Another Travel Startup Leans On TMC Support

By | May 30, 2017

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

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

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

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

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

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

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

Image: Thinkstock

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

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

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

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

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

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

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

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

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

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

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

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

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

New Entrants New Markets

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

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

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

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

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

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

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