Corporate travel veteran and Serko senior vice president of North America Tony D’Astolfo takes us through how corporate booking tools got to where they are — under-appreciated and criticized. He challenges readers to think about where they should go from here and highlights hard questions travel managers need to ask.
“How did things ever get so far, I don’t know. It was so unfortunate, so unnecessary.”
“The Godfather” movie fans out there will recognize those words spoken by Don Vito Corleone as he addressed the heads of the Five Families during a brutal, internal war. That line also perfectly describes the current corporate online booking tool environment. How so? I’ll make you an offer you can’t refuse: read on and find out.
No one disputes that booking online is a cornerstone of most managed travel programs. It’s the predominant method for most companies. You would think that making it easier and more efficient is of primary importance. Yet, we continue to hear that business travelers are not satisfied with the OBT user experience and, in many cases, their overall travel program. Clearly something is very wrong.
The lack of “consumer-grade” tools consistently is blamed for the increase in traveler complaints and lower travel program customer satisfaction scores. In the worst-case scenario, it leads to travel program leakage, straining both corporate spend management and duty of care initiatives.
Two studies three years apart indicated that the corporate OBT was a long way from being the preferred place business travelers went to book travel.1
According to a separate, August 2018 GBTA/SAP Concur survey, 78 percent of travel managers ranked “a more user-friendly booking experience” among the three innovations they were most excited to add to their programs.
The corporate OBT space historically lagged leisure travel sites in providing a consumer-grade booking experience because the systems served two masters: the travel buyer and the traveler.
Travel buyers need the system to apply corporate policies and negotiated rates, and emphasize preferred suppliers. It is critical for capturing info like trip reason and client project codes.
These don’t necessarily enhance the user experience. It can have the opposite effect. They add complexity — requiring more screens, clicks and time — and diverge from the simplicity of consumer tools.
Another factor is the commoditization of the OBT. The market seems to have settled on what booking tools are worth. As someone who knows the subject well, I can tell you they are severely undervalued — to the point of making investment difficult.
For a direct-to-consumer travel site, a simple hotel booking can easily yield $30 in commission revenue (10 percent of a two-night stay at $150 per night). That is probably 10 times what a corporate OBT would get for the same booking, which at the same time must provide sophistication not needed on consumer sites.
Content fragmentation is another complication. No longer is the GDS the sole source of content. As suppliers go direct to travelers, travel buyers are concerned.2 Whether airline ancillaries or supplemental hotel program content from Expedia or HRS, aggregating content adds to the challenge.
It’s no wonder the corporate OBT experience continues to lag. SAP Concur, which provides the market-leading Concur Travel OBT, has taken to suggesting that travelers book wherever they want. Concur will import booking info to the traveler’s expense system (usually at a cost). While that is certainly one way to address the situation, it comes with some downsides. Most importantly, travel program managers lose the ability to influence traveler decision-making at the point of purchase, where the greatest program savings typically are found. Booking outside the program also could complicate things for the traveler and TMC if and when service disruptions occur.
Startups such as TripActions, TravelPerk, Upside and Lola draw attention with claims of a better mousetrap, complete with enhanced traveler tools and TMC operational capabilities. While investors salivate over a slice of the $1.5 trillion global business travel market — and pony up big money to get in on it — making the leap from marketing to Main Street might not be that easy.
Well into 2019, do the only choices available force compromise?
Do travel managers choose to compromise traveler satisfaction by using tech that lags the direct-to-consumer experience and risks program leakage? Or do they go for complete disruption by throwing out the baby (TMC) with the bathwater (OBT) and moving to an unproven startup?
“How did things ever get so far?” Indeed.
(1) According to a 2017 survey by Business Travel News and Deem, 44 percent of 219 respondents said a bad booking tool frustrates managed travelers most. The study found that among websites used for travel, company/TMC booking sites were preferred by fewer respondents (24 percent) than consumer online travel agencies and direct supplier websites (both 39 percent), review sites like TripAdvisor (30 percent) and “general” search engines (28 percent).
In a 2014 Phocuswright poll of 520 managed business travelers, 49 percent said they used OTAs as a source for planning travel. Direct supplier sites ranked second (44 percent), just ahead of company/agency travel booking site (43 percent).
(2) In the 2017 BTN/Deem survey, 45 percent of 250 respondents said travel managers and TMCs should be “extremely concerned” about supplier-direct initiatives. Another 43 percent indicated moderate concern.
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