New York — Buying a corporate booking tool isn’t at the top of the to-do list for Carlson Wagonlit Travel. As rival American Express Global Business Travel works to close by year-end its acquisition of KDS, CWT will leverage its CWT To Go mobile app.
Speaking here last week at the Business Meetings Travel and Tech Expo, CWT CEO Kurt Ekert all but ruled out buying a booking tool. “Even if you build a better mousetrap, it’s very difficult to unseat the incumbent and there are very thin, if any, economics in that part of the industry,” said Ekert. “So rather than trying to fight an uphill battle to displace established players, we’ll work with them as appropriate. We’re going to focus on areas where we can win.”
Ekert said there are around 100 corporate booking tools in the world. “They have been chosen by corporate travel managers because they offer a good service,” he added. “Whether we like it or not, interfacing with those booking tools in a manner that meets the needs of travelers and procurement folks is critically important.”
CWT during “the next 12 to 18 months” will deliver “a fundamentally different consumer experience” via the mobile app, said Ekert.
“You’ll see that be expanded and potentially even move in a bit to the desktop environment,” he said. “It will be probably not as functionally heavy as a traditional corporate booking tool, but it will be much more consumer-oriented.”
CWT To Go uses technology from WorldMate, which CWT bought in 2012. Officials have said they’re funding the app’s ongoing development by maximizing hotel commission revenue. This approach makes less sense for larger clients that either collect commissions themselves or use non-commissionable, negotiated rates. However, the CWT app does make negotiated rates available to users.
From their long history of cooperation, CWT and KDS have a lot of mutual clients, mainly in Europe. While some sources in travel management seem certain that joint clients won’t be KDS users for long, CWT itself has not gone there.
“The KDS ownership change does not impact CWT clients or the current working relationship we have with KDS,” according to a press statement. Ekert suggested CWT would treat KDS like any other booking tool.
Asked about other TMCs that distribute KDS, American Express Global Business Travel vice president of digital traveler Evan Konwiser said they should be happy their “relatively small” tech partner is now owned by a corporate entity that will invest in it.
“The horsepower has increased dramatically,” Konwiser said during the BMTTE conference. “We’re committed to operating KDS as an independent entity. We want them to continue their innovation. We want to retain their talent. It would be very silly of us to spend money on a technology company and make it operate only in the GBT fabric.”
Still, expect the GBT version to get the best bells and whistles.
Konwiser said the acquisition is about “providing more seamless, end-to-end content, pricing and servicing. And it’s about access to an incredible team to help drive our innovation agenda and our product agenda.” Nevertheless, he said, “We’re still focused on choice and our clients having access to all the booking tools. We support pretty much everyone today because of our global reach. We intend to continue to do that. No tool will be right for every company in every market, and our partners are really important to us. It’s not about becoming an Egencia model with one integrated product.”
Konwiser continued: “TMCs like to complain a lot. ‘We can’t control the booking tool. We can’t influence them. We’re getting in line, just like you are. You go call them, maybe they’ll listen to you.’ This is the refrain all the time, even from very large clients. We have to put our money where our mouth is.”
What about the expense management portion of the KDS suite? “It’s not something I will talk about,” he said. “It’s not part of our work right now, meaning we’re focused on the travel piece, not the expense piece.” Konwiser admitted he doesn’t know whether the expense software would even be maintained.
Several KDS travel clients said they are in “wait-and-see” mode on the acquisition. On the condition of anonymity, one said, “given that a significant number of KDS accounts use TMCs other than Amex, I think they’ll have to proceed with caution.”
Speaking during The Company Dime’s first Teleconference last month, World Travel Inc. president Dee Runyan was in full eye-rolling mode. “I have seen this movie,” she said. “I think they’ll struggle to maintain productive commercial relationships with non-GBT TMCs.”
Like other TMC sources, Runyan said her company is not likely to recommend a booking tool owned by a large competitor. She also cast doubt on the potential for innovation, saying a “flourishing tool needs the entire market kicking the tires.” For a GBT-owned tool, she said, GBT priorities would obviously top the list.
WestRock corporate travel manager Karen Hatch held out hope for a positive impact. Also speaking on the Teleconference, she said GBT could make KDS a more serious choice in the United States, where online booking tools have been flagging. “There are so many better tools in the leisure market,” Hatch said.
Terms of the KDS deal have not been disclosed. KDS posted losses in three of the past five years, including a $673,082 loss for the year ending March 2016. Revenues that calendar year were up 14 percent to about $23 million. The company had around 100 employees when it issued its latest annual report a few months ago.
Disclosure: BMTTE contracted The Company Dime to provide content for last week’s conference.