“Book It” Will Spark Travel Value Engines

Book It, the oh-so-clever service from Short’s Travel, is a game changer.

Book It makes the “Shop anywhere, but book it here” concept practical for corporate travelers.

Travelers can use any website to find an itinerary and fare they like, then send that flight info to Short’s via e-mail.

The Book It system looks up the traveler’s corporate profile, presents relevant travel policies, applies the corporate discount, and with 3 clicks from the traveler, books the flight.

This “Shop anywhere, but book it here” model is incredibly powerful.  It eliminates a huge chunk of traveler objections to using a corporate self-booking tool.

Let’s think about some fascinating implications:

Corporate Self-Booking Tools (CBTs) don’t need to invest in, and charge for, sophisticated search and shop functionality. The Book It model co-opts every OTA and supplier.com site’s investment in search/shop by conceding those functions to the players who do that best.

So we should see lighter-weight CBTs, ones that are open to the Book It model of “shop anywhere, but book it here”. And self-booking fees should go down, yes?

What about travel policies and preferred supplier pricing?  How will a company apply those before a ticket is issued?

Start with the idea that travel policies are crude attempts to help travelers determine what the best value is.  The concept of lowest logical fare is Exhibit A. It’s a clunky framework for guiding a traveler’s choice.

We need a much smarter way to define value.  Enter the Travel Value Engine.

The Travel Value Engine will use these types of factors to propose a few itineraries and fares to the traveler:

  • The traveler’s preferences, which comes from the itinerary selected in the “shop anywhere” step;
  • The corporate travel policies about cabin class, connections, etc.;
  • Preferred supplier pricing, perks and volume or share goals;
  • Availability of unused tickets;
  • Duty of care considerations;
  • Attribute-based weightings, such as Fastest, Cheapest, Nicest, Most Compliant, etc., similar to what Rearden’s Deem does;
  • Social and gaming factors that influence the traveler’s choice of itinerary, such as what Serko offers in its SBT.

Done well, the Travel Value Engine offers a few attractive itineraries and fares.  The traveler selects one and sends it to the light-weight booking tool. The ticket is issued, the data is captured, and the TMC stands by, ready to serve the traveler.

This makes the Travel Value Engine the first, and by far the most important place to influence business traveler behavior.  Travel managers will need value engines that are really good at accounting for the factors mentioned above.

That strikes me as a fairly complex task.  I suspect a few very focused suppliers will solve the problem.  We’ll see travel value engines that are potentially independent of booking tools, TMCs and GDSs.

Travel value engine suppliers will compete on doing the best job of figuring out relevant choices for the buyer’s travelers. They’ll charge for their smarts, and they’ll figure out insightful new ways to measure their results.

Imagine that – achieving 100% adoption of your corporate booking tool, capturing all that data, and having a value engine that effectively influences desired traveler behavior. That’s the kind of travel innovation I’d like to see.

(Hat tip to CWT’s  William El Kaim for his comments on this topic here.)

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This entry was posted in Airlines, Innovation, Managed Travel 2.0, TIILTS, Travel Management, Travel Policy, Travel Procurement, Travel Technology and tagged , , . Bookmark the permalink.

12 Responses to “Book It” Will Spark Travel Value Engines

  1. Pingback: Short’s Book It: A Brilliant Booking Breakthrough | Gillespie's Guide to Travel+Procurement

  2. Interesting…so many hurdles to still overcome to have a real working model.
    Serko tried this approach in 2001 when API’s didn’t exist and built technology called web inheritance; this went out and took snapshots of the sites and merged it together to produce a booking. The issue was change! As fast as we could build technology to remap the sites the sites changed; the technology advanced on and new ways of limiting access to these hooks appeared.
    Is it a great idea ? I’d have to say Yes, is it a solution to the problem…we will wait and see.

    When it can work out how to move a crew of 300 and handle groups; when it can tell that the user has selected the logical flight and determined the impact on employee remuneration I’d say it has a chance.
    When it can manage the process of change and the overall impact of the flight change to the car then the hotel and what the penalties are… When do we actually stop and realise it is not about the booking of travel ( that first snapshot) but the management of that booking through all aspects of changes and the impact of the travellers selection on the business. What I’d say is Flight searching has changed; it is now about the logical flight especially when booking international…
    We solved this problem and we have a successful model in Asia the most complex market with unprecedented high adoption levels.

    • Scott Gillespie says:

      Hi Darrin, let’s assume that the scope is limited to transient travel, and within that, to just the type of trips that are typically eligible for online booking. One more restriction – limit the scope to the task of presenting a few good itineraries to the traveler, so he can make a good choice.

      That sounds like your reference to a “logical flight”. Can you tell us what goes into creating that logic…any of the factors listed above? Why or why not? Your insights will be greatly appreciated!

      • Hi Scott
        Answering the question you raised below and above; the movement of logical flight selection is based on what the company desires you to purchase and what is reality for the traveller incorporating cost. In your example that you were shown – the flight/fares did not return but you were shown alternatives. Why is this? was it that the fare was not available via GDS channels – was the search using the wrong methods; was the fare actually outside of policy – was the flight shown in the alternatives options logical.
        What we have found is that to determine logical flights you first must know everything that occurs on that day; looking at policy and balancing this on the cost of travel for that employee in hours outside of work and paid etc.
        Why would an employee be put on a 1 stop flight inside a time window when 30min later a direct flight leaves at $30.00 more. The overall fare saving does not outway the employee cost therefore it is not a logical flight – the direct flight is. The same goes for flying home on a Sunday and the traveller arriving tired for work on the monday when it was better to get them home on the Friday to recover over the weekend; this has to be balanced with expectations. At Serko we call this Fatigue Management, managing the risk and balance of logical selections based on employee performance and risk and cost. (Patent Pending of course)

        You then run into the reason why travellers use the airline sites; because the content although in a lot of cases is there in the GDS is never shown – it is so deep in the possible search options that it is never shown. Why? Preferencing – before you even get to search the GDS and Airlines have already worked out which routes they want you to fly and preferenced this. What we had to do is strip all this out and build the fare engine back from logical availability searches. We invented one-way sector fare searching for OBE in 1999/2000 we have applied this to return fares – allowing cheap selection of outbound and flexy on return – to build a dynamic display that is based on the logical route/flight/fare and cost to the business.

        I do think what they have started to do is great!
        I just think that to make it commercially viable they have a way to go; that is why I said it is a great idea as anything that helps the user search and determine logical flights is always good.
        What I find frustrating is that we expect the traveller to know best – in SOME cases with no knowledge and skills in this area; We have to build the solutions that work; that match the airline sites – that bring back the content and give the users what they expect. The only reason these solution exist or are being invented is that the OBE’s are not doing their job right in the first place. You only have to look at why a massive amount of all international fares are repriced by our comeptition to see it doesn’t work. Why they come out with statistics that adoption in Asia is hard & don’t expect more than 16%.

        Build a solution that does what they expect and removes the need to go out side the process and they will use it. We listen/learn invest and change – I like that fact that they are thinking outside the square; that they are looking at ways of bringing the airlines sites to the OBE process – this is what I like; It brings the traveller inside the booking process even when they have gone away from it.

        Darrin Grafton CEO
        SERKO.

  3. Cheryl Livingston says:

    It is a good concept but viewing a price and actually getting that price at the time of ticketing seems almost impossible. What is the timing from start to finish?

    • Scott Gillespie says:

      Hi Cheryl, my understanding is that it takes less than two minutes from the time a traveler e-mails an itinerary from a website, such as Kayak or Hipmunk, to the time she is presented with a ticketable itinerary from Book It. Depending on complexity of the original itinerary and the originating website, it could be as little as a few seconds.

      In the demo I saw, Short’s showed that the originally-requested itin was not available. Book it returned a few other very similar itins, one of which was less expensive than the originally-requested itin.

  4. Alan McLintock says:

    Interesting approach. One problem at least for European based businesses will be Value Added Taxes. Businesses can normally recover this VAT but only if their invoice is a formal VAT invoice made out in the company’s name. Many OTA’s and leisure travel agencies buy in and sell on merchant/net rates where no VAT recovery is possible. So where OTA’s are used for fulfilment/supply of travel then the overall cost to the business (for at least hotels) could be higher once the ability to recover or not recover VAT is taken into account. A merchant rate for a UK hotel of £110 is more expensive than a GDS rate of £120 (as the business will recover the £20VAT embedded in the GDS price giving a net of VAT recovery cost of £100).

  5. Scott Gillespie says:

    Hi Alan, you raise a good point, as the VAT issue clearly affects the net cost. Under a “Shop anywhere, but book it here” model, the booking will take place via the corporate’s self-booking tool. Therefore, the corporate should preserve its ability to obtain an invoice, yes?

    I see now that the VAT issue is another factor that needs to considered by the Travel Value Engine. So the process would be:
    1. Traveler shops anywhere for a flight or hotel, and finds one to his liking on an leisure OTA site.
    2. He e-mails that potential booking from the OTA to his company’s Travel Value Engine (TVE)
    3. The TVE uses the submitted booking (not yet ticketed or sold) as the basis for finding a few similar flights or hotels.
    4. The TVE uses a VAT formula, along with its knowledge of the corporate’s negotiated rates and discounts, to present net prices for each of the few alternative flights/hotels back to the traveler.

    How does this look to you?

    • ALan McLintock says:

      Hi Scott, gets a bit sucked into how VAT works and how VAT works in the travel sector. Bottom line is you would need to know how the OTA contracts with its suppliers and it would be bad news if it is on a merchant/net rate basis (as opposed to post pay commissionable rates). Happy to talk off line of it would be useful. For US small to medium co’s it may not make a huge difference (recovering the VAT can be costly to do) and similarily for what today is unmanaged or lightly manage travel. Just another complication to take into account but VAT/tax should never be the tail that wags the dog particularly if there are other benefits and savings.

  6. Scott Gillespie says:

    For proof of this Travel Value Engine concept, see this article covering Superfly’s approach to flight search. Superfly’s CEO, Jonathan Meiri, ends by predicting corporations will adopt this approach. http://www.eyefortravel.com/news/north-america/%E2%80%9Ckayak-simply-outdated%E2%80%9D-jonathan-meiri-superfly%E2%80%99s-ceo

    • Hi Scott,

      Thanks for adding the link. I think this is a great conversation. The root problem is that corporate travelers are demanding an improved user experience. The corporations themselves want better search tools that include the travel policies.

      At http://www.superfly.com we try to provide users with a personal value of a ticket and most of our customers are heavy travelers flying on the company dime.

      Forwarding itineraries that were found on consumer sites in order to get them priced for the corporate travelers could work, but there are a lot of hurdles. Wouldn’t it be better if the corporate tools would simply provide an efficient experience?

      Cheers,
      Jonathan

  7. @Jonathan “Wouldn’t it be better if the corporate tools would simply provide an efficient experience”. It’s not just about experience … It’s about travel value, it’s about being able to benefit from innovations and to be able to let users use the tools they want. The problem is that corporate booking tools is a “small” niche and I understand that you do not want to jump in.

    But, if instead of redirecting travelers to suppliers web sites (via direct connect), you could redirect them to their TMC/OBT, it could be great. Of course, you should get rewarded for that …

    Another option will be to have you get “corporate fare” from ITA … and include them in your value engine. If you can access corporate rate, then the work is done.

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