by other parties that require us to access or book content via independent fare links or other inefficient means drive material non value-added costs. Accordingly, in order to continue to holistically meet the needs of our clients and partners, we may need to implement new/different types of charges in these types of circumstances.”

During an American Society of Travel Agents event in early June, World Travel Inc. president Dee Runyan said the IAG move “affects us, potentially our revenue streams, and for our corporate customer clients a price increase ultimately. For most of us, more than 50 percent of our business runs over an online booking tool. So we turn to them.”

Also speaking at the ASTA event, Deem chief commercial officer Tony D’Astolfo said, “We’re going to figure out a way to bring that content in. If they have an API available to us … it will look just like how we source Southwest today, which is next to everybody else.”

None of the companies listed in IATA’s NDC registry as having full capabilities is a major corporate booking tool developer. Aggregator Travelfusion is listed as such. Its corporate travel software clients include Concur.

Some observers thought it odd that upon the IAG announcement, Concur would state support for NDC, branded fares through GDSs and TripLink. Using multiple channels presumably drives up costs.

“The evolution of NDC itself is probably the biggest challenge,” said Doug Anderson, SVP for the travel product at Concur, during a Wednesday interview.

Mike Koetting

Mike Koetting, Concur EVP of supplier and TMC services

“Every supplier seems to have their own flavor of the standard,” added Concur EVP for supplier and TMC services Michael Koetting. “Our preference, if possible, is for content to be made available via the GDS because we know it’s efficient for the rest of the managed corporate travel ecosystem, particularly our TMC partners. If that content is not available in the GDS and it is relevant and compelling to our travelers, then we’ll do what’s necessary to secure access to it. That includes if it’s NDC content not available in the GDS.”

The TripLink strategy, Koetting said, is in place because “we know that for whatever reason some travelers prefer to book with the supplier and we believe that when travelers do so they should have access to their corporate discount and those purchases should be every bit a part of the managed corporate travel program as a traditional GDS-based booking.”

Even if the content is the same as in another channel, such as NDC? “Even when [for example] there is full content in the GDS, we know — based on Concur, GBTA and TMC statistics — that there are a lot of travelers who book directly with the supplier. There is unique content, there is a perception of unique content or maybe it’s simply a convenience factor.”

AA signed up last year for TripLink. Garner said more on that would be announced soon.

Given AA’s program and IAG’s plan not to surcharge bookings through NDC connections, a burning question is how soon GDSs will hook up to NDC application programming interfaces. IAG told the industry it was “continuing to work with the GDSs on potential NDC connectivity.” None of the three major GDSs is listed by IATA as having full “offer and order” capability.

Travolution quoted an Amadeus official as saying the GDS does not expect to add BA’s NDC pipe until as late as 2019. He said this is because the next version of IATA’s standard is not expected until December.

17.2 And Corporate Travel, Too

Like BA’s last year, AA’s NDC summit is designed in part to increase understanding of and support for NDC in North America. The corporate travel community here lags its European equivalent. NDC supporters reported a lot of improvement in corporate travel awareness following the late May IATA Business Travel Summit in Geneva. Its agenda featured five buyers and there were many more in the crowd. AA managing director for strategic account sales Hank Benedetti spoke.

IAG didn’t show, raising some hackles.

Attendees declined to be quoted because IATA asked that what happened in Geneva stayed in Geneva. A few of them told The Company Dime that participating corporate buyers demonstrated an increased appreciation of NDC’s potential for improving the customer experience through dynamic bundles and other negotiated content.

Farelogix CEO Jim Davidson said he heard some rallying around NDC’s next version, 17.2. His favorite anecdote from the conference illustrated the increased awareness: “I heard corporate buyers talking about a schema version!” Davidson said that as a tech developer, Farelogix takes on the onus of keeping up with all the versions. Garner said AA’s API is compatible with multiple iterations.

By all accounts, the technical issues are the easy ones. More difficult is the question of how GDSs would be paid under new frameworks. Sources said multiple pricing models are under consideration, and they are likely to differ by market. Perhaps it’s based on full content versus non full content versus NDC. Perhaps it’s a more complex version of “home and away” segment pricing. Maybe airlines pay distributors next to nothing on basic economy.

As AA seeks to expand the wholesale model, sources said BA is looking at something very similar.

That NDC and airline-GDS negotiations can be considered separate matters offers little comfort for intermediaries that would rather not spend development dollars incorporating a new pipe when they’re perfectly happy with the GDSs. That is, unless the benefits outweigh the costs.

There are reports of custom fares and features enabled through direct connections, but the Europe-based carriers have not described any financial incentive program for booking in new ways (only a penalty for not).

“We’ll figure it out,” said Direct Travel senior vice president Mike MacNair at the ASTA event. “We have and we will. There are more opportunities for us to charge more for consulting and systems development up front. It’s impressive how this industry adapts and stays relevant.”

Some will emerge as bigger winners than others. Former CWT executive Martin Warner, now a consultant with MW Consultancy, offered his thoughts after the IAG announcement:

“The intermediaries (TMCs, OBTs and online travel agencies) are at different stages of readiness in integrating NDC solutions to ensure travelers and corporates can still see ‘full content’ choice across carriers in the booking/enquiry process. Will clients move if certain TMCs are not ready in time, or at all? Some who do not have independent layers above the GDS may have to simply pass on the [surcharge] to the client until such time that they have integrated capability to view and book using NDC content.”

He wonders how much room is left for cost increases to clients.

“What is the ‘tipping point’ of any increased premium of buying through a TMC rather than direct? If it becomes another $20 more expensive to book via a TMC, does the TMC value proposition get challenged sufficiently that their addressable market size reduces as some clients — both at the low end of managed/unmanaged, and those big enough to re-engineer their managed travel programs — re-examine the ‘prime contractor’ role of the TMC and find alternatives for online/untouched bookings where they consume less of the TMC’s services?”

Concur’s Anderson said another challenge “for most managed programs is in support. How do you support those bookings? That’s still kind of the big piece to work through.”

According to AA, its NDC connection offers full support capabilities for settlement and changes.

“With British Airways’ NDC connection, tickets are issued by British Airways,” AA noted. “American’s NDC issues tickets on neutral ticket stock to facilitate existing industry and agency processes.” Garner explained that when an airline sells a ticket on its own stock, that limits the agency’s capability to interact with the record post-ticketing. Some airlines have established processes to open up those tickets amid disruptions.

“From the beginning, we issue tickets on neutral stock like an agency is doing with a GDS, so the agent is in control at all times,” said Garner.

Additional info: The $2 incentive will result in back-end payments settled as an ARC/BSP agency credit memo. Agencies can combine the program with other AA incentive agreements unless they already are on the wholesale arrangement, as some OTAs are.

The content commitment: “Agent will have access to the best published fares for American-marketed flights made generally available to the public (e.g., through or a GDS), and all schedule information and seat availability related to such fares.”

Ancillary products currently available in AA’s NDC: paid load factor-based upgrades, same-day flight changes, same-day standby, paid seat assignments and pre-order meals. The airline indicated “plans to offer pre-paid baggage and is evaluating a variety of other enhanced functionality and ancillaries to make available via its NDC connection.”

More than 250 people from 20 countries representing about 120 travel agencies, 24 technology companies and seven industry organizations registered to attend AA’s NDC Summit, according to Garner. Speakers included AA personnel as well as AmTrav’s Jeff Klee, HRG’s Nigel Meyer and a representative of a year-old tech firm called AirGateway that offers “NDC-compliant real-time aggregation” to TMCs and others. It adopted BA’s NDC connection last year.

Disclosure: ASTA and The Company Dime have a research and events partnership.


NDC’s Upshot: Altered TMCs, Evolved Air Deals

Teleconference 8: NDC In Corporate Travel

Explainer: IATA’s New Distribution Capability

Airline-GDS Negotiations Heat Up As Parties Try To Sway Lawsuit’s Outcome

BA Champions IATA’s NDC For Corporate Travel

Direct Airline Distribution Hasn’t Grown

Teleconference 1 (Beta): Airline Direct Distribution


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Nineteenth Century Tech Joins SEO, Data Mining In Business Travel Startup Marketing

Nothing beats word of mouth for business travel providers seeking new clients. Established players count on referrals, with the most gratifying coming from former users recommending them to new employers. New entrants incentivize to evangelize. The lucky business travel startup hooks a big fish corporate account and rides the wave of publicity. Downstream from big corporate, new entrants going after unmanaged business travel are making what resemble business-to-consumer plays. That requires an ad budget.

There is diversity in the approaches.

startup marketing

Image: Thinkstock

“These companies have to do more marketing than trade shows and trinkets,” said Atmosphere Research Group’s Henry Harteveldt. “They start with search engine optimization (SEO), but can’t just do that and search engine marketing (SEM) and a Facebook page. They need to be more comprehensive.”

The throwback in the crowd is Upside’s radio ad campaign. Upside is going after unmanaged business travel. Asked during a recent American Society of Travel Agents conference whether the Upside ads were working as well as those Priceline ran back in the day, Jay Walker, founder of both, said:

“It’s very different. When you have William Shatner telling you that you can name your own price for airline tickets — and of course the vast majority of airline tickets are purchased by leisure travelers — you’re going to have a much bigger uptake. Upside’s radio ads are targeting unmanaged business travelers. There are maybe 10 or 15 million of them and they already have their way of doing things. That being said, it’s going really well. It’s very hard to stand out in the U.S. with any kind of advertising budget. The smallest Pringles variation of a flavor spends $10 million. We are using radio personalities — everyone from Howard Stern to Rush Limbaugh, which is a very broad range — to tell people there’s something new and exciting. Radio is very efficient, and cost-effective. Ninety-five percent of American adults listen to the radio once a week and they listen to it because they want to.”

Darned right it’s hard to stand out. Nevertheless, Walker said, “digital media is also quite good.”

It’s not for everybody, but some startups spend on Google and Facebook. The duo takes in nearly half of global ad spending. They accounted for 77 percent of the nearly $12 billion in U.S. online ad growth last year, according eMarketer data published this week in the Wall Street Journal.

“One thing I can say that we’re not doing is, for example, performance marketing up against the behemoths,” said Choon Hong Peck, co-founder and CEO of ETA Inc. “There’s just no chance we can perform well in that kind of environment.” Big budget advertising also is out for others including Pana and NexTravel (which is focused on midmarket rather than small firms).

Advertising is one of the least effective means of lead generation for TMCs, according to a survey this year by ASTA and The Company Dime. More than 60 travel management company executives participated.

startup marketing

Image: Thinkstock

Where some startups and TMCs meet in digital marketing is on original content. That helps with generating more business from existing clients as well as finding new ones.

“You have to give information for customers to come into your shop now,” said Mike MacNair, a Direct Travel senior vice president, also speaking at the ASTA event. “The ways to do that electronically are more cost-effective than ever before. Having those tools and going back to existing customers to remind them of why they’re managing travel is important. In the SME market, that person wearing multiple hats has no idea how to remind all the travelers why they should be doing this. Infographics, stories, tales, blogs, white papers … they’re all really important to have.

“It’s the triple sale,” he continued. “You should be managing travel, you should be managing travel through me, your people should be using the system I just sold you. It’s a hard sale.”

MacNair and other TMCs like the United Kingdom’s Click Travel for years have blogged about the merits of managing business travel. As with TMCs, some startups do this more than others.

Companies in the unmanaged category, naturally, do not employ a travel person. “They try to inform themselves,” said 30SecondsToFly co-founder and CEO Felicia Schneiderhan at the ASTA event. “They Google ‘how to write a travel policy.’ It’s important that we are present in the results. We have invested a lot of our energy into content marketing and search engine optimization. We have a special advantage in this field. Nils Cartsburg, my CMO, founded his own SEO agency a decade ago.

“This is how we get to the SME market,” she continued. “If we didn’t have this very scalable, very cost-effective channel, it would be very difficult. You can’t throw money at SEO and expect results. It needs to grow organically. SEO is very effective but takes a long time.” just hired an SEO specialist. But like TripActions and others, it also is focused on leveraging networks, contacts and intel to better target potential clients and create referrals.

startup marketing

Image: Thinkstock

“We’re in closed beta primarily with companies in Texas where we get to grab coffee and find out what’s working,” said CEO Daniel Senyard. “It’s direct selling to fill up with companies willing to go along for the ride. We kind of bridge finance, travel and HR. There’s a plethora of conferences we can spend a lot of money going to but we’re zeroing in on micro-communities. Where are the CFOs and HR pros gathering once a month or per quarter to discuss trends or have a luncheon? We think it’s more cash- and focus-efficient to sponsor a luncheon than to go to a big conference.”

TripActions includes spending on SEO and SEM (even on Instagram) as part of its marketing mix, but also commented on local networking. “In markets we’re operating we discovered CFOs have their own communities, their own mailing lists, etc.,” said CEO and co-founder Ariel Cohen. “When CFOs started to see the savings, they started to talk about it in their communities and we started to get inbound requests.”

In the ASTA research, sales was the No. 2 source of new business for travel management companies after referrals. In later interviews, startups generally didn’t talk much about sales teams, with the exception of Pana. Noting that SEO is not a primary strategy, CEO and co-founder Devon Tivona said:

“We look pretty similar to a traditional TMC in our methods. We’re a huge fan of sales and believe in that as a way to grow our business. We leverage a massive amount of data in all our outreach, based on our proficiency as tech people. There’s so much publicly available information about all potential clients out there in the world. I know their last fund-raise, their growth rate, what technology they use, traffic data on their website, their social presence, etc. I have a list of 5,000 companies with seven or eight attributes I’m focused on.

“We do an immense amount of data collection and then when we reach out to a prospect, we demonstrate our knowledge. A typical email might say, ‘Hey I saw you raised a Series A and you likely hired x people and we’ve seen with other clients that travel management at this stage …’ It’s such a higher-level conversion rate versus the blanket email.”

“I think that’s smart,” said Harteveldt. “It shows some ingenuity and allows a company to be more focused and collect the info they need and want, as long as it’s not inappropriate. There’s that proverbial fine line between cool and creepy.”’s Senyard agreed that blanket emails are inadequate. He said he has tried using lists bought from business journals, but they produced a “very bad response rate.”

Another strategy is channel partnerships. Travel and travel tech suppliers, expense management providers, accounting software firms and even banks offer possibilities. TMCs can fit, as well. Some startups use them simply to support customers and provide fulfillment. Others see TMCs as useful for lead generation, or as resellers.

Pana and TripActions work with Bruvion Travel and S.R. Travel, respectively, but are considering adding more. 30SecondsToFly moved from a small corporate agency partner to Christopherson Business Travel.

“We wanted to be a technology company from the get-go,” said Schneiderhan. “We never wanted to be a service company. That’s not what we are good at. It was very important for us to find good partnerships with travel agencies to add what our technology couldn’t provide. Our artificial intelligence cannot replace an agent. We are still far away from that. Working with an agency means we both need to adapt. Our business partners needed to adapt their workflows around how our tools and interfaces work. That’s a risk for us. As a startup, speed means life or death. Partners need to adapt quite quickly.”

NexTravel has added TMC partners since launching with Atlas Travel & Technology Group, including Adelman and W Travel. CEO and founder Wen-Wen Lam said the company is “doubling down” on partnerships. Reseller relationships have allowed NexTravel to defer building up its sales team, though that is in the works.

Upside considers TMCs part of its “ecosystem.”

Disclosure: ASTA and The Company Dime have a research and events partnership.


New Corporate Booking Platform Using Artificial Intelligence

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

Another Travel Startup Leans On TMC Support

Latest Startups Try Texting, With Agent Or Bot

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TMC Vet George Opens North America For Agency Automation Firm Tramada

Longtime corporate travel sales exec Mary Ellen George joined Sydney-based travel agency automation firm Tramada Systems to lead its expansion in North America.

Sixteen-year-old Tramada offers agencies a cloud-based, GDS- and online booking tool-agnostic alternative to back-office systems like Trams or Travcom. This includes business intelligence, though Tramada is happy to export data to its clients’ preferred data visualization and reporting tools.

Begun last September, the U.S. expansion required the company to add integration with Travelport’s Apollo (it already supported Amadeus and Sabre). It also had to adjust for date formats, tax info and terminology. Tramada delivered version one of its U.S. product to clients in April. “What we have found is that 95 percent is universal, and 5 percent requires localization,” said Tramada CEO Jo O’Brien.

Tramada head of North America Mary Ellen George

Tramada is out to help TMCs reduce costs. Its partnership with Onyx CenterSource, for example, streamlines the commission recovery process. “Tramada is like the keeper of the truth,” said O’Brien. “The feed we send to them is accurate and rich, and then reconciliation is automated. We can attribute commissions to each hotel segment. You know who is paying, or not, and you can manage your relationships. Many midsize or smaller TMCs don’t bother because it’s too hard. Often the commissions are small, and they come in bit by bit. One of our clients had a team of five people on this, but in integrating Tramada with Onyx that got them down to one full-time equivalent.”

Tramada integrates with Sabre profiles. It offers a Sabre Red app for travel agents to view customer data and travel histories. The app also applies quality control to bookings. Alternatively, agents toggle between the GDS and the Tramada software.

Tramada connects with mid-office tools from the likes of Concur and Cornerstone, and offers itinerary delivery and other associated services. It partners with Canada-based software provider Magnatech Travel Management Solutions for unused ticket management.

Excluding the “mega” TMCs, Tramada claims 80 percent share of the corporate travel market in Australia. That includes marquee early client Corporate Travel Management, which has a couple dozen U.S. offices following the acquisitions of Montrose Travel, Travizon, USTravel and others.

“With some of the older systems, travel agencies are hanging on as long as they can,” said George. “A lot of the big guys have gone to the cloud but regional and super-regional agencies still are operating on legacy financial systems. This is an opportunity to enable that mid- to large-market travel agency to modernize and up their game.”

George is a veteran of large travel management companies, having served in leadership roles at American Express Global Business Travel and BCD Travel. Most recently she was senior vice president of sales at HRG North America. During her 16 years with the companies that became BCD Travel, George helped create the model for travel agency support of online bookings.

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Research shows companies increasingly are establishing enterprise-wide risk management programs to offer a bird’s-eye view of all types of risk. So far, though, travel risk doesn’t seem to be part of the conversation.

North Carolina State University’s Poole College of Management has an enterprise risk management practice sponsored by Deloitte. Its reports divide risks into three buckets: macroeconomic (i.e., exposure to currency fluctuations or political instability), strategic (disruption, change in customer preferences) and operational (supplier uncertainty, succession challenges).

Traditionally, corporate risk leaders are responsible for one silo and tend to unknowingly “lob” risks to the others, according to Mark Beasley, Poole’s Deloitte Professor of enterprise risk management. Not being a risk expert, for example, the technology lead may create legal, cash management or reputation risks, he said. Risks may fall between the silos or spread across them. Not thinking strategically threatens strategy, according to Beasley.

ERM, though, is a top-down process that offers a more holistic view, closing gaps between departments.

NC State and the American Institute of CPAs has for the past eight years surveyed CFOs or similarly situated business leaders about ERM. In 2016, the poll received 432 responses. Results showed that while growth plateaued in the past few years, the share of surveyed organizations employing a “complete, formal” ERM process was up to 28 percent in 2016 from 9 percent in 2009. For large and publicly traded organizations, the figure was closer to 50 percent.

The research also showed that growing percentages of organizations appointed a chief risk officer or equivalent (42 percent last year), and created a management-level risk committee (58 percent).

Image: Thinkstock

Does travel have a seat at that table?

“If you’re a travel risk manager, you’re going to be at a big company and that company probably already has some sort of ERM process,” said Bonnie Hancock, executive director for NC State’s Enterprise Risk Management Initiative. “So I would think the leader of ERM should be looping in the travel risk manager, and if not, I would want to get connected to ensure that travel risks are getting the appropriate consideration.”

ERM has been around for well more than a decade. The literature on it is extensive and comprehensive, but references to travel are hard to find.

“When we talk about risk and uncertainty, we talk about particular events,” said Hancock. “I think of travel as a root cause of events — the loss of a key employee, or not understanding the culture you’re traveling to and creating a reputation risk. You could see it as a subset of a lot of other risks — geopolitical, succession, etc. Maybe it didn’t rise to its own category, but it is a consideration.”

One of NC State’s surveys asks executives to rank 30 different risks. Among them, several are either related to or broader than travel, including: terrorism, political uncertainty, shifting trade policies, regulatory changes, supplier viability, talent retention, cyber threats and privacy protection. Some of those were among the survey respondents’ top ten risks.

Meanwhile, travel risk management literature in turn scarcely mentions ERM. One exception is Charles Brossman’s book, “Building a Travel Risk Management Program: Traveler Safety and Duty of Care for Any Organization.”

An excerpt:

“Putting enterprise risk into more context with TRM, consider all of the different ways that employee and contractor mobility touches most aspects of a company’s operations, including a company’s approach to risk management. For example: travel to assess the risks associated with expanding operations into a new market; travel to meet with parties being considered for merger, acquisition or partnership, and their impact on the company’s reputation; travel to ensure compliance with legal and environmental requirements involving a project or operation.”

In an interview this week, Brossman said he wasn’t surprised that the authors of ERM literature do not address travel.

“If they don’t mention travel, it’s because they don’t get it,” he said. “The potential risks you put travelers in front of that can affect your business and reputation should be measured in a structured program for both common and strategic business decisions and executive decision support.”

International SOS executive vice president Tim Daniel said the ERM concept was popularized by insurance companies. It’s a big theme for the Risk and Insurance Management Society. Travel is a “narrow focus” in that bigger arena, he said.

“We do see it come up in market development exercises,” said Daniel. “Risk should be associated with opportunity. For example, I want to do business in new markets or existing markets where risk levels are shifting. What do I need to know about? Sometimes there are travel safety challenges.”

If they are on the lookout for “bigger conversations” that may be taking place, travel professionals could find “a place to put their story forward and potentially gain legitimacy,” said Daniel.

Travel Recon founder and CEO Toby Houchens said he thinks the role of TRM increasingly will be explored in the context of ERM. “Everyone agrees there should not be silos,” he said. “There is risk in duty of care, risk in finance. They should be tied together.”

A former travel manager and current member of the Global Business Travel Association’s risk committee, Robert Mintz said ERM could help TRM in its weakest area: training.

“Whether for travelers or an emergency management group, the time isn’t set aside for proper training,” said Mintz. “So [it would help] to have it institutionalized in areas that have defined processes — they have their checklists and they’re religious about it to the point of annoyance. To place travel risk in that larger continuum of IT and HR and executive management (and facilities, physical security and insurance) ensures the seat at the table.”

If the tie between ERM and TRM strengthens, travel risk systems could be joined up with other software to offer the ideal broad view.

“We believe a company needs best-of-breed in different capabilities, but that needs to be tied together with one or two user interfaces,” said Houchens. “Now we’re looking at companies with 10 risk vendors and 10 contracts, and they don’t need them all.”


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Defense Department Seeks Rewards Program Partner For Rebates On Meal Spending

When you spend more than $1 billion annually on dining, it’s wise to sign up for programs that could kick back millions. It’s especially appreciated if the money you’re spending is from taxpayers. That’s why the U.S. Department of Defense Travel Management Office plans to pilot a dining rewards program.

On DOD’s behalf, the Defense Human Resources Activity Contracting Directorate last week announced a request for proposals from vendors for just such a program. They have until July 10 to respond.

The pilot “will enable the DTMO to determine the most effective approach to sourcing, to develop program policies, to leverage purchasing power, and to identify the requirements, technology, and processes to implement an effective enterprise-wide dining program for the DOD military and civilian personnel on official travel,” according to the announcement. “The period of performance shall be from the date of award through 12 months for the base period plus four 12-month option periods.”

Image: Starbucks

The announcement noted that while corporate dining rewards programs can return upwards of 6 percent, DOD’s high spending is expected to earn more. A personal rewards program would also be included, and the contractor would be responsible for helping DOD market the program to travelers.

According to presentation materials from the March 2017 GovTravels conference, in fiscal year 2016 just $124 million of the $1 billion in meal spending was charged using the Government Travel Charge Card (provided by Citi). The proposed dining program — which would track spending through commercial cards — “does not require major change to regulations, measurable workload for services or burden on [the] traveler,” according to the presentation.

Officials hope the added incentives will increase spend on the card, thereby increasing bank rebates as well.

DOD travelers in fiscal 2016 spent more than $2 million at both McDonald’s and Buffalo Wild Wings, according to the RFP. Those were the top two merchants among 100 restaurant companies at which the department’s travelers spent a reported $41 million. Others over $1 million each included Subway, Chili’s, Applebee’s, Texas Roadhouse and Starbucks.

The winning contractor would be asked to include more of the “top restaurants” where DOD travelers currently dine and to “maximize participation” for restaurants located on military installations.

DOD credited the General Services Administration-chartered Government Travel Advisory Committee for recommending in 2015 that government travel programs adopt dining rewards. The committee included Lockheed Martin travel officials Claudia Bonetti and Mark Stansbury. Stansbury is a longtime proponent of the concept.

According to GTAC materials, Anthem director of travel and events Cindy Heston, also a committee member, in March 2014 joined the Lockheed Martin officials in making a presentation about rewards program provider Dinova.

A statement attributed to Dinova VP for enterprise partnerships Chris Froelich indicated the company was aware of the Defense RFP and “looking forward to participating in the process.”

Rewards Network did not respond to requests for comment. It facilitates the IHG “dine and earn” program among others. IHG is a key lodging partner to the Defense Department.


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Expensify Alleges Patent Infringement In Suit Against Smaller Expense Rival

Expensify sued expense management competitor Abacus Labs for infringement of receipt capture patents.

Expensify’s cap-donning and sometimes pugnacious CEO and founder David Barrett announced the suit on Friday “with no joy.” He claimed Abacus infringed “two of our most core patents surrounding receipt scanning and, most importantly, the automatic matching of the scanned receipt to a credit card feed.”

Innovations allegedly protected by the patents make up Expensify’s SmartScan technology, which allows users to photograph paper receipts such as “credit card slips, odometer readings and cash receipts,” according to the complaint. The software uses optical character recognition (OCR) to extract text from images and insert receipt data into expense reports. It also “analyzes that text to determine what portions correspond to the merchant name, amount, currency and date of the purchase,” according to Expensify. It looks for a currency symbol and if it doesn’t find one, uses a location-based default. It checks already-imported expenses to avoid duplicates.

“In nine years we went from nothing to being the second-largest and fastest growing expense management system in the world,” claimed Barrett’s Friday blog post. Abacus entered the market “late” in 2013, “forcing it to copy” SmartScan “in an effort to gain lost time,” Expensify alleged in the complaint.

Expensify indicated it has more than 4.8 million users at more than 700,000 companies and is growing by 66 percent annually.

Barrett committed to “using every legal tool at our disposal to compete as forcefully as we can.” Expensify filed suit Friday in the United States District Court for the Southern District of New York, located in Manhattan about two miles south of Abacus’ headquarters.

Abacus did not immediately respond to a request for comment.

Expensify CEO David Barrett

Expensify claimed Abacus product descriptions and marketing materials demonstrated the patent violations. Its products capture low-quality images of receipts using mobile phones, Expensify noted. They apply OCR to extract and auto-populate date, merchant and amount. If receipt data are not legible, Abacus uses “a second resource” — humans, Expensify guessed — who use card numbers, receipt amounts and vendor info to complete records. The Abacus software then classifies the type of receipt (for example, cash, personal card or corporate card) based on the gathered info, the complaint alleged.

A YouTube video purportedly further illustrates the Abacus infringement. It depicts the process of “associating the captured image with personal or corporate credit cards of the user and then scanning a plurality of transactions recorded in the financial accounts of the user,” Expensify’s attorneys wrote. “Abacus then compares the known information from the receipt with known information from the financial accounts. When Abacus finds an information match, it identifies the information that was undeterminable from OCR.”

It’s not clear whether those details distinguish Abacus’ activities from those of other expense software providers. Vendors including Concur, Databasics, Deem, KDS, Tallie, TravelBank and Unit 4 promote receipt scanning.

According to Chrome River documentation, the firm’s software “enables expense submitters to simply snap and send an image of a receipt into their expense report. From there, its OCR (optical character recognition) technology can automatically extract vendor, amount and date to automatically create and categorize expense items.”

ExpenseBot CEO and co-founder Ed Buchholz during an April 2016 interview acknowledged the existence of Expensify’s first patent, but questioned its breadth. “They do have a patent on a certain process,” he said. “I’m not sure the extent of it. Our counsel reviewed it and our process is apparently not overlapping.”

Coupa, meanwhile, talks about leapfrogging OCR technology with voice. “Just dictate: “$5 Starbucks today,’ ” said Coupa Software VP of strategy and product marketing Donna Wilczek during an interview last year.

PC Magazine last September published a review of eight expense systems, all of which it said use OCR to reduce manual data entry. The article mentioned Abacus but indicated “the products that glean the most data from receipt images are Certify Now and Xpenditure Small Business.”

“A lot of people do receipt scanning,” Barrett told attendees to the Global Business Travel Association convention last summer. “It’s relatively easy to about 70 percent accuracy, but if it’s only 70 percent accurate, that means you have to double check it and automation is very limited.”

Expensify in 2015 settled with competitor Nexonia a lawsuit claiming the latter violated Expensify’s SmartScan trademark. Included in Barrett’s emailed statement at the time:

“To address the elephant in the room since we’ve sorta cornered the market for patents involving mobile receipt scanning (which has since become a required feature for anybody in the expense management space), I’m often asked how aggressive we intend to get with them. The truthful answer is: I’m not sure yet, and I’d welcome your advice. Nexonia was an easy decision since they were an older incumbent who used mobile scanning and our trademark to close a new round of funding, which is obviously unacceptable.”

Nexonia is now a licensee of Expensify’s receipt scanning patents, which Barrett called a “weapon of mass destruction.” Other rivals could be licensees, as well.

Abacus markets itself as an expense report killer, just as Expensify has for years.

Abacus execs told The Company Dime in May 2016 that its software treats each receipt as its own expense item and thus eliminates the traditional notion of a “report” that must be “submitted.” This speeds up reimbursement. Those responsible for approving expenses submitted by large numbers of employees could sift and sort individual receipts, teasing out only those that require attention. “Forget the report,” said Abacus CEO and co-founder Omar Qari. “Here are the expenses that require your attention. We’ll auto-approve the $5 coffees.”

Here’s Barrett at GBTA last summer:

“Everything we do is about total automation to the point where you take a picture of the receipt, you put your phone back in your pocket and you never think of that receipt again. To the business traveler, no one thinks of the expense report. The grouping of expenses in the expense report is not interesting to them. It’s interesting to the finance team, but to the business traveler, they live one receipt at a time. So we give them that experience — one-receipt-at-a-time business travel. And that depends on super-accurate receipt scanning, and we’re the best in the business.”

Barrett said Expensify creates the report for travelers “automatically, according to the accountant’s design.” Is it a cash expense? Then there’s no reason to wait for anything less than daily reimbursement. Perhaps a traditional monthly report still is created, though automatically, to handle card statements.

“There are a whole range of algorithms that can scan an expense report to see if it’s good or not,” he said. “Maybe 48 of these 50 expenses are fine. Don’t even look at it! It’s a waste of everyone’s time to look at a $5 Starbucks receipt.”

In the interview two months prior, Qari bristled at an Expensify graphic depicting the expense management market with Concur, Certify, Chrome River, Expensify and Tallie as key players and Abacus as a lesser brand. (Dozens of other providers were not listed.)

“That’s highly inaccurate,” Qari said of the Expensify depiction. “They’re unaware of our features.”

In the same interview, Qari addressed the Expensify patents, its report-killing maxim and its longtime slogan about expense reports that don’t suck:

“It’s kind of hard to claim that OCR technology or anything around stripping data from a receipt is something that is patented. We don’t take that approach. Our approach is open. When we built something into iOS for swipe-to-approve expenses, we just open-sourced it.

“Making it not suck for employees is only part of it. What about admins? What about making it better? What about empowering you to improve your career [or the company’s position]?

“With Expensify, you have to create an expense and then create a report. If you turn it on, it auto-submits at the end of each day and it’s riddled with errors.”

In its suit, Expensify aims to recover lost profits and seeks a royalty “to be determined” at trial. Attorneys argued Expensify also is entitled to pre-suit damages. They requested a permanent injunction enjoining Abacus from infringing the patents.

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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,, 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 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 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 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, “excludes pre-paid properties and properties that have restrictive cancel rules.” Short’s Travel Management in March announced it would offer 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 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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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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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 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.


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.


Explainer: ‘Smart Contracts’ On The Blockchain

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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.”


Teleconference 2: Hotel Buying

2017 U.S. Corporate Hotel Rates: Small Increases, Some Happy Surprises

Not Steeply And Not Everywhere, Average U.S. Hotel Rates To Rise Again In 2017

Data From Price Assurance Tools Promise Power For Buyers

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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.


Podcast 2: Check out Bersen by Deloitte VP Christa Degnan Manning and Travel Tech Consulting president and PhoCusWright senior technology analyst Norm Rose discussing the cost of travel and expense management processes during our 2015 podcast.

Upside Enlisting Travel Management Companies To Support ‘Self-Managed’ Service

ETA’s Business Travel App Impresses In Beta

Teleconference 3: Online Booking Tools

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