Business travel startups are huge right now. New-entrant corporate booking tool NexTravel is working on its mobile app. Artificial intelligence and text bots are making a go of it. Agents are going virtual.
Also hot? Rewards.
The notion of the incentive program isn’t new, but it’s rapidly attracting automation. Rocketrip was the first in a club that during the past year added a few members: TripActions, TravelBank, TravelPerk and Upside. “I guess they’re onto us,” joked Rocketrip founder and CEO Dan Ruch.
He claimed progress into the more managed end of the market through travel management company partnerships. The newest startups may be more attractive to companies that do not already manage travel. This isn’t to say they don’t have experience with the broad range of the business travel market.
Now in beta and called Upside, the spin on Jay Walker’s new TMC is rewards. Presented during the travel booking process with opportunities to be flexible — on choice of supplier, airport, hotel location and more — users earn gift cards in exchange for helping their companies save money. According to Upside, here’s how it works: “Just answer a series of questions about your upcoming trip and choose three airlines and three hotels you’re willing to use. We’ll then create a custom trip for you filled with savings and rewards.
“Your company will save 10 percent to 20 percent versus published prices, and you’ll earn an average of $150 in major-brand gift cards for helping save money.”
Upside guarantees its claim to the lowest rates with a generous offer, at least in the beta. “If you book a trip in the Upside beta that is higher than the same trip on another website, send us an email with a screen-grab of the lower prices and we will send your company a check for double that price difference.”
Upside at the moment is targeting late summer for full availability. The company declined to make available CEO Walker for an interview.
Menlo Park, Calif.-based TripActions did not respond to requests for information, but it’s in the enviable position of having a potential client and partner speak for it. TripActions “is definitely a disruptor in booking travel,” according to Xilinx global travel manager Jean Sloan. “It’s a great option for the smaller company that does not have a rigorous managed program and wants to save money on their business travel spend.”
Sloan explained that the TripActions app checks booking requests against market pricing and offers a “gamification approach” for travelers to take the cheaper choice. She said if the traveler can be flexible, “considerable” savings is available, particularly on lodging. Reporting and risk management support are available.
“Also, there is no license fee nor a transaction fee,” according to Sloan. “We are considering beta testing with one of our small divisions in the near future.”
ExpenseBot has chatted with TripActions about a possible partnership. “I’m a big fan,” according to ExpenseBot CEO Ed Buchholz. “They’re blending an unmanaged travel approach with managed travel capabilities and are sure to speak to the needs of a considerable portion of the midmarket.”
TripActions last year hired as client engagement adviser Ron Wagner, a travel management veteran formerly of BCD, CWT, iJet and others. According to its website, TripActions is focused on “mobile booking, live itineraries and 24/7 phone support.” A sensibility about behavioral science drives the rewards component, employing positive reinforcement by aligning the financial interests of employees and employers, according to the site. TripActions already has Android and iOS apps.
Less info is available about TravelBank. Parent Travelator Inc. is registered in California. Its site promises to “give your employees the freedom of choice to book business travel wherever they want.” It indicates there’s a benchmarking component, harking back to Google’s travel program — a forerunner for all these startups.
TravelPerk is banking on a similar concept. “When a travel manager or employee goes to search for their required trip, we not only display available results, we also create a budget for their trip in real time,” according to its site. “This dynamic budgeting algorithm is a revolutionary way for your company to manage business travel costs in a way that is always fair to the employee who is traveling.”
Clients have the option to share savings with employees.
TravelPerk is incorporated in the United States but based in Barcelona and registered as a travel agency in Spain. According to its site, it makes money on commissions (like most of these new companies, presumably). TravelPerk claims that “hardly anyone” offers more travel inventory. It integrates with Expensify.
“There is still lots of venture money out there,” said Atmosphere Research Group’s Henry Harteveldt. “Travel is an attractive area for investment but the more sizable opportunities in leisure have been addressed. There’s massive consolidation on the online travel agency side, with meta search, etc. So consumer is, for the most part, the very thin part of the long tail. Corporate travel is still in the thicker part and folks are looking at this because they haven’t seen all that much innovation. Whether all these new companies really do have anything different from how the rest of the TMCs are doing something remains to be seen.”
Meet The Establishment
The new providers appear more attractive to less managed programs. Companies with preferred rates and suppliers are going to be a hard sell for travel services looking to make money only on commissions.
All the attention has Rocketrip’s Ruch “personally thrilled.” He said it helps validate a concept that in days past was taken only lightly. Perhaps gamification was the wrong label. “I don’t really count what Amex did with Badgevillle or Concur with Price To Beat as real efforts,” Ruch said. “They were feature-driven.”
Three-year-old Rocketrip now is the budgeting system behind Concur’s offering and the pair have a robust partnership, said Ruch. His company also works closely with TMCs — he named American Express Global Business Travel, Carlson Wagonlit Travel, Frosch and Travel Leaders. This level of collaboration signifies a move upmarket from where Rocketrip started. It may now be part of the establishment, but Rocketrip still has clients that take a more open approach to travel policy. Ruch refutes the notion that rewards programs are best applied in smaller companies or unmanaged travel programs.
He claimed an advantage in being agnostic about the booking channel, which one would think startups calling themselves travel agencies could not do. “They’ll have a challenge in disrupting what Amex or CWT or BCD have built,” Ruch said.
He said 95 percent of Rocketrip’s clients already have a TMC. The solution integrates with Concur Travel and, to a lesser degree, other booking tools. Gerson Lehrman Group and OnDeck Capital are examples of companies using the Concur configuration. Most Rocketrip clients spend more than $1 million annually on travel and Ruch said one client spends about $300 million.
Whether bookings are in a managed system or on the open market, Rocketrip works by creating a trip ID and a budget. Travelers earn gift cards based on savings or actions relative to policies like booking the lowest fare, purchasing in advance, taking connections, riding the rails instead of flying, sharing cars or trading down on class of service.
Any corporate incentive program draws questions. How are the tax implications handled? Aren’t we just paying employees to do what they should anyway? Will they travel more or longer to earn rewards?
Ruch is accustomed to these concerns. He said “some of our clients will gross up payroll because they believe the employee shouldn’t feel the burden, but most of our clients include tax withholdings on the next payroll run.” He repeated the second question: “Do they want to reward employees for doing what they should anyway? The answer is no. We should not reward what they should do anyway. Rocketrip was never about that. It’s about rewarding employees for unexpected behavior. That’s what makes a deployment complex and high touch. The first hard part is determining how you know what they were going to do. From there, the motivation is to change behavior. It might not mean complying with policy.”
As to the last question, Ruch said his data shows client travelers haven’t increased travel in order to earn more. Still, Rocketrip offers controls to monitor behavior or set limits.
Consultant and gamification expert Tom Ruesink said Rocketrip “has done a good job” recognizing the existing programs many companies have, and integrating with them.
Ruesink is skeptical about the focus on rewards. Not that badges are the way to go, either, but he suggested old-fashioned recognition can serve the purpose of gaining traveler buy-in on company programs. “From a gamification purist’s standpoint, rewards are one of the last things you focus on,” he said. “It doesn’t necessarily get at the recognition part or support overall company goals. ‘How am I a part of this program?’ That’s where I think there’s a long way to go. I’m amazed there isn’t more ‘thank you’ type recognition. You see very few companies really recognizing the traveler for sacrifices they’re making.”
There are practical matters, too. Ruesink said the concern about traveling extra is a real one for customers. “Do you see an increase in trips instead of travel avoidance and videoconferencing?” he asked. “That saves more money.” He questioned how a rewards program is applied fairly when most of the population already follows policy or buys intelligently.
Harteveldt said it’s possible the sprouting startups represent a fad. “There’s so much stupid money out there,” he said. On the other hand, frustration with travel policy is a powerful force. “There’s a new generation of companies that are looking for different ways to manage travel,” he said. “People don’t like being told what to do. You need both the carrot and the stick, but corporate travel has focused a lot on sticks. There will be room for both of these types of approaches.”
Additional info: In the beta program, Upside is offering web chatting powered by Intercom as well as in-house telephone support. For air travel, only single person, roundtrip, domestic flights are available in the beta. Gift certificates are to be delivered by email two days after the trip takes place.
Upside has hired a number of industry veterans. Formerly of Hertz and Radius, Brian Butler is director of travel partnerships. Ex-American Express Global Business Travel exec Jonathan Hamblett is vice president of supplier relations. According to job postings, Upside is using Concur’s Compleat mid-office technology and Sabre’s Trams back-office. Mobile apps on Android and iOS are on the way.
TripActions CEO Ariel Cohen is on the agenda for a Silicon Valley Business Travel Association event in June.