Despite being told from our childhood days that it’s good manners to share, the so-called ‘sharing economy’ is having a rough ride. The likes of Airbnb and Uber have encountered legal strife and protests on an international scale.
These types of suppliers can be filed under ‘disruptive’ – a term that could also apply to the likes of Lyft and Bla Bla Car within the car rental sector, and Hotel Tonight and Couchsurfing in accommodation. Yet within corporate travel, things appear to be going more smoothly. At last July’s GBTA Convention, Airbnb and Uber unveiled business travel divisions, with the former also now integrated into Concur’s Trip Link.
Business travel is a target for tech savvy start-ups – some of whom regard business travel as “antiquated” (see box, p23). Is more disruption to come? And if so, are travel management companies (TMCs) prepared? Paul Richer, senior partner at travel IT consultants Genesys, believes a new genre of business is on the horizon: “With Airbnb and Uber scaling so quickly, I don’t see more peer-to-peer businesses gaining market share unless they can differentiate themselves with a new way of adding value.” As a result, ‘peer-to-peer aggregators’ could be the next big thing. “Aggregators succeed through large-scale aggregation. The bigger the business, the more attractive it is to both suppliers and buyers,” says Richer.
Innovation in the industry
For Jared Simon, COO and co-founder at Hotel Tonight, future disruption will result simply from improving experiences. “As long as we can still find elements of the travel booking and stay experience that cause friction for travellers, or for travel suppliers, there is room for more innovation in the industry,” he says.
Many TMCs brush aside talk of disruption as hype. “If we take the sharing trend, it’s nothing too radical from a TMC perspective,” argues Ian Carron, chief information officer at Capita. “It’s just a new breed of intermediary, like a global distribution system. The challenge is to make it relevant. As a TMC, should we connect? We’ll reach out to [Airbnb] if we feel we are driven by our customers, but there are consistency and reliability issues.”
HRG director Stewart Harvey agrees. “They’re not that disruptive. Sometimes there’s a lot of hype,” he says. “We’ve never limited ourselves to a single GDS and years ago we spent a lot of money on our own technology.” HRG is continuing to develop Insight, its interactive mapping and reporting tool. “We can adjust because we’ve built an environment that lends itself to flexibility,” Harvey adds. “The trend for TMCs is less about booking, but more about helping clients manage bookings from so many sources. The point is not about the data, it’s about the size of the door, or the quality of the hinge.”
Speaking at the recent Disruptive Travel Trends in Europe webinar, organised by ACTE and Radius Travel, travel buyers said the demand was not yet there for Airbnb, citing safety as the main concern. However, Peter Brodbeck, head of global travel management at Syngenta Crop Protection, says closer collaboration with IT and risk teams is needed as business travellers increasingly merge their trips with leisure travel. Daniel Meyer, senior travel buyer at Accenture, adds that TMCs now have more of a technology or consulting role, asking: “With an offline stay, what can Airbnb do to secure our trust?”
Meanwhile Reed Elsevier travel manager Marijke Poppink admits she has just began renting her own car out, by the hour, using a service called My Wheels. “The technology is so easy, and the platform so good. I can’t imagine we cannot have this sort of thing for staff. It’s worth looking into – the technologies are there.”
The GDSs appear also to be preparing for a new wave of intermediaries. Amadeus vice-president Decius Valmorbida says the travel tech giant is “keeping a close eye on the evolution of solutions and business models in this area”, with examples such as Bla Bla Car for sharing and Flight Car for peer-to-peer ground transport rentals.
He also cites the importance of end to- end bookings. “For a TMC, one of the largest drivers of value and efficiency is to ensure a homogenous workflow from pre-trip to post-trip servicing for the different forms of content available,” he says. “For last-mile transportation, we have partnerships with traditional transfer companies, as well as on-demand cab services such as Cabify. We’re now evaluating how best to offer Uber to customers.” Syngenta’s Brodbeck goes further. “What we’re embracing is not door-to-door, but end-to-end. Everything [in the booking process] should start in one place, and that then dominates what should be booked, whether offline or online, and then integrated into expenses. I want an open platform, for example for Expedia, but also direct connect to airlines and hotels, so I can avoid those discussions with staff who say they can find it cheaper.” Whatever the outcome, HRG’s Harvey believes TMCs are well placed to survive, and thrive: “Many people thought the agent would die with the internet,” he says. “But we’ve always had the attitude of asking: ‘What’s next?’”
Room for disruption in business travel
Rocketrip was founded in 2013 by Daniel Ruch and Gillian Tee. It provides an incentive-based platform to businesses, with staff financially rewarded for finding the cheapest way to travel within policy. Ruch told Buying Business Travel: “Business travel is antiquated. There are billions invested in the old way of doing things. The challenge is that infrastructure is so old. We are working in a market with GDSs, and we have to integrate with old systems. You have to have lots of enthusiasm and have vision – it takes time. “We’re not a business travel company. But are we disrupting an antiquated method of managing travel? Yes. We are the carrot, not the stick. What gives us the edge is the model of rewards: incentives versus enforcement.”