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Start-ups: On the fringes

Maze

Start-ups outside business travel are working their way in to help make buyers’ lives simpler, says Nick Easen

The managed travel space is far from perfect. Yet it has evolved over the decades to create a complex ecosystem of buyers, TMCs, suppliers, content providers and more, all there to service the business traveller.

Now a new agile species is emerging: the start-up. And they are looking to disrupt a largely settled and quite conservative market.

A host of companies with catchy names are popping up in many a travel buyer’s inbox vying for patronage: Lumo, which anticipates air travel disruptions (thinklumo.com); Voya, a personal travel assistant start-up (voya.ai); Rocketrip, which rewards business travellers for savings (rocketrip.com); Flyr, which finds cheaper fares (flyrlabs.com); TroopTravel, a meeting location finder (trooptravel.com); Travelperk (a free business travel booking tool); Freebird, a flight rebooking tool (getfreebird.com); Stasher, a luggage storage solution (stasher.com), and many others.

They are are keen to counter inefficiencies in the sector and question how travel buyers operate. “Most start-ups only focus on niche parts and stand-alone processes of business travel, often not replacing existing solutions. The complexity of business travel has caused start-ups to focus with only a few being able to master the full picture,” says Maximilian Lober, co-founder of Voya.

ENTRY LEVEL

Buyers need to understand the costs and benefits of each innovation, although this can be time-consuming. “Researching the product evolution roadmap is key to ensure it will grow with the market and its changing needs,” explains Nour Mouakke, founder of Wizme, a start-up focused on meeting reservations.

Mark Williams, chief financial officer of consultancy Dots & Lines, agrees and says: “Buyers should be asking questions such as: What will this do to help my travellers? What is the direct cost and what are the indirect costs of integration, communication and training? How long will it take to become operational in my environment? What is the potential ROI?”

Many start-ups would like buyers to start testing their solutions without necessarily going through an RFP or corporate supplier process. “It is worth giving select teams access to some of these solutions before launching integration projects,” says Anders Mogensen, chief executive of Gaest, a booking venue start-up.

CUTTING THROUGH
Another difficulty for buyers is to cut through the noise and distinguish which start-ups’ products could be useful to their travellers. 

“I am finding that start-ups are coming in and promising me the earth,” says one travel manager anonymously. “Some are recommended to me and I do look at a handful. But this market is a hard nut to crack.”

Maximilian Waldmann, founder of Conichi, a start-up managing seamless hotel check-ins, agrees: “The biggest issue here is the fragmented landscape where for a simple business trip roughly ten parties are involved: TMC, online booking tools, content provider, GDS, a travel app, airline, hotel, PMS, bank and expense tool.”

Yet this is also why the more ancillary purchases and business traveller experiences are ripe for disruption. They are easier to tackle – start-ups do not need such deep pockets, and it is a lot harder and more expensive to upend a whole managed travel ecosystem.

“From purchasing meals and app-based ground transportation through to finding and accessing airport lounges and gyms for traveller wellbeing, it’s these additional areas and services that are areas to watch,” states Ellen Trotochaud, vice-president of global business development at SAP Concur.

There is a lot of hype about artificial intelligence with predictive technologies coming to the fore – ranging from anticipating travel disruptions with Lumo to finding fares with start-ups like Flyr, based on statistical models. Chatbots, powered by start-ups, such as Destygo, are also getting better and could have a profound impact once widely deployed.

INTO THE MAINSTREAM
“There is a great deal of innovative work being carried out at the start-up level today,” notes Trotochaud.

 It’s not happening in isolation. This is an era of great expectations; blame next-day delivery from Amazon Prime or instant holiday bookings. 

“Business travellers increasingly want a consumer experience in a corporate setting. They want to be able to book in the way they know they can in their personal lives. They don’t want to feel limited,” explains Ariane Gorin, president at Expedia Partner Solutions.

Such ideals have helped fuel fintech, insurtech, retail-tech, reg-tech and now travel-tech. Over the past five years, the UK has attracted £28 billion in digital tech investment, according to think tank IPPR North, far more than any other European country.

Venture capitalist money is readily available around many a sector hoping to sniff out the next Uber or Airbnb, while the managed travel space is looking for cost savings.

Suzanna Chiu, head of Amadeus Ventures, says: “Start-ups are now making technology available to a wider range of travel buyers, with SMEs, in particular, now able to access vast swathes of sophisticated technology at an affordable price.”

Traveller assistance, data consolidation, trip reporting and end-to-end travel procurement are also focal points, and more entrepreneurs are working their way in from the fringes to the mainstream. Buyers need to be ready to spot them at the right time.

FUNDING VIA CO-CREATION
Some start-ups can strike it rich by being snapped up by bigger players, but there’s also more collaboration as the larger travel companies cannot be as agile as small-scale entrepreneurs.

As a result, there is now a new buzzword in this space – co-creation. “The paradigm has shifted as start-ups and established companies now work hand-in-hand toward finding solutions,” says Xavier Herault, manager, innovation management systems at CWT.

It’s why a handful of big brands from Amadeus to British Airways, Marriott to Booking.com, have incubators. The aim is to tap into the va-va-voom of start-ups bringing fresh thinking into the sector. Many don’t even have a background in travel, but are unafraid to try new things.

Yet a big brother is often needed in the managed travel space to negotiate distribution and content deals with hotels, airlines and rail operators. It can be difficult, especially for those looking to break into the booking game. There is an existing data and deal infrastructure that’s difficult to navigate.

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