Tony D’Astolfo On The Compromises Of Corporate Online Booking Tools

From The FieldCorporate 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 

Tony D'Astolfo, Serko
Tony D’Astolfo, Serko senior vice president, North America

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. 


Related
• Caroline Strachan On The Move To Attribute-Based Online Travel Shopping
• Tony O’Connor On The OBT Obstacle Course
• Louise Miller On Considerations For Online Booking Tool Selection
• Andrew Jordan On How Experience Eats Product For Breakfast, Lunch And Dinner

Author: Tony D'Astolfo

Tony D'Astolfo is a 35-year travel industry veteran and an accomplished executive with deep expertise in travel and technology. In 2018 he joined Australasia-based online travel and expense company Serko to lead efforts in North America. Tony was previously chief commercial officer at Deem, where he was responsible for developing and driving the commercial strategies for all sales, marketing and customer-related activities. Prior to joining Deem, he was managing director of research and consulting firm Phocuswright. Tony's career started with United Airlines, where he spent more than 19 years in leadership roles. He also worked for GetThere and GroundLink. Tony is a long-time member of GBTA and ACTE, and a former member of the Board of Directors of ACTE and Board of Directors of WINiT (Women In Travel). Connect with Tony on LinkedIn.

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Caroline Strachan
Advisor

Nicely done Tony. I’m looking forward to seeing all the Next Gen Storefront and attribute shopping come to life this year; hopefully that will propel the OBTs forwards (well those that see the light that is!).

Jennie Robertson
Subscriber
Jennie Robertson

Totally agree! And yes, I’m in the baby/bathwater group 🙂 – at a startup, I have that luxury where bigger companies with traditional programs may not. I’m also not super impressed with NGS yet, will be interesting to see how that translates to mobile.

Caroline Strachan
Advisor

Great to hear, good for you. We’re listening to both buyers and OBTs at the moment to work out sentiment in the market. We think we know what needs to happen but would love to openly listen too. Have you seen PSGR1 and their NGS? They’ve gone straight to mobile.

Jennie Robertson
Subscriber
Jennie Robertson

I have not, will check it out – thank you! 🙂

Richard Clowes
Subscriber
Richard Clowes

Like you say, the ability to make money off jumping into this arena will limit those willing to take the risk. In addition, outsiders don’t realize the complexity of the procurement process. This is far from being an Amazon shopping cart. We all believe the purchase process should be better but that’s an easy statement to make without any real solutions being offered. There is certainly value in the role of the TMC but while the economic model remains the same, I wonder if there will be little change. Is that being pessimistic? I think it’s pragmatic. You’d need to… Read more »

Daniel Senyard
Subscriber
Daniel Senyard

Great post, Tony. I think that employees searching (and booking) off-channel is a “feature” and not a “bug.” Searching for value is a natural human behavior that a better/different mousetrap won’t completely curb. And off-channel activity is usually not done maliciously – employees are often trying to find a better deal for both themselves and the company. From the perspective of this “unproven startup” founder, the problem isn’t really leakage but the lack of access to data and guidance that leakage causes. If you can capture off-channel booking and behavioral data, companies can be more flexible with employees while still… Read more »